Cuba: Changes on the way

After a long wait and numerous postponements, the Cuban Communist Party, which oversees and directs the politics of the island, has decided to hold its sixth congress, in April 2011. The last was held in 1997, more than 13 years ago.

At the same time as the announcement of the meeting, which was made by the second secretary of the organisation and president of the republic, General Raul Castro, the release of a 32-page pamphlet entitled ‘A Plan for Social and Economic Policy’, was made public. The document contains 291 proposals and attempts the definition of a new model for the country’s economic, productive, commercial, and social policy which, it is hoped, will help Cuba weather the current crisis.

The release of the Plan is in keeping with the principle that “the socialist planning system will remain the cornerstone of the management of the national economy” and with intent to move the island towards greater efficiency in production. It seeks the elimination of a wide range of paternalistic practices of the Cuban state and will establish its credibility with new and old foreign investors.

Public debate

The goal of the massive distribution of the Plan is to make the text into an object of debate among both party organs and citizens in order to see where there is agreements and disagreement and to devise changes to its concrete, tactical, and strategic elements. However, the categorical formulation of many of its points, the specialisation necessary to understand many of its sections, make it clear that its general application is a work in progress carried as part of the so-called “perfecting of the Cuban economic model” promoted by a government struggling with the difficulties, incongruencies, and incapacities of the system in place up until now, which was in many ways a response to the profound crisis the country experienced in the 1990s and which resulted in the existence of a double currency scheme, among other ills.

While many aspects of the document stand out, the most notable include the decentralisation of the economy by granting autonomy to entrepreneurs and the introduction of economic and financial instruments in a process that is usually dominated by political and administrative decisions, often anti-economic, as the reality of the country demonstrates.

Thus in very precise language, the Plan warns that in the period to come the survival of almost all businesses will depend on their ability to generate earnings, and if they don’t they will face ‘liquidation’. Meanwhile entities that receive state money will be reduced to a bare minimum. The Plan also states that the solidarity projects with other countries will be subjected to economic evaluation, never previously the case.

The Plan also contains numerous calls for ending subsidies, the elimination of jobs in state companies, and the promotion of forms of non-state production, services, and land use, with a projected increase in the work force in cooperatives and free lance operations.

These developments will be accompanied by the rollout of a new fiscal policy that includes imposition of a high tax rate for the highest earnings.

The economic shakeup that has begun in Cuba is in every way radical and profound, though there is no parallel wave of major changes to the single-party political system and government structures. Nonetheless, the social impacts of the changes that have already occurred and those to come will constitute a serious challenge to the Cuban political system.

For the people, the most controversial changes involve the new labour policy and the elimination of subsidies, which extends even to education and health care. The possibility that a part of those laid off in coming months will move into freelance work just as many who are already freelancers will have their status finally legalised makes this one of the more complicated solutions, given the country's critical economic situation.

It is clear that the ‘structural and conceptual’ changes in the Cuban model announced three years ago by then interim president Raul Castro are starting to take shape and make their presence felt in Cuban social and economic life. Now we will see how they effect the lives of millions of Cubans, doomed to live in a country in which economic competition and work must now take the place of state paternalism, and where efficiency will now try to displace subsidies, and where economic and social inequality is certain to rise after decades in which equality was officially created and promoted.

IPS