Cuban Parliament: New rules of the game

HAVANA — After a weeklong debate, the final session of the 2014 Cuban Parliament ended with the approval of three major issues: the start of the normalization of relations between Cuba and the United States, the Economic Plan, and the State Budget Law for 2015.

Last Friday (Dec. 19) the deputies unanimously approved a declaration of support for the allocution by President Raúl Castro that day, when he dealt with the new ties between the two governments and the release of the antiterrorists imprisoned in the U.S., Gerardo Hernández, Ramón Labañino and Antonio Guerrero, as well as the release of the U.S. subcontractor Alan Gross, detained on the island.

In his speech at the closing of the National Assembly, the Cuban president referred to his U.S. counterpart, saying: “We share the idea that a new stage can be opened between the United States and Cuba, which begins with the reestablishment of diplomatic relations.”

Castro also reiterated Cuba’s willingness to cooperate in multilateral and bilateral discussions about dangers that require collective and effective humanitarian responses that shouldn’t be politicized. Later, he confirmed his attendance to the Summit of the Americas, where he will again cross paths with Barack Obama.

The Cuban economy in 2014

The Commission on Economic Affairs of the National Assembly of Popular Power reviewed the nation’s economy for the past year. Here are some of the most interesting data put on the table:

• In 2014, the Gross Domestic Product was 1.3 percent, a figure below the 2.2 percent originally planned.
• So far, 498 cooperatives have been approved, of which 329 have been formed. Three hundred others are being evaluated.
• Four hundred and seventy-six thousand persons hold licenses as self-employed entrepreneurs. A trend of slow growth is being recorded.
• As part of the improvements in the nation’s domestic trade, 12,988 gastronomy units [eateries] are being turned over to non-State management. The turnover already has affected 3,570 establishments, 27 percent of the total.
• Tax revenues associated with non-State management (includes self-employed entrepreneurs, non-agricultural cooperatives, farm producers and other natural persons) will total 2.84 billion pesos, showing a growth of 29 percent in comparison with the revenues collected in 2013.
• The budget execution for 2014 will show a fiscal deficit of 3 billion 406 million pesos, i.e., 4.1 percent of the GDP, lower than the figure approved in the State Budget Law.
• It is estimated that the Total Expenditures will rise to 49.9 billion pesos, 2.7 billion pesos higher than the figure approved by law, for the reasons mentioned at the start. Structurally, 95 percent corresponds to Current Expenditures, 72 percent of which are assigned to budgeted activities.

The public agenda

In other commissions, the parliamentarians analyzed some of the more routine issues that affect the Cuban population:

• An analysis was made of life in the mountains, where a lamentable situation persists among most of the medical clinics, due to breakdowns in the communications plants, among other problems. Many of the roads are in bad condition and areas of important cultivation, such as coffee, have been abandoned. These situations contribute to the exodus of farmers from the rural areas, according to the commissions on National Defense and Agricultural Foods.
• The prices of transportation in its new modalities accounted for the most frequent complaints at the Commission on Attention to Services. The deputy minister of Transportation said that 13 cooperatives linked to transportation had been approved and created. Fifteen are awaiting approval.
• The irregularities in the commercialization and quality of regulated products were also analyzed, without major solutions in sight. The items analyzed included the sale and quality of poultry and soja yogurt, and the scarce availability of replacement parts for electrical cooking utensils.
• The unrestricted sale of liquid gas should be extended in 2015 to the provinces of Artemisa, Mayabeque, Matanzas, Camagüey and Holguín, thence to the rest of the country, depending on local conditions.
• The negative influence of the U.S. blockade, the restrictions of liquidity in the country, and errors made in the past in these areas of the economy were some of the obstacles to the participation of foreign capital in the Cuban economy after the enactment of Law 118 on Foreign Investment, according to the Commission on Constitutional and Juridical Affairs.
• The conditions in the schools for children with behavioral disorders and in the homes for children without familial care, especially issues related to the instability of school attendance, the stipend allotted for activities outside the care center, the lack of shelter for youths 18 and older, and disconformity with the sanctions imposed on families that neglect their children were the issues heard by the Commission on the Care of Children, Youths and Equal Rights for Women.
• A total of 14,426 sources of contamination have been found in Cuba’s water supplies, of which 2,258 directly affect the quality of the water. This problem, discussed in the Commission on Industry, Construction and Energy, turned out to be related to the inexistence of environmental regulations when granting licenses to self-employed entrepreneurs, many of whom dump the residues of their activities into the public drainage system.
• The rise of the price of fertilizers and their containers was described as one of the causes of the high cost of agricultural products, the main reason for debate in the Commission on Agricultural Foods.

Looking to 2015

• Looking to 2015, the Cuban economy is expected to grow by 4 percent, in an effort to reverse the trend to deceleration in recent years.
• The State Budget Law for 2015 projects net revenues of 48.99 billion pesos, a growth of 6 percent in comparison with the estimate for 2014.
• Plans are under way to raise the tax on profits, matching the projected growth of industry in the economic plan.
• Foreign investment will get tax breaks, such as the exoneration for eight years of payment of the tax on profits, on duties during the investment process, and on taxes for the use of manpower, among other breaks.
• Local budgets will benefit with the extension to all municipalities of the territorial contribution toward local development, consistent with Guideline 37. This strategy will have a more visible impact beginning in 2016.
• The expenses projected in the Budget Law amount to 54 billion 854 million pesos, i.e., a 10-percent increase.
• Public Health and Education will be assigned 29 and 24 percent, respectively. The cost of medications will rise by 200 million pesos, due to the application of international prices to the products exported by BioCubaFarma.
• The current transfers of unbudgeted activity are expected to rise by 16.4 percent, compared with 2014. The increase is basically concentrated in the financing for exports and the substitution of imports. Some subsidies are involved.
• In the balance of revenues and expenses, the fiscal deficit is projected at 5 billion 563 million pesos, representing 6.2 percent of the Gross Domestic Product. That amount includes the current deficit of 2 billion 486 million pesos, so measures must be taken to reduce it as much as possible.
• Fifteen billion 54 million pesos are allotted to the financing of entrepreneurial activities, providing increases in the productive processes and the purchases made by farm producers. The increase exceeds 2 billion pesos.
• Two billion 606 million pesos will be allotted to the regulated family food basket, meaning an increase of 256 million pesos.
• Additional financing will be requested for revenues, for a maximum of 6 billion 827 million pesos, which is the fiscal deficit plus the amortization of debts contracted by the Budget in previous periods, amounting to 1 billion 264 million pesos.
• This financing will be covered by the resources available in the Budget accounts, which include the portion of the deficit that was financed but not executed in 2014, estimated at 484 million 400,000 pesos and the emission of Public Debt for 6 billion 343 million pesos, which will be backed by Sovereign Bonds.
• More than 2 billion dollars will be spent in the importation of foodstuffs: milled rice, beans, peas, cooking oil, powdered milk, cereal, etc.
• Productivity must rise by 6 percent and the median salary by 5.8 points. The median salary will be 585 pesos per month.

Sources: The newspapers Juventud Rebelde and Granma / Translation by Progreso Weekly.