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Should Cuba Change the Model or Weather the Storm

Economic measures announced on Tuesday, October 15, at the Mesa Redonda TV program contain aspects that deserve quiet reflection. It is not absurd that some return to the 1993 package implemented during the economic crisis to find answers.

In a way, the decision taken by the Cuban authorities was inevitable. The mistakes in monetary policy since 2003 have had consequences, particularly with regard to the management of the convertibility of the convertible peso (CUC) and the conditions that should have made possible the sustainability of the de-dollarization process decided at that time. Added to this is the little progress in increasing external competitiveness, one of the key factors behind the current balance of payments crisis.

In October 2004, the Cuban government announced that the circulation of the U.S. dollar would be eliminated and replaced with the convertible peso (CUC), with which it coexisted since the mid-1990s. At that time, the measure was justified based on the persecution of foreign banks, by the United States government, that exchanged the dollars raised, resulting in a fine to UBS Bank, the largest entity of its kind in Switzerland.

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