[News] Restructuring Cuba's Economy - A Cuban Spring?

Anti-Imperialist News news at freedomarchives.org
Tue Apr 23 13:49:02 EDT 2013

April 23, 2013

Restructuring Cuba's Economy

  A Cuban Spring?


This is a fruitful period of experimentation and debate in Cuba. It is 
now almost seven years since Raúl Castro replaced his brother Fidel, 
first as interim president in 2006 and then as president in 2008. Under 
Raúl, the country is taking steps to transform the economy, and 
a critical discussion is erupting over the dismantling of the 
authoritarian Communist model. Julio Díaz Vázquez, an economist at the 
University of Havana, declares: "With the updating of the economic 
model, Cuba faces complex challenges . . . in its social and political 
institutions. . . . The heritage of the Soviet model makes it necessary 
to break with the barriers erected by inertia, intransigence, [and] a 
double standard." He adds, "These imperfections have led to deficiencies 
in [Cuba's] democracy, its creative liberties, and its citizens' 

Among the most important changes that have echoed internationally is the 
decree that took effect January 14 allowing Cubans to travel abroad 
without securing a special exit permit. Also, homes and vehicles can now 
be bought and sold openly, recognizing private ownership for the first 
time since the state took control of virtually all private property in 
the early 1960s.

The government is distributing uncultivated land, which constitutes 
about half of the countryside's agriculturally viable terrain, in 
usufruct for 10 years in 10-hectare parcels with the possibility of 
lease renewal. To date there are 172,000 new agricultural producers. 
Beyond agriculture, 181 occupations filled by self-employed or 
independent workers such as food vendors, hair stylists, taxi drivers, 
plumbers, and shoe repairmen can now be licensed as trabajo por cuenta 
propia---self-employment. As of late 2012, about 380,000 people are 
self-employed in a work force of 5 million.

The most dramatic move against the old economic order came in April 
2011, when the Sixth Communist Party Congress issued 
313 lineamientos, or guidelines. A potpourri of measures and 
recommendations, the document calls for autonomy for the state 
enterprises, an expansion of cooperatives, new taxing laws, and changes 
in the system of subsidies, including modification of the monthly food 
rationing system. The government established a committee of over 90 
people, led by former minister of economy Marino Murillo, to implement 
the policy recommendations.

A major weakness of the lineamientos, according to Armando Nova of the 
Center for the Study of the Cuban Economy, is that they fail to tackle 
major macroeconomic challenges. While the lineamientos acknowledge the 
country's low economic productivity, as well as large trade deficits, 
there is no analysis of how to overcome these systemic problems. 
Moreover, the lineamientos contain no overarching conceptualization of 
where the society is headed other than a general commitment to 
socialism. "What type of socialism is being referred to?" Nova asks.2 Is 
the new socialism akin to what Lenin outlined in the New Economic Policy 
(NEP) in 1921, when Russia permitted small-scale peasant production and 
private businesses? What is the role of private property in Cuba, and 
how can a new economy curb the growth of inequality? These are all 
critical questions that the Sixth Party Congress failed to address.

There are, however, different schools of thought on how to move the 
economy forward. Camila Piñeiro Harnecker, in an essay titled "Visions 
of the Socialism That Guide Present-Day Changes in Cuba," describes 
three different visions: (a) a statist position, largely reflecting 
the old guard, (b) a market socialist perspective, advanced by many 
economists, and (c) an autogestionario, or self-management, stance that 
calls for democratic and sustainable development primarily through the 
promotion of cooperatives.

The statists recognize that Cuba faces serious economic problems but 
argue that they can be corrected through a more efficient state, not 
through a dismantling of the state. They call for more discipline and 
greater efficiency among state industries and enterprises. A loosening 
of state control, they contend, would result in greater disorganization 
and even allow capitalist tendencies to emerge. This position points to 
the disaster that occurred in the Soviet Union in the late 1980s after 
an attempt to end central control over state enterprises.

The statist position is most deeply entrenched among midlevel 
bureaucrats and the party cadre, who fear a loss of status and income 
with the end of direct control over Cuba's economy. Some heads of the 
Cuban military enterprises---which include food and clothing factories, 
as well as hotels, farms, and telecommunication stores---also manifest 
this tendency, although surprisingly many officers, including Raúl 
Castro, are in favor of decentralization and a greater use of market 

Those committed to a socialist market economy contend that only the 
market can unleash Cuba's productive forces. To increase productivity 
and efficiency, the state needs to grant more autonomy to enterprises 
and allow competitive forces to drive the market. In the short 
term, privatization is necessary, even if this means an increase in 
inequality, the exploitation of wage workers, and environmental 
degradation. As the country develops, the state can step in to level the 
differences and distribute the new surpluses to support social programs.

The economists who argue for market socialism tend to be located in what 
is referred to as academia---the research institutes and centers, many 
of which are affiliated with the University of Havana.4 Academia looks 
to the Chinese and Vietnamese experiences, particularly their appeal to 
foreign investment, although they believe that Cuba should do a better 
job of controlling corruption. This position also finds support among 
state technocrats and some managers who want to see their enterprises 
expand and become more profitable as they are privatized. There is also 
significant support for the market economy among self-employed and 
working people who feel that they can enjoy the material prosperity of 
China or the Western world only through more individual initiative and 
private enterprise via the market.

The autogestionario position, which Piñeiro advocates, has a 
fundamentally different view from the economists over how to break with 
the old statist model. Instead of relying on competition and the market 
to advance productivity, the democratic socialist values 
of participation, association, and solidarity should be at the heart of 
the workplace and the new economy. Control should not come from the top 
down but from the bottom up, as workers engage in self-management to 
further their social and economic concerns. As Piñeiro writes, "The 
autogestionarios emphasize the necessity of promoting a socialist 
conscience, solidarity, and a revolutionary commitment to the 
historically marginalized." These principles can be practiced in 
cooperatives and municipal enterprises, leading to increased 
consciousness and productivity in the workplace.5

Piñeiro admits that support for the autogetionario position is less 
consolidated, coming from intellectuals, professionals, and those 
involved in the international debates over 21st-century socialism. One 
of the problems is that the old statist model used the 
terms participation, autonomy, and workers' control to characterize the 
relations in the factories, enterprises, and cooperatives that operated 
poorly in Cuba, and this language has now fallen into disfavor. Today 
those who try to revive these terms are often seen as making a utopian 
attempt to resuscitate failed policies.

Ultimately, Piñeiro is optimistic, seeing "a new path for the nation." 
It will be a hybrid composed of "a state socialism better organized, a 
market," and "a truly democratic sector."

The periodical Temas is one of the main forums for debate over the Cuban 
economy's direction. As editor Rafael Hernández said in an interview in 
November 2012, "The process of change is slow but irreversible. The 
question is whether the improvement in economic conditions can be rapid 
enough to maintain the support of the people at the base. Cooperatives 
that now exist only in the agricultural sector have to expand into small 
manufacturing and the services."

Hernández sees the need to engage the professional and technical sector 
that constitutes one quarter of the Cuban working population because of 
the revolution's historical commitment to public education. He explains: 
"Their talents have to be harnessed to the process of economic and 
social change. We need a public sector, not a governmental sector." He 
points to the need for elderly care facilities as an example, saying, 
"My mother had Alzheimer's. I had to take care of her at home, but she 
would have had a better environment and perhaps even better care 
if doctors and medically trained personnel had been able to set up 
retirement homes either as cooperatives or private medical facilities 
paid for by some combination of government subsidies and contributions 
from the families."

Hernández also argues that the magazines, newspapers, and publishing 
centers need to be held accountable to the public as opposed to the 
state. Like Temas, other periodicals should be run by workers and 
editorial councils in order to better respond to the public interest. 
The day before my interview, Temas writers and staff traveled to one of 
Havana's municipalities to discuss their new issue on social development 
and the implications for the local residents.

A debate is also emerging in Cuba over democracy and 
socialism. Temas recently ran an article by Julio César Guanche, "La 
participación ciudadana en el estado cubano" (Citizen Participation in 
the Cuban State). After a lengthy discussion of the centralization of 
power in Cuba's presidency and the limits of Cuba's National Assembly of 
Popular Power, Guanche calls for a new "collective order" comprising 
"the state, the public sphere, mass organizations [and] citizen groups . 
. . guided by the principles of autonomy and cooperation, with the 
direct participation of the [popular] bases." He argues that Cuba should 
draw on the "new Latin American constitutionalism" in Venezuela, 
Bolivia, and Ecuador, where constituent assemblies were convened to 
draft new constitutions that embrace the principles of both 
representative and direct democracy. Guanche concludes his article by 
stating that to bring Cuban institutions up to date, and "to radicalize 
democratic socialism," Cuba needs its own "national constituent process."6

A critical question is what the updating of the Cuban economy means for 
social and economic equality. Will everyone advance, or will there be 
"winners and losers," as under capitalism? Myra Espina Prieto, in a 
publication of the Center for the Study of the Cuban Economy, analyzes 
the social impact of the policies that flow from the 313 lineamientos of 
the Sixth Party Congress. On the positive side, she sees an increase in 
individual opportunities through the creation of a "multi-actor" economy 
that includes "mixed capital enterprises, cooperatives, the usufruct 
agricultural producers, self-employed workers, etc." At the same time, 
she notes the "precarious" nature of many of the new forms of employment 
that could "increase the levels of poverty."7 Most of the 181 
occupations opened up for self-employment are low skilled and 
low paying, reproducing what one finds in other Latin American 
countries---an impoverished informal economic sector.

My personal experiences in central and old Havana corroborate her 
concerns. Visiting in November 2012, I noticed a significant increase 
since the previous April in fruit and vegetable vendors in the streets, 
a larger number of marginal private cafés, and people vying to enter 
the tourist trade, either through the offering of simple services like 
bicycle-taxis or, more notably, female and male sexual companionship. 
When I asked why this was occurring, the responses indicated many were 
losing their formal jobs as state enterprises were downsizing and 
laying off redundant workers to increase efficiency and productivity.

As Rafael Hernández says, "There is a push from below. The people have 
endured much since the collapse of Soviet aid, now over two decades ago. 
The time has come for them to experience a better life. If we can get 
economic results, there will be broad popular support for 
a corresponding participatory and democratic opening." Julio Díaz 
Vázquez told me in November, "There is more critical discourse in Cuba 
at all levels than ever before. Now we have to see if we can end the old 
economic system and construct a new society."

The times are challenging in Cuba. It may be an overused metaphor to 
describe a society as having a "spring." But if some combination of the 
three visions can drive the Cuban economy forward, there may indeed be a 
Cuban spring.

/*Roger Burbach* is the director of the Center for the Study of the 
Americas (CENSA) based in Berkeley, CA and is the author with Michael 
Fox and Federico Fuentes of /Latin Americas Turbulent Transitions: The 
Future of 21^st  Century Socialism, /to be released in January, 2013./


1. Julio A. Díaz Vázquez, "Cuba: actualización del modelo 
económico-social," Centro de Investigaciones de la Economía 
Internacional, Universidad de la Habana, unpublished manuscript, 
November 2012.

2. Armando Nova González, "Teoría y práctica en los lineamientos de la 
politica económica y Social," Temas, no. 72 (October--December 2012):78.

3. Camila Piñeiro Harnecker, "Visiones sobre el socialismo que guían los 
cambios actuales en Cuba," Temas, no. 70 (April--June, 2012): 46--55. 
Also see her edited anthology, Cooperatives and Socialism: A View From 
Cuba (Palgrave MacMillan, 2012).

4. Interview with Julio A. Díaz Vázquez, Havana, November 2012.

5. Piñeiro Harnecker, 50.

6. Julio César Guanche, "La participación ciudadana en el estado 
cubano," Temas, no. 70 (April--June, 2012):77--78.

7. Myra Espina Prieto, "Retos y cambios en la política social," in Pavel 
Vidal Alejandro, Omar Everley Perez, Villanueva , eds, Miradas a la 
economía cubana, el proceso de actualización (Havana: Editorial Caminos, 
2012), 162, 167.

*This article appears in the Spring issue of the NACLA Report on the 
Americas, The Climate Debt: Who Profits, Who 
Pays? See: https://nacla.org/edition/8974

Roger Burbach is the co-author with Michael Fox and Federico Fuentes 
of Latin America's Turbulent Transitions: The Future of 
Twenty-First-Century Socialism, just released by Zed Books. To order the 
book, see www.futuresocialism.org

Freedom Archives 522 Valencia Street San Francisco, CA 94110 415 
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