Progreso Weekly

Some executives on state run farms are still relying on government subsidies to bail them out, says Granma.
Some executives on state run farms are still relying on government subsidies to bail them out, says Granma.

HAVANA TIMES — Unproductive and/or inefficient state-run enterprises were warned that they could be shut down or turned over to self-employed workers if they didn’t mend their ways.

The warning came in an article Monday (Jan. 13) in the Communist Party daily Granma, written by the newspaper’s Camaguey correspondent, Miguel Febles Hernández, and undoubtedly cleared by the party’s leadership.

Titled “The heavy ballast of economic losses,” the article reminds readers that the 2011 Economic Guidelines of the Party and Revolution provide that “the state-run enterprises or cooperatives that consistently show financial losses in their balance sheets or an insufficient labor force, that cannot pay with their assets the obligations they have contracted, or that present negative results in financial audits, will be submitted to a process of liquidation or can be transformed into other forms of non-state management.”

Although almost three years have passed since the Guidelines were approved by the Sixth Party Congress in April 2011, “there are still enterprises, especially in the farm sector, whose economic-financial status is pitiful,” the article says, “and in some cases, despite repeated warnings, do not show a radical change in the short run.”

Some executives are still relying on government subsidies to bail them out, “as if the State were a life preserver to set aright their failure to execute the plans and control their business expenditures.”

“Always waiting for deliverance ‘from above’ that might pull the chestnuts out of the fire, many management teams fall into immobility, routine, negligence, mediocrity and lack of initiative, phenomena that negatively affect the performance of any organization,” the article continues.

Those managers clearly have no idea “of how to come out of their quagmire. They only propose temporary fixes that barely serve to suspend the problems, without solving them once and for all.”

“This state of affairs will change little if we don’t eliminate the unproductive personnel that still abound in the companies, the payment of wages for no productivity, the inadequate handling of bank loans, the idle inventories, the cost of lost animals or harvests, and the unending chain of unpaid bills.”

“The issue goes beyond a simple rearrangement,” the article explains. “It is a question of linking the revenues to the results obtained, to raise productivity, diversify production and services, to improve efficiency and seek new alternatives and variations to get the most of the potential of each entity.”

“Only […] with greater autonomy and greater responsibility, the companies can ‘oxygenate’ their accounts and generate profits that ensure self-generated development, comply with the tax laws and contribute to the progress and social welfare of the localities where they operate.”

The article ends by saying that “the socialist state enterprise is and will be the very heart of the country’s structural base. To make it into a strong and organized entity should therefore be everyone’s greatest endeavor.”

9 thoughts on “Shape Up or Shut Down, Cuba Warns State Businesses

  • An equitable distribution of the goods and services necessary for a decent life such as Cuba tries to do within the framework of the U.S. economic war upon the society , is the way of the democratic future .
    Once U.S and world capitalism collapses of its inherent need for ever- increasing profits and the elimination of workers in favor of far more efficient and increasingly intelligent machines, a democratic world society will arise from the ashes.
    Cuba’s mode of distribution of the necessary goods and services foreshadows what the world will have to do albeit in a more democratically decided fashion.
    That’s the anarchist view of things and it’s predicated upon the belief in the basic goodness of humankind and a democratic future. .

  • Haven’t you heard? WalMart is investing heavily in their online store in anticipation of the inevitable downsizing of the US storefronts. On topic, if the modern world has moved on to greater online purchasing, the costs of brick and mortar consumerism will naturally go up. So, just about the time when the everybody else is getting their groceries delivered by drones, Cuba as a late entrant into the 21st century will be forced to pay a higher start-up costs to get access to the same Black Friday madness that the rest of us so thoroughly enjoy. If Cuba were Guatemala, you could reasonably argue that third world countries always accept a lesser quality of life (as measured by most) or pay a premium to live like the people live on TeleMundo. But Cubans are terrific consumers. They are as brand-conscious and fashion-forward as any NYC SoHo socialite or Beverly Hills Botox-filled trophy wife IF given access to the resources. This regime has set the Cuban people and Cuban culture back 100 years in their capacity to “keep up with the Jones”.

  • Apparently they will fire both the CEO AND the guy in the mail room, as exemplified by today’s paper which announces that, nationwide, J.C. Penny is closing hundreds of stores and laying off thousands of employees. Pretty soon the only alternatives for brick-and-mortar will be Wal-Mart…and the dollar store! But of course ever more folks are just ordering through anyway!

  • That’s weird. I could have sworn this article was about Cuba and Cuban state businesses. So why are people discussing the USA and Google?

    If the government really is planning on handing over the operations AND ownership of state businesses to worker co-operatives, then that would be a very positive step for Cuba’s economy and democracy.

    However, I am suspicious that the government will use issues like this to provide a pretext for re-assigning individual state businesses to one of the larger state corporations, such as the military-owned holding company. GAESA already has extensive holdings in tourism, trucking, restaurants, manufacturing and farms. Since Raul Castro became president of Cuba, GAESA has been rapidly expanding their control of the Cuban economy. Should it come as a surprise then to learn that the director of GAESA is Raul Castro’s son-in-law?

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