The Type of Wholesale Markets on the Horizon
Yenisel Rodriguez Perez
HAVANA TIMES – One of the major contradictions caught sight of in Cuba’s self-employment and small business liberalization process is the marked absence of a wholesale market that can sustain the activities of these two sectors.
This forces small-scale employers and the self-employed to pay extremely high prices for the raw materials they use. This leads to a rise in the price of goods and services and has an impact on consumers, particularly among a profoundly impoverished population.
This economic divide leads to dissatisfaction everywhere – even the bureaucratic and political elite, which has traditionally benefitted from the devastating effects of anti-market measures, appears to spare no effort to overcome the problem.
Despite this, the situation remains stagnant. At this stage, we’ve heard just about every sort of excuse from the government economists, and they don’t have much to add.
During one of the last television appearances of economy minister Murillo, a government journalist complained about the endless postponement of the creation of wholesale markets.
His complaint was forgotten in later sessions of that government discussion. It wasn’t until the very last day, as a result of an essay-protest by the same journalist, that government officials saw themselves forced to address the issue publicly.
The panel reacted with an authoritarianism worthy of a Medieval monarch.
“Say it, say it, say it!” With such rude words, Esteban Lazo Hernandez, Vice-Chair of the Council of State and Member of the Party Secretariat, gave the floor to the dissatisfied journalist.
Murillo’s response was a vigorous beating around the Bush. That said, during his reply, he revealed some concrete information about the future of the highly-demanded chain of distribution.
Many of us were left speechless.
As it turns out, our bureaucrats are considering wholesale prices at 20 % below retail prices currently being applied in the country, without taking the magnitude of the purchase into consideration. This is a total insult, though I must confess my information about how prices are set internationally is not exhaustive.
More than an economic reform, what Raul Castro’s government is preparing is an act of compassion on behalf of the slave-holder, within the winding roads of Cuba’s pro-capitalist bureaucracy.
Currently, Cuba’s retail market can arbitrarily increase the profit margins of domestically manufactured products by as much as 50 %. For this, they use analogous products that are imported into the country as reference and forget about the production cost.
This reveals the magnitude of the scam that would result not only from setting such high and immutable prices for the wholesale market to come, but from taking as reference a retail system fraught with speculation and under a bureaucratic monopoly.
One thought on “The Type of Wholesale Markets on the Horizon”
The fundamental flaw in the Castro economy is the lack of competition which leads to “price-setting” which ends up becoming “price-fixing”. Letting the market decide nearly eliminates shortages and assures equal access.
Comments are closed.