RIO DE JANEIRO, BRAZIL – In order to implement the country’s new constitution, the members of the Cuban National Assembly passed several laws on the operation of the government. At the end of the parliamentary session, President Miguel Díaz-Canel emphasized the country’s achievements in the fight against the Coronavirus pandemic. At the same time, he denounced the recent tightening of the U.S. blockade.
Four new laws were up for discussion, which are intended to govern the country’s institutional structure. These laws define the functioning of the President, Prime Minister, Council of Ministers and governors in accordance with the constitution that came into force in April 2019. Among other measures, the new laws restrict the term of office of top officials to two legislative periods. With the support of at least one-third of deputies, impeachment proceedings against the President may be initiated in the future. The update of the provisions on the dismissal of elected representatives in the municipal parliaments and at the national level was also voted on. Parliament also passed a new law on the operation of diplomatic services.
Draft laws that had already been made public were discussed in working groups with experts from several institutions, and citizens were able to submit their proposals by e-mail. As Foreign Minister Bruno Rodríguez emphasized before the vote on the new Diplomatic Service Act, 24 of the 38 articles had been modified as a result of debates. Other drafts also underwent changes. “This is an experience that we must continue and expand,” said Díaz-Canel, summing up the expanded participation of citizens and specialists in the legislative process.
Government representatives reported to deputies at the meetings. Alejandro Gil, Minister of Economic Affairs, said that in recent months the country needed to address not only the consequences of the Covid-19 pandemic but also the impact of the U.S. economic blockade. Since 2019, over 130 new sanctions have been imposed by President Donald Trump’s government, resulting in additional losses of over US$5 billion per year.
Given the increasingly challenging circumstances, 250,000 of the 630,000 self-employed, which include mainly private restaurant owners, accommodation and transportation service providers, have temporarily given up their licenses in recent months. “In this difficult context, we cannot go on as we have done up to now,” says Gil. In implementing the new economic strategy adopted by the Politburo in July, progress has been made in all 16 key areas.
Under the new rules, state-owned companies will be given greater autonomy in the future and are to interweave with the private sector, which has now gained access to foreign trade. The next step is to submit a comprehensive agricultural reform to the Council of Ministers for approval, which will transfer regulatory powers to the local government level and increase the opportunities for marketing food products. In addition, before the end of the year, new loans and financial resources, including foreign investment, are to be made available for the development of agriculture.
Starting in late November, state-owned companies will also be able to take out real estate mortgages, which will serve as collateral to foreign investors to improve access to credit. To this end, the State Council passed decrees 14 and 15. The amendments will come into force on November 23rd.
State companies, Cuban trading companies and Joint Ventures can then use part of their fixed assets, real estate and services as collateral to foreign investors and creditors with the authorization of the State Council. After a preliminary risk assessment, the establishment of financing structures will also be possible. If debtors fail to meet their obligations, the new legislation provides for seizure and repayment to creditors using the proceeds of public auctions. When repurchasing mortgages on state-owned companies, the state reserves its right of first access.
The amendment to the Mortgage Law is intended to create “new incentives for more business opportunities”. The resolutions are intended to improve the country’s credit rating by increasing investors’ “confidence and security over their loan funds used to start a business”.
The amendment aims to “promote the use of collateral for economic relations between individuals and corporations”, including the expansion of real estate mortgages, which previously could only be taken out on vacation and recreational homes. This would allow families who previously had no access to credit due to low income to give their house as collateral to the bank.
Finance Minister Meisi Bolaños Weiss introduced the 2019 budget report to deputies. According to the report, the deficit last year stood at approximately 6.2 percent of GDP. This means that the negative balance was somewhat lower than planned, despite the substantial wage increases in the state sector. Education, health care and subsidies accounted for 67 percent of government spending. Tax revenues rose by three percent. The private sector’s share increased by just over one-fifth, thereby generating 14 percent of government revenues and 19 percent of tax revenues in the past fiscal year.
The coronavirus pandemic has caused a global clash of different political paradigms in recent months, Díaz-Canel said in his speech at the closing session. This has shown “the humane and fair nature of socialism”. Despite the “extreme and unprecedented tightening of the blockade”, Cuba has shown solidarity with other countries in the fight against the pandemic, while at the same time containing the virus at home and reducing its lethality.
Given the pandemic and the challenging economic situation, he stressed the need to step up “the pace and the far-reaching changes” within the framework of the new economic strategy, with as much as possible being initiated this year.
The next parliamentary session will take place in December. In addition to the 2021 draft budget, further bills are to be passed then.
The National Assembly met in virtual form for the first time. In compliance with the distancing rules, only 225 of the 590 deputies in parliament attended in person at the first session since the start of the Coronavirus pandemic, including Communist Party Secretary General Raúl Castro. The others were connected in several small groups by video conferencing.