Cuba

Cuba’s Communist Party lays out a vague future for private enterprise

Private jeweler and electronics technician Gabriel La O repairs a mobile phone inside a government store where he rents work space in Havana, Cuba.
Private jeweler and electronics technician Gabriel La O repairs a mobile phone inside a government store where he rents work space in Havana, Cuba. AP

Reports that Cuba plans to legalize small and medium enterprises delighted those who favor the expansion of the island's private sector, but a closer look shows the change is mentioned in vaguely worded documents that project government plans until 2030.

The legalization of the so-called PYMES (Spanish acronym for small and medium enterprises) is part of a Cuban Communist Party document noting a project to “conceptualize” the “theoretical basis ... for the economic and social model that we aspire to as part of the process of actualizing” the island's system.

The project was made public as part of another document on a “Projected National Economic and Social Development Plan until 2030 … whose fulfillment will contribute to reaching that model, in the long run.”

Those expecting quick approval of the PYMES — Cuba now technically recognizes only cooperatives and private business activity by people, such as plumbers and carpenters but not plumbing or carpentry companies — should prepare for the slow pace of government reforms.

The two documents, discussed during the Communist Party's recent VII Congress, reveal as much about the goals the government has been unable to meet in more than 50 years as the ideology and economic policies that blocked the road to those goals.

The texts, which are expected to be ratified by the legislative National Assembly after they are discussed by party cadre and members of mass organizations, reflect the general goals of increasing the country's Gross Domestic Product, productivity, spending on infrastructure, internet connectivity and technological development, as well as its economic integration with the rest of the world.

Among the strategic sectors singled out for development in the 2030 Plan are construction, electricity, telecommunications, internet connectivity, transportation and warehousing for commercial activities, hydraulic installations and networks; tourism and related activities such as marinas, golf and real estate; professional services, especially medical personnel; non-sugar agriculture and the food industry; production of pharmaceuticals and biotechnology; the sugar industry and light industry for the domestic market.

The plan also includes sections on the need to give value to salaries, maintain the levels of social assistance, avoid “shock therapies” and improve the quality of life of Cubans as well as the quality of services such as health and education.

The documents make no mention at all of the massive emigration of Cubans, especially the young, which has increased considerably in recent years and together with the low birth rate is leading to an increasingly aged population.

There is only one reference to ways of stimulating the birth rate and one broad acknowledgment of the importance of “economic and social stability, without insecurities or uncertainties about the future of people or families, an essential achievement that must be consolidated.”

The texts also note that “in the future society to which we aspire” the socialist economy and central planning will occupy “a primordial place.” That means the “existence of non-state forms (of economic activity) will depend on the goals of socialist development.”

The government will not allow “the concentration of property and wealth by natural persons or non-state enterprises,” the documents added.

The economic model described by the Cuban leadership recognizes market forces but puts them under direct government controls and makes them part of a centrally planned economy, which until now has produced few positive results.

Within this tiny space, direct foreign investment will be allowed and the government will “recognize private property that fulfills a public function in specific activities and whose owners are people or companies — Cuban as well as foreign,” according to the documents.

The texts added that the government will decide what activities will be allowed and their size, and that investments by companies totally owned by foreigners — rather than co-investments with government entities — will be authorized “on a case-by-case” basis.

Cubans will be able to establish “small businesses carried on basically by the worker and his family,” the documents added, as well as “private companies of medium, small and micro sizes, according to the volume of the activity and the number of workers, (to be) legally recognized as companies.”

The text also noted that the private businesspeople will be “a complementary element” in the future economy, needed to create jobs and increase productivity but under intense government controls and precise limitations.

As the government announced years ago, the 2030 plan calls for eliminating Cuba's dual-currency system. But the plan explains that price controls will be retained by “regulating the currency in circulation, exchange rates, measures to regulate monopolistic and speculative activities, government's purchases and sales at adequate rices and fixing prices or their limits.”

On national defense and security, the Communist Party documents state that the island will retain “essential objectives” designed to guarantee the preservation of the Cuban political system. It also states that “the revolution will never let down its guard” and adds that “history shows all too eloquently that those who forget this principle do not survive their mistake.”

The texts also recognize “the right to a job, health, education, security, information, recreation, culture, sports and the welfare system” and “work toward a decent home.”

It makes no mention of fundamental civil liberties but does include “the right to defend the independence and the socialist homeland.”

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