Cuba Charts Economic Future

Patricia Grogg

Havana, Cuba

HAVANA TIMES, Nov 10 (IPS) — Cuba will develop its socialist economy relying on integration with friendly countries, accepting foreign capital as a complement to national investment, using its human capital efficiently and increasing high added value production, according to draft guidelines to be discussed by society at large.

In the social arena, the government will be less paternalistic and will seek to eliminate gratuities and the food ration book system, say the Draft Guidelines for Economic and Social Policy, circulating this week in Cuba as a basis for popular discussion prior to the Sixth Congress of the Cuban Communist Party (PCC).

The Congress, to be held in the second half of April 2011, will be entirely devoted to updating the island’s economic model, President Raul Castro announced Monday.

It has the authority to affirm the reforms that are already under way in labor and agriculture, and to approve others that are still being considered.

The announcement of the Sixth PCC Congress, postponed several times since 2002, took many people by surprise, but the proposed focus on the economy was regarded as logical and realistic in academic circles. “The economy is the foundation upon which everything else is built,” a researcher who requested anonymity told IPS.

The document needs to be studied

“I’ve just bought a copy of the 32-page document, and I can’t comment on it properly yet,” the academic said. Nevertheless, the first few pages of his copy were already underlined and there were annotations in the margins. “These are points that I think need clarifying,” he added, excusing his reluctance to discuss the contents.

The document was selling like hot cakes. “People were practically snatching them from my hands,” a Havana post office worker told IPS. “I hope they deliver plenty of copies this Wednesday, because many people went away disappointed when we ran out.”

Experts say the Sixth PCC Congress is an opportunity to move away from improvised economic measures and towards an orderly strategy, with clearly-defined phases, that will finally set aside the so-called “real socialism” characteristic of Cuba’s former Soviet bloc allies, and respond instead to the country’s present needs.

Havana service station.

According to the draft guidelines, socialist state enterprises will remain the main model in the economy, but “mixed capital companies, cooperatives, farmers with the right to use idle land, rented property landlords, self-employed workers and other forms that contribute to raise the efficiency of social labor” must be recognized and encouraged.

The non-state companies will be able to supply themselves in the market at non-subsidized wholesale prices.

People with an interest in one of the 178 trades and professions authorized for self-employment and private enterprise see access to wholesale supplies as essential to lowering the costs of their goods and services, although the authorities have stated that this development will depend on whether the country is able to afford it.

Much interest over dual monetary system

Great public interest is being shown in the stated intention to advance towards “monetary unification.” Cuba has a dual system, with the Cuban peso as its national currency, and convertible pesos (CUC) as the hard currency which replaced the U.S. dollar in 2004.

However, the process will depend “on productivity increases, the effectiveness of distributive and redistributive mechanisms, and the availability of goods and services,” the document says. Item 54 adds “because of its complexity, it requires rigorous preparation and execution, both objectively and subjectively.”

A sensitive issue for a large sector of the Cuban population is the proposal to “implement an orderly elimination of the ration book as a regulated, egalitarian form of distribution (of food) at subsidized prices, which benefits those in need as well as those not in need.”

Banking on regional integration topped by ALBA

As for economic integration, the guidelines give priority to continuing participation in the Venezuela-led Bolivarian Alliance for the Peoples of Our America (ALBA), and working intensively on economic coordination, cooperation and complementarily in the short, medium and long term for the achievement of its goals.

Selling coffee.

A “strategic goal” is to continue participating actively in economic integration with the rest of Latin America and the Caribbean, and to maintain Cuba’s membership in regional bodies like the Latin American Integration Association (ALADI), the Caribbean Community (CARICOM) and Petrocaribe.

Although the guidelines do not mention it explicitly, the Cuban government will continue to give priority to its relations with Venezuela. When he announced the Sixth PCC Congress, Castro also reported that the two countries are moving towards even closer economic ties, and have decided to extend their comprehensive cooperation agreement, launched in 2000, for another 10 years.

Popular debates on the draft economic and social policy guidelines will be held from Dec. 1, 2010 to Feb. 28, 2011, according to the schedule of preparations for the Congress. The public’s opinions and suggestions will be taken into account when the document is finalized for adoption, said Castro, who made his announcements with Venezuelan President Hugo Chavez seated beside him.

The First National PCC Conference will be held later in 2011, “to analyze internal party issues and other matters of national importance.”

The Conference had initially been planned to take place before the Sixth PCC Congress, in order to elect new governing bodies of the PCC, including the Central Committee, the Politburo and the Secretariat, which would then be responsible for completing the preparations for the Congress.

The Cuban president, who is also Second Secretary of the PCC, explained that the meetings had been switched around because of the progress made in preparing the discussion documents about the economy, the major issue. He said the first copy of the draft guidelines on economic and social policy was given to his elder brother, former president Fidel Castro.

Fidel became seriously ill in July 2006, and in early 2008 he declined to stand for reelection as president of the Council of State, but he retains his position as First Secretary of the PCC, which the constitution defines as the “highest leading position in society and the state.”

One thought on “Cuba Charts Economic Future

  • Great article, Patricia. I think every sincere socialist in the world is eager to learn of how the PCC intends to reform the economy and hopefully save the Revolution.

    Your most interesting and most hopeful phrase for me is that the Congress “will finally set aside the so-called “real socialism” characteristic of Cuba’s former Soviet bloc allies, and respond instead to the country’s present needs.” While this is still very general, it nonetheless reflects a clear understanding that “real socialism” is “something other than” the state monopoly model that has been such a disappointment since 1917.

    It is disappointing however that the concept of “usufruct” in the agricultural sector is still in the mind of the PCC establishment. This concept results from a moralistic, religious-like demonizing of the historically evolved institution of private productive property. It tries to get the results of direct land plot ownership by farmers and ranchers without giving these productive working families title to the land. It has never worked; it will not work; it cannot work because the pride of legal ownership is part of the rural producers’ emotional and spiritual link to the land. It they do not own the land, they will not have the motivation to work it productively.

    Also, with legal ownership the rural can then cooperate together for both purchasing economic inputs and marketing–nationally and internationally–for the best prices.

    One suggestion our nascent US movement would make to the PCC is to include the establishment of a socialist “cooperative stock market.” Such a market where people all over Cuba could make “preferred,” non-voting stock investments in employee-owned cooperative corporations on the Mondragon, Spain model. In this way a worker in one province could help fund cooperative enterprise in another province. It would be one more way to focus national capital in the development needs of the country.

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