The Cuban economy on the agenda of the Council of Ministers in February

Amidst the serious situation affecting the Cuban economy, at the last meeting of the Council of Ministers in February, Miguel Díaz-Canel could only emphasize the need to "implement the urgent transformations, the most necessary ones, that must be made to the economic and social model." More or less the same as always, but now the situation does not allow for delays.

The irresponsibility in managing the economy cannot be greater. In the face of the imminent humanitarian crisis striking the Island irreparably, Díaz-Canel can only think of insisting on "transformations in business autonomy; municipal autonomy; resizing the state apparatus, the government, and institutions; national food production; municipal balances; changing the energy matrix, which involves not just renewable sources but everything related to national crude oil; exports, linking them with the flexibilities approved for foreign direct investment; leveraging economic partnerships between the state and private sectors, especially at the municipal level; and promoting business with Cubans residing abroad."

But really, is this what matters right now in an economy suffocated by a lack of energy, the genuine impoverishment of the population, and the depletion of infrastructure? Not at all. Díaz-Canel is mistaken if he thinks that his agenda can achieve "the macroeconomic stabilization of the country, increase foreign currency revenues, and develop domestic production, with an emphasis on food." It's hard to believe he has forgotten the resounding failure of the Tarea Ordenamiento implementation, and that he is now pursuing the same approach again.

Under such conditions, the Cuban communist leader identifies two culprits in the current situation.

First, companies, because it is said that they do not take advantage of business autonomy, but the truth is that the control exercised by the regime over economic activity remains detrimental and does little to help achieve this objective.

Secondly, the municipalities, which he mentioned are not taking advantage of the opportunities that have opened up to them, some of which are quite absurd, such as "managing foreign direct investment; managing their own closed currency schemes; managing economic partnerships between the state and non-state sectors; designing and proposing their local production systems; and managing investments with Cubans residing abroad." Municipalities managing exchange rates, foreign investments, or economic partnerships. Incredible.

That Díaz-Canel places companies and municipalities in the crosshairs of Cuban communists in the current context, demanding from them roles that they do not have or do not know how to fulfill, is a negative situation, especially in times of high demands like the present. And it is primarily a serious irresponsibility.

There is a sense that Díaz-Canel wants to drag everyone into the absolute failure impacting the economy. Thus, when he says that “we all need to contribute to national production, we all need to promote food production, we all need to contribute to macroeconomic stabilization, to generate more foreign income for the country, more exports, a better utilization of productive capacities, the realization of the energy matrix change, and a proper relationship between the state and non-state sectors,” he is merely redistributing costs and responsibilities.

There is no more absurd way to waste time. During the meeting of the Council of Ministers, information was presented regarding the results of the update to the government program, following the implementation of the agreements from the XI Plenary of the Central Committee of the Party and the last session of the National Assembly of People's Power. It maintains its 10 general objectives, only modifying some of its specific objectives, the actions to be taken, and the indicators and targets that will measure them.

In short, the only noteworthy aspect of this process has been the change of the document's name to “Economic and Social Program of the Government for 2026” (previously called “Government Program to Correct Distortions and Revitalize the Economy”), which is expected to be made public this March and is intended to be updated annually. This is what the Cuban communist leaders are focused on—renaming documents that are of no use while the country collapses.

At this point, the report on the economic situation in January was presented by the Minister of Economy and Planning, Joaquín Alonso Vázquez.

The data is alarming, to say the least. There are hardly any figures or indicators, but the state of the economy is very serious.

Goods exports are not being fulfilled, except for products such as honey, machine-rolled and twisted tobacco, lobster, rum, and biopharmaceuticals, which do meet the expected commitments. Insufficient income for purchases abroad is the true essence of the embargo.

The service exports related to the Health sector approached 100%, and telecommunications exceeded expectations, but he mentioned that the tourism figure stood at 85%.

With this information, the self-financing schemes in foreign currencies, of which 86 have already been approved in sectors such as transportation, industry, oil, coal, fishing, tobacco, sugar, food production, and others, continue to face risks and challenges that are being addressed in a precarious manner, and as always, the blame lies with the blockade.

It was reported that agricultural productions do not meet the demands of the population, are insufficient, and do not cover the expected deficits of imported food outlined in the plan. This is an official acknowledgment of the disaster in the economy, which was also attributed to the blockade.

Regarding inflation, it was reported that prices at the end of January increased by 0.67%, but the annual index of 12.5% remains elevated due to an excess of liquidity and a deficit in the supply of goods and services as a result of the management of the government budget.

When referring to social assistance, the minister provided the usual statistics that surprise most Cubans, such as “178,666 families are being supported, encompassing 303,298 beneficiaries; 63,788 mothers with three or more children in vulnerable situations are being assisted; and social transformation actions are underway in 1,249 communities.” The general numerical data is always present, but there is never an evaluation of what these public spending actions truly mean.

Regarding the economic plan approved for this year, the minister simply stated that "it is the minimum that can be achieved," highlighting that central planning is caught in a serious crisis from which it does not know how to escape, except through the tedious resort of provincial Party plenums and meetings with provincial councils, which were held "to set new commitments." Ultimately, a waste of time.

Regarding the issue of the decentralization of powers to the municipalities, a process that is being pursued rapidly, Alonso Vázquez stated that “in this first semester, we can transfer to the municipalities the authority to approve non-state economic actors,” and they are working “on the approval of state-run small and medium-sized enterprises at the municipal level, and in a subsequent step, the creation of new companies.” The process of establishing the necessary small and medium-sized enterprises remains under the central control of the regime.

Regarding the matter of the change in the energy matrix, the Minister of Energy and Mines, Vicente de la O Levy, stated what is evident and that "the progress of municipalities in developing their complete transition strategy is still slow. While actions are being taken (such as providing panels to doctors, teachers, and children who depend on electricity, among others), the municipality must have a sustainability strategy with its own resources." He cited as an example that "there are nine municipalities that already have a design in place, but we need to continue making progress." Indeed, nine is a very limited number.

On the State Budget, the Minister of Finance and Prices, Vladimir Regueiro Ale, addressed the compliance with the indicators outlined in the Government Program set for the economic year of 2025, and described “the good performance in the approved subsidies in the economy, in tax collection, and in the positive balance of the current account.” The origins of the unbearable tax pressure and public spending in Cuba.

It has been reported that local budgets continue to show a surplus, due to exceeding the expected revenues, and all provinces are improving their budget results, with Artemisa, Havana, Mayabeque, Matanzas, and Villa Clara all achieving surpluses. This situation is what defines Díaz-Canel's obsession with intervening in municipal autonomy.

In this regard, the Minister of Finance and Prices stated that since 2021, the State Budget laws have mandated the allocation to municipalities of part of the surplus from the transferred revenues of the previous year, to be used for territorial development, in line with the Program for Strengthening Local Budgets. In 2025, the most recent precedent, this measure benefited 111 municipalities.

A territorial income distribution system that has notable negative effects on effectiveness and efficiency. The reason is that the resources allocated for exceeding ceded income are transferred to the bank accounts of territorial development for each municipality, along with the collections from the Territorial Contribution, so that by 2025, 141 municipalities exceeded the ceded income plan; in nine provinces, over 80% of their municipalities exceed their respective income plans. But then, what happens to the remaining 20% that do not exceed or come close? The system will end up creating first-class and second-class Cubans based on their area of residence; this is what communist municipal reforms lead to.

The leaders are mistaken in suggesting that with this system “municipalities will have a greater amount of financial resources to fund projects and actions approved in the Territorial Development Strategies; and this will encourage local governments to manage their revenue plans more effectively,” when there are still municipalities that do not see this improvement and lag behind.

Regarding the execution of the State Budget for 2026 as of the end of January, the official explained that the deficit is lower than planned and, consequently, the current account result is positive and exceeds projections. There is no doubt that Cubans are experiencing the harsh reality of this adjustment undertaken by the leaders.

The Council of Ministers also discussed the regrettable phenomenon of payment chains, measured by "the state of overdue accounts receivable and payable at the end of the year 2025," an issue that the regime has been trying to correct for years, but has not succeeded, mainly because it is well known that state intervention in the economy is what creates these distortions.

The meeting finally addressed the draft decree "For the Strategic Management of Territorial Development," which would repeal the one approved in 2021, as well as the results of the National Employment Survey 2025 and the outcomes of the Development and Business Program of the Special Zone of Mariel by the end of 2025. Oh, but does Mariel still exist?