Cuba faces pressing economic tasks ahead

CUBA’S newly-elected President Miguel Diaz-Canel must tackle pressing economic challenges, including raising wages, ending the dual currency system and spurring economic growth, according to Cuban economist Juan Triana.

An economics professor at the University of Havana, Triana said Diaz-Canel should govern with the same “creativity” and “pragmatism” demonstrated by Raul Castro during his two terms in office. Castro led a modernization drive that encouraged limited private enterprise, and did away with many onerous economic and financial restrictions.

“If today we are facing these challenges, it’s because Raul Castro decided to initiate a change, to transform the economy to have a prosperous and sustainable nation. He was not afraid of risk and that is why progress has been made,” Triana said. “We will have to learn, undo laws and approve new ones in order to advance in this reform process...”

The single biggest challenge today is to make the economy grow at adequate rates, a task that is “far” from being achieved, he said. According to official data released by the national statistics bureau ONEI, since 2009 GDP has only grown at higher than 3 percent once, in 2015. In 2016 and 2017, growth registered 0.9 percent and 1.6 percent, respectively.

Modest growth

The outlook for 2018 is for modest 2 percent growth, a figure that according to the Cuban expert will not change the declining trend observed in the last decade.

“The Cuban economy must have greater flows of foreign direct investment and we must end the resistance and bureaucracy that exists to facilitate it,” he said. Official figures indicate that in 2017 Cuba managed to attract more than US$2 billion in foreign capital, presenting a business portfolio of US$10.7 billion.

The portfolio is backed by a foreign investment law approved in 2014 that offers tax breaks, repatriation of capital and other incentives.