The Cuban government declares a state of war economy: Measures to confront the crisis

The Cuban Government declares itself in a "war economy" Cuban authorities have publicly acknowledged that the country's economy is in a critical situation, which they have referred to as a "war economy." This declaration, made in a recent meeting of the Council of Ministers, is in response to the severe crisis that has even surpassed the well-known Special Period of the 1990s. Faced with this situation, the government of Miguel Díaz-Canel has announced a new package of measures aimed at revitalizing the economy and achieving the long-awaited macroeconomic stability. The First Deputy Minister of Economy and Planning, Mildrey Granadillo de la Torre, explained that the measures seek to adjust the 2024 Plan and Budget to the conditions of a "war economy." These measures come at a time when Cuba ended 2023 with a 30% inflation rate, a 2% economic contraction, and a sharp depreciation of the local currency against the dollar and the euro in the informal market. However, Cuban economist Pedro Monreal has expressed some reservations about the use of this term. According to him, referring to the situation as a "war economy" could justify greater control by the authorities, which could limit the economic freedom of citizens. It is important to consider that excessive control can generate discontent and affect private initiative at a time when the Cuban economy needs to encourage investment and production. The government's proposed measures, published in the official newspaper Granma, include budget cuts, a policy of uniform prices, and regulations aimed at correcting distortions in the economy. A uniform pricing policy will be established that will apply to all sectors of the economy, both state-owned and private. Some basic products will have maximum selling prices in an attempt to control inflation and ensure the population's access to essential food and items. One of the most controversial aspects of these measures is the intention to postpone or even halt investments that are not considered essential. This has created uncertainty in sectors such as tourism, which has historically been crucial to the Cuban economy. The lack of investment can negatively impact the country's growth and development, posing significant challenges in terms of the economy. President Miguel Díaz-Canel has acknowledged the economic complexities facing Cuba, which manifest in issues such as delayed delivery of food through the ration book, frequent power outages, and inflation affecting families' access to essential products. The president has pointed out that these difficulties are often related to bureaucracy and inefficient controls within the country's institutional system. In summary, the Cuban government's declaration of a "war economy" reflects the seriousness of the economic situation on the island. While it is necessary to implement measures to stabilize the economy, it is essential to find a balance that allows for growth without restricting the economic freedom of citizens or discouraging private investment. The path to Cuba's economic recovery is uncertain, but it is crucial to make informed decisions that benefit the entire population.