14ymedio, Reinaldo Escobar, Havana, 14 September 2016 – Limits on property tenure and wealth accumulation are prominent in discussions about the documents issued by the 7th Congress of the Cuban Communist Party (PCC). “The Talibans” – as the hardliners are often referred to – demand precision and the entrepreneurs also need it, for different reasons, to understand the subjective opinion of the local overlord who is going to determine whether someone has become too prosperous.
With only 15 days left to complete the analysis of the Conceptualization of the Bases* of the National Development Plan, issued by the congress, these documents have been discussed only by “the membership of the party and the Young Communists Union, and representatives of mass organizations** and large sectors of society.”
In December, if the deadlines are met, a plenary session of the PCC Central Committee will put the final touches on the these directives, perhaps with some modifications or additions. The principles that govern the country’s economic activities in the coming decades will not have been subjected to the scrutiny of a significant number of citizens.
This Monday one of these debates took place with several district delegates selected from the Santa Clara’s People’s Council. According to the official newspaper Granma, among the most debated topics was Paragraph 104 of the Conceptualization, which rejects the idea of “the concentration of property and wealth in natural or legal persons.”
As the official Party organ, Granma usually chooses with care the opinions it publishes, and in this case it published the opinion of several delegations about “the need to define how far it will allow this phenomenon [tenure of property and wealth] to go, and the imperative of defining limits.” Others called for “strict supervision by the competent bodies, with their control system to prevent the proliferation of new rich in Cuba.”
Such fears are consistent with the implementation of a new measure where it is stipulated those receiving monthly salaries exceeding 500 Cuban pesos (CUP, about $20 US) must make a special contribution of 5% to Social Security. A decision that also includes workers at state enterprise earning up to 5,000 CUP (about $200 US), who will have to also pay a personal income tax of 3%.
However, a self-employed person who has a personal net income of 60,000 CUP a year (an average of 5,000 per month) faces a tax rate of 50%. This is a clear obstacle to the development of private entrepreneurs, which the government has had to tolerate given the economic collapse of the country, but against whom it maintains a stubborn animosity.
Following the recent closed-door discussions, it is probable that the limits of wealth concentration in the hands of Cuban citizens will be defined with more precision. It is very likely that when the definition is written precedence will be given to the voices insisting “this is and will remain a Revolution of the humble, by the humble and for the humble.”
With this thundering no one can sleep, grow or prosper. If, given that a successful entrepreneur who manages to earn the equivalent of about $200 US a month will be placed on the top of the food chain and pay the highest tax rates, what can be expected from the corrective they will reserve for those who start a small or medium sized business?
During the five years in which the Guidelines from the Sixth Communist Party Congress were in effect, Point 3 of the economic management model was designed to prevent the concentration of property. Some analysis suggested this point would be eased in the Seventh Congress, but instead it was strengthened by adding the word “wealth.”
A superficial glance could lead to the conclusion that those incapable of creating, moved by envy, want to tie the hands of those who through risk, imagination and personal effort put their goals above the prosperity managed by the generosity of a paternalistic and controlling state. Surely there are better arguments to explain these blunders.
*“Base” in this context refers to what in other, non-totalitarian contexts, would be called the “grassroots,” that is Party organizations at the local level.
**”Mass organizations” refers only to government controlled entities such as the Federation of Cuban Women (FMC), the University Students Federation (FEU), and so on.