Updating of Cuban economic model continues to advance

Yaima Puig Meneses & Leticia Martínez Hernández

THE Council of Ministers, in a September 21 meeting presided by President Raúl Castro Ruz, approved a group of policies which respond to various Economic and Social Policy Development Guidelines of the Communist Party and the Revolution, thus continuing to move forward with the updating of Cuba’s economic model.

President Raúl Castro RuzCouncil of Ministers Vice President Marino Murillo Jorge presented the National Medications Program, which he recalled has been revised and renovated on several occasions over the last few years, although its fundamental purpose has been maintained: to guarantee the people’s health and limit the effects of the economic blockade imposed by the United States government, which has had a serious impact in the medical field.

He clarified that the essential concept of the program has not changed, but that some elements have been modified. He explained that the policy is directed toward developing a comprehensive program based on the complete cycle of research, development and production, prioritizing the needs defined in the Basic Health Profile for the population and the appropriate use of medications. Additionally the policy projects producing a 120-day reserve supply so that the Public Health System’s planned needs can be met in a timely fashion.

Murillo, also head of the Policy Implementation and Development Permanent Commission, reported that a management and control system will be established in pharmacies and opticians to guarantee control of medications.

From 2014 through 2017, he said, a digital system for the management and sales of medication will be implemented, along with improvements in the infrastructure and equipment needed by community pharmacies to comply with established norms and procedures.

Murillo went on to explain the updating of the Natural and Traditional Medicine Development Program, being conducted in accordance with Guideline No.158 approved by the 6th Congress of the Communist Party of Cuba, which calls for prioritizing progress in this area.

He reported results from a diagnostic study which revealed a lack of comprehensive economic planning for the development and sustainability of natural and traditional medicine, since it has not been considered a priority. Noted were shortcomings in organization, training, equipment and resources necessary to production, use and distribution, as well as little support for producers who provide raw materials used to prepare alternative medicines.

Among other difficulties, Murillo pointed out that many natural products appearing on the national market are priced too high and that production is not planned based on an analysis of health needs in different provinces. There have been no market studies and local production centers often do not have the facilities or technology to ensure a quality product, he said.

Murillo indicated that, as part of the updated policy, natural and traditional medicine will be an integral part of the National Medications Program and will become an important tool throughout the public health system for prevention, treatment and rehabilitation, based on the Basic Health Profile established for the Cuban population.

Specific measures included strengthening research with a view toward promoting the development and use of natural and traditional medicine; designing a wholesale and retail pricing policy to both encourage producers and promote the use of alternative products; direct contracting between those preparing natural products and agricultural producers of all kinds; as well as coordinating efforts to improve pharmacies with local production centers.

President Raúl Castro commented on the issue, emphasizing that despite its being considered strategic for the country, necessary attention has not been paid to this type of medical care. He therefore called for the development of a detailed plan, with input from all provinces, to definitively consolidate the program under the direction of the Policy Implementation and Development Permanent Commission and the ministers of Public Health and Agriculture.


The Council of Ministers additionally discussed measures taken to improve the country’s community day centers for the elderly, known as Casas de Abuelos, and senior citizens’ homes, outlined in a report also presented by Vice President Murillo, who said, “Given the current and projected rate of aging of Cuba’s population, ensuring the care of older citizens is one of the greatest difficulties facing families, causing people in the prime of their working lives, principally women, to leave the workforce.”

These institutions do not have the capacity to meet the demand for their services and their ability to meet the needs of disabled elderly Cubans is even more limited. The quality of attention provided has also suffered due to problems with building maintenance, equipment, furniture and staff, Murillo reported.

The Vice President said that the comprehensive analysis of the issue and the measures to be taken should reflect both Guidelines No.144 and No.173, which respectively call for the implementation of strategies to address the aging of the population and the elimination of excessive subsidies, following the principle of subsidizing persons in need and not products in general.

Among the measures discussed was the development of a program to provide maintenance and repair of facilities, renovate furniture, and eliminate accessibility barriers, in order that by 2025, the country’s facilities will be fully functional and services improved.

Additionally, Murillo reported that in 2014, on an experimental basis, community centers for disabled elders will be opened in several provinces.

Additionally, over the next two years (2013-2015), new community day centers and residential sites will be established, projects which must be highly functional and durable, with rational use of space, plus low initial and ongoing costs.

Once living conditions and quality of services in these facilities have been improved, the state subsidy will be reduced and fees charged. Social Assistance will assume the cost of services – entirely or partially – of low-income citizens, identified on the basis of investigation, those receiving a limited pension or without family members to care for them.

Murillo added that non-state forms of economic management [cooperatives and self-employed] will be encouraged to become involved in providing services to community centers and senior citizens’ homes.

“The problem of population aging is a serious issue,” President Raúl Castro said, emphasizing the need to analyze the situation in detail, understand its causes and seek solutions, because attending to the needs of the elderly is “a priority.”


During the meeting, the Council of Ministers also approved a third group of 73 non-agricultural cooperatives. Of these, 38 will be devoted to commerce and restaurant services; one to industry; one to transportation; and 33 to construction.

Murillo Jorge reported that 41 cooperatives have emerged from former state-run operations, while 32 are the result of self-employed individuals coming together to work cooperatively. Among the basic characteristics of the new cooperatives are that they will operate in both national currencies, CUP and CUC; they were constituted with financial contributions from the associates; they will be requesting bank credit for start-up; and prices to be charged will be determined by supply and demand.

With the approval of this new group of cooperatives, Murillo added, the principal that the state will maintain ownership of the fundamental means of production is maintained. At the same time, the state is removing itself from activities which are not considered essential to the country’s basic development.


Murillo also presented the final report on data gathered during the Population and Housing Census conducted in September of 2012, the most thorough and costly statistical investigation ever.

The Census revealed that Cuba’s population stands at 11,167,325 persons – 10,418 less than the number counted in the previous national census of 2002. As for gender distribution, a slight majority of women was noted (50.1% as compared to 49.9%), a relationship which is the opposite of that determined in the 2002 census.

The aging of the country’s population was confirmed with 18.3% of inhabitants being 60 years of age or older, as compared to 17.2% between 0 and 14 years of age. Murillo also pointed out that the racial composition of the nation continues to evolve toward a more mixed race population.

Council of Ministers Vice President Murillo also reported that 3,885,900 living places were visited, of which 3,882,424 were households. The remaining number are workplace accommodations where people reside permanently and collective living sites such as senior citizens’ homes and those for unattended children. “These figures allow us to conclude that between the Census of 2002 and that of 2012, the number of dwellings increased by 9.9%,” he commented.

The final Census report indicated that the number of Cubans economically active rose to 5,022,303, representing 54.3% of the total over 15 years of age, with 78.3% of these working within the state-run sector.

Raúl commented that this data merits careful attention and should not be simply filed away, saying that such information is fundamental to the work of leaders from the municipal to the national level.

It was also reported that, over the next few days, the media will be distributing more information about final Census data.


Leonardo Andollo Valdés, deputy director of the Policy Implementation and Development Permanent Commission, presented the results of a study of the Ministry of Construction and proposals to improve its functioning to ensure, among other goals, the separation of state regulatory responsibilities from those of its enterprises.

He reported that the study revealed the Ministry’s limited ability to make strategic projections given the unwieldy number of tasks its central leadership undertakes. Also noted was the surplus of budgeted entities which incur significant expenses.

Other problems cited were the ineffectiveness of state inspectors facing repeated violations of building codes; training which does not prepare highly skilled workers; inefficient planning and management of material and financial resources, which often interrupts construction projects and leads to poor quality work.

He explained that within the new structure, the central directorate will be more cohesive and efficient. Work will be managed by three Central Enterprise Management Organizations (OSDE in Spanish): the Construction and Industrial Erection Enterprise Group; the Construction Materials Enterprise Group and the Construction Design and Engineering Enterprise Group.

These state enterprises will direct, along with the Ministry, the internal changes needed to achieve better organization, efficiency and autonomy, in an effort to improve economic and productive performance.


Andollo Valdés also introduced a policy to make better use of the country’s guest houses, and other facilities of this type belonging to government bodies and enterprises, by creating a lodgings and recreation system which would function on the basis of fees charged clients, to be paid personally or by the sponsoring entity.

Prices at these facilities would not be subsidized and would depend on their category, assuring that the enterprises managing such sites could generate enough earnings to allow for their sustainability and development.

A large number of these installations will gradually be designated for use as dwellings, to be assigned by provincial and municipal Administrative Councils, prioritizing families who have been living in temporary housing several years after losing their homes and those facing critical social challenges.


The last issue addressed by the Council of Ministers was that of overdue accounts payable and receivable as of June 30, a question the body has systematically discussed in these sessions. Lina Pedraza Rodríguez, Minister of Finances and Prices, explained that at the close of the first half of the year, a tendency toward reducing such outstanding payments was noted.

Despite this trend, she said, the number of overdue debts owed by one entity to another, within the same organization, remains high, generating a cascading effect of outstanding debt within the economy, an issue to which the Council will devote more attention in future meetings.

Closing the discussion on this agenda item, Raúl commented that, in general, progress in this area is being noted and said, “We will have to continue checking on the problem regularly until it is resolved.”

The ministers also approved a policy on compensation for athletes, training staff and sports specialists, as well as proposals to improve the functioning of Havana’s City Historian’s Office. Granma will provide more details on these issues in future editions.

September 21, the Council of Ministers led by President Raúl Castro approved a number of policies which respond to several Economic and Social Policy Guidelines of the Party and the Revolution, with which the updating of Cuba’s economic model will continue to advance.

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