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Council of Ministers analyzes national economic performance

consejo de MinistrosCuba’s Council of Ministers, meeting at the beginning of last week in the Palace of the Revolution, and headed by President Miguel Díaz-Canel Bermúdez, analyzed national economic performance in the first half of the year; the 2017 State Budget settlement and the control measures applied in its implementation; as well as exports, external loans for investments and foreign investment.

Acceptable economic performance is estimated for the first half of the year, despite the tensions that characterize the Cuban economy, informed Alejandro Gil Fernández, deputy minister of Economy and Planning, presenting the report on expected performance for the period to the Council of Ministers.

Highlighted among the aspects that have most impacted the country’s economic performance were the insufficient availability of resources; the effects of weather events on harvests; shortcomings in export earnings; and the impact of heavy rains, in addition to the tightening of the U.S. blockade and its extraterritorial effects.

However, moderate growth is expected in the construction sector and trade, while favorable results in meeting the main agricultural produce plans have been reported, and activity levels in the food industry are mostly in line with what was planned. In tourism, having surpassed the figure of two million visitors was considered positive, possible thanks to the swift recovery from the damages caused by Hurricane Irma.

The importance of continuing the joint work among all agencies in order to meet plans was noted. There are still potentialities in the economy that permit continued advances, for which efforts must be focused to achieve greater activity and efficiency.

The report sparked a wide-ranging debate among those participating in the meeting, who addressed issues such as the importance of identifying existing reserves in each organization; achieving better supervision of the disaggregation of the Plan; and prioritizing those investments that can contribute most to the country’s development.

The President of the Councils of State and Ministers stressed the need to prioritize investments with a productive impact. He offered the example of water diversion projects, investments that ensure water for both the population and agriculture, with more irrigation resulting in more food; as well as investments in tourism, which provide income immediately; and in the food industry, which substitute imports and also result in more products for the domestic market.

Minister of Finance and Prices, Lina Pedraza Rodríguez, presented the report on the 2017 State Budget settlement, which specified that the budget implementation recorded a fiscal deficit inferior to that approved by the National Assembly of People’s Power, resulting from the combined effect of higher income than planned, and the non-execution of some expenses.

Among other data of interest, it was reported that tax and non-tax revenue from the state sector represented approximately 86% of all income, which confirms that state enterprises continue to be the main economic contributors. Meanwhile, non-state forms of management represent 11%.

Regarding territorial contributions to local development, it was explained that 525 million pesos were approved by administration councils for the repair and maintenance of state facilities, to respond to the proposals of constituents, and to solve problems in infrastructure of collective use.

The expenditure structure of budgeted activity was detailed, reflecting the socialist character of Cuban public spending. For example, it was noted that 29% of the budget is allocated for public health and social welfare, 22% for education and 16% for social security.

In 2017, more than 21,000 people throughout the country benefited from subsidies to undertake construction works on their homes. It was noted that provincial and municipal administration councils need to streamline the allocation of these funds.

At this point on the agenda, representatives of the ministries of Food Industry and Agriculture reported on the analyses and measures adopted in those enterprises making the greatest contributions, surpassing planned taxes on earnings, and those that closed the year with unplanned losses.

At the end of the debate, Council of Ministers members approved to submit the State Budget settlement report to the National Assembly of People’s Power, for consideration, analysis and approval in its next session.

Meanwhile, Comptroller General of the Republic, Gladys Bejerano Portela, announced the results of audits carried out on the 2017 Budget settlement process, in which discreet advances could be seen. Among the main deficiencies, she pointed to untapped potential in income planning, and in the control of budget implementation regarding expenditure destination and use.

In particular, analyzed were several cases of excessive payments for constructive work in different state institutions, which are under investigation by the Ministry of the Interior and the Attorney General’s Office.

First Vice President of the Councils of State and Ministers, Salvador Valdés Mesa, called for better and much more effective planning, especially in the case of the State Budget. The earnings above plans outlined in the report presented are a demonstration of the reserves that continue to exist in terms of planning, which result in financial resources that the country needs, he stressed.

Meanwhile, compañero Díaz-Canel noted that there must be increased control over the State Budget; systematic analysis of these cases in Council of Ministers meetings; strict tax discipline ensured; and suitable contractual relationships between the state sector and self-employed workers.

The Cuban President stressed that the population must be fully aware of what the country invests in education, health, and social welfare, to appreciate the impact that the implementation of the Budget has on their daily lives.

Likewise, he agreed with the First Vice President of the Councils of State and Ministers on referring to the promotion of a wide-ranging debate of these issues in the next session of the National Assembly.

The second point on the agenda was to examine the main issues that would allow for swifter progress in exports, the use of loans, and foreign investment.

Rodrigo Malmierca Díaz, minister of Foreign Trade and Investment, assured that: “Reaching economic growth levels that lead to development implies raising accumulation rates.” To do so, it is essential to increase export income and foreign investment, as well as access to external resources through medium and long-term loans.

As a result of the approval in 2014 of the Foreign Investment Policy and its new regulatory framework, there has been an increase in foreign capital investment, but this still remains very low in relation to total investment in the country, he said.

The Minister explained that, in addition to objective issues such as the economic blockade and the dual currency system, factors of a subjective and organizational nature limit both exports and the use of loans and attraction of foreign investment, closely related issues that must be comprehensively addressed.

The advances achieved in these three areas will be decisive to the economic performance of the country, he emphasized.

In this regard, the Council of Ministers approved a set of decisions, among them conducting monthly meetings with the heads of central state administration agencies to review exports and foreign investment businesses case by case, as well as the management and execution of external loans. Likewise, to increase supervision of enterprises that carry out foreign trade operations.

Finally, the President of the Councils of State and Ministers insisted on the need to further boost foreign investment, given what it represents for the country’s development. We have to be creative and take risks, without affecting our sovereignty, he stressed.


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