Cuba’s economic growth rate, agricultural production in decline as prices continue to rise | July 25, 2023

Jul 25

Dear Friends,

Last month, CDA hosted a delegation of four Cuban entrepreneurs in Washington, D.C. where they shared the impact of U.S. policies on their businesses as well as domestic opportunities and challenges for Cuba’s private sector with policymakers, the private sector, NGOs, and experts in the U.S.-Cuba policy space. The entrepreneurs shared recommendations on how the US can better support Cuban entrepreneurs, including by removing restrictions on travel, increasing flexibility in issuing licenses for U.S. citizens to invest and trade with Cuban private businesses, and granting Cubans access to digital marketing, online payment processing platforms and technologies, and subscription-based platforms such as Shopify, PayPal, and Zoom.

Cuba’s growing private sector has become both a guarantor of the provision of certain goods and services to the population and a beacon of hope for the Cuban people. Check out some of CDA’s recommended readings to learn more about Cuba’s private sector and Cuban entrepreneurs!

Transforming U.S.-Cuba relations: From dominating to elevating, Miguel “Mike” Fernandez, The Miami Herald
Cuban entrepreneurs get a crash course in business, Patrick Oppmann, CNN
US disengagement in Cuba creates opportunities for China, Russia, Micho Spring, The Boston Globe
As Cuba’s private sector roars back, choices and inequality rise, Ed Augustin, Al Jazeera
McGovern: ‘The Cuban People & Entrepreneurs Should Not Have To Wait Any Longer For Change To Happen’, Forbes
The Upside of Helping Cuba’s Private Sector, John McIntire, Americas Quarterly
Cuban capitalism is getting real. Cuban capitalists hope U.S. help will be just as real, Tim Padgett, WLRN

CDA is seeking two remote fall interns! CDA interns work with staff mentors to monitor and analyze current events, help plan delegations, work with partners in Congress to change policy, amplify our communications to policymakers and the public, and work on essential administrative tasks that build the nuts-and-bolts skills necessary to run a nonprofit organization. The deadline to apply is August 11. Visit our website to learn more about the internship and to read reflections from past interns.

Apply now!

Help CDA cultivate the next generation of activists to promote engagement, mutual respect, and dialogue in U.S. foreign relations with countries of the Americas by supporting CDA’s Stephen M. Rivers fellowship! With your generous support, we can provide opportunities for emerging change-makers to learn essential skills, access valuable resources, and build meaningful connections, empowering them to shape the course of a more productive U.S. foreign policy.

Learn more about how we’re expanding the Fellowship’s impact, including by expanding the paid, full-time position to cover both Cuba and Regional Migration, and read testimonials from former fellows here. Help CDA sustain our fellowship and build the next generation of activists by donating here!

Donate now!

This week’s Top Stories

Cuban economy minister says no quick fix to devastating crisis
Cuba’s agricultural production in decline, prices have risen by 18 percent in 2023
Cuba introduces new Military Penal Code

Continued Coverage

Cuba faces medicine shortages
US sends fourth deportation flight to Cuba
Visa regimes shape routes for Cuban migrants

The views and opinions expressed by authors are their own and articles do not necessarily reflect the views or positions of CDA.

This week, in Cuba news…

U.S.-CUBA RELATIONS

Scientists carry out surveys of Cuba to verify the impact of climate change (Spanish)

Last Tuesday, a group of Cuban scientists and videographers in partnership with U.S. organizations launched a 5,700-kilometer scientific expedition circumnavigating Cuba’s coastline to assess the health of the island’s coral reef ecosystems, OnCuba News reports. The expedition seeks to understand the far-reaching impacts of climate change on Cuba’s ecosystems and coastal communities, and assess the effectiveness of marine protected areas, which currently protect 25 percent of Cuba’s marine platform. The research team will analyze the current state of Cuba’s intricate ecosystems, including shark populations, the issue of microplastic pollution, the microbial loop, and megafauna, which includes manatees, turtles, and birds.

The University of Havana’s Center for Marine Research, the Environmental Agency, and Avalon-Marlin are leading the scientific venture with the support of U.S.-based environmental organizations such as the Environmental Defense Fund (EDF), Wildlife Conservation Society, and the Harte Research Institution. The findings from the expedition will provide valuable information to fill data gaps that will be important for Cuba, the US, and the Caribbean, and inform future conservation efforts. Environmental and health protection have been leading areas for cooperation between the US and Cuba, with the re-establishment of diplomatic ties initiated under the Obama administration spurring new opportunities for collaboration in these areas.

Updates on Cuban Migration to the US

New flight with deported Cubans takes off from Miami; Cuba receives 87 irregular migrants from the U.S.; 33 arrived by air this Thursday (Spanish)

Last week, the US returned 87 Cuban nationals to Cuba, El Nuevo Herald reports. The U.S. Coast Guard (USCG) returned 54 Cuban nationals on July 17 (see below for more information on Cubans interdicted by the USCG) and U.S. Immigration and Customs Enforcement (ICE) sent a plane carrying 33 Cuban nationals with final orders of removal to Cuba in the fourth U.S. deportation flight to Cuba of 2023 on July 20. According to a statement published in state news source CubaDebate, the flight consisted of 31 men and two women, 12 of whom were detained after migrating by sea and 19 of whom left Cuba regularly on flights before traveling on irregular routes throughout the region. Onlookers of the deportation flight reported heart-wrenching farewells between the deportees and their family members, sparking intense conversations within the Cuban-American community in Miami. Many are now raising questions about the immigration policies that result in the painful separation of families and the challenging circumstances faced by those compelled to return to Cuba after residing in the United States for an extended period.

The flight comes three months after the US resumed deportation flights to Cuba following a two-year pause due to COVID-19 restrictions. After the removal of the “wet foot, dry foot,” policy in January 2017, the Obama-Biden administration made a deal with Cuba’s government to send back migrants that arrived irregularly in the US, which allowed the U.S. Department of Homeland Security (DHS) to work under an expedited removal process.

Source: Elaborated by CDA with data from the U.S. Coast Guard (USCG)

Since the Fiscal Year (FY) 2023 began on October 1, USCG has interdicted approximately 6,862 Cuban migrants–surpassing the total number of Cuban migrants in all of FY 2022. This time last year, seaborne migration reached approximately 3,369 Cuban migrants. Seaborne migration saw a steady increase in FY 2022, totaling more than the past five years combined; in FY 2022, 6,182 Cuban migrants were interdicted by the USCG, while the total number of interdictions between FY 2017 and FY 2021 was 2,927.

Source: Elaborated by CDA with data from the U.S. Customs and Border Protection (CBP)

In the month of June, 10,885 Cuban migrants, asylum seekers, and refugees attempted entrance into the US, bringing the total number so far in FY2023 to 164,475 Cuban migrants. In comparison, total Cuban migration to the US reached approximately 157,000 migrants this time last Fiscal Year. According to data from the U.S. Customs and Border Protection (CBP), in FY 2022, there were 224,607 total encounters with Cuban migrants and asylum seekers–a 471 percent increase from the previous year. “Encounters” constitute either an expulsion, in which migrants are deported to their home country or last country of transit, or apprehension, in which migrants are detained in the US, by CBP.

IN CUBA

Cuba still struggling to earn foreign currency; Cuban economy minister says no quick fix to devastating crisis

Cuba’s economy continues to face significant challenges in 2023, with the island’s growth rate standing at less than 2 percent, falling short of the previously announced figure and lagging eight percentage points behind pre-pandemic levels, Reuters reports. Cuba projected a growth rate of 3 percent for this year. Cuba’s Minister of the Economy, Alejandro Gil, reported substantial decreases in three of Cuba’s largest sectors: Cuba’s primary sector, encompassing agriculture, mining, and basic production, experienced a decrease of 34.9 percent compared to 2019, manufacturing witnessed a decrease of 20 percent, and the services sector, including tourism, communications, and education, experienced a decrease of 4.9 percent. According to Cuba’s First Deputy Minister of Economy and Planning (MEP), Leticia Morales González, low export earnings have also contributed to the country’s economic struggles, reaching only $1.3 billion in the first six months of 2023, a mere 35.7 percent of the initial expectations. Meanwhile, the island has spent $4.4 billion on imports so far in 2023. Comparatively, in 2019, Cuba reported exports of $12.6 billion and imports of $11 billion.

Cuba’s dependence on imported food, fuel, and agricultural inputs continues to yield significant challenges for the island, including with meeting its export and import targets and by contributing to a triple-digit inflation. Minister Gil reported that Cuba’s inflation rate has surged to 45 percent this year, adding to last year’s 39 percent increase. However, economists, including Cuban economist Pavel Vidal, believe that this figure underestimates the actual inflation rate due to the underrepresentation of the informal market. Cuba has attempted to implement price controls to combat inflation, but with limited success in the face of low productivity and output. Minister Gil called that the economic situation in Cuba is “complicated,” before noting that the gradual recovery of the Cuban economy has not reached the desired pace while the government works to find solutions. The current record-breaking wave of Cuban migration and the failure of tourism, exportation, and remittances to rebound to the same rate as before the COVID-19 pandemic have exacerbated existing issues, driving up inflation to unprecedented levels and resulting in shortages of many basic goods and services with increasing periodicity.

National Assembly: price increase, agricultural decrease and difficulties with the basic food basket (Spanish)

Cuban authorities revealed during a session of Cuba’s National Assembly of People’s Power (ANPP) that agricultural production is in decline, the distribution of Cuba’s regulated family food basket has been “negatively” impacted, and prices have risen by 18 percent since the beginning of the year, OnCuba News reports. Cuba’s Minister of Finance and Prices, Vladimir Regueiro Ale, reported that since the beginning of 2023, there has been an 18 percent price growth in Cuba’s Consumer Price Index (CPI), totaling a 45 percent increase compared to the same period in 2022. As CDA previously reported, food and non-alcoholic beverages prices are up by 66.48 percent, restaurants and hotels by 65.02 percent, and transportation by 29.45 percent. The island’s Consumer Price Index (CPI), which measures changes in the average price level of goods and services commonly consumed by households, increased by 3.64 percent in May alone. Minister Regueiro Ale acknowledged the “dissatisfaction” among both the population and the government regarding prices and emphasized the need for “concrete and tangible” solutions. He attributed the inflation increase to “external factors” such as the international economic crisis and the United States’ embargo, along with fiscal deficits to fund the state budget. Minister Regueiro Ale shared that authorities are working to address the issue through price agreements on certain products – namely agricultural products – and establishing a methodology for the formation of cost and expense sheets of products and services, among other measures. However, issues remain with setting agricultural and other product prices, leading to regional disparities in the effectiveness of measures taken. At the same time, Leticia Morales González, First Deputy Minister of Economy and Planning (MEP), highlighted Cuba’s Macroeconomic Stabilization Program, which aims to reduce inflation, stabilize the island’s exchange rate, and reduce the fiscal deficit, before noting that the pace of economic recovery is insufficient for the population.

ANPP’s Agri-Food Commission reported that agricultural production saw “unfavorable results” in the first five months of 2023, revealing insufficient and decreased production compared to the same period in 2022. The Commission’s report highlighted that several products including rice, beans, root vegetables and vegetables, pork, eggs, milk, and coffee have not reached planned production levels. The officials cited the island’s fuel shortages and limited supplies of fertilizers, pesticides, and animal feed, as well as organizational and management problems, as contributing factors to the low agricultural production. According to the Commission’s report, Cuba’s agricultural sector imported or produced only 0.6 percent of the planned 28,900 tons of fertilizer between January and May 2023. The island’s economic crisis has also impacted the island’s ability to provide the regulated family basket, which are monthly food products the government distributes to families. Rationing, which previously ensured a meager food quota for Cubans, has been gradually reduced in recent years, notably affecting children and the elderly. According to First Deputy Minister Morales González, 100 percent of the regulated family basket is imported at a cost of 1.6 billion dollars. Politburo member and President of the ANPP, Esteban Lazo Hernández, called on the Agri-Food Commission to “reduce imports and increase production levels to guarantee food in the basic basket.” Cuba’s government has reportedly moved to prioritizing the distribution of the family basket to vulnerable groups including children, pregnant women, and people over 65. Various ministers highlighted the need for increased engagement with private agricultural producers in particular, with Cuba’s Minister of the Food Industry, Manuel Sobrino Martínez, stating that the emergence of over 800 private micro, small, and medium-sized companies (MSMEs) in the agricultural sector has “revitalized the sector” in Cuba.

The country’s high dependence on imports and donations, low agricultural productivity, and limited access to foreign currencies significantly reduced the availability of domestic and imported food commodities. Currently, Cuba relies on imports for 80 percent of its food supply, cultivating less than half of the island’s arable land and spending approximately $2 billion USD annually on importing food. Although Cuba has said it would prioritize domestic food production in 2023, it has struggled to ramp up such production, after failing to do so from 2021 to 2022.

Cuba will sanction up to five years in prison for evading military service

Cuba’s National Assembly of People’s Power (ANPP) approved the island’s new Military Penal Code, which defines new substantive norms for the military criminal justice system, including prison sentences of up to five years for those who evade the two years of military service, OnCuba News reports. There currently is no defined date for when the Code will go into effect. The new Military Penal Code was created to build upon previous Military Criminal Law and complement the island’s new, more general Penal Code approved in May 2022, which defines 37 new crimes, defines the age of criminal responsibility at age 16, and increases penalties for violence against women, discrimination, environmental infractions and more, among other measures. Among other measures, Cuba’s new Military Code will penalize those who desert their unit or place of service, avoid the call to service, or attempt to evade military service through self-injury. Article 41 in Chapter III of the code stipulates that anyone who avoids military service will face imprisonment ranging from two to five years. Cuba’s military has seen individuals attempt to evade military service through self-injury previously, as CDA reported at the time. Soldiers serving disciplinary sanctions were reported to have swallowed screws, washers, and blades in order to be assessed as unfit for service.

Cuba’s National Defense Law mandates that all male Cuban citizens starting at the age of 18 must fulfill two years of military service. According to OnCuba News, the mandatory nature of military service has been met with resistance from many Cubans, particularly mothers. This dissent was amplified by the major fire incident in the industrial area of Matanzas nearly a year ago, where four recruits between 18 and 20 years old, serving as firefighters as a part of their military service, tragically lost their lives due to a lack of necessary experience and training. Ruben Remigio Ferro, President of the Supreme People’s Court, described the code as an “outcome of collective, diverse elaboration from the grassroots.”

BioCubaFarma recognizes a 40% deficit in the basic list of medicines (Spanish)

During the first regular session of Cuba’s National Assembly of People’s Power (ANPP), Cuba’s state biopharmaceutical corporation and producer of medicaments, BioCubaFarma, reported a 40 percent deficit in the medicines it supplies in the first half of 2023, OnCuba News reports. The President of BioCubaFarma, Eduardo Martínez, revealed to ANPP Health and Sports Commission deputies that of the 633 medicines foreseen in its annual plan, they are unable to produce 251 medicines, including oncological and cardiological treatments as well as basic antibiotics. Mr. Martínez attributed the shortages to issues with importing raw materials and production materials, maintenance issues at production plants, and difficulties with financing and payment to suppliers due to the U.S. economic embargo. According to Eduardo Martínez, to mitigate the effects of the shortages, BioCubaFarma will implement production priority levels based on the drug’s impact on public health, seek new suppliers, equalize medicine distribution between provinces and healthcare institutions, and implement a plan to boost export revenues.

Last year, Cuba also reported a 40 percent shortage of the medicines it supplies, again citing the U.S. economic embargo and issues with the import of raw materials as contributors to the situation. Cuba’s biopharmaceutical industry reported in May that early 2023 saw the reestablishment of the production of some medicines in high demand, but “it is not possible to satisfy all the needs.” Medicine shortages and raw goods shortages have been a prominent feature throughout the country’s economic crisis.

CUBA’S FOREIGN RELATIONS

Cubans seeking asylum in Germany multiply by eight in the first semester (Spanish)

During the first half of 2023, the number of Cubans seeking asylum in Germany has multiplied eightfold compared to the same period in 2022, surging from 73 to 607, Swissinfo reports. The increase reflects an upward trend in recent years; a total of 187 Cubans requested asylum in Germany in 2022, up from 38 asylum requests in 2021. Authorities identified a trend in the way Cubans have been requesting asylum in Germany, which requires Cubans to obtain Schengen Visas to enter and stay in the country, however, does not require transit visas for Cubans traveling through the country. To request asylum in Germany, many Cubans purchased plane tickets to destinations without visa requirements for Cubans, such as the United Arab Emirates or, until April, Serbia, that include layovers in Germany. Serbia eliminated the visa-free regime for Cubans in April 2023 to regulate the increasing flow of Cuban migrants amidst pressure from EU member states. Once in Germany, Cubans will then present themselves to the police and request asylum. However, according to the spokesperson for Germany’s Minister of the Interior, “not even half” of the migrants who request asylum through this route continue on with the asylum process, rather most fail to report to the designated migration office after requesting asylum. According to EFE, approximately 300 Cubans have disappeared after making an asylum claim during a layover and forgoing the remainder of the asylum process. This trend has raised concerns for some about the efficacy of border control and asylum procedures within the Schengen Zone. Heiko Teggatz, the head of the German Police union, demanded an urgent review of the right to asylum and Schengen rights, stating it was “unacceptable that the Schengen border code can be undermined by a simple trick, that is, with a transit flight.” EFE reports that approximately 95 percent of asylum applications submitted by Cubans are rejected by German authorities.

2 arrested in Serbia suspected of smuggling Cubans to Spain as part of an international crime group; 62 arrested in Europol-Interpol human trafficking crackdown

On Monday, Europol and Interpol announced the successful disruption of an intercontinental migrant smuggling network that smuggled Cuban migrants to the European Union (EU), AP News reports. A monthslong investigation coordinated by Europol and Interpol and including law enforcement from five countries, including Serbia and Spain, resulted in the arrest of 62 individuals this week, including 25 Cubans. The investigation was launched in October 2021 after Finland, Greece, North Macedonia, and Serbia reported a rise in the number of Cuban citizens attempting to enter Europe with fake documentation. It is estimated that the network managed to smuggle approximately 5,000 Cuban nationals into the EU. The criminal network targeted vulnerable Cubans, offering to organize their migratory journey to Europe and provide fake documentation for a fee of 9,000 euros or $9,969.30 USD. The investigation revealed that Cubans would fly from Cuba to Serbia, where they were then smuggled into Greece and North Macedonia before being flown to Spain. Until April 2023, Serbia was one of less than 10 European countries that allowed Cubans to enter without applying for a visa, making it an incredibly popular route for migrants wishing to emigrate to the EU in recent years. Serbia eliminated the visa-free regime this year to regulate the increasing flow of Cuban migrants amidst pressure from EU member states.

In addition to the arrests, law enforcement confiscated 18 pieces of real estate, 33 vehicles, and 144 bank accounts, along with significant amounts of cash in various currencies. Europol and Interpol expect additional arrests to be made during the ongoing investigations.

EVENTS

Coral Gables, FL, Book Presentation: El Monte, July 26

On Wednesday, July 26, David Font-Navarrete, Assistant Professor in the City University of New York’s Department of Music, Multimedia, Theatre, and dance, will discuss Lydia Cabrera's “El Monte.” Professor Navarrete will speak on the book’s panoramic account of the multifaceted influence of Afro-Atlantic cultures in Cuba. His translation of the book allows Cuba’s rich folklore and Cabrera’s voice to shine. Join Professor Navarrete at Books & Books starting from 7:00pm EDT. Call (305) 348-1991 or email CRI@fiu.edu to register.

Miami, FL, Five Cuban Composers of the Diaspora (1900-2013), August 22

On Tuesday, August 22, Assistant Professor, Department of Art History and Musicology Iván César Morales Flores, will examine the musical careers of five Cuban composers after leaving the island during the 1990s. During the lecture, he will examine the musical stylistic changes of the composers Ileana Pérez Velázquez, Eduardo Morales-Caso, Keyla Orozco, Ailem Carvajal, and Louis Aguirre, and how their Cuban heritage and life beyond the island impacted their musical careers. The event starts at 12:00pm EDT. Call (305) 348-1991 or email CRI@fiu.edu to register.

Miami, FL, Film Screening: Good Things Will Come, September 15

On Friday, September 15, the FIU will host a film screening and discussion of the documentary “Good Things Will Come (No Hay Mal Que Por Bien No Venga).” The brief documentary delves into the early 1960 Pedro Pan Airlift which saw over 14,000 unaccompanied Cuban children sent over to the United States by their parents. The focus is on the experiences of two of these “Pedro Pans,” Guillermo Vidal and Ricardo. They recount the traumatic events that led to their parents’ heart-wrenching decision to send them on an uncertain journey to the United States, as unaccompanied child refugees. Through their narratives, the film intertwines their parallel stories, reflecting on the profound impact this event had on their lives and what we can all learn from it today. The event starts at 7:00pm EDT. Register here.

Miami, FL, New Directions in Cuban Studies, October 18-22

On October 18, the Cuban Heritage Collection of the System of Libraries in the University of Miami will host its fifth edition of the multidisciplinary symposium, New Directions in Cuban Studies. This year’s theme is “The great challenges for Cuba yesterday, today and tomorrow.” The symposium will promote works of postgraduate academics on Cuba, with the purpose of spreading the achievements of the global Cuban diaspora. To apply, complete the application online. Deadline for applications is July 15, 2023.

Coral Gables, FL, Book Presentation: Transnational Cuban Networks of Exchange, October 20

On October 20, Books and Books will host an in-person book discussion of “Circulating Culture: Transnational Cuban Networks of Exchange,” by postdoctoral Research Fellow Jennifer Cearns. Her study delves into the meaning of Cuban culture and identity in a transnational context. Woven into her insightful analysis are evocative vignettes that portray the creators of a resilient and dynamic network—one that defies geopolitical boundaries and has withstood the rapid social changes spanning from the Obama-Biden administration, through the passing of Fidel Castro, and into the Trump-Pence administration. Jennifer Cearns’ work offers a compelling narrative that unravels the remarkable story of this enduring network and its role in shaping contemporary Cuban life. The event starts at 7:00pm EDT. Call (305) 348-1991 or email CRI@fiu.edu to register.

Miami, FL, Panel Discussion: Revisiting the War of 1898 and its Long-Term Repercussions for Cuba & the U.S., October 25

On October 25, FIU will hold a panel discussion focused on the impact of the War of 1898 on Cuba and the United States. Leading scholars Javior Figueroe, Marial Iglesias Utset, Kate Clarke Lemay and Taína Caragol will delve into how the aftermath of the Spanish-Cuban-American War transformed the United States and its newly acquired territories, how Cuba emerged as a 1902 nascent republic, and the growing ubiquitous presence of the United States. The event starts at 2:00pm EDT. Call (305) 348-1991 or email CRI@fiu.edu to register.

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Maria Espinosa