Cuba boosts subsidies for private business

From Cuban News Agency:

Cuban Gov. Earmarks Nearly One Billion to Get Enterprises Into Shape

HAVANA, Cuba, Jul 29 (acn) The Cuban government recently allocated approximately $998 million Cuban Pesos (CUP) for the revitalization of a number of enterprises involved in the production of goods and services, to compensate the loss they have accumulated over the years and face their lack of liquidity.

In presenting an update of the State budget before the Commission on Economic Affairs of the Cuban Parliament, for the first half of 2011, Minister of Finances and Prices Lina Pedraza said the ministries on the priority list are those of agriculture; food, light, basic and iron and steel industries; domestic commerce and construction.

Pedraza said the capitalization of the entrepreneurial system will target subsidized products such as rice and beans first, since their production still falls short; and it includes restructuring the enterprises’ finances and in some cases even settling their debt, in a move to boost their management capacity.

The minister announced that for the rest of 2011, people will be subsidized in the purchase of construction materials according to their income.

Likewise, the government will try to secure certain raw materials for the self-employed, such as wheat, oil and eggs, while a final solution in the creation of a wholesale market is reached, Lina Pedraza explained.

As part of the budget update, Pedraza said incomes and expenses increase on an equal proportion, and the deficit of $2.6 billion passed in the previous session of the National Assembly, which represents 3.8 percent of the country’s Domestic Gross Product.

The minister made it clear that failing to fulfill sale and commodity circulation programs due to the low demand of certain goods, as well as inefficiencies in actions to collect debts with the State in most of the provinces, have affected takings negatively.

Pedraza said it is also important to analyze the impact in the budget of reordering the process of cutting inflated payrolls, and reiterated the call to tighten monthly budget control at all levels.

Deputy Jose Luis Rodriguez described the decision of placing nearly $1 billion CUP for entreprenurial restructuring and settling the companys' debts as a wise move.

Luis Manuel Castañedo, also a parliament member, also hailed the measure, though noting that its direct impact in the people should not be disregarded since “salaries continue to be the same while the prices of a group of products in retail stores is increasing.”

In the first day of sessions of the Cuban parliament’s permanent commissions, the members of the group on Economic Affairs heard details about tax administration, self-employment and tax policy.

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