extinguishing the fire with more smoke
By Ernesto Eimil (14ymedio)
HAVANA TIMES – During the onset of the current session of Cuba’s National Assembly, Prime Minister Manuel Marrero spoke about the results of the government’s management in 2024, a year when Cuba’s crisis worsened significantly, and the measures they plan to implement in 2025.
Marrero’s speech oscillated between propaganda, acknowledgment of unmet objectives set for 2024, and a series of measures or promises for the upcoming year.
The National Assembly routinely meets a few times a year for a few days to receive and unanimously approve government plans and dictates.
This summary by El Toque presents the most notable points of Manuel Marrero’s address.
Economy: Dollarization and “New Relationships” with the Private Sector
Marrero announced that the country will advance partially in the dollarizing its economy, with export sectors operating under partial dollarization schemes. Wholesale, retail, and tourism sectors will handle foreign currencies. What the government refers to as “non-state management forms” (private) will also need to pay in hard currency for foreign trade-related matters. Contradictorily, Marrero also announced measures aimed at de-dollarizing other sectors but did not provide details.
On tax evasion, the prime minister reported inspectors had identified debts exceeding 6 billion pesos ($50 million dollars at the official exchange rate of 120 X 1). As a collection method, more than 9,000 debtors were restricted from leaving the country. “All or nearly all of those immediately pay,” Marrero asserted.
A new exchange rate is expected to be approved in 2025, introducing a more flexible system that adapts to market supply and demand. The current rate on the street is around 320 pesos X 1 USD.
Authorities claim inflation slowed in 2024, though it was estimated at 28% by late October. Marrero noted that money in circulation had decreased this year, albeit insufficiently. “It’s kept under the mattress,” he quipped [referring to the lack of confidence in the Cuban banks].
The government aims to improve business relationships between the state and private management by signing administrative, marketing, and economic partnership contracts.
Energy: Promises of More Megawatts from Renewable Energy
Regarding the nationwide and rolling blackouts, the recovery of the National Electricity System will be overseen by Ramiro Valdes, a historic regime military figure who will turn 93 in April 2025. Marrero stated that 500 new MW of solar energy would be added in the first half of the year, with another 700 MW in the second half, totaling 1,200 MW by the end of 2025. Experts note this partial transition to photovoltaic energy is highly complex given the resources required. Additionally, salaries for electricity company workers will be increased.
Marrero acknowledged the government’s failure to impose higher tariffs on heavy electricity consumers, intended to encourage saving—an outcome that did not materialize. To address this “distortion,” he announced that new private businesses (not just heavy consumers) will need to seek their own renewable energy sources for self-sustainability, contradicting a recent decree.
Production
To boost production, tariffs on some imported goods and raw materials will be reduced by 50% or entirely. Conversely, tariffs on imported products like rum, tobacco, and cigars will increase.
The government’s 2024 production targets for basic foods such as milk, eggs, meat, and corn were unmet. However, targets for rice, beans, vegetables, and tubers were achieved, albeit way insufficient to meet citizens’ demand.
Regarding the sale of basic rations, Marrero acknowledged product shortages and staggered deliveries. “We can’t sell rice to everyone at once. By the end of October, rice was distributed, but with delays,” he explained.
Importation of Essential Goods
Marrero referenced the ongoing tax exemption for non-commercial essential goods entering through customs—a measure extended since July 2021. Extensions will likely continue in 2025, although Marrero did not explicitly confirm this. He expressed concern about untaxed imports of items that end up for sale. “No measures will apply to medicines,” he clarified.
On purchasing, importing, and selling vehicles, the government approved updates to policies governing the transfer of ownership of motor vehicles, trailers, and semi-trailers.
Telecommunications
The government will implement measures to recover foreign income from telecommunications. Unlimited data packages previously purchased in local currency will be discontinued. “Etecsa has lost foreign currency income, and it needs foreign currency to invest,” Marrero said. New top-up offers in foreign currency will be introduced, unused Nauta Hogar home internet balances will roll over monthly, and roaming fees will now require payment in foreign currency.
Health: A Self-Financed Sector
Marrero promised that the healthcare sector would be self-financed, with 100% of income from the export of medical services allocated to purchasing medicines and supplies. In 2024, medical diplomacy was the Cuban government’s most profitable export service. [Nonetheless, medicines remained in dire shortage for the Cuban population and medical services were increasingly deficient.]
Outlook for 2025
Key challenges mentioned for 2024 included reorganizing and protecting external financial flows, partial dollarization, and alleged intervention in the currency market. A year ago, in December 2023, Marrero falsely claimed the exchange rate was projected externally—a claim previously debunked by El Toque, as it reflects supply and demand on the island.
At the start of his speech, Marrero blamed part of the crisis on the usual culprits: US sanctions and external factors. “Lift [the sanctions] and put us to the test,” he declared.
Beyond the propaganda, the immediate outlook remains grim, even for the government itself. Total foreign currency income fell short, and foreign investment did not meet expectations. In recent years, it has become almost traditional for appointed President Miguel Diaz-Canel to claim the following year will be better. Marrero predicted 2025 would bring “greater challenges.”
The possibly most severe economic, social, and human rights crisis in 60 years has apparently diminished the traditional government optimism.
First published in Spanish by El Toque and translated and posted in English by Havana Times.
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