The “Virtuous Circle” of Cuba’s Reforms

Fernando Ravsberg*

A great many State cafeterias are empty and have no products to offer the public.

HAVANA TIMES — The slow implementation of economic reforms in Cuba is justified with the argument that the government does not want to make any mistakes. Every step taken is allegedly preceded by a pilot test used to evaluate the consequences of the change.

This is doubtless a new way of doing things in the country, in which concrete results matter more than inspiration. Many Cubans, however, have grown impatient, because the waiting period is sometimes longer than what they deem necessary.

The food service business is a case in point. It is clear to all Cubans that State cafeterias and restaurants are, generally speaking, disastrous and that the private sector is the one offering the best services today.

But the process of putting this sector in the hands of cooperatives and the self-employed is advancing at a snail’s pace, despite the fact that anyone who walks by a State cafeteria can see the poor quality of the menu themselves, in the event the establishment sells something other than cigarettes and rum.

In my neighborhood, there’s a cafeteria that people have been referring to as the “flies palace” for years, owing to the number of these insects that inhabit it. Curiously, the inspectors who monitor the self-employed so rigorously have never set foot there.

The self-employed have managed to offer better services in the catering business.

I have a friend who set up a very successful cafeteria in the Havana town of Guanabacoa who has been waiting for years to rent one of the most dilapidated facilities in the area from the State, in order to transform it into a prosperous business.

It’s clear that much of the prosperity of these private businesses is owed to the fact supplies are bought at low prices in the black market, which gets its stocks from State warehouses, the products that State cafeterias should be serving.

It’s like a dog chasing after its own tail. This happens, in part, because the government still refuses to create wholesale markets with preferential prices for the self-employed and cooperatives, the kind that exist everywhere in the world.

According to some Cuban economists, these markets, in addition to giving the self-employed advantages, would make the State more efficient in terms of tax collection, as having control over supplies would allow it to calculate what a business’s actual profits are.

What’s certain is that the slowness and indecision that characterizes the application of these policies prevents the self-employed from growing in numbers and limits the State in terms of laying off superfluous personnel at its institutions and ministries.

If the country’s economic plan for the future is to have half or more of the population in non- State jobs (as self-employed, cooperatives or farmers), the government should act in a more determined, coherent and global manner.

A raise in the salaries of teachers depends, in good measure, on the growth of the non-State sector.

The logical course of action upon detecting some form of stagnation should be for authorities to offer greater facilities that will attract new workers to the non-State sector: wholesale markets, tax breaks, bank credits, a greater range of supplies and access to machinery and tools.

A change in mentality is also needed. Cuba must put behind it the economic Stalinism inherited from the Soviet Union, which condemned all private initiative, and move forward towards a range of forms of property than even Marx and Lenin thought compatible with socialism.

Even today, whenever the press or some leaders speak of corruption, they mention only the private sector, all the while concealing the constant destitution of corrupt managers at “socialist State companies.”

The fact of the matter is that the growth of the self-employed sector and cooperatives would increase the incomes of many Cubans, reduce State payrolls and fill the nation’s coffers with tax payments.

This “virtuous circle” could afford the government the financial surplus needed to raise salaries in such indispensable sectors as education, where salaries are still well below the income required to meet basic needs.

Photos: Raquel Perez

11 thoughts on “The “Virtuous Circle” of Cuba’s Reforms

  • December 3, 2014 at 9:24 am

    Fernando, once you have > a third of the population “believing” that they are independent of the state you will have a counterrevolution on your hands, for better or (in my mind) worse, just as the burgeoning mercantile class wrestled power away from the kings & broke the feudal system apart at the dawn of the renaissance. I still believe that benevolent dictatorship (or participatory communism) is the way to go, to lock in the beneficial ideals of the revolution. Where I live in Canada, p-r-o-f-i-t-a-b-l-e public institutions, entities, & infrastructure are being looted & disposed of shamelessly & control (of information, markets & government) is now in foreign hands.

  • September 21, 2014 at 12:36 pm

    When you control an entire country the way the Castros control Cuba, there is no real need to acquire wealth. In effect, Fidel’s wallet is the Cuban treasury. Is there a creature comfort that Fidel or Raul could desire or imagine that would not be delivered to their doorstep? They have wisely managed to avoid that stereotypical expression of wealth historically displayed by dictators cut from the same cloth. No gilded palaces for the Castros. Nonetheless, there is no doubt that they have not failed to enjoy every minute of the pillaging they have wrought on the Cuban people.

  • September 21, 2014 at 12:30 pm

    The US has much less influence in the internal politics of most Latin American countries. So what? When we had more influence it was more of a burden than a benefit. Now we are no longer asked to make loans that are not repaid and resolve internal political differences between different versions of the same tyranny. At the end of the day, everyone in Venezuela who wants and can afford to buy an iPhone 6 will continue to do so. Pitbull, the Miami-based hip-hop megastar, will still sell out concerts throughout Latin America and the Dallas Cowboys merchandise is still the second hottest-selling sports item (#1 Barcelona) in Mexico and Central America. Many times, anti-US commenters parrot comments without really understanding the comment itself. The US loss of political influence in the region has meant very little in the lives of Americans. In the long-term it may likely be a good thing. Watching Argentina, Venezuela and Brazil endure their political growing pains from a distance is less costly to American taxpayers. Moreover, as Cuba continues to circle the drain economically, these recently emerged Latin American organizations will be called to task. Will they, as the EU did for Greece and Portugal, step up to assist Cuba or as the collective of Latin American countries done in the past, stand by and do nothing?Time will tell.

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