Condition for growth: external finance and domestic economy

The process of renegotiating the foreign debt that has carried out Cuba in recent years has resulted in a marked improvement in international credibility and the macroeconomics of the country, which has been achieved mainly by increased exports our professional services and income from tourism.
In the last six or seven years the country has begun to slow, even reverse the net balance of foreign trade in goods and services. That is, it has been able to accumulate a surplus, while we have exported more goods and services than imported

Norwalk (CT)

In dialogue with the Trabajadores newspaper, Dr. Antonio Romero Gomez, professor Research Centre for International Economics (EIPC), University of Havana, explained that this situation allows Cuba gain greater credibility as a partner for other countries; and inward, contributing to reduced domestic supply deficit from the increased availability of foreign credit.
 How has Cuba been able to improve their situation with foreign partners?
In the last six or seven years the country has begun to slow, even reverse, the net balance of foreign trade in goods and services. That is, it has been able to accumulate a surplus, while we have exported more goods and services than imported.
This reserve has allowed the conditions to face with some availability of financial resources, the process of renegotiation and rescheduling of debts that had accumulated.
The fact that we begin to normalize external financial relations with a significant part of our major creditors, allows Cuba to regain its international credibility, which has a direct impact on relations with major trading partners.
One of the most important undoubtedly was held with Russia, which involved the cancellation of 90% of the debt, which considerably eased the level of external obligations. The same was done with Mexico and China, and recently the agreement with representatives of the Group of Cuba creditors (Paris Club) was signed to regularize the payments of overdue debt. In this regard the disbursement of an amount of $ 2 000 600 million was agreed; exempting him a significant proportion of the debt that the country maintained with that block.
This is critical because it is the last step to have again normalized relations with the international financial market and therefore to be creditworthy.
What is the impact on relations with other countries?
The fact that we begin to normalize external financial relations with a significant part of our major creditors, allows Cuba to regain its international credibility, which has a direct impact on relations with major trading partners.

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To some extent this is observed in the case of Mexico, which has been one of the countries that has presented attractive proposals for investment in the Mariel Special Development Zone. This is associated with that, once reached agreements with Mexican banks, automatically Cuba is creditworthy and as a result, Mexican companies can now apply for funding to conduct business with the island.
You said that debt forgiveness has been made possible thanks to exports of goods and services. How do these results impact on the national economy is highly import?
We have exported more goods and services that all we have imported. However, the Cuban economy continues to maintain a chronic deficit in trade in goods, ie goods, where we import more than we export.
However, it is a surplus in the services account, which is mainly explained by the increase in the provision of Cuban professional services, in addition to the generated by tourism.
The income account for these in external balances is enough, and more, to offset the deficit in trade in goods. In recent years this has created a surplus that has been able to offset the merchandise trade. Cuba exports about 4 to 5 billion annually convertible pesos in assets, however, import from 9 billion to 11 billion.
From 2008 to 2009, when the international economic crisis arose, the country decided to restrict import levels as an essential part of its policy to meet this challenge; but such a reduction could not be maintained for long, because we are a highly import-dependent economy.
Everything indicates that the Cuban economy will achieve growth around 4%, which is very important because it breaks the inertia of very low rates of economic growth that we held, which accounts for the maturation of the transformations that have taken place in the country
What is the impact this situation in the country in the midst of updating our economic model?
In Cuba it has embarked on a process of changes that are very important, complex, contradictory, but essential.

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The changes in macroeconomic management are associated with what has happened in the external sector, which has led to that the country is now better able to provide more financial slack to allow it to grow at higher rates, as has occurred in this year.
Everything indicates that the Cuban economy will achieve growth around 4%, which is very important because it breaks the inertia of very low rates of economic growth that we held that accounts for the maturation of the transformations that have taken place in the country .
Moreover, this growth is in very adverse international conditions for the vast majority of countries in Latin America and the Caribbean. Paradoxically Cuba grows when many nations of our region are in full stagnation.
 And how this process is reflected in the individual economy in the population?
Unfortunately what happened at the macroeconomic level is not yet reflected directly in the vast majority of Cuban homes. These changes in the macroeconomic environment have not yet influenced needed to produce significant changes in the micro-economic field, ie, the level of efficiency in enterprises, expenditures of the population in local development and in the solution of accumulated problems in specific markets.
results are observed in the macroeconomic environment of the functioning of the Cuban economy that have not been accompanied by sufficient structural changes that modify the micro-economic environment of the country.
However, there is a disconnect between these aspects, as it begins to have greater external financing, which is important for investments, companies and local development. The latter, under certain conditions, could contribute to the increase in total factor productivity, which is the basis for improving the quality of life of the population.
 What economic sectors have grown fundamentally?
I think a major part of this economic growth is associated with three basic factors.
First, what happened to the sugar harvest this year, because although the plan was not met, involved an increase of almost 20% in the total value of production over the previous year.
Second, some sectors of the manufacturing industry are very depressed begin to become dynamic as part of key investments made by the country. The changes in the socialist state enterprise, which still do not solve essential problems, have achieved an increase in average productivity from greater autonomy to increase their production value.
Finally, the tourism sector has been important in the dynamism of the Cuban economy. There are estimates showing growth of around 15% of visitors in 2015 compared to last year, which is significant considering that the international environment is very unfavorable.