HAVANA, July 18, 2024 (BSS/AFP) - The government of crisis-rattled Cuba on Wednesday launched an offensive targeting small and medium-sized private businesses opened after a historic policy shift nearly three years ago on the communist-run island.

"We are not here to shut them down... but we do have to reorganize," Prime Minister Manuel Marrero said Wednesday at a legislative session that will run through Saturday.

Cuba is suffering through its gravest economic crisis in thirty years, with a tightened US embargo piling on top of soaring inflation, low production levels and a tourism sector struggling to recover from the Covid-19 pandemic.

In an attempt to mitigate the shortages, Havana in 2021 authorized for the first time in 60 years private companies to open in some industries, such as tourism, construction and food supply.

Private sector imports, valued by the government at $1.3 billion in 2023, have since caused "an uncontrollable spiral of demand for foreign currency in the country," favoring the development of an illegal market, Marrero said.

Some firms "have even gone so far as to offer domestic goods and services in foreign currencies," he added.

In an over-two-hour speech, Marrero acknowledged that the authorities "lacked foresight," when changing the policy.

But companies have "also failed to comply with things that were clear," he said, stressing the need to "reestablish order and discipline" in the economic system.

Among the measures envisioned are increased audits, beefing up the inspector corps, closing companies that under-declare, and strengthening electronic payment systems.

President Miguel Diaz-Canel, who in 2018 succeeded Fidel Castro's brother Raul as the country's top leader, lashed out on Tuesday at the "corruption" and "high levels of tax evasion" that are weighing down the economy.

Almost five percent of Cuba's 11 million people have fled to the United States in the past two years, the biggest wave of emigration since Fidel Castro's revolution.