Financing for Cuba's Sustainable Future

The Economic Commission for Latin America and the Caribbean’s (ECLAC) most recent report on the Social Panorama of the region places Cuba among the countries with the most favorable indicators in education, health and social protection. 

These achievements, however, are far from secure. The economic sanctions imposed on Cuba over the last several decades and its exclusion from major international financial institutions, has significantly restricted its ability to address developmental challenges. Together with the impact of the COVID-19 pandemic, and the structural vulnerabilities associated with its status as Small Island Developing State (SIDS), the need for more secure access to development financing in Cuba could not have been more urgent. 

Recognizing the need to bridge this funding gap, the UN country team in Cuba launched a joint program to establish an Integrated National SDG Financing Framework in Cuba (CIFFRA). The seeds of this initiative were planted two years ago following a series of dialogues and discussions between the UN Coordination Office in Cuba with UN System agencies and national institutions. 

After identifying the potential of an Integrated Financing Framework which is tailored to Cuba’s specific economic circumstances, the Resident Coordinator’s Office promoted the proposal together with key partners, including the Central Bank of Cuba, the Ministry of Economy, the Ministry of Foreign Trade and Investment, the Statistics and Information National Office, and the Ministry of Finance and Prices; under the auspices of the United Nations SDG Joint Fund (SDG Fund).
 

Two years since its launch, the Joint Program has opened a route to strengthen financing for sustainable development in Cuba, as a means of implementing the 2030 Agenda. The Program combines the leadership of ECLAC -which has strong expertise in addressing regional economic challenges-, and the contributions of UNDP, which has five decades of experience in the field tackling development issues. CIFFRA comprises a package of policy recommendations in key areas including foreign investment, channeling remittances to the productive sector, promotion of exports, innovative financing mechanisms and new tools for the modernization of public finances, including a methodology for formulating program and results budgets.  Moving into the next phase of implementation, the Resident Coordinator’s Office is collaborating closely with the national authorities to develop a joint roadmap to fully operationalize these critical recommendations. 

Although CIFFRA is part of more than 60 examples of Integrated Financing Frameworks supported by the Joint SDG Fund, each Framework is developed through a unique, country specific approach, as the Deputy Regional Director of ECLAC, Hugo Beteta explains.  "We thought it was going to be very difficult: understanding the specificities and restrictions of an economy like Cuba's, with severe problems in its balance of payments... we saw it as a great challenge, but once we started working together it went extremely well".

Government entities and local organizations have become closely integrated into the new SDG Financing Framework. The SDG Lab for example – a monitoring platform for sustainable development initiatives which was supported by the Joint Program, has benefitted from the expertise of local stakeholders. Working closely with UNDP and CIFFRA experts, national and local entities led by the Ministry of Economy developed a methodology to identify SDG accelerators and design a training program to increase gender awareness in financing policies. 

Since the launch of the CIFFRA, financing for development has gained greater prominence in Cuba, and was included as a key pillar in the 2020-2024 UN Sustainable Development Cooperation Framework, as agreed and signed by the Government. 

Preceded by initiatives that boosted foreign investment and trade, CIFFRA has now identified 12 strategic areas for development financing in Cuba, including financing productive transformation, modernization of public finances and external debt management and has promoted discussions with national institutions, international experts and policymakers around them. 

According to UN Resident Coordinator in Cuba, Francisco Pichón, the success of the Joint CIFFRA Program is rooted in its collaborative and inter-disciplinary nature. 

"Access to innovative financial instruments is a challenging and urgent issue to preserve Cuba's social protection system and its SDG achievements. That is why we need a lot of collective thinking.  The best proposals always come out of this spirit of cooperation."  

CIFFRA marks just the beginning of Cuba’s path towards more sustainable financing for development. The Resident Coordinator’s Office in Cuba is continuing to support new initiatives to strengthen access to development financing, including a new fund targeted towards small and medium-sized enterprises in the food production sector. Work is also being done on the design of a development finance institution (DFI), which would help mobilize financing for small actors in the agricultural-food sector and for other actors.

This story was written by the RCO in Cuba with editorial support from UN DCO. To learn more about the work of the UN in Cuba visit Cuba.un.org