CUBA: Another minister dismissed
Thank you for reading LatinNews' chosen article from the Latin American Weekly Report - 30 May 2024
Cuba’s minister for foreign trade & investment (Mincex), Ricardo Cabrisas, has become the latest cabinet member to see the door. As with the departure in February of now-former economy minister Alejandro Gil (2018-2024) [WR-24-05], Cabrisas’ dismissal is the latest suggestion of strife at the top as a result of the economic crisis afflicting the island. This stems from factors including the continued impact of the coronavirus (Covid-19) pandemic, devastation wreaked by hurricanes, US economic sanctions, and the dire state of energy infrastructure.
On 23 May the Partido Comunista de Cuba (PCC) government led by President Miguel Díaz-Canel announced the departure of the 87-year-old Cabrisas, who retains his other post as deputy prime minister. Named to the post in April 2023 supposedly for his experience and management capabilities [WR-23-17], Cabrisas has been replaced by his deputy, 53-year-old electronic engineer Oscar Pérez-Oliva Fraga, who has over 15 years’ experience in the foreign trade sector, having held posts such as director of business evaluation for the Mariel special development zone (ZED Mariel).
Two days before Cabrisas was dismissed, Cuba’s minister of finance & prices (FFP), Vladimir Regueiro Ale, provided the latest update on the state of the economy, which the latest (9 May) forecast from the Economic Commission for Latin America and the Caribbean (Eclac) projects will grow just 1.3% in 2024, well below the 2.1% average for Latin America & the Caribbean.
Speaking to TV programme Mesa Redonda, Reguerio admitted that the government was struggling to address the fiscal deficit, which an earlier Eclac report estimated remained at double-digit levels in 2023 (around 10% of GDP). He also admitted that government income this year is insufficient “to guarantee the expenses that must be incurred” to cover the 63% of expenses intended to finance research and science programmes, health, education, social assistance, and other social programmes. Regueiro also acknowledged that the government had failed to achieve its objective of reducing inflation, which was running at 32.33% in April in annual terms – in turn a tacit admission of the failure of the economic stabilisation plan presented at the end of last year as part of efforts to boost Cuba’s flailing economy (see our sister publication Economy & Business [EB-24-01] for more details).
Cuba’s private sector
In 2021 the Cuban government legalised the creation of small- and medium-sized enterprises, although cuentapropistas (self-employed small entrepreneurs) have been legal for some years. Speaking at a special briefing on 28 May, an unnamed senior US State Department official said that with over 11,000 private businesses registered – operating in diverse fields from food distribution to construction and auto repair – Cuba’s private sector is now responsible for nearly one-third of all employment on the island.
US seeks to boost Cuba’s private sector, small businesses
Against this continued backdrop of economic strife, on 28 May the US Department of the Treasury’s Office of Foreign Assets Control (Ofac) announced it was amending regulations as part of efforts to support Cuba’s nascent private sector – a clear bid by the US administration led by President Joe Biden to boost economic activity in Cuba as a means of addressing migration.
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The new measures authorise “independent private sector entrepreneurs who are Cuban nationals to open, maintain, and remotely use US bank accounts” and grant them access to services such as social media and collaboration platforms. The measures also re-authorise ‘U-turn’ transactions (fund transfers that originate and terminate outside the US where neither the originator nor beneficiary is subject to US jurisdiction). This authorisation had been revoked in 2019.
The new guidelines, which also amend terminology to clarify that prohibited Cuban officials and prohibited PCC members are excluded from benefitting from these actions, are in line with a policy first announced in May 2022 by the Biden administration of easing restrictions on Cuba, although hopes for a rapprochement akin to that which ensued under Barack Obama (2009-2017) ultimately have failed to materialise.
Writing on social media, Cuba’s Foreign Minister Bruno Rodríguez dismissed the new measures as “limited”, decrying Cuba’s permanence on the US list of ‘State Sponsors of Terrorism’, to which it was re-added in 2021 under Biden’s predecessor, former president (2017-2021) Donald Trump.
Removal from one list
The changes announced by the US Department of the Treasury’s Office of Foreign Assets Control (Ofac) follow the US’ recent removal of Cuba from a short list of nations considered as ‘not fully cooperating’ (NFCC) in counterterrorism efforts and endeavours. However, Cuba remains on the US list of ‘State Sponsors of Terrorism’ – a major complaint of the Cuba government. The designation subjects Cuba to sanctions that penalise persons and countries engaging in certain trade with Cuba and restricts US foreign assistance, among other things.
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