Sunday, December 16, 2012

Economic Reforms in Cuba Require Decentralisation

Economic Reforms in Cuba Require Decentralisation
By Patricia Grogg

HAVANA, Dec 11 2012 (IPS) - The social and economic model that is taking
shape in Cuba based on changes gradually being implemented require
reforms for strengthening and giving greater autonomy to local
government bodies, which began to be renewed in October with the
election of new municipal assembly members.

Now that state, cooperative and private forms of property have begun to
coexist in the Cuban economy, "decentralised decision-making is going to
be essential to the success of these transformations," Ricardo Torres, a
researcher with the University of Havana's Centre for the Study of the
Cuban Economy, told IPS.

That principle is considered basic to the goal of local development, a
process in which municipalities are becoming central players instead of
recipients. The government wants projects such as small-scale industries
and service centres, especially in the food sector, to be part of the
strategy of municipal self-reliance in terms of supplies.

To ensure financial autonomy, the tax system that will go into effect in
January will include taxes on businesses, trading companies and
cooperatives, with the goal of financing projects in the areas where
they are located. That income will increase municipal budgets for local
productive and service activities.

Torres said that a mixed economy (in terms of ownership) and
decentralisation are becoming characteristics of the model that could
emerge from the reforms that were approved in April 2011, during the
Sixth Congress of the ruling Communist Party of Cuba.

On that occasion, President Raúl Castro announced that the "excessively
centralised economic model" had to open up. "Practical experience has
shown us that excessive centralisation conspires against the development
of society and the entire production chain," Castro said.

"All of our lives, we have seen a Cuban model based on a central power,
from which all decisions come. Now we have seen that that is not
viable," said Professor Marta Zaldívar of the University of Havana's
Faculty of Economics.

For Zaldívar, who has been working on the issue for several years, local
development will continue to be a pending issue if there is no legal
framework for management at the provincial level. "Some steps have been
taken, but they are still incipient. The process is slow and time is
running out," she said.

In an interview with IPS, Torres said that "in a situation where there
is greater heterogeneity among economic actors, it is essential for them
to be able to make autonomous decisions about a multitude of variables
and questions related to the life of these organisations."

At the same time, he said, this is a new path, which requires a break
with schemes and patterns of behaviour. "In fact, there will be cases
where it will be necessary to de-concentrate ownership in enterprises
that are too large for the size of the domestic market. It is an area in
which state companies will have to be more autonomous," he said.

In line with these changes in business management, the national
government will have a number of powers, but it will have to share
authority and functions with provincial and municipal authorities. "That
is another long and difficult learning process that Cuba is setting out
on now," Torres commented.

Local and provincial governments "will have to play a leading role in
setting the development agenda for their regions, which requires a
number of things, including greater autonomy for them to make relevant
decisions in certain areas, such as setting local policies that do not
interfere with the national strategies," he said.

In his view, the conditions are not yet fully in place in every province
and municipality, which means the process will have to include the
strengthening of local government capacities, so that the local and
regional authorities are able to become more active agents in economic
and social development at the municipal and provincial levels.

The municipal delegates who won the recent local elections — a process
that lasted until November in some places due to Hurricane Sandy's
impact on the eastern provinces — are the government officials closest
to the grassroots of society.

One frequent complaint voiced by Cubans is that a delegate may be very
good, but does not have the resources to solve voters' problems.
However, delegates are not actually in charge of directly solving
problems; their job is to represent and express the needs, concerns and
difficulties of their constituents, and to inform them of measures
passed by the municipal assembly.

Municipal elections are held every two and a half years. On this
occasion, they will be followed by elections in February for
representatives to provincial assemblies and the National Assembly – the
single-chamber parliament. The official Communist Party media outlets
have acknowledged that these government bodies need to boost their
authority and participation in the process of changes.

By taking on a more central role in developing their regions, local
officials will reinforce democratic participation and bring government
closer to citizens on the local level, Torres said. He added that
citizens, in turn, will be more interested in giving their votes to
individuals shown to be the most competent in given situations.

In that sense, Torres did not rule out the future professionalisation of
municipal and provincial delegates, and of the members of the National

"As of now, in most cases, representatives at all levels fulfil their
duties simultaneously with those of their previous occupation; however,
if we really want these people to turn toward the development of their
communities, the issue of professionalisation should be analysed and
debated," he commented.

* With reporting by Ivet González.

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