Economist Pedro Monreal issued a stark warning on Tuesday about the Cuban government's ambitious plan of 176 economic measures. He criticized the lack of adequate fiscal backing to sufficiently support even the vulnerable citizens that the government itself acknowledges.
According to official statistics, 1.365 million people are identified as vulnerable in Cuba, yet by 2025, the budget was only sufficient to aid 303,000 individuals.
In a post on social media platform X, Monreal highlighted the vast gap between the resources allocated for social assistance and the officially recognized needs. He questioned the potential of these 176 measures to drive economic recovery while millions of Cubans continue to experience declining living standards.
The Legacy of Past Economic Reforms
Monreal drew parallels between the new economic measures and the previous Tarea Ordenamiento initiative. "Those who, in 2020, defended Tarea Ordenamiento as essential for reviving the national economy now claim that it can be rescued through these 176 measures," he remarked.
The economist pointed out the stark contrast between the government's promises and the harsh reality. Tarea Ordenamiento, introduced in 2021, promised better conditions for state workers but ultimately resulted in rampant inflation and a significant loss of purchasing power.
A Fiscal Gap Beyond Reach
The central argument Monreal presents is the significant discrepancy between the current social assistance resources and the needs identified by the government. The latest figures show 1.365 million individuals and 1.004 million households in vulnerable situations, yet by 2025, only 303,000 people and 179,000 households received aid, amounting to 5.396 billion pesos, which is merely 0.43% of the GDP.
To extend this aid to all recognized vulnerable populations would require increasing spending by approximately 4.5 times the current amount. Monreal estimates this would necessitate around 24.3 billion pesos, pushing the budgetary effort to about 2% of the GDP—a level he deems unsustainable.
The gap widens when considering the UN's estimate, which identifies 4.2 million people in Cuba with humanitarian needs, representing 44.5% of the population. Addressing such a large demographic would demand spending close to 6% of the GDP, according to Monreal's analysis, making the official figures appear overly optimistic.
The Question of Financing Social Assistance
Unveiled by Miguel Díaz-Canel on June 11 and later confirmed by the National Assembly, the 176 measures include a proposal for state and private entities, both domestic and foreign, to contribute to "community-level social responsibility." However, Monreal points out the absence of quantitative estimates on potential contributions from these sources, as well as a lack of clarity regarding savings from the removal of universal subsidies.
This uncertainty gains significance given the substantial resources needed to broaden social coverage to all vulnerable individuals acknowledged by authorities.
Investment Priorities: Tourism vs. Health and Agriculture
Monreal's critique of social disparities aligns with a long-standing investment policy that has favored sectors like tourism. In 2024, Cuba allocated 37.4% of its total state investment to tourism, equating to 36.843 billion pesos, compared to 1.977 billion for public health and 2.645 billion for agriculture.
The investment in tourism was nearly 14 times greater than in agriculture and over 18 times higher than in public health. This investment strategy is largely directed by GAESA, a military conglomerate heavily involved in strategic sectors of the Cuban economy and subject to ongoing U.S. sanctions due to its role in funding the regime amid widespread economic hardship.
Monreal's Criticism of the New Economic Package
Monreal has persistently criticized the 176 measures since their announcement, labeling them as a "monstrous" or "deformed hybrid," and warning about the ambiguities in their implementation. He condemned one measure as "anti-worker."
In August, merely two months after the package's introduction, several provinces reinstated price caps, contradicting the purported goal of economic flexibility associated with some of the measures.
"The official narrative emphasizes the interconnectedness of the 176 measures but remains vague about their sequence and the social impacts of an asymmetric application. 'Unleashing productive forces' is a future promise requiring time and a production priority. Meanwhile, widespread poverty is experienced daily," Monreal wrote.
The economist further cautioned that delaying measures to curb social deterioration "would increase the risk of exacerbating" the situation and further erode public trust in the regime's economic promises.
Understanding Cuba's Economic Challenges
What are the 176 economic measures in Cuba?
The 176 economic measures are a set of policies announced by the Cuban government aimed at addressing economic challenges. They include proposals for increased community responsibility and changes to subsidy systems, but have been criticized for lacking clarity and sufficient fiscal support.
Why is the Cuban government criticized for its economic policies?
Critics argue that the Cuban government's economic policies are insufficiently funded and fail to address the basic needs of the population. The prioritization of sectors like tourism over essential areas such as health and agriculture has also been a point of contention.
What challenges does Cuba face in expanding social assistance?
Cuba faces significant fiscal challenges in expanding social assistance, with current resources falling short of meeting the needs of the vulnerable populations. Addressing these needs would require a substantial increase in budget allocation, which is currently deemed unsustainable.