Cuban rum and cigars: from ruling the world to needing protection.

It may seem fair developmental strategythat he Castroism There has been an increase of 200% – this is very high if we take into account the depreciation of the peso – Duties on import of alcoholic beverages and tobacco for, according to official Gazette, Increase “the security of national production in these sectors”.

It may seem so because industrial protection policies Properly focused and implemented they can drive growth, as South Korea, Japan and Germany demonstrate. However, if these policies are conceived and implemented incorrectly, they become a tremendous burden that generate harmful dynamics that are very difficult to correct even in the long term, according to politicians and businessmen. Given the vested interests between them, as has happened in Argentina or India.

Cuba -An independent Cuba-could be, and probably should be Apply tariff protectionism to industries such as steel or pharmaceuticals (assuming these will be able to compete internationally) given the huge capital required for these productions to establish themselves, the novelty of their existence on the island and the fact that they have no competitive edge within the value circuit. These things are not beneficial. But protect alcohol and tobacco,

Expansion of alcohol And tobacco In the largest part of the Antilles, it has accumulated more than five centuries of tradition and experience, leading to a top position in quality and share of the world market due to its geographical, geographical, climatic, geotechnical and demographic conditions. CubaEven today, it has excellent competitive advantages in relation to other producers, which has justified and facilitated its specialization in these areas.

Yes now, After more than 500 years of accumulated experienceAnd with clear and proven benefits for that production, Cuban alcohol and tobacco need to be protected by the governmentThis means that something has been done very wrong in the management of these industries because, at this point, other countries should protect themselves from them. Cuban export,

Sadly it’s not even that It renewed tariff protectionism This is a symptom of the decline in the country’s two most important producers of finished goods; the worst part is that protectionism is bad policy. Far from protecting these industries, this policy sentences them to further decline, as the worst could happen. Cuba today produces only 36% of the tobacco it produced in 1958The reasons for such debacle are to be emphasized, now adding tariff protection which anesthetizes rather than sharpens trade nerves.

Guaranteeing an internal market to any national industry through tariff barriers Which artificially makes external competition more expensive, does not encourage much needed and necessary improvement based on innovation, because the only logic is that, in today’s globalized economy, it makes the difference between expansion or extinction.

If today Cubans prefer to drink foreign beers rather than national brands, it is because their quality-price-availability ratio exceeds that of the local ones. The same applies to cigarettes and tobacco, which flood the timbreiches that distribute nicotine throughout Havana through Panama. The only real way to reverse such a trend is to improve the national product through innovation, not by making the foreign product more expensive.

It’s no secret that Inability to compete on equal terms with producers from other latitudesOf these, Cuba’s oldest export industries (sugar and livestock have already died out) have only one reason: State monopoly, socialism, Castroism, loyalism… In short, evil. The solution will come only by going in the opposite direction.

But it is clear that besides fundraising efforts (Tariffs represent 14% of state income) This led to an increase in Castroist protectionism Its purpose is not to protect any national industry for which they have no use. Crazy five-fold increase in tariffsWhen its only and obvious salvation will be privatization of the entire production, transportation, storage, processing and marketing process, there is no progress.

He CastroismAs always, it is Giving priority to one’s own interests over the interests of the nation, In this case, he is taking care of his tobacco shop and a persecution that has kept the “illegal” trade of spirits even stronger than the one that forced the intense smuggling trade south of eastern Cuba for three centuries. did.

through andThis tariff puts pressure on Castroism Wants to stop, just as the country went from being a world leader in sugarcane and beef exports to being a leader in neither sugar nor meat, it has now moved from being a recognized exporter to being an exporter. Net importer of alcohol and tobacco derivatives, Could it be that they are feeling embarrassed or it is affecting their pocket?


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