Tuesday, November 16th 2010 – 22:40 UTC
Cuba to further open its economy and eliminate double currency system
The Cuban government admitted it will have to amend several laws and
decrees before implementing a plan of updating the Socialist economic
model, the official Granma daily reported this week. This includes
eliminating the double currency system.
"If state companies loose money they will be closed" said Minister
Murillo "If state companies loose money they will be closed" said
The announcement follows the government's release of a document on
"economic and social guidelines" intended to lead the island's economy
out of its current shambles and lack of production to a situation where
it can cut its ever growing dependency on imports from food and the most
basic elements to energy, plus attract foreign investments.
The plan was presented by Cuban president Raul Castro with the support
of the dominant Communist party of the island which debated for several
President Castro warned delegates about the delicate situation of Cuban
production and recalled his recent statement that if Cuba does not fix
its floundering economy the whole revolution will "fall off the cliff".
During the meeting Economy and Planning Minister Marino Murillo
mentioned as an example of productivity agricultural cooperatives which
are allowed under current legislation but are not extensive to
cooperatives in industrial or service sectors.
"There are things which do not work currently under state control
formulas, and we should make proper laws for them," Murillo said.
Participants also discussed the way to unify the country's currencies.
Cuba has two currencies: the Cuban convertible peso (CUC), equivalent to
1.08 U.S. dollars, and the national peso (CUP), valued only 1/24 of the
CUC, or 4 US cents.
The Economy Ministry said restructuring of the economic model should
proceed by abandoning the dual currency. But "the dual currency will be
solved only by producing efficiently for the real economy" warned Murillo.
On the liquidation of state enterprises with repeated losses Murillo
said "it is not possible to keep a company with losses for 10 years and
then have the state, the rest of the community pay for the bloated
However he was quick to point out that "we are not reforming the
economic model as some foreign media want to see".
Since taking office in 2007, Castro has repeatedly called for
restructuring of the Cuban economy and better use of human and material
resources to improve the economy which also demands "improved work
habits" and "less corruption".
The first phase of the new measures include relocation of half a million
government workers and the opening of small private business after 42
years of state control over the economy.