Cuban Economy Continues to Grow

President Raul Castro of Cuba speaks on the vital role of the trade union movement in the transformation of the economic situation on the revolutionary Caribbean island nation-state. , a photo by Pan-African News Wire File Photos on Flickr.

Havana. December 20, 2012

Cuban economy continues to grow

• Economy and Planning Minister Adel Yzquierdo presents report on 2012 economic performance

Ivette Fernández Sosa
Granma International

THE Cuban economy should close out the year with growth of 3.1% in its Gross Domestic Product (GDP), considered favorable given the adverse international economic situation and restrictions imposed by the U.S. blockade, according to Adel Yzquierdo, Economy and Planning Minister and Council of Ministers Vice President, in his report to the National Assembly of People’s Power, providing a balance sheet on the country’s economic performance in 2012.

Growth of the GDP, slightly less than the 3.4% planned, was most affected by the failure to complete planned investments, which were 19% below the projection, although 15% greater than in 2011.

Among the reasons for this shortfall, the Minister identified problems related to the lack of a comprehensive approach in the investment process, the absence of supervision, low productivity, poor management of imports, limited personnel and delays in the granting of credits, which led to the paralysis of resources which could have been used for other purposes. Contractual obstacles, incorrect technical preparation of projects and overestimation of works as a result of deficient planning also played a role in the failure to complete planned investments.

Projected goals for several sectors were not met but most areas of economic activity did show favorable progress in comparison to last year. Examples of this pattern include the sugar industry and retail sales of construction materials, agricultural supplies and toiletries.

Other shortfalls were reported in the production of fresh milk, eggs, beans and corn; in tourism; nickel mining and processing; and passenger transportation.

Nevertheless Yzquierdo stated that, in comparison to 2011, the majority of sectors showed growth and expenses for social services were maintained at a level similar to that of last year.

Other data indicates that labor productivity grew by 2.1%. Non-state economic activity increased by 23%, while the state sector declined 5.7%. Electrical consumption in the residential sector was higher than projected, and greater than in 2011, partially as a result of increasing home-based self-employment.

Yzquierdo reported that the 2013 Economic Plan projects a 3.7% increase in the GDP, which is considered acceptable in the present economic situation.

Moreover, significant growth in important areas is expected in 2013, as compared to 2012. Manufacturing and agricultural production should grow by 4%, while a 20% increase is projected for the sugar industry.

Other sectors which must reach greater levels of production next year include construction (with a 20.8% increase projected) and transportation of freight (13%), as well as passengers (10%). Productivity should also increase, as well as the number of workers involved in non-state economic activity. Social services will be maintained within the parameters established in 2012.

Yzquierdo emphasized the need to increase domestic food production and to develop alternatives for animal feed. He explained that the cost of necessary food items has been projected at almost two billion dollars, which implies an expenditure of $300 million more than this year.

Even with contracts signed well in advance, the purchase of items such as soybeans, wheat, corn, and soy flour will require $225 million more next year, given price increases.

Another increase due to greater imports of chick peas and corn will imply an additional expense of 29 million dollars.

Yzquierdo reported that more than $7.7 billion has been projected for investment, the greatest portion of which will be in productive facilities. Priority attention will also be given much needed building maintenance, he said.

Communications expenses reflect the elimination of services previously provided free of charge and moneys have been set aside for those budgeted entities which require support.

According to the Minister, the 2013 plan was conceived on the basis of a more integral approach in terms of monetary and financial equilibrium; purchases abroad were further consolidated; and the strengthening of the country’s wholesale market was projected.