Cuba implements 'war economy' to tackle crisis and curb inflation
The Cuban government has announced plans to strengthen price controls and combat tax evasion. According to Reuters, this move is seen as a desperate attempt to address the budget deficit and inflation under measures labeled a "war economy" by the authorities.
6:53 AM EDT, July 5, 2024
"We are here with the conviction that all of us are here to save the revolution and to save socialism," said President Miguel Diaz-Canel during a government meeting in Havana, as quoted by "Granma," the official newspaper of the Central Committee of the Communist Party of Cuba.
Major crisis in Cuba
The economic crisis in Cuba stems from a combination of factors, including the effects of the COVID-19 pandemic, tightened sanctions imposed by the USA, and a state-dominated model hindered by bureaucracy, mismanagement, and corruption, as assessed by Reuters.
The social and economic situation in the Caribbean country has been considered the worst since the revolution led by Fidel Castro in the 1950s. In the last two years, a record number of residents have fled from Cuba. Electricity shortages further hamper life and economic activity on the island.
First Deputy Minister of Economy and Planning Mildrey Granadillo de la Torre explained that the measures announced by the government in Havana aim to address macroeconomic imbalances, increase foreign currency flow, and stimulate domestic production, with a particular emphasis on food production.
The report from the government meeting in the official Cuban media described the difficult economic situation but did not provide specific data. It also did not state when the announced measures will be implemented.
The Cuban authorities lifted the ban on private businesses in 2021, which had existed since the Castro revolution. However, supporters of the Communist Party argue that price disparities have contributed to the sharp rise in inflation.
