Wednesday, November 10, 2010

The times they are a changin'

Or is it, "The more things change the more they stay the same"?

Just as I finished reading the 100+ pages of legalese contained in the Gaceta Oficial that makes official Cuba's economic reforms in the area of massive layoffs, self-employment, and the new tax code and social security system for entrepreneurs, the CCP (Cuban Communist Party) comes out with this new 32-page document "Proyecto de Lineamientos de La Political Economica y Social," outlining the aims of its upcoming 6th Party Congress to take place in April, 2011 (H/T to Cafe Fuerte for putting it up so fast!).

Someone at Party headquarters has been busy lately!

Cafe Fuerte has a very useful analysis of the quite significant (economic) changes outlined in the document here in Spanish (Principales puntos del documento del VI Congreso del PCC).

What follows after the break is my own summarized translation of their analysis.

Readers are also encouraged to read La Flaca's always sharp and perceptive analysis here.  Sanchez admits that her take on the document is quite skeptical.  However, she notes that most potential entrepreneurs do not yet intend to "take the bait" offered by the announced opening in self-employment given the atmosphere of distrust of the government that fills the air.

She also finds it disheartening that not a single line of the document (written by a political party) has to do with the expansion of political or civil rights (like the right to freely leave or return one's own country, not to mention freedom of expression, association, or of the press).

It's all economix.

"The Party will have its Congress in April," Sanchez notes sardonically. "They will approve changes not very different from the ones outlined here and a year or two from now we will be asking ourselves whatever happened with so much spilled ink. Whatever became of that program that aimed to perfect and improve instead of changing and ending?"

Tuesday, 9 November 2010, 10:12 p.m.
Originally published, Tuesday, 9 November 2010, 3:31 p.m.


- The document that will serve as a basis for the discussions leading up to the 6th Party Congress, planned for April of 2011, was published on the Internet in the afternoon today.  Café Fuerte has summarized its main points.

The document was available at Cuban newsstands across the country early starting Tuesday morning at the price of one peso.

The document has an Introduction and 12 chapters about the main economic transformations that are being instituted to pull the country out of its current economic crisis.

Raul Castro indicated that the text of the document was reviewed by Fidel Castro, who is sill the First Secretary of the CCP.  In fact, the document begins with a long quote from Fidel from May 1, 2000, where he defines the word revolution: "To change everything that needs changing."

These are the most relevant points of the document:

  • As long rumored, Cuba's ration booklet, in place in one form or another since 1962, will be eliminated.  (Interestingly, this move is justified based on the following logic: controlled and egalitarian distribution induces people to engage in bartering and resale of rationed items, fueling the black market).
  • The real estate market will be liberalized, allowing the much freer buying and selling of houses and apartments (at the same time, the document warns that the state will not allow "accumulation of properties" in few hands).
  • The state will expand the private sector and offer access to bank credits and a wholesale market.  (In line with this change, “new forms of non-state management" will be opened up including mixed capital enterprises, cooperatives, land in usufruct, a rental market, private labor, and other forms of employment).
  • Again, the state will guard against the concentration of property within these new forms of private and mixed enterprise.
  • An effort will be made to unify the currency, eliminating the dual currency system in place since 1990.  (However, this complex task will be done only "after a rigorous preparation and [through a methodological] execution").
  • Public enterprises will enjoy greater autonomy and current administrative controls will be lessened.  (At the same time, unprofitable enterprises will be closed down).
  • Health and education will continue to be free, but social outlays will be adjusted based on available resources.
  • Cuba will continue to attract foreign investment and to search for new forces of financing in order to halt the decapitalization of the productive system.  Tourism will be expanded through the creation of marinas, new golf courses, and newly developed properties for big spenders.
  • Cuba will begin to repay its external debts and comply strictly with its repayment commitments in the future in order to improve its credit rating.
  • The tax system will be based on the principle of equity.  Higher earners will have to pay higher taxes so that inequality can be kept under control.
  • These economic reforms are aimed at eliminating the current deficit in the balance of payments, generating more external earnings, substituting imports, and creating conditions that will allow for "a transition to a higher stage of development." (Anyone out there ever heard of Walt Rostow?)
  • (And finally it should come as no surprise) the document assures readers that these new economic policies correspond to the belief that ONLY SOCIALISM is capable of overcoming the difficulties and preserving the conquests of the revolution, and that in the modernization of the Cuban economic model planning will take precedence over the market.

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