Cuban Government Announces Currency Reform and Opening of Tourism

RIO DE JANEIRO, BRAZIL – In a special broadcast on the state of the nation, Cuba‘s President Miguel Díaz-Canel and Prime Minister Manuel Marrero reported on the upcoming currency reform and a realignment of the country‘s coronavirus strategy.

The concept of the currency reform was passed by the Communist Party’s Politburo on September 23rd and 24th, and will be implemented under the leadership of former Minister of Economy Marino Murillo. Currently, training and preparatory courses are underway in all institutions involved, from which some lists with sample prices have been leaked, as the President conceded.

However, these do not yet include the full scope of the reform, in which the whole wage and price structure is being reorganized. The CUC (convertible peso) will be abolished and the Cuban peso (CUP) will be given a new exchange rate, which will also make it exchangeable into US dollars.

In the process, many subsidies will be reduced. Wages, pensions, and their real purchasing power will increase. The monthly rationing booklet “Libreta” will be retained for the time being, “but later, when the situation in our markets is different, we will have to phase it out,” the President said.

He added that agricultural reform and the downsizing of the state sector, which is to interact better with the private sector in the course of monetary unification, were also on the agenda. The “required and simultaneously undesirable partial dollarization” in the context of the economic and supply crisis of recent months could only be reversed in the long term by stepping up the implementation of economic reforms. Given the restructuring of the economic system, Díaz-Canel appealed for trust. All accounts and savings were safe. Adequate time frames were planned for the exchange.

This week, the population is to be briefed by the respective Ministers on the full details of the currency reform.

Despite the repeated intensification of the US blockade, the principle that no one is left behind in Cuba is still in force in the current crisis. Concurrently, the head of state cautioned for a realistic expectation: “The currency reform is not a magic solution to all our economic and financial troubles, but it will contribute to an increase in labor productivity and a more efficient development of the productive forces”.

The President also announced a realignment of the country’s coronavirus strategy. Thirteen of the 16 provinces could soon welcome tourists again, and the required regulations came into force yesterday, Monday.

With a total of 5,917 coronavirus cases and 123 deaths, the socialist Latin American island is well ahead in containing the virus. There are 522 cases per million inhabitants. By comparison, the figure is 10,773 in the Dominican Republic and 3,755 in Germany. After two outbreaks with subsequent lockdowns in Havana and Ciego de Ávila, the nationwide case numbers dropped back to well below 50 per day. There are currently only two Cuban Covid-19 patients in intensive care.

Given these positive results, it is no longer reasonable to maintain the strict measures that severely restrict economic activity, the president explained. Therefore, a review of the coronavirus policy has been decided. The task now is “to find a new normalcy for living with the disease without taking great risks,” Díaz-Canel said. In this process, citizens’ personal responsibility and the internalization of certain basic rules would play an even greater role. The criteria for the relaxation phases to date and their measures have been changed, and the rules are to become simpler and more effective.

Masks are now used in all phases, but in its final phase, it no longer needs to be worn outdoors but only in closed rooms and in crowded areas. People who may be infected should be placed in home quarantine rather than being referred to state institutions. The Council of Ministers’ special daily meetings on the coronavirus situation will now be held only twice a week, and the briefing by epidemiologist Francisco Durán, which was formerly also held daily, will now take place only on Fridays.

Three provinces have not yet reached the final relaxation phase of the “New Normality”: Havana, Ciego de Ávila, and Sancti Spíritus. The remaining 13 provinces are preparing for a gradual opening to international tourism. Flights will be restored to these provinces on Monday. However, incoming passengers must produce a reservation for a state hotel and undergo a free PCR test, which now replaces the two-week quarantine for citizens entering the country. The tourist center of Varadero will be the first to open to tourists on October 15th.