Middle-ranking officials would benefit the most from this law
14ymedio, Ourense (Spain), 14 September 2024 — With the publication of the Official Gazette on August 19, 2024, the Cuban Government authorized its own political and mass organizations to create private companies, as of September 19. Soon, the Union of Young Communists, the Committees for the Defense of the Revolution, the Federation of Cuban Women and the National Association of Small Farmers will be able to form companies.
This act of “deconcentration” could entail certain benefits for the state officials of these organizations, whose private businesses will be able to take part in a regulated market and will enjoy the regime’s approval.
However, according to the Gazette, these companies will not be able to exercise any function other than “social development programs, particularly in the community, including care for people and families in vulnerable situations.”
One of the possible responsibilities that the regime could give to these newly created companies is the management of food, products and basic services for the inhabitants of the region where they live. This function would ease the burden on the State and focus the population’s attention on these private companies, since they would be the suppliers of essential items and food.
The Gazette refers to Article 53 of the Constitution: “The State encourages, through fiscal or other incentives, private companies that carry out socially responsible practices that pay tribute to the economic, social and environmental development of the territories and the nation.” This rule opens the door for these companies to enjoy financial incentives and even state financing – through the mass organizations themselves.
This green light for the creation of economic entities could be the first step toward the emergence of a new oligarchy
This green light for the creation of economic entities could be the first step toward the emergence of a new oligarchy in Cuba, outside the upper echelon but protected by political power.
The law has its precedent in what happened in Russia after the dismemberment of the Soviet Union. During the government of Boris Yeltsin, a process of privatization of industry began, where the main beneficiaries were entrepreneurs and former officials who handled relevant information about the companies, whose shares were put up for sale. That is, these companies never changed “owners.”
In 1999, Vladimir Putin came to the presidency and created – through relations of influence – new links between companies and power. Then the term silovarcas emerged, a union between oligarch and siloviki, a Russian word that describes the military and security elite of that country.
If there were a tropical version of the silovarcas in Cuba – which already exists to a certain extent but maintains a low profile – the intermediate officials who will be in charge of private companies belonging to political and mass organizations would benefit the most. Its emergence, however, would lead to an environment conducive to corruption, influence peddling and the exploitation of resources for one’s own benefit.
There will be no bureaucratic obstacles to the creation of these companies, and they will also enjoy ample facilities to establish preferential prices for their goods and services. Moreover, they will not have supply problems, since their logistics networks are directly connected to the infinity of resources for these organizations.
As of September 19, 2024, political and mass organizations, as a result of these new provisions in the Official Gazette, will have free rein to displace and replace the Cuban private sector.
Translated by Regina Anavy
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