This Tuesday a new Decree-Law went into effect in Cuba, gradually expanding cooperatives. In a preliminary state it is expected to contribute to the creation of more than 200 associations of this type throughout the country. Since the last session of the National Assembly, in July of this year, we have been awaiting the implementation of a measure that is expected to invigorate the island’s ailing economy. Until now, this kind of management has only been allowed in the agricultural sector. But starting now it will also include restaurants, transport, personal and domestic services, the recovery of raw materials and construction, among other sectors.
This measure is part of a plan of increased flexibility and economic adjustments approved by the Sixth Congress of the Communist Party of Cuba in 2011. According to official propaganda is part of a process of “updating the current model” rather than dismantling it. However, some critical sectors had advocated for less nationalization and more cooperatives, as an alternative to privatization.
This Tuesday’s edition of the newspaper Granma said that it is a decree-law that establishes the “experimental constitution” of these associations. It also announced that the lease of state-owned premises shall preferentially be offered to those workers who work in them now. Of course, when these workers “voluntarily determine to form a cooperative.” To form the cooperative the applicants will have to present a request to the municipal organs of People’s Power and these submit them to various committees.
Initially “first degree” associations will be authorized, with up to three employees. It is also expected that “second degree” associations will be permitted, made up of two or more cooperatives, although right now they still will not be implemented. A General Assembly, where each partner will have one vote, will be directed by each of these groups.
The official organ of the Communist Party clarifies that the the prices of products and services marketed will be governed by the laws of supply and demand. Although it warns that there will be some exceptions in which the State will determine the sales prices. During the session of the National Assembly in July, Vice President Marino Murillo said the government was working on the preparation of a General Law of Cooperatives.
Among the best received points of the new Decree-Law is the fact that these new entities will have a legal existence. They will not be administratively subordinated “to any state entity” although it’s been made clear that they should “conform to the guidelines set forth by the governing bodies” of each activity. For example, in the case of a group of workers who form a construction cooperative, they will have to abide by the quality standards dictated by the appropriate Ministry.
The new Decree-Law is also related to the Law No. 113 of the Tax System to take effect this coming January. This grants tax incentives for cooperatives compared to other state forms of management.
The economic adjustment plan driven by Raul Castro still has major gaps. Complaints from the self-employment and cooperative sector center on the inability to get bank financing and the lack of a wholesale market. The government has said the latter will be gradually implemented beginning in 2013, but this announcement has not quieted suspicions. However, a brief glimmer of autonomy is being opened with the Decree-Law that goes into effect on this second Tuesday of December.
11 December 2012
