Greater investments despite economic slowdown

The Cuban government is setting out to strongly increase investments that generate development, despite planning a GDP growth of barely 2 per cent.

Tourism continues at the head of the sectors with planned investments in 2016.

After confirming a moderate 4 per cent growth of the economy in 2015, for the new year the Cuban government is aiming at a more restrained increase of the gross domestic product (GDP) of 2 per cent, which it defined as a very tense goal.

Economy Minister Marino Murillo considered that it was a rational plan according to the economic conditions of the country and the situation of the world markets, which he described as critical. Despite the extremely unfavourable environment, he considered it was possible “to take advantage of the tendency of the low prices on the world market.”

 

When presenting the Economic Plan for 2016 to the National Assembly of People’s Power, the also vice president of the Council of Ministers insisted on the need to increase efficiency in the use of hard currency and resources, and urged reducing the consumption indices to favour saving, fundamentally in imports and energy.

 

Just in food, Cuba will import 1.94 billion dollars, a slightly lower amount – in 25.5 million dollars – to the purchases made in 2015.

 

 The Cuban government has set itself the goal of a barely 2 per cent GDP growth this year.

The Cuban government has set itself the goal of a barely 2 per cent GDP growth this year.

The saving proposed by the government in the consumption of energy will be greater. To face the estimated setbacks, the authorities are planning a 5 per cent reduction in the spending on energy through the resource of efficiency. It is also orienting a proportionally greater reduction in the consumption of energy carriers in the administrative activity and in services. The authorities have adopted the philosophy of keeping an eye on efficient consumption in services and prioritising the allotment of resources to activities that generate wealth.

 

According to the plan, the country will consume 8.4 million tons of oil this year, almost half for power generation.

 

Despite the economic slowdown and limitations, the government has programmed strong investments for this year: more than 7.841 billion pesos, a figure that surpasses by 13.5 per cent that of 2015. The majority will be directed for sectors and activities vital for the country because of the generation of hard currency. The tourism installations, which will absorb 1.3 billion pesos, rank first. Energy and oil, agriculture and livestock, measures to face the drought, telecommunications and the infrastructure of the Mariel Special Development Zone also stand out.

 

Of these investments, 58 per cent are for programmes for the country’s development, Murillo reported to the deputies. He said that the planned investments “have their own sources of financing, the majority foreign.” Though such a financing implies debt, the minister warned that “one cannot be afraid. There’s no way of thinking about development if you don’t invest.”

One of the priorities of the plan points to the reduction of fuel consumption through a more efficient use of transport.

One of the priorities of the plan points to the reduction of fuel consumption through a more efficient use of transport.

 

It has been planned that around 50 per cent of the imports in 2016 will be made through credits and this demands working for a sustainable indebtedness, which is no more than being able to pay with the incomes from the debts incurred, said Murillo. Credits must be rational so that the debts are sustainable, he said. “A credit asked for has to be paid.”

 

The Cuban outlay for the payment of debts should stand at around 5.3 billion dollars.

 

In the case of investments, he said, this implies being able to pay them with theiryields and for this it is necessary to achieve what is previewed in the feasibility studies and meet the execution timetables.

 

The government is planning the greatest growth of the economy in 2016 in the sectors of construction; hotels and restaurants; agriculture, livestock and forestry; transport, warehousing and communications; electricity, gas and water; and the sugar industry. (2016)

 

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