Monetary Order in Cuba with Medium and Long-Term Effects

Havana, Dec 28 (Prensa Latina) The new monetary order in Cuba will have medium and long-term effects, but in the short term, the positive impacts on productive activity will be minimal, academics warned.

Reflecting on the significance of this process underway in t Cuban Economy, affirms that this forecast leaves aside the possibility that at least in the first year there are appreciable gains in purchasing power in the population groups.

Cuban authorities decided to move towards monetary and exchange unification, a complex process that implies wide-ranging modifications in various economic-financial aspects, which are also inevitably necessary to see their first results, Torres added.

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Speaking to Prensa Latina, the economist explained that since the wealth created does not change in the initial moments, any increase in purchasing power in a group implies an equivalent loss in the rest of the actors.

In this regard, he explained that ultimately the increase in real consumption and the standard of living depend on sustained increases in productivity, which have to do with measures of greater significance.

Torres recalled that the ordinance is designed with an interdisciplinary and cross-cutting nature, which includes monetary and exchange unification, the elimination of excessive subsidies and undue gratuities, as well as the transformation of income, all to advance the country’s economic strategy.

In his opinion, unfortunately, and despite the fact that the fundamental political documents dictate clear guidelines for some of these measures, their implementation has been slow and unstructured, which limited the impact of those that were implemented.

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Ultimately, the standard of living of the inhabitants of a country depends on the trajectory of productivity and this depends on structural factors, so that transformations in the nominal sector can facilitate other changes, but they are generally useless by themselves, he asserted Towers.

For the student of the Cuban economy, the full implementation of the provisions of the monetary system is justified by the conviction shared by broad sectors of the government and academics, based on their impact on the success of other necessary changes in the reform.

There are, however, disagreements in the sequence and scope of its implementation, but in any case it will be one of the most important transformations in the Cuban economic environment in the last 30 years, predicted the doctor in Economic Sciences from the University of Havana.

 

 

Featured image: File Photo.

(Prensa Latina-English)

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