By Marcos Alvarez Arguija
For the past few decades, the Cuban economy has suffered the effects of the global crisis as to cash-flow in foreign currencies, which is manifested in a deficit in the balance of payments; and current and capital accounts have carried on with this debit balance.
Immediate causes are mainly related to the reduction of exports, the increase of prices of substantial imports, and the deficient recovery of investments.
Contradictorily, the traditional production of export goods have decreased due to several factors, which has brought about the loss of markets, which used to act as a secure source of income.
Cuba lost ground in the sugar market, which it used to lead, and it experienced a fall in the export of products such as citrus, coffee, and cigars, and at some point even the nickel industry did not make the most out of favorable prices in the international market.
As said by the vice president of the Council of Ministers, Marino Murillo, during sessions of the People’s Power General Assembly last December, exports increased by 41.5 per cent in 2010, but the Cuban economy could have made better profits if the sugar and nickel industries would not have failed to meet their plans, which resulted in that nickel failed to contribute with 120 million dollars and sugar with 65 million.
Non-traditional exports and the medical and pharmaceutical industry did not suffice to balance such losses, while the export of services did made its contribution and thus the country is somehow lacking policies to make up for that economic deficit.
Betting on the export of services, not only in the field of tourism, is a way to protect the economy from the ups and downs of goods markets, most of which act as financial intermediaries for investors and raise uncertainty and instability in world trade.
In this sense, one of Cuba’s main strengths is the qualified scientific and technical human capital it has trained through the history of the Revolution.
Making the most of this human capital by turning it into a source of incomes for the country should be addressed as a wider policy that will enhance perspectives for this partially exploited capital, as noted in the Guidelines recently passed during the Sixth Congress of the Cuban Communist Party (PCC) on the Economic and Social Policy of the Revolution.
Yet, solid markets of strategic goods such as nickel and oil can bring about important revenues, which in addition to sugar, fresh sea products, cigars, coffee, among others, should make up a necessary export portfolio.
Rescuing traditional exports, looking for new opportunities for non-traditional export products, and consolidating the medical and pharmaceutical industry should become a priority for the Cuban economic policy.
The aforementioned Guidelines confirm this need that demands the implementation of new mechanisms to give it impetus.
Outlining an efficient export strategy calls for making the necessary investments and for a change of aptitude by producers and traders, which so far have acted out of habit and have not had economic motivation to do something about it. (ACN)