Reviewing Cuba’s “Experiment” with Non-agricultural Cooperatives

By José Jasán Nieves Cárdenas  (Progreso Weekly)

HAVANA TIMES — The “experimental” opening to cooperatives in Cuba begins to show signs that it needs corrections.

Although the opening was defined by the authorities as “a test” — because, except in agriculture, the Constitution does not recognize other spaces where cooperative ownership may exist — so far 452 permits have been issued by the Council of Ministers for cooperatives engaged in the recycling of raw materials, transportation, food service, management of farmers’ markets and accounting, among others.

In most cases, cooperativism has meant the transfer of the enterprise’s management to the salaried workers, who must pay rent to the enterprise’s owner (the Cuban State), pay taxes and procure their own raw materials and clientele.

The expressed willingness that these societies be free of State tutelage has not always guaranteed that sales will increase, much less that autonomy exists.

‘Caged’ cooperative and stunted pines

The breeding of ornamental birds — such as cockatiels, canaries and rosacolis — is one of the sectors allowed by the new rules, with the premise of promoting the birds’ exportation and giving the breeders some commercial autonomy.

The tasks of the organization that represents breeders — the National Ornithological Association of Cuba (ANOC) — were changed into a “funnel” structure, where all bird-breeding cooperatives in the country must export or import birds through a single organization situated in Havana, the Export Cooperative. The change has shown only negative effects.

“The basic problem today is that we no longer export. It is a flaw that we carried over from the ANOC and has continued to reproduce itself ever since we adopted this commercial format,” says Andrés Marrero, manager of the first bird-breeding cooperative in the central province of Cienfuegos.

In 2012, 17 bird roundups were carried out for export; in 2013, seven; in the first four months of 2014, only one. And it’s not just the frequency of the roundups that has dropped. The number of birds trapped is progressively smaller, the partners say.

“We have no way to keep track of what’s being exported. We cannot believe that the entire country today depends on a single Mexican client, and that the Export Cooperative has no obligation to tell us what sales deals it’s making,” complains Arturo Mancebo, another member of the Cienfuegos cooperative.

Near the bird-breeders’ cooperative, at a busy intersection in Cienfuegos, is the Pinos Altos Cafeteria. Until January, it belonged to the Municipal Enterprise of Commerce and Gastronomy; since then, it has been adrift.

“Everything has been very irregular. [The previous operators] left us in the lurch and did not provide the supplies they promised,” says Ricardo Montes de Oca, a waiter for 19 years, who looks with dejection at the few clients in the shop.

“We used to sell ham, roast pork and refreshments but we lost them as soon as we became a cooperative. No other state-owned supplier agreed to continue serving us,” he said.

“We had been told that we could sign contracts with anyone who is authorized to manage a commercial activity, be it private, state-owned or cooperative,” says the cooperative’s chairman, Abel Mas Sosa, recently elected by the workers’ assembly.

Food cooperatives presumably can buy from state-owned suppliers such as the Milk Enterprise, the Meat Enterprise and the Food and Fish Enterprise, the only wholesalers who legally distribute many products. “But their representatives tell us that their main offices still haven’t established the procedures to sign contracts with us,” Mas Sosa says.

Authorities at the Ministry of Domestic Trade say that the problems affecting some cooperatives originate not only in the state-owned suppliers (who are officially permitted to sell to cooperatives) but also in the passivity of the workers themselves, who keep waiting for everything to come “down the pipeline,” as happens in all public businesses.

The new cooperative workers acknowledge that defect, but also point to the limitations that have forced them to make political deals to get some of the supplies they need.

“We’ve been able to continue selling some products because the state-owned company that owns this building continues to deliver the portions of merchandise that it used to send to our predecessors,” Mas Sosa says. “It is clear to me that, until we become totally independent and can sign contracts with all suppliers, we’ll be held back.”

Let’s change the focus

According to the leaders of the economic reform, such as the vice president of the Council of Ministers, Marino Murillo, turning state-managed shops, cafeterias and restaurants into cooperatives is “an important step in the transformation of the socialist state enterprise, and the quest for its maximum efficiency as the core of our economy.”

That, said in a context where the authorities constantly repeat that the businesses will not change owner (the State) but only managers, leads me to think that the conversion of selected businesses into cooperatives will be made “from above,” not through the initiative of ordinary citizens.

An illustrative detail. This year in Cienfuegos, 70 state-owned cafeterias, restaurants and barbershops will be turned into cooperatives, while only five applications for “cooperatives in construction” have been approved by the territorial government.

In view of that, some voices are warning about the danger of seeing the mere transfer of management as a magic wand that will provide all solutions.

“Because wages have been depressed for years, one might think that changing the state-run system into a cooperative formula will immediately improve the economic status of the new cooperative members. Nothing could be farther from the truth,” says Gizel Donéstevez, a Ph.D. in Economic Sciences at the Maria Abreu de las Villas Central University.

“That will only happen if the collective-management system manages to cover the costs with revenues, if the burden of state-employed intermediaries is eliminated, if real autonomy in management is fostered, and if regulation mechanisms are established that will encourage the producer,” she says.

Although it is useful to allow the transformation of state-owned enterprise into cooperatives, it would be far more successful to create the conditions for a natural blossoming of the businesses, Donéstevez believes, because conscious participation guarantees greater energy and interest among the partners. If cooperativism is not a voluntary initiative, it is not cooperativism.

A social and economic “experiment” such as the cooperatives initiative implies toppling many mental barriers that are deeply rooted, after more than 40 years of verticality and excessive control. The old methods will continue to replicate themselves until all the ties that bind economic cooperation are released.