Informacion economica sobre Cuba

We Approach the Present Through the Past / Dimas Castellanos
Posted on May 8, 2013

New resolutions issued by the Ministry of Economy and Planning,
introducing changes in economic relations, give more attention to the
re-insertion of non-state forms of management. The measures, published
in the Official Extraordinary Gazette, No. 4, of February 21, 2013,
authorize the “payment in convertible pesos (CUC), to legal entities to
natural persons in certain activities.”

Among the new provisions are food services offered by self-employed
workers, the contracting of minor repairs services for government
entities and the tourism system. They also apply in the experiments that
are approved as new forms of management. Contract payments are to be
made by “checks, cards, notes, bills of exchange, local credit cards and
others.” The amounts payable are not limited by administrative
decisions, as the amounts to be executed must be approved in the budgets
and plans for the fiscal year of legal persons.

The information, that with the exception of North Korea which has no
news range anywhere in the world, in Cuba, due to the pushback suffered
in economic relations, is a peculiar, necessary and important fact.

It is a peculiar fact, because it is a step backwards. In 1959 the
government unleashed a crackdown on private property and economic rights
that began with the nationalization of foreign-owned companies,
continued with national companies and did not stop until the elimination
of the last 56,000 small private enterprises with the Revolutionary
Offensive of 1968.

The result of the nationalization was inefficiency. The disappearance of
the products and services provided by the closed establishments could
never be made up for by the State. Instead, interest in productive
results began to decline, which together with the insufficiency of
wages, forced Cubans to survive on the margins of legality with
consequent ethical deterioration.

It is, therefore, a partial return to what existed in Cuba before 1959,
when the products and services offered by small private companies were
paid for with the Cuban peso which was pegged to the U.S. dollar. The
difference with the past is that there is now a dual currency: charge
devalued pesos salary paid in CUC and the vast majority of products and
services, which means Cubans return to the past in worst conditions.

At the same time, it is a necessary event because limitations and
contradictions of the measures introduced to overcome the crisis in
which the country is sunk, are not yielding positive results and must be
amended and supplemented. Self-employment, a step in that direction, is
only a tenuous resurrection of what existed before 1959 and require the
removal of the barriers that were born to play an effective role in
economic relations. Hence the need for the recent measures and other
measures that will have to be enacted.

And finally, it is an important event because the delay has been so
great that the return to the past is a step forward. The intention of
the changes, that were manifested in 2006 and began to take shape from
2008, has not yielded the expected results. While the causes are many,
among them two contradictions are highlighted: one, the attempt to
achieve an efficient economy while preserving the model that led the
country into the crisis; two, changing some aspects of the economy while
ignoring the systemic character of social phenomena. These two
contradictions, in an unfavorable national, regional and international
context, with a huge debt and the possibility of losing at least part of
the large subsidies from Venezuela, prevents the possibility of further

In this sense, according to an article by Yaima Puig Meneses, that
appeared in the newspaper Granma on Thursday February 21, Marta García
Pino, the specialist of the Macroeconomic Policy Group of the Standing
Commission for Implementation and Development, said, “It is not a casual
or isolated measure, rather a strengthening of self-employment in
conjunction with the creation of other forms of non-state management as
part of the reorganization of the economy in the country, making it
necessary to modify the limits for the payments to natural persons from
legal persons.”

The few results obtained with the measures that have been implemented
are forcing them to reform the reforms in real time, complementing them
with new provisions, such as the recent decisions about the payment in
CUC from legal persons to natural persons as well as other provisions
sure to be enacted.

Consequently, to advance is imposing the need to reintroduce economic
relations and forms of property that were removed and remained banned
for decades.

The result of this process is that it is producing changes. Whether or
not the results of political will, what is important is that each step
generates new contradictions, new scenarios and new possibilities. For
that reason opinion journalism has a duty to point out the slowness,
limitations and inconsistencies of the changes with critical remarks and
suggestions, and at the same time to stimulate everything that goes in
the direction of the transformation, until vital aspects that remain
outside the government agenda are introduced.

I mean citizen rights and freedoms, without which the current measures
also will not yield the results that Cuba urgently needs.

Published in Diario de Cuba

1 March 2013

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