Cuba Sticks to Modest Reform Plan Despite Poor Results
August 16, 2016
Cuba on Tuesday published policy guidelines for the next five years that
signal no new domestic initiatives although it upgraded foreign
investment to “fundamental in certain sectors.”
The 275-point social and economic plan, coming at a time of weak
economic growth and drastically reduced supplies of Venezuelan oil, is
extremely similar to one Cuba adopted in 2011, which called for
decentralization of its state-run economy, support for some small
business, recognition of market forces and the need for more foreign
The reforms in the 20ll plan have, however, yet to be fully implemented
because of stiff bureaucratic resistance, President Raul Castro said at
a Communist Party Congress in April.
Cuba’s President Raul Castro, left, talks with Vice President Miguel
Diaz Canel during the opening of the National Assembly session in
Havana, Cuba, July 8, 2016.
“The struggle between hard-liners and the bureaucrats opposed to
meaningful reform, and liberals who see the need for a swift
streamlining of the economy and greater freedom, continues,” said John
Kirk, an author of many books on Cuba.
“The key question is whether ideological intransigence will trump
pragmatism,” he said.
Despite improved relations with the United States and other western
countries, there is no sign Cuba is ready to do more than tweak its
Centralized planning and a state monopoly on the means of production
lead off the new guidelines, as they did previous ones. Five years ago
the reform plan authorized small business, but forbade “concentration of
property”; the new one adds to that “wealth.”
The previous document called for a significant reduction in the state’s
participation in the sale, distribution and pricing of food in favor of
private initiative and market forces, while the new one omits this. In
practice the state has once more taken control of distribution and is
Economist Andrew Zimbalist, a Cuba expert at Smith College in the United
States, said he was not surprised the “new plan is old and if anything
appears to be a mild retreat from liberalization of the economy.”
He said detente with the United States and the economic crisis in
Venezuela made Cuba’s leaders feel more vulnerable.
The government last month announced cuts in fuel and energy and a
reduction in imports, citing a lack of hard currency caused by low
export earnings and less Venezuelan oil.
“When the revolution senses difficult times, it has always attempted to
assert more central control,” said Zimbalist.
The only apparent recognition of the poor economic results of reforms to
date is in the section on foreign investment.
Five years ago the plan termed foreign investment complementary to local
efforts in some sectors, while the new one states it is “an important
source for the country’s development,” and “fundamental in certain sectors.”
“The more full-throated endorsement of foreign investment could
eventually transform and uplift the Cuban economy,” said Richard
Feinberg, author of a new book, “Open for Business: Building the New
“But that will depend on if it is reflected in an accelerated approval
by the bureaucracy and an overall improvement in the business climate,”
Source: Cuba Sticks to Modest Reform Plan Despite Poor Results –