March 1, 2021

Cuba authorizes the sale of foreign currency cars to alleviate the crisis



The Cuban government announced Thursday that it will sell vehicles imported in freely convertible currency to natural persons from next February 24 with a 10 percent reduction, as part of the measures put in place in order to raise foreign exchange and alleviate liquidity crisis of the economy.

The commercialization of cars was already carried out in the country since 2014, but then it was only carried out in Cuban convertible pesos (CUC, one of the two local currencies circulating on the island, which in its case has parity with the dollar).

In announcing the new measure, the Minister of Transportation of the island, Eduardo Rodríguez, said that this decision is based on “the legitimate need of many citizens to have a means to move when public transport, logically, fails to cover all the vast demand for daily mobility. “

The headline acknowledged that this decision will not directly impact the majority of the population, but explained that the revenue generated from the sales will be destined to a fund to acquire spare parts in order to reinstate buses and other vehicles to the public transport service that today they are paralyzed, as well as restoring the investment plans of those media.

DETAILS OF ECONOMIC MEASURE

The Minister of Finance and Prices, Meisi Bolaños, said that the prices with which the cars have been marketed are maintained, although with a 10 percent commercial reduction.

The retail sale of automobiles entered into force in Cuba five years ago between reforms to eliminate bans and “update” the socialist economy on the island, but the measure provoked a lot of criticism among Cubans due to the high prices set by the Government.

When the market was then opened to entities authorized to sell motor vehicles, rates ranged from $ 20,000 to $ 110,000 and only two models with more than a decade of use were offered at about 15,000.

On the next commercialization of vehicles, the first vice president of the Cimex corporation, Iset Vázquez, said that in principle it will be carried out only in Havana in the agencies of that company that are enabled and will later be extended to the rest of the country.

The importation of new vehicles and specific parts, such as different engine models, is planned based on the request made by customers to the marketing agencies, according to the executive.

OTHER ITEMS FOR MARKETING

The Cuban government authorized in October last year the purchase of high demand appliances such as washing and refrigerating televisions, as well as parts and pieces of automobiles and other merchandise through magnetic cards, backed by a bank account in freely convertible currency.

In addition to the sale of cars, this Thursday an expansion of the batch of products included in these sales was announced, including security systems, heaters, cold rooms, extraction hoods, and computer equipment such as laptops, paint cars and professional tools, among others.

Three months after the launch, the Deputy Prime Minister and head of Economy, Alejandro Gil, described the progress of the regulations as positive, although he acknowledged that a pending debt is the stability of the offers, because there is a deficit of high demand products in the network of 80 stores enabled for these sales.

Gil also indicated that the importation by natural persons, an additional service that is incorporated, will specify the implementation of the measures.

It is an old claim by Cubans to solve the constant shortage of all types of goods, whose importation is heavily taxed by the State.

In relation to the tax that has been applied in Cuba to the US dollar since 2004, the holder said that it is not possible to eliminate it under current conditions.

In that sense, he attributed responsibility for the application of this tax to the United States government for the economic embargo policy that it maintains against the island and specifically for transactions with the dollar.

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