Cuba’s Former Minister of Economy José Luis Rodríguez recognizes “mistakes” and the impossibility of reaching the 2% growth predicted in 2024
14ymedio, Madrid, 27 August 2024 — Cuba’s gross domestic product (GDP), which collapsed by 1.9% in 2023, will not even come close this year to the predicted 2% increase. An article published this Monday in the state media – Evaluation of the International Economy and Its Impact on Cuba – and signed by the former Minister of Economy, José Luis Rodríguez, bluntly exposes the debacle that the country is experiencing. The novelty is the recognition by an official source of the size of the disaster, although it continues with the usual propaganda mantra of the “decisive weight of the US economic blockade.”
The other culprits, according to the author, are the 2020 Covid-19 pandemic, the increase in food prices worldwide – 20% above the average values of 2014-2016 – and the “international breaches of agreements that were supposed to guarantee the import of oil” – currently above 81 dollars a barrel – but also the “slow recovery in tourism,” and, what is more striking, “the consequences of mistakes made in our own management.” The result of all this, according to the economist, “is that the country suffered between 2019 and the first half of 2024 a loss of more than 4 billion dollars in external income.”
Compared to 2019 and until 2023, revenues decreased by more than 3 billion dollars. One of the most relevant items is remittances — the money sent home by Cubans abroad — the country’s second source of income behind the sale of medical services, which between 2019 and 2020 fell by 26% (to $2,348 million), “according to unofficial sources,” and in 2021 by more than 50%, to $1,084 million. “This figure does not seem to have increased in 2023, not even considering that Western Union resumed sending remittances to Cuba, which augured a greater increase,” says Rodríguez, recalling that “remittances play an important role as working capital for the non-state sector and sustain an appreciable level of consumption in the market that operates in MLC” (freely convertible currency).
One of the most relevant items is that of remittances, which have fallen to 1,084 million dollars
Citing a report reviewed by CNN in 2021, the author indicates that “26% of Cuban households received remittances, about 2% of the GDP. Some 83.7% came from the United States, and more than 60% arrived informally.” Another study that is included in the article is one from Inter-American Dialogue, which estimated money transfers to the Island in 2023 at 2.458 billion dollars, but the former minister clarifies that “there is no clear evidence that remittances grew to that level last year.”
Another “negative element” recognized by Rodríguez is the “non-compliance with payments of the external debt service,” which forced the regime in 2020 to a new renegotiation with the Paris Club – apart from the one agreed in 2015 – “achieving a postponement of the payments for t
