Friday, June 21, 2013

Cuba’s Economic System: Reform or Change?

Cuba's Economic System: Reform or Change?
June 20, 2013
Fernando Ravsberg*

HAVANA TIMES — Marino Murillo, Vice-Chairman of Cuba's Council of
Ministers and architect of the island's recent economic reforms, has
urged the country to aim for growth by eliminating "all of the obstacles
that the current economic model places in the way of the development of
the productive forces."

The problem is that the greatest obstacle could be the model itself,
which is based on relations of production that hinder the country's
economic development, slow down changes, interfere with reforms and
bring about discontent among the population.

By implementing this socialist model, which dates back to Stalin's time,
Cuba obtained the same results seen in all other countries which copied
it: agricultural production crises, industrial stagnation, shortages and
a disaffected citizenry.

Murillo invoked socialism's theoretical forefathers, who said that the
new, socialist society would need to nationalize only the "fundamental
means of production", a prescription that wasn't exactly followed by a
model which placed even junk food stands in State hands.

To be at all effective, every economic change essayed in the country
today, no matter how small, invariably demands a whole series of
subsequent reforms. And it is precisely there where the model, and its
defenders, prevent the reform from becoming effective or yielding its
best results.

Though the Cuban government's official discourse itself is calling for a
"rejuvenation" of the country's model, the fact of the matter is that it
will be next to impossible to fit a new piece into this jigsaw puzzle
without altering the pieces around it, without producing a domino-effect
that will ultimately change the entire pattern.

The government runs into these obstacles every time it attempts to move
one of the pieces of the puzzle. When it decided to hand over
State-controlled lands to the peasants, officials invoked Cuba's
"current legislation" to forbid farmers to set up their homes in farm areas.

Such absurd restrictions discouraged many and pushed others to quit the
food production sector altogether and devote themselves to securing
construction materials illegally, so as to be able to build a home
elsewhere, far from prying looks.

Massive and hugely inefficient, the agricultural sector may well be the
very paradigm of bureaucratic mismanagement, but it is far from being
its only expression in the country. Cuba's import system is a true
bureaucratic gem, in which producers are those with the least say in
official decisions.

A Cuban factory wishing to import a piece of equipment from abroad is
required to approach the importing company assigned to it by the State.
Technically speaking, this "importer" does not actually import anything
– it merely puts out a bid among foreign companies with offices in Cuba.

Employees from these companies are the ones who travel to the
manufacturing country, purchase the equipment and bring it back to Cuba.
Under the country's current model, the manager of a Cuban factory is
expressly forbidden from contacting the foreign export company directly.

Thus, the person who makes the order is an office clerk who knows little
or nothing about what the company needs and who, in the best of
scenarios, will opt for the cheapest piece of equipment available,
something which often leads to serious production problems later.

In the worst cases, these "intermediating State importers" are bribed by
foreign companies so that they will purchase obsolete or poor-quality
equipment. In recent weeks, Cuban courts tried hundreds of State
employees implicated in these types of "deals".

These are the "relations of production" which keep equipment in Cuban
factories paralyzed for months, waiting for the needed spare parts,
while State importers take all the time in the world to decide what to

Most Cubans I know support the changes that have been implemented thus
far and want these to make headway quickly and effectively. It is hard
to come by anyone who feels nostalgia for the old model, which proved
more efficient in establishing restrictions than in satisfying the
material needs of the population.

But these relations of production continue to find support in Cuba, from
the defenders of "Real Socialism." Ironically, or not surprisingly, most
of them are isolated from the reality of this socialist system, enjoying
government perks that compensate for the "small inconveniences" of
everyday life.

During a recent debate, a Cuban journalist suggested that these
officials catch a city bus from time to time, so as to immerse
themselves in everyday reality. When they told me of this, I recalled
the old anarchist graffiti which warned us that "those who do not live
the way they think end up thinking the way they live."
(*) An authorized Havana Times translation of the original published in
Spanish by BBC Mundo.

Source: "Cuba's Economic System: Reform or Change? - Cuba's Havana" -

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