The ruler Miguel Díaz-Canel defended the dollarization of the economy in the National Assembly as a solution to the deep economic crisis facing the island.
"To navigate this situation [of crisis], we have been compelled to accept the partial dollarization of the economy," he euphemistically stated on Friday during his remarks at the closing of the National Assembly's session period.
He also admitted that this situation further deepens social inequalities in the country.
"What undoubtedly, in some way, benefits those who hold certain capital resources or receive remittances, is that it leads to an unwelcome widening of the gaps that define social inequality," said the leader, he added.
The leader of the regime acknowledged the bleak situation in which Cubans live, a reality that has worsened during his tenure, without taking any responsibility for it.
“The high dependence on imports and the cross-cutting effects caused by the instability of the national electricity system lead to a significant paralysis or slowdown of economic activity, which results in a deficit in the supply of goods and services to the population and a contraction of exports,” he described.
"Consequently, the importation of food for the basic basket and the fuels necessary for electricity generation and the functioning of the economy is limited," he continued.
Finally, he referred to “the limited availability of medicines and the decline in transportation services, solid waste collection, and water supply, among others, which shape the difficult situation our people face every day.”
To alleviate inequality, Díaz-Canel stated that "we need to enhance the effectiveness of the state's redistributive social function," without clarifying how he plans to implement something in which his administration has so far faltered.
Dollarization of the economy
In February, the regime's decision to move towards the partial dollarization of the economy sparked an intense debate about its political and economic implications.
While authorities defend the measure as a necessary step to improve the availability of foreign currency and control its illegal circulation, critics such as economist Pedro Monreal argue that this process is more about a strategy of political control than an economic necessity.
Since the official announcement in the National Assembly of People's Power (ANPP), Prime Minister Manuel Marrero Cruz justified the partial dollarization by stating that "currencies are being moved illegally in society" and that the decision aims to allow the government to have control over them and utilize them for the welfare of the population.
However, Monreal stated that this policy is not an inevitable necessity, but a choice made by the government to consolidate the economic power of the State and exclude other market players.
In response to the desperate need for foreign currency, the government has implemented several emergency measures, such as the increasing opening of stores that operate exclusively in dollars and the sharp increase in telecommunications service rates.
Frequently Asked Questions about Dollarization and the Economic Crisis in Cuba
Why does Miguel Díaz-Canel support the partial dollarization of the Cuban economy?
Miguel Díaz-Canel defends the partial dollarization of the economy as a necessary measure to address the economic crisis that Cuba is experiencing. According to him, this decision aims to improve the availability of foreign currency and control its illegal circulation. However, this policy has been criticized for increasing social inequalities, benefiting those who have access to dollars, whether through remittances or earnings in foreign currency.
How does dollarization affect social inequality in Cuba?
Dollarization deepens social inequalities in Cuba by benefiting those who have access to foreign currency, such as individuals who receive remittances. This widens the gaps between those who can shop in stores that only accept dollars and those who rely on the Cuban peso. The majority of the population, lacking access to foreign currency, finds itself in an increasingly vulnerable position.
What are the main criticisms of the economic management of the Cuban government?
The main criticisms of the Cuban government's economic management include administrative inefficiency, corruption, and a lack of investment in strategic sectors such as agriculture and energy. Furthermore, it is noted that the economic measures implemented have not had the expected impact, leading to widespread deterioration in the quality of life and an increase in poverty and inequality.
What role does the U.S. embargo play in Cuba's economic crisis according to Díaz-Canel?
According to Díaz-Canel, the U.S. embargo is the main cause of the economic crisis in Cuba. The ruler emphasizes that the sanctions imposed by the United States have worsened the island's economic issues. However, he also acknowledges that there are internal failures that have contributed to the deterioration of the economic situation.
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