{"id":238687,"date":"2021-05-10T09:50:11","date_gmt":"2021-05-10T13:50:11","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=238687"},"modified":"2021-05-10T09:50:11","modified_gmt":"2021-05-10T13:50:11","slug":"economic-reform-in-cuba-principles-and-pseudo-principles","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/cuba\/economy\/cuban-economy\/economic-reform-in-cuba-principles-and-pseudo-principles\/","title":{"rendered":"Economic reform in Cuba: principles and pseudo principles"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The reform is not reversed. This is one of the messages sent by the recently concluded <\/span><a href=\"https:\/\/oncubanews.com\/tag\/viii-congreso-del-partido-comunista-de-cuba\/\"><span style=\"font-weight: 400;\">8th Congress of the Communist Party of Cuba (PCC)<\/span><\/a><span style=\"font-weight: 400;\">. And it is that, judging by the delays and setbacks that an unidentified group of \u201cbureaucrats\u201d\u2014necessarily high-ranking\u2014managed to interpose as of 2014, the slowdown of the process in this conclave was a possibility.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although the definitive versions of the so-called \u201cguiding documents\u201d have not yet been published, what happened in this event, both due to the content and nuances of the main speeches and the appointments in the hierarchical structures, allows us to take a peek at a fraction of the complex plot that seems to compete in these structures for some time: the different visions of the country model and the distribution of powers to undertake them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many of the most critical debates in the deliberation spaces in Cuba today were addressed in the opening and closing reports of the event. In economic matters, a significant part of the argument is aligned with what was conceptualized in the two previous Congresses, which ratifies its validity and demands its immediate implementation. <\/span><\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"fw1HexP2wO\"><p><a href=\"https:\/\/oncubanews.com\/cuba\/viii-congreso-del-pcc-un-balance-preliminar\/\">VIII Congreso del PCC: Un balance preliminar<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"\u00abVIII Congreso del PCC: Un balance preliminar\u00bb \u2014 OnCubaNews\" src=\"https:\/\/oncubanews.com\/cuba\/viii-congreso-del-pcc-un-balance-preliminar\/embed\/#?secret=q2KOqZ0KcS#?secret=fw1HexP2wO\" data-secret=\"fw1HexP2wO\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p><span style=\"font-weight: 400;\">However, some critical points for the economic advance of Cuban socialism and some substantive and defining processes that are underway were not resolved in the central discourses of the conclave. Instead, it was intended to elevate to the rank of principle unnecessary continuities of stubborn footholds, supported by conceptually precarious theses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As endorsed in the <\/span><a href=\"https:\/\/www.pcc.cu\/sites\/default\/files\/tesis-resoluciones\/2021-04\/Actualizaci%C3%B3n%20de%20la%20Conceptualizaci%C3%B3n%20del%20Modelo%20Econ%C3%B3mico.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Resolution on economic issues<\/span><\/a><span style=\"font-weight: 400;\">, the Congress ratified that \u201cwe are in the historical period of the construction of socialism.\u201d This statement, although it may seem trivial to many, constitutes the conceptual support to undertake the reform; because it means, when compared to the model of statist socialism that we inherited, which recognizes socioeconomic heterogeneity, the need for the coexistence of different forms of ownership, the impossibility of doing without the market as the basic mechanism of coordination between economic actors, and the unfeasibility of governing the economy by decrees, among other aspects. The fundamental mission of this period, well understood by the Chinese and Vietnamese, is to develop productive forces.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now then, in this economy, about which we already agree on its heterogeneous nature, and which is also extremely open\u2014given the composition and quantity of its funding\u2014, supposing that any foreign trade operation is carried out through state-owned enterprises constitutes a colossal attack on the development of the productive forces. Meanwhile, it does not guarantee any main function for the socialist ideal that governs the project. It only constitutes a perverse burden from the inherited model.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although the depth of the current supply crisis requires quick and daring solutions, and there are proposals in this regard worthy of consideration, I agree not to promote private import channels destined for the retail trade. However, the urgent need to generate new domestic goods, to which the private and cooperative sector is being summoned, will not be able to be solved while their demands for importing fixed assets and inputs continue to be subject to the aberrational dynamics of state-owned enterprises that currently control that activity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the greatest sin does not lie in the state condition of the enterprises in charge of providing foreign trade services, but in the prevailing oligopolistic distribution. This is the main source of the inefficiency and rentism that prevail in Cuba today. In this area, as in others, the operating enterprises must be competitive and this will not be fulfilled as long as they enjoy artificially secured market shares. The <\/span><a href=\"http:\/\/www.cubadebate.cu\/especiales\/2021\/04\/17\/informe-central-al-8vo-congreso-del-partido-comunista-de-cuba\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Central Report<\/span><\/a><span style=\"font-weight: 400;\"> itself states that \u201cthe state business system is facing the challenge of demonstrating in practice and consolidating its position as the dominant form of management in the economy. This is not something achieved by decree\u2026. Old bad habits have to be changed and entrepreneurial and proactive traits developed in the management teams of our enterprises and establishments, which every day will function with greater autonomy, pursuing higher productions with more efficiency.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To counteract this deformation of the operating model, the authorities could mobilize a couple of options, viable in the short term:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As part of the granting of autonomy, all state-owned enterprises could be empowered to carry out foreign trade operations, thus creating better conditions for competition among them.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The legal norm that regulates the emergence of MSMEs (micro, small and medium-sized enterprises), must authorize them to directly choose their portfolio of foreign suppliers and clients, without imposing on them by decree the mandatory intermediation of state-owned enterprises, which they might not need.<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Absolute state control over foreign trade is far from constituting a principle of socialism, much less if it works through a monopoly structure. The only thing it efficiently produces is obstacles to the development of productive forces, as well as a formidable instrument of control and non-tax collection. Promoting private commercial imports would have more costs than benefits if it is suggested only \u201cto establish a non-state system of domestic trade.\u201d But, at the same time, it is essential for the accelerated development of domestic productions that must be undertaken by the private and cooperative sectors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another controversial issue addressed by the Central Report refers to the old and legitimate claim that the practice of professional activities be recognized in the <\/span><a href=\"https:\/\/oncubanews.com\/en\/tag\/cuban-private-sector\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">private sector<\/span><\/a><span style=\"font-weight: 400;\">. A policy announced more than three months ago by the Council of Ministers\u2014which is waiting patiently for the legal norm to implement it\u2014will significantly expand the number of activities that can be carried out privately, including many by professionals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is no reason to associate the fair demand of some sectors\u2014such as architects, lawyers, accountants, and tourist guides\u2014that were excluded in a first version, with aspirations of privatization. The private exercise of a profession does not imply the privatization of the means of production where this professional works, and much less for the abovementioned professions. These types of connections that are argued from the extreme accuse a simplification similar to those that still identify the <\/span><a href=\"https:\/\/oncubanews.com\/en\/tag\/joe-biden\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Biden<\/span><\/a><span style=\"font-weight: 400;\"> administration as a socialist threat to the United States.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, I agree with the concern that there are actors\u2014especially those closest to that possibility\u2014yearning for a privatization process that allows them to be awarded the assets that they currently manage. Here is a critically important threat that has not been sufficiently addressed in the Reports.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, the isolated mention of tourism and the confidence in its future possibilities is a way of protecting the investments in the expansion of capacities that continue to take place in this sector. The persistence of these works has been highly questioned given the uncertainty associated with future scenarios and given the irrecoverable opportunity costs involved in not relocating these resources today to other survival priorities, including food production. Therefore, it should not be considered a settled issue.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When referring to the dollarization process that has been growing in the economy, the Report predicts an indefinite durability. Although it is a complex issue, perhaps economically unavoidable, the truth is that these sales do increase real inequality gaps that do not emanate from interpretation problems or communication deficiencies. As long as the State does not intervene in the exchange market to offer some legal means of access to freely convertible currency in exchange for Cuban pesos, the state policy will be excluding large masses of people from the consumption of the stores that sell in hard currency. The worst thing is that this exclusion is determined, not by low-income levels, but by its disconnection with external remittance sources. It is a true privilege that, as a concept, is closer to contradicting a socialist principle than the issues mentioned above. It cannot be sustained.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the midst of the most unfavorable economic crisis in the last 25 years, pressured by the most complex health situation since the <\/span><a href=\"https:\/\/oncubanews.com\/tag\/coronavirus\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">pandemic<\/span><\/a><span style=\"font-weight: 400;\"> began, without the economic siege having changed one iota with the new U.S. administration, and now under internal fire by actors seeking to challenge the political system, Cuban authorities are facing a colossal challenge. The unity of objectives that is achieved within the government, the transparency with which it projects its objectives and actions, the way in which it is increasingly built on participatory designs, the humility to correct errors and the irrefutable adherence to the socialist rule of law endorsed in the Constitution, are some of the essential starting conditions.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the midst of the most adverse economic crisis in the last 25 years, the Cuban authorities are facing a colossal challenge.<\/p>\n","protected":false},"author":3779,"featured_media":238689,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13904],"tags":[14816,14914,33481],"ppma_author":[34057],"class_list":["post-238687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cuban-economy","tag-cuban-economy","tag-cuban-private-sector","tag-economic-reorganization"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Economic reform in Cuba: principles and pseudo principles | OnCubaNews English<\/title>\n<meta name=\"description\" content=\"In the midst of the most adverse economic crisis in the last 25 years, the Cuban authorities are facing a colossal challenge.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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