Wednesday, July 20, 2016

Cuba - Where is the Money?

Cuba: Where is the Money? / Iván García

Iván García, 18 July 2016 — Two retirees, a strolling detergent vendor
and a vacationing doctor, kill time in a park in south Havana, debating
the surprising Portuguese victory of Cristiano Ronaldo in the European
Cup. They also comment on the Regime's new austerity measures, which
presage another season of "skinny cows" [shortages].

Neither the shade of a carob tree nor a soft breeze relieves the
sleep-inducing heat of July. When it seems that the topics of
conversation are exhausted, a grey-haired man, a now-retired civil
engineer, asks: "Does anyone know where the money in Cuba is going? And
what the Government does with the millions of dollars it receives from
family remittances?"

No one has an answer. On the Island, the topics of hard-currency income
and defined expenses are State secrets. It's supposed that in a normal
country the government officials offer this information to its citizens.

But Cuba isn't a normal country. It's an anachronistic autocracy ruled
by the military and a gang of friends who, 57 years ago, descended from
the Sierra Maestra promising to restore the Republic and rescue democracy.

Neither one nor the other happened. For decades, the calculations on the
Island have never added up. Hypothetically, taking as a reference the
economic growth beginning from 2000, the national economy has shown a
numeric chain of progression in its GDP that not even the so-called
Asian tigers have achieved.

If we add up the growth in GDP of the last 16 years — which in some
years was greater than 10 percent — we arrive at a simple conclusion: If
we believe the official report, Cuba has been the nation that has grown
the most on the planet.

Into what accursed black hole has this "growth" fallen? A specialist I
consulted bored me with figures and macro-economic data. And finally, as
always, he blamed the Yankee "blockade."

Okay. So we can't have highways like those in Germany, or as many cars
as the United States or a State of Well-being like Norway. But according
to Eduardo, an ex-official of foreign commerce, "from the concept of
exporting products and services, [and the receipt of] donations and
family remittances, the Government, each year, brings in around 14 to 16
billion dollars."

"So, where is the money?" I asked him. His answer is an invitation to do
the math.

"In 2015, Cuba earned 2.7 billion dollars from tourism. Although the
exact figures for the export of medical and professional services is not
known, it's calculated that it must be above 9.0 billion dollars. The
exports of nickel (we're going to discount sugar, since its production
has been rickety for five years), tobacco, coffee, shrimp, vegetal
charcoal, bee honey and other sectors, would round off to some 1.5
billion dollars. And as far as remittances, 3.0 billion. The result adds
up to some 15 billion dollars," emphasizes the ex-official.

But it doesn't add up. The State earns hundreds of millions of pesos in
taxes just on the more than 500,000 private entrepreneurs. Add the tax
on cigars and alcoholic drinks, the silent tax on the salaries of State
workers and the tax — between 200 and 300 percent — on products that are
sold in convertible pesos in the dollar stores.

To all these taxes we must add the petty milking of the pockets of Cuban
emigrants, who must pay hundreds of dollars in order to renew their
passports, the inflated price of flights from Cuba and the abusive
customs fees. And although this past March the Cuban foreign minister
announced that the 10 percent penalty on the U.S. dollar would be
eliminated, this "revolutionary tax" once decreed by Fidel Castro
continues in force.

Nor is this the only way of taxing hard currency that the Government
has. If a relative abroad sends a package that weighs more than one and
one-half kilograms, there is a tax established by the General Customs of
the Republic, and when you go to pick it up at the post office, you have
to pay 20 Cuban convertible pesos [roughly $20] for every kilogram over
that weight. A veritable robbery.

Being conservative, the sum total of all these taxes in both monies
surpasses 20 billion pesos. And I believe I'm cutting it short.

And the expenses? Of course, as in every country in the world, the three
hungry lions that devour an important part of the GDP are education,
public health and defense.

But since Raúl Castro assumed power in 2006, few new schools have been
built, and the existing ones are poorly repaired. Salaries for
professors and teachers don't exceed 20 dollars per month.

Healthcare is self-financed from the export of medical services. The
amount of money it generates permits the design of an efficient health
system. But it doesn't happen that way in most of the hospitals. Some
well-equipped clinics exist for ministers, high-ranking military
officers and foreigners.

But the majority of hospitals and polyclinics need thorough repairs, and
there's a deficit in the supply of equipment and medications. A doctor
earns a salary equivalent to 60 dollars a month, and many live in
precarious conditions.

For 27 years, the Government hasn't invested in buying combat weapons.
But it wastes an enormous sum maintaining the colossal apparatus of
repression and social control. The Regime never offers details about this.

The hypothetical expenses for defense, education and public health can
reach the sum of 6 billion dollars, another 2 billion to buy food and
some 5 billion for investments in tourism and industries that generate
hard currency.

For 10 years, General Raúl Castro's administration hasn't spent its
millions on public works or on the construction of housing. Any serious
calculation that would be done would always reveal a surplus.

Where does all this money end up? There are two possible scenarios. The
evil-minded one is that it goes into a Swiss bank account or a fiscal
paradise. If we give the Government the benefit of the doubt, we can
suppose that a good part of the money goes to create an important
reserve of hard currency.

Not included in the national budget is the resale of some 25 percent of
the petroleum sent by Venezuela to Cuba, which can reach around 8
billion dollars a year.

With the income from exports that the Government admits it has, and the
studies on the income from family remittances, about which the Regime
never informs us, it's not understood how it spends 1.9 billion dollars
a year to guarantee the annual supply of petroleum.

Nor can it evade the issue of donations made by millionaires from Middle
Eastern countries for renewing the networks of aqueducts and sewers, and
credits from China, Russia and other countries for constructing
industries, hotels or golf courses.

Cuba, financially speaking, has achieved considerable guarantees. In
spite of the embargo, since 17 December 2014, after the diplomatic
renewal with the United States, a dozen nations have forgiven a
substantial part of its debt.

Like the retired civil engineer, many Cubans wonder what the Cuban
government is doing with the money. Any hint would be very valuable.

Diario las Américas, July 16, 2016

Translated by Regina Anavy

Source: Cuba: Where is the Money? / Iván García – Translating Cuba -

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