Author Name: Carribean Channel, Cuba TV.
This story was originally published on canalcaribe.ict.cu. [1]

Keys to understanding the Ordering Task in Cuba
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In the midst of the current situation, Cuba adopts and implements the Economic-Social Strategy to boost the economy and face the global crisis caused by COVID-19.

This strategy is the result of the analysis of the national and international experience, the opinion of the people and is consistent with what is stated in the Constitution of the Republic of Cuba, the Conceptualization of the Economic Model, the Guidelines of the Economic and Social Policy and the Agenda for Sustainable Development 2030.

Defined to respond to the new challenges imposed by the new coronavirus pandemic, the development of the strategy will increase the capacity to face the economic, commercial and financial blockade imposed by the United States on Cuba; resist by creating and taking advantage of the opportunities derived from the solidary behavior and prestige of the country in the face of the pandemic.

In this sense, it has 16 areas of results in which it works simultaneously. However, there are currently five prioritized essential aspects:

🔸️ Food production and marketing.

🔸️Incentive to exports.

🔸️ Transformations in the business system.

🔸️Perfecting self-employment.

🔸️ Monetary and exchange management.

The latter, due to its transversal nature, is necessary to advance in the rest of the economic transformations.

With the presence of Army General RaĂşl Castro Ruz, first secretary of the Central Committee of the Communist Party of Cuba, President Miguel DĂ­az-Canel BermĂşdez reported that the process of Monetary and Exchange Management will begin on January 1, 2021, with a Unique exchange rate of 24 Cuban pesos for one dollar.

“The corresponding elaborations and analysis have been concluded, as well as all the necessary legal norms, so it is considered that the conditions have been created that allow announcing the start of the ordering task as of January 1,” said the president in a radio and television appearance this December 10.

As announced, this process of Monetary and Exchange Ordering implies a new exchange rate, the cessation of the circulation of the CUC, the elimination of excessive subsidies and undue gratuities, and a modification in the distribution of income.

DĂ­az-Canel recalled that in the last two Party congresses the fundamental concepts that should guide the work in this regard were specified, particularly in the VII Congress.What characteristics does the Monetary and Exchange System have in Cuba?

The Monetary and Exchange System creates many expectations in Cuba, at the same time, it generates doubts in the population and also speculations about what will happen on January 1, 2021, the “day zero.”

Precisely to explain about this process and clarify the concerns of Cubans and Cubans on the subject, on October 14 last, the Minister of Economy, Alejandro Gil Fernández, and the head of the Implementation Commission appeared on the Roundtable program.

Regarding the Guidelines, Marino Murillo Jorge, who this Friday will provide from the same radio and television space, new information to our people about the implementation process of the Ordering Task, in the first broadcast of a series dedicated to this important step within the Economic Strategy and Social of the country.

Canal Caribe shares with its readers some concepts to understand the essential aspects of the Monetary and Exchange System in the Caribbean nation.What does this important process include in Cuba?

In the first place, it is necessary to clarify that this process in the country has a transversal and interdisciplinary nature. In this way, it includes monetary and exchange unification, the elimination of excessive subsidies and undue gratuities, and the transformation of income.What does the dual currency imply?

The dual currency in Cuba implies that the economy works with two domestic currencies (CUP and CUC), which coexist and legally share, to some extent, the functions of money. Meanwhile, the dual exchange rate is the existence of two legal exchange rates, 1 CUP = 1 CUC = 1 USD for the business sector, while for the population circuit it is 25 CUP = 1 CUC = 1 USD.Why the Monetary and Exchange System at this time?

Due to the complexity of this process and its transversal nature in the Cuban economy and society, it is not possible to advance in other transformations of the economic area if the country is not ordered monetarily.

«In the environment of the global crisis that we are experiencing, with the effect of COVID-19 and the decreases in the economies, we believe that we cannot continue waiting, due to practical problems. What if the situation worsens?

The blockade is getting worse than ever, and the comrades who are working on these issues agree that it is not possible to face other things if we do not achieve a monetary order to be able to advance in deeper issues in the economic model, “explained Murillo.

What will happen to subsidies and gratuities after January 1, 2021, on “day 0”? On this subject, Murillo Jorge explained that «subsidizing a low-income family is part of the humanity of our socialist model. And all the gratuities are not bad: health, education and all the achievements of the Revolution.

The problem is when this has a massive character that does not stimulate work productivity. Currently, all people are subsidized, even those who do not work. At the same time, not all of them get paid. “This is something that must be transformed urgently,” added Murillo.

It will not be possible to eliminate subsidies and gratuities, or to reduce them gradually, if there is no transformation of income, that is, salary, pensions, retirements and social assistance.

Now, there is a group of products linked to the consumption of the population that will remain with centralized prices once the monetary unification occurs. Some will keep their subsidies, but in other cases they will be eliminated.

“In the case of the regulated family basket, we will maintain some products with centralized and also subsidized prices. Other products will also have one-time costs, but without subsidies.

However, the latter will also be kept within the supply book to ensure that they reach all people, “explained Murillo on the subject on October 14 at the Round Table. To this he added that it is a priority to eliminate excessive subsidies and undue gratuities, always protecting children and pregnant women, citizens unable to work or services with high national consumption, such as electricity.

How would the basic reference basket be made up?

The reference basket of goods and consumption is the starting point of the minimum wage. The head of the Permanent Commission for the Implementation and Development of the Guidelines explained that if you earn the minimum wage – which is the basket and a little more -, you are not in the same condition as someone who earns five minimum wages, who consumes five baskets .

Given the doubts of the population regarding the inclusion of food or something else, he added that a basket cannot include only food, since people not only eat, “they also spend on hygiene and hygiene products, they have to pay for electricity, transportation public, they must dress and, therefore, the basket must include all these expenses.

The one proposed also includes an estimate for medications in case the individual becomes ill and an estimate for home repair and maintenance, but there are those who do not have to incur these expenses.

Will there be an increase in wages and prices?

The answer to this question is yes. However, Marino Murillo Jorge stressed that if you only talk about prices going up and you don’t take into account that wages are going to go up, then the analysis is not correct.

«In economics there is a great theory between the real wage and the nominal wage.

We, in this process, have a great aspiration and I believe that we will be able to fulfill it: that all employees are in better conditions than at the starting point where we are, ”Murillo explained. The salary fund in the country will rise by 4.9 times, while that allocated to social security will do so by five times.

Meanwhile, prices in the state sector are expected to rise well below those values. On this subject, Murillo clarified that, if the dynamics of wage growth is higher than that of price increases, then those who work with the State will be in a better position.

In PDF, new salaries, pensions and social assistance benefits The Extraordinary Official Gazette No.69 published this Thursday 19 resolutions of the Ministry of Labor and Social Security (MTSS) that establish the new changes in the distribution of the population’s income in relation to salaries, pensions and social assistance benefits , as part of the monetary ordering process that will begin on January 1.

(C) Cuba TV, Cuban state owned media.
[1] Url: https://www.canalcaribe.icrt.cu/en/12029-2/