Cuba debates economic path ahead under Raul Castro
By Marc Frank Wed Feb 7, 5:12 PM ET
HAVANA (Reuters) – Cuban economists are busy studying ways to rev up one
of the world's last communist-run economies, a step encouraged by acting
President Raul Castro since he took over from his ailing brother six
The debate is focused on how to make Cuba's inefficient command economy
more productive and take advantage of newfound financial buoyancy in
foreign exchange earnings.
"There is consensus on our goals: more popular participation, the
country's development and a better material and spiritual life," China
expert and economics professor Evelio Vilarino told Reuters this week at
a globalization conference. "Where there is no consensus is on how best
to achieve that."
In a series of end-of-the-year speeches, Raul Castro expressed
frustration with bureaucracy, demanded answers to declining food output,
urged Cuba's press to be more critical and authorized a study of
socialist property relations.
Cuban economist and agriculture expert Amando Nova said agriculture
reforms of the early 1990s — when Cuba divided state farms into worker
cooperatives and legalized private produce markets — stopped halfway.
"We need farmers to participate more in production and price decisions,
to be able to purchase inputs and in general enjoy more autonomy from
the state," said Nova, who is involved in a report on agriculture
commissioned by the government.
Similar reports are being prepared on other sectors of the economy where
the state dictates most output and prices in exchange for inputs and
Many experts view Raul Castro, 75, as more pragmatic than his brother
and believe he could steer Cuba's 90 percent state-run economy toward
one that resembles the more open Chinese model.
ADAPT, DON'T ADOPT
Luis Marcelo Yera of the National Economic Research Institute, a member
of the panel looking into property relations, said Cuba is taking a path
closer to one of his favorite Japanese sayings.
"Adapt, don't adopt — we can adapt the best experiences but not adopt
another's model," he said.
Marcelo said the panel was "looking at better defining property under
socialism … because experience has demonstrated it has many problems
Cuba's foreign exchange earnings have nearly doubled over the last two
years, thanks mainly to the export of medical and other services to
Venezuela and record-high nickel prices.
Economic growth has sped up to three times its pace at the start of the
decade when Cuba was pulling out of the economic collapse that followed
the collapse of its former benefactor, the Soviet Union, in 1991.
Nevertheless, the state has run into problems investing the revenues
through its more than 3,000 state-run companies. The economy also
suffers from chronic disorganization, bad accounting, poor quality, lax
discipline and graft.
The head of parliament's economic commission, Osvaldo Martinez, told
Reuters the debate over economic policy probably would be taking place
even if President
Fidel Castro were not too ill to govern.
"We are not talking about the Chinese model, but a Cuban model, the best
way forward given Cuba's possibilities, realities, resources and
problems," Martinez said.
Some Cuban economists believe that only by adopting China's model of a
capitalist market under communist political control, or at a minimum by
decentralizing and developing private cooperatives and markets in
nonstrategic sectors, can internal production be improved.
Others say any opening would provide the United States with a chance to
topple the socialist system.
Agriculture specialist Nova said taking steps to loosen the economy
would not threaten his sector.
"Decentralization and more autonomy would result in more production and
food security, consolidating our economy and making us less vulnerable,"