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The economic crisis in Cuba continues to deepen amid prolonged blackouts, rising inflation, a decline in gross domestic product, and a sustained deterioration of the standard of living.
In this context, the Cuban economist Orlando Freire Santana outlined, in a recent interview with CubaNet, a series of measures that, in his opinion, are essential for guiding the country towards genuine recovery.
With over four decades of experience in state institutions such as the Ministry of Sideromechanical Industry, the Fishing Industry, and the National Office of Tax Administration (ONAT), Freire provides a severe diagnosis of the current economic model and proposes a profound transformation that goes beyond mere adjustments.
The economic crisis in Cuba continues to deepen amid prolonged blackouts, rising inflation, a decline in gross domestic product, and a sustained deterioration in living standards. In this context, Cuban economist Orlando Freire Santana outlined, in an interview with CubaNet, a series of measures that he believes are essential to guide the country towards a real recovery.
Three key measures to overcome the crisis
Before any broader diagnosis, Freire summarizes what he considers the core of the immediate solutions and proposes three urgent actions:
1- Privatize key sectors of the economy: “When I talk about privatizations, I am fundamentally referring to industry and commercialization.”
2-Eliminate harassment of the non-state sector: “Stop harassing the non-state sector of the economy.”
3-Boosting Agricultural Production: "More support for land usufructuaries to increase agricultural production." According to the economist, these measures are directly related to one of the country's major structural problems:
"One of the factors keeping the country in its current state is the weak agricultural production."
Partial privatization of healthcare and education
The economist also speaks out on sensitive sectors such as health and education.
His proposal is not a complete privatization, but rather a mixed model: "You cannot privatize all of healthcare or all of education... part must be left to the State and the other part privatized."
It advocates that this scheme would allow for maintaining access for the most vulnerable sectors while also creating opportunities for efficiency for those who can afford to pay.
In addition, it proposes to restore historical institutions: “We need to restore religious schools… and return those that were confiscated.”
In this regard, he emphasizes the need for compensation: “Properties that were not compensated must be compensated... so that the economy runs smoothly and there is no resentment.”
First 100 days: Free prices and dismantling of the state apparatus
In a potential economic reform, Freire believes that the initial decisions should focus on dismantling the current control mechanisms.
One of the most important would be the liberalization of prices: “We can’t continue with prices approved by a bureaucrat… the market provides the information you need.”
It also proposes to eliminate inefficient state structures, especially in agriculture: “Acopio is a tremendously inefficient company… it often leaves goods in the fields.”
For the economist, the problem is not just economic, but organizational: "There are many intermediary entities that are hindering progress."
Inflation: The underlying problem is the lack of production
Freire insists that controlling inflation does not rely on administrative measures, but rather on a real increase in supply: “The most effective way to control inflation is to increase production.”
However, he acknowledges the main obstacle: "Practically nothing is being produced."
Partial dollarization exacerbates the situation: “There are stores where you have to have dollars… so the salary in national currency makes no sense.”
Foreign investment and trust
Another key aspect of their proposal is the openness to foreign investment: “The energy sector and all sectors must be opened to foreign investment.”
Freire believes that this is the only way to obtain resources and technology: “It is the only sector that provides technology and financial resources.”
However, he acknowledges that ideological and regulatory obstacles persist: “There are many hurdles… there is still a mentality that foreign investment is taking away from you.”
To reverse this situation, he emphasizes the need to build trust: “The investor must know that they can repatriate their profits and that their assets will not be confiscated.”
Private sector under pressure
In the interview with CubaNet, the economist acknowledges the existence of a private sector in Cuba, but warns that it operates under adverse conditions: “It is a sector that is heavily pressured by the State.”
Describe a constantly uncertain environment: "If you are under the threat of inspectors and regulations, you have no security... and no business can thrive like that."
A country without financial backing or productive capacity
After outlining these priorities, Freire describes the overall state of the economy emphatically: “The general state of the Cuban economy is bad.”
In the interview with CubaNet, he explains that one of the central issues is the weakness of external finances: "The external debt is not being paid... and national production is not being fulfilled."
This is compounded by the absence of strong exporting sectors: “There are no quality exportable goods that can propel the country into a free trade agreement.”
The result is an economy unable to meet its own import needs, which directly affects domestic supply.
Domestically, the situation is no better. Freire summarizes the scenario with two key variables: "Tremendous inflation and a low standard of living."
Critical indicators: blackouts, inflation, and GDP decline
Among the most concerning indicators, the economist highlights the energy crisis and also emphasizes the behavior of the gross domestic product, which "has decreased significantly in recent years."
This is compounded by the sustained increase in prices, which has eroded the purchasing power of the population: "The purchasing power of wages has significantly diminished... and that of pensions is at rock bottom."
Freire warns that the measures taken by the Government, such as salary increases, are insufficient: “It’s just a little pill for pain… it doesn’t solve anything.”
Legal and constitutional reforms
Freire argues that economic changes must be accompanied by profound legal transformations: "The current Constitution proposes a centralized economy... I would replace it with a market economy."
It also questions the role of the Communist Party: “Who has seen a constitution state that one party is the rector of society?”
GAESA: a parallel economic power
One of the most sensitive points of his analysis is the role of GAESA: "It controls the revenues of the tourism sector... and it is not overseen by the Comptroller's Office."
According to the explanation, this distorts the investment policy: “Investments are made in underutilized hotels while food production and industry are neglected.”
Therefore, he proposes a drastic measure: "It would be good to dismantle GAESA."
Structural change and political debate
Freire is clear in stating that the necessary changes cannot be superficial: "A complete change of the current model is needed."
While he acknowledges that there are examples like China and Vietnam, where economic reforms have been implemented without political changes, he warns that the Cuban case is different.
"For real transformation... a political change is necessary."
Even so, he acknowledges that there are diverse positions within the system itself: “There are reformist leaders and hardline leaders.”
The weight of the embargo and internal responsibility
Regarding the sanctions from the United States, the economist downplays their impact: "They carry secondary weight... the fundamental issue is internal inefficiency."
A Model for the Future: Market Economy and International Integration
Looking to the future, Freire proposes a market-based model: "The Cuban economy must be a market economy, with the State playing a secondary role."
This model would include: Greater legal security; Increase in exports; and Integration into trade agreements
"It is very difficult to see a country that is not involved in free trade agreements and that can make progress," he noted.
Human capital and emigration
The economist also warns about the impact of mass emigration: "It has taken away technicians, skilled workers, and significant cultural capital."
To reverse this trend, it is crucial to improve incomes and create real opportunities within the country.
Despite the critical diagnosis, Freire leaves a message of hope: “Have faith that everything can change… the fundamental change is economic.”
However, its conclusion is clear: without profound reforms - and possibly without political transformations - the Cuban economy is unlikely to emerge from its current stagnation.
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