- Development & Aid
- Economy & Trade
- Human Rights
- Global Governance
- Civil Society
Sunday, May 19, 2013
- Rules allowing Cubans to buy and sell cars and homes, and now, to take out loans, are two of the latest steps taken to “modernise” the economy.
Some 500 bank offices throughout the country began receiving and processing applications on Tuesday for loans in Cuban pesos to non-state workers, farmers and people who need to repair or build their homes. Credits also will be available in the future for purchasing personal items. The new credit policy is governed by Decree-Law 289 and other resolutions issued in November that went into effect almost a month later. Until now, only farming cooperatives had access to loans.
The new loan policy is aimed at contributing to the growth of private enterprise, which is supposed to absorb hundreds of thousands of employees slashed from the public workforce.
The total number of self-employed workers, known as “cuentapropistas”, is now estimated at more than 300,000 – twice as many as last year.
The number of licensed trades and activities for cuentapropistas was expanded to 181, and the taxes they pay have been cut.
The new bank loan policy follows the legalisation of the buying and selling of motor vehicles and homes. A decades-long ban on those sales had fed a lucrative black market. The two measures were among the most anxiously awaited by the Cuban population.
“I have to see how the credits work, because I really don’t have anything to start with,” he said. Another man, a plumber who did not wish to give his name, told IPS that he was more interested in the possibility of hiring out his services to state companies.
According to the new legislation, state enterprises can draw up contracts with no financial limits for business dealings with workers in the emerging private sector. The workers must open a checking account, because transactions cannot be done in cash.
As the year comes to an end, popular expectations are focused on the updating of the migration policy announced by President Raúl Castro to parliament in August. “Maybe it will come as a Christmas present,” said Adriana, a young professional with plans to move abroad.
Her hope is that the promised change will involve the elimination of requirements such as the exit permit and letters of invitation, which are obligatory for Cubans who wish to travel for personal reasons. Moreover, the cost of the documents is considered excessive (about 350 dollars).
Changes are also expected in the policy of obligatory loss of residency for those who emigrate. “The fact that you want to live outside of Cuba because of economic or other problems does not mean that you should lose your residency for life,” another local resident, Alejandro Cruz, told IPS.
In that respect, some believe that the Housing Law reform that went into effect in November paved the way, to a certain extent, for migration changes by significantly changing the policy of émigrés definitively losing their right to the ownership of their homes.
Although the state can still confiscate the home of the person who emigrates, it is only a step in the transfer via payment to relatives or others who live in the home.
One of the law’s articles states that “acts of transferral of home ownership are valid, carried out by their owners according to the law, before definitively leaving the country.” The regulation is considered to be a tacit elimination of confiscation.
Many hope that Castro will announce changes to the migration policy during the parliamentary session set for Friday, although the agenda is expected to focus more on an assessment of the economy’s performance in 2011 and projections for 2012.
In that respect, the president announced progress during an expanded meeting of the Council of Ministers in late November. According to the meeting’s official report, economic growth for 2011 was expected to be 2.7 percent, lower than the projected 3 percent.
One reason for the shortfall was low production levels for foods such as beans, plantains, pork and milk, forcing the country to increase imports. “Just to buy powdered milk, it was necessary to spend an additional 15 million dollars,” the official newspaper Granma reported in its summary of the meeting.
According to official estimates, food imports totalled about 1.6 billion dollars in 2011. Imports are expected to decrease in volume in 2012, assuming an increase in domestic production; however, spending is not expected to go down, due to higher food prices on the world market.
Analysts have continuously noted that this was the third consecutive year that Cuba has not suffered from the impact of devastating hurricanes. In 2008, hurricanes caused an estimated 10 billion dollars in economic damages. In that sense, time has been on the side of change.