On Thursday, Miguel Díaz-Canel encouraged Cuban state enterprises to allocate a portion of their profits not only toward salary increases but also to enhance the living conditions of workers and support retirees and vulnerable individuals in the communities where they operate.
This proposal was made during a visit to three production facilities in Havana—the pasta factory La Pasiega, the export-import company Cítricos Caribe S.A., and the Ronera Occidental—according to the Cuban Presidency's report.
Joined by the Minister of the Food Industry, Alberto López Díaz, and the Minister of Agriculture, Ydael Pérez Brito, the leader advocated for companies to use part of their earnings to address social needs.
"Profits shouldn't be allocated solely to salary increases. They should also support workers in areas like housing, food, and other incentives, as well as care for retirees and vulnerable people in the community," stated the official report.
Amid Economic Hardship
The comments come amidst a significant decline in the purchasing power of Cubans. Currently, the minimum pension is approximately 4,000 pesos per month, equivalent to less than 10 dollars on the informal exchange rate, which is insufficient to cover basic food needs.
The financial strain is also affecting the state itself. In June, the government in Granma acknowledged challenges in ensuring pension payments to more than 111,000 retirees, highlighting the fiscal pressures the country faces.
Expanding Enterprise Autonomy
The visit was part of the roll-out of 176 economic and social measures approved in June by the Government and the Communist Party. During the tour, Díaz-Canel emphasized that the new measures would grant state enterprises greater autonomy, including the ability to set certain prices, manage their profits with increased flexibility, establish their compensation systems, directly manage fuel, and import without intermediaries.
The leader also emphasized that employees should be involved in company decisions "from planning to profit distribution," as part of a strategy to build a sense of ownership and curb workforce attrition.
Challenges Facing Enterprises
The visited entities demonstrate the challenges facing Cuba's economy. The pasta factory La Pasiega is currently operating at 80% capacity, producing about 10 tons daily, while transitioning to a state microenterprise model for greater management autonomy.
Meanwhile, Ronera Occidental, known for brands like Legendario, Herencia, and Don Diego, experiences power outages sometimes lasting over eight hours. To mitigate the impact, the company is developing a solar power project. It currently has 150 kilowatts installed and plans to double that capacity to 300 kilowatts to meet a significant portion of its energy demand.
Díaz-Canel's call comes as the government promotes a model that expands the social responsibilities of enterprises. Economic reforms foresee both state and private actors contributing resources to fund community initiatives and social support programs, in an environment marked by the state's budget constraints.
All of this unfolds while the official average salary remains far below the estimated cost of covering a Cuban family's basic needs, a gap that continues to affect the living standards of millions on the island.
Understanding Cuba's Economic Challenges
What is the current minimum pension in Cuba?
The current minimum pension in Cuba is around 4,000 pesos per month, which is less than 10 dollars at the informal exchange rate.
How is the Cuban government addressing enterprise autonomy?
The Cuban government is implementing measures to grant state enterprises greater autonomy, allowing them to set prices, manage profits, establish compensation systems, and import directly without intermediaries.
What challenges do Cuban enterprises face?
Cuban enterprises face challenges such as operating below capacity and dealing with frequent power outages. For instance, the pasta factory La Pasiega runs at 80% capacity, and Ronera Occidental experiences power cuts over eight hours daily.