Totalitarian control of the economy, with a bit of window dressing
The “Conceptualization of the Cuban Economic and Social Model of Socialist Development” adopted at the VII Congress of the Communist Party of Cuba (PCC) and published on May 24, seeks to paint a picture of the path that Cuba will take in the coming years.
The document aspires to regulate, based on a statist aprroach, the forms of private and cooperative property that have been incompletely implemented, with many limitations and missteps, since the enactment of Resolution 32 of 7 December, 2010 by the Ministry of Labor and Social Security.
Since that time, through the end of April this year, 510,558 people obtained licenses to engage in private business operations. In addition, 350 non-agricultural cooperatives are currently operating.
And yet, there has been no real flowering of private and cooperative ownership. The above figures are a reflection of how sluggish this process has been in the last five years.
In the second chapter of the “Conceptualization …”, referring to the ownership of the means of production, subsection 2.1 ( “Main forms of ownership of the means of production: state, mixed, cooperative and private”) there is an element that characterizes the entire document: the priority assigned state ownership, and the complementary role of other types.
In the document, the more than 4,000 SMEs and microbusinesses already operating in Cuba are recognized as legal persons for the first time. However, to prevent any misunderstandings about the PCC’s policy on this issue, the document explains that “the exercise of private property rights is demarcated by rules governing the limits of the concentration of property and wealth.” That is, the consolidation of a wealthy and influential middle class will not be permitted.
The members of the PCC and the so-called “mass organizations” have received guidelines from the authorities to support and promote state over private and cooperative ownership. That is, they want to put up barriers thwarting anyone from getting rich.
The “Conceptualization …” reaffirms that the philosophy that will continue to dominate the Cuban economy will be one upholding state ownership over the means of production.
The conceptualization of the economic model under discussion is nothing like the socialist market economy that has proven so successful in China, with its “socialism with Chinese characteristics,” or in Vietnam, with the implementation of Doi Moi (“Renewal”).
In China and Vietnam, land, basic industry, telecommunications, and the banking and transportation sectors are state-owned, but state-owned enterprises are governed by market laws, and compete with each other in a price system governed by supply and demand, and the State does not interfere in their operations, nor does it favor them over private companies. In Cuba, in contrast, state enterprises are governed by central planning, imposed directly “from above.”
It would be rash to interpret this document’s measures as constituting reform, as some have ventured to assert. Nowhere does it even employ the word “reform,” and its prologue states that the conceptualization of the economic model is rooted in the concepts of the Revolution, as expressed by former leader Fidel Castro, and the economic guidelines approved at the Sixth Congress of the PCC, and reaffirmed at the Seventh Congress. It is explained that the conceptualization stresses the principles of socialism, along with “the basic concepts and characteristics of the ideal of a socialist society, forged by the Revolution.”
With all of this, where is there any place for reform?
The document does not refer to any opening up without exclusions (currently impeding individuals and cooperatives from exporting), the free flow of foreign capital, urgent investments in infrastructure, or the legal recognition of capital markets or private property to achieve greater efficiency in the economic sphere, which would allow for the creation of an efficient private industrial sphere.
We must remind those who have been quick to applaud the document conceptualizing the economic model that the Cuban military dictatorship cracked down on all kinds of freedoms long ago, that the PCC still has the last word, and that in Cuba there is no political, economic, legal or media independence.
The current Constitution of the Republic, enacted in 1976, and reformed in 1992 and 2002, isn’t worth the paper it´s printed on. The current leaders, who seized power in 1959, have announced that the Constitution will be subject to amendments, but when is not known. They have, however, announced that Articles 3 and 5, affirming the irreversibility of socialism and the hegemony of the PCC, will remain unaltered.