We Approach the Present Through the Past / Dimas Castellanos

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 retreat.

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