By Roberto Jorquera
Whilst the United States escalates its economic blockade of Cuba, the Cuban government's national budget for 1996 continues to prioritise the needs of the population. Though 1995 was another extremely difficult year for Cuba's economy, it has improved steadily since its most difficult years, 1993-94.
The Cuban National Assembly on December 26 debated and adopted the national economic plan and the state budget for 1996. Central issues included how to overcome food shortages and the imposition of taxes for the first time since the victory of the revolution in 1959.
The issue of taxation arose in response to the increased development of self-employment, which allows some people to earn in one day more than a teacher or doctor earns in a month.
Fidel Castro said during the discussion, "We still believe in the enormous benefits of socialism, and the national interest, which is the people's interest. Everything that the country does is for the people, not for one wealthy social class or an exploitative class. But the tax that we are discussing fundamentally refers to the income of self-employed persons, and particularly to those who receive large sums of money: a tax on profits."
The Cuban economy is projected to grow 5% in 1996, and a reduction in the budget deficit in the order of 25% is foreseen. Investments are to increase by approximately 27%. There will be significant increases in the production of cement, steel and nickel, and the net contributions from tourism will be 50% greater than in 1995.
In 1995 the budget deficit was projected to be 1 billion pesos, but by the year's end it stood at only 775 million pesos.
For 1996, spending has been set for 12.22 billion pesos, of which 7.05 billion is being allocated for social services. Even though the economic blockade has strangled the development of the economy, Cuba is still projecting to increase the financial resources for health, education and social services by 2.6% in relation to 1995. Other areas also expecting increases include housing, highways and community services. The areas that will be hit by cuts are those of the armed forces and state administration.
In a meeting of the Science and Technology Forum held in Havana in January, Fidel Castro commented on the current situation: "Taxes are necessary in order to maintain the achievements of the revolution and to diminish the privileges and inequalities that could be created ... Capitalism is moving into chaos ... We are developing solutions to the world's problems, in the way that we think that those problems should be solved, and other peoples are doing the same."