Cuban Communist Oscar Martinez: `Our economic reforms are based on socialist principles'

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"We are reorganising the workforce, not firing workers. We are directing them to other areas of work vital for the economy, mainly food production."

[For more analysis and discussion on the economic changes in Cuba, click HERE.]

November 3, 2010 -- Umsebenzi -- A South African Communist Party (SACP) delegation recently visited Cuba a part of its political interaction between South Africa and Cuba, and its quest to build socialism and strengthen ties between it and the Communist Party of Cuba.

Yunus Carrim, editor of  the SACP's monthly journal, Umsebenzi, interviewed Oscar Martinez, the deputy head of the International Relations Department of the Communist Party of Cuba. Published below is the full interview, as it appeared in Umsebenzi.

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Yunus Carrim: What is the nature of the economic problems Cuba is currently experiencing?

Oscar Martinez: In the context of our other problems, the US economic and financial blockade is hurting our economy more now. The blockade has been the main obstacle to our social and economic development over 48 years. With the collapse of the Soviet Union and the socialist bloc, we lost our main trading partners. It was a severe blow from which we have not yet recovered.

The 2008 global economic crisis also hit us hard. The price of nickel, a major export earner, has gone down. And we have had huge losses with the hurricanes. But also our productivity is too low. We need greater efficiency and more saving to ensure economic growth. We are a small country with limited resources. We need better organise our production, improve discipline and update our economic model. We are importing far too much, especially food, and need to be more self-sufficient. We need to focus far more on agriculture. Food production has now become an issue of national security.

Isn't the US blockade easing?

In practical terms, no. The main aspects remain and overall the blockade has even got worse. Since 2009 there have been more prohibitions on companies doing business with Cuba. Yet 187 countries [just] voted against the blockade in the UN General Assembly. Direct economic damage to Cuba since the blockade began in 1962 until December 2009, according to conservative estimates, surpass US$15.4 billion. If this was calculated according to the present value of the US dollar, it would be about $23.9 billion.

But if you have economic problems how does it follow that you have to retrench half a million state workers? Especially since you're a socialist state?

We are not retrenching. That's a capitalist term. We are not putting people out on the street. We are not going to leave them without social assistance. We are reorganising the workforce, not firing workers. We are directing them to other areas of work vital for the economy, mainly food production. We are making these changes as part of updating our economic model in order to ensure that our socialist system is sustainable on the basis of the rational and effective use of the workforce.

The first phase will be concluded by the first quarter of 2011. As part of the process, we are giving people land, and helping them to make productive use of it. A significant section of this land is near the urban areas, where 80% of the working population lives. If this land is used to produce food, it will also reduce the fuel and transport costs because it's near the urban areas. We have too many bureaucrats and professionals, not enough artisans. We want to move people from just producing paper to areas of the economy in which they can be productive and contribute to the economy. We are trying to find new areas of work for them. As President Raul Castro says, "We have to remove once and for all the notion that Cuba is the only country in the world where you can live without working." If they do not accept work that the government directs them to, they can be self-employed. We have opened up 178 areas in which they can work. Over two years, the state will have to give up about a million workers.

Are you going to reskill the workers? And what areas are you opening up?

Yes, we are going to fully support the workers to get new skills and other means to get started. Our higher educational institutions are also going to assist. Banks will help with loans. Our main priority, of course, is food production, with the emphasis on substitution of imports, but we also want to increase imports in certain areas.

The new areas being opened are in tourism, trade and services, mainly. We are to allow more people to be self-employed as transport providers, bricklayers, stonemasons, plumbers, electricians, panel beaters, shoe repairers, hairdressers, shoe makers, accountants and so on. We are also to allow people to have restaurants with up to 20 seats. Labour must be got from the owners' families, but they can also employ a limited number of people.

Will there be a minimum wage for those employed and any restriction on the profits of the restaurant owners and others?

Yes, there will be a minimum wage. These will be limited enterprises and they won't be able to make huge profits. We are introducing new redistributive taxes. In fact, new regulations related to this, including the modification of the tax system, have already been published in a special edition of the government gazette.

But ultimately you will be introducing a further measure of private enterprise?

But we're not opening the door to capitalism. No way! Our economic reforms are based on socialist principles. In any case, we have always had self-employed workers. We are just increasing their numbers. Self-employed workers may be able to accumulate more in certain cases, but that'll be based on their hard work, not through exploiting others.

But in the context of the joint ventures with the private sector and other economic reforms since the early 1990s aren't you gradually drifting away from socialism?

No, no! We are consolidating socialism in new difficult global conditions. We are not expanding the private sector significantly, and the fundamental means of production remain in state hands. Even where people work on the land, the product will be theirs, but the state will retain ownership of the land. We are not privatising the land. And if people do not make productive use of the land, we will take it back from them as part of our leasing agreement and allocate it to others.

It's impossible to seriously build socialism with our low productivity. We must have a strong economy, especially to ensure our free health and education systems. You must understand we are shaping our own Cuban model of socialism. Ours is an authentic Cuban revolution. It's not been imported from anywhere. It`s based on our history, our culture, the nature of the Cuban personality, the psyche of the Cuban people, our natural resources, our climate, our position as a small island, our location in the Caribbean, and our specific problems now.

We are not perfect but we are working very hard to make socialism work. We have to make these changes to preserve socialism in the context of the economic and financial crisis and the anachronistic US blockade. The changes we are making are under the control of the Cuban Communist Party, with the support of the people. After 51 years of our revolution, we cannot afford now to make major strategic mistakes.

Have there not been increasing inequalities within Cuban society since the economic reforms of the early 1990s? And with the reforms, a change of values? And what about corruption?

Yes, there are inequalities, and we are addressing this to prevent the gap growing. But the major distortions come from the money sent to Cubans by their relatives from the US and elsewhere. For example, one US dollar is equivalent to the entire ration card we give to our people. So those who get money from outside are better off.

Over time, we want to do away with the two currency system we introduced after collapse of the Soviet Union. (Cubans use the Cuban peso, which is weak compared to the US dollar, but US dollars are exchanged into the convertible peso, which is closer in value to the US dollar). But to do this, we have to increase the productivity of our workforce, to have a strong economy. We can then raise the salaries of workers.

And, yes, we are also aware that the values of people can change. We are addressing this in various ways, including through new and more intensive ideological programs in our schools, the Young Communist League, the mass organisations, workplaces and elsewhere. We have open debates about this issue. That's the best way to deal with it.

We are also getting stronger against corruption through prevention measures and prosecution of offenders. Any process of change will have challenges. Our economic reforms will be managed gradually and progressively to try to prevent distortions. Of course, this is not the first time we've introduced reforms, but we are aware of the far-reaching consequences, and we are working towards avoiding possible negative effects.

So what is the response of workers to your new economic reforms?

We have spent long hours with the trade unions and workers. We discuss our problems. We make them public. That's how we can solve them. If we are open with people they will support us, as they did during the "Special Period" after the collapse of the Soviet Union and the socialist bloc. We have also been given lots of ideas by the public and are including these in our plans.

But the workers are worried. You see, until now the state has been doing everything for them. They have become too dependent on the state, on the excesses of government paternalism. Now they have to adjust. It won't be easy, but we will do it. In a situation like this, the government has to be part of the solution.

We are not going to leave the workers alone. We are going to assist them in their new work. We have to make these changes. If we don't make them we will burden future generations. We are doing this for us but mainly for our children.

Submitted by Terry Townsend on Fri, 11/12/2010 - 12:53


Announcing its first Communist congress since 1997, Cuba is examining ways to create jobs and ease private sector controls

Richard Gott

Tuesday 9 November 2010

Raúl Castro, president of Cuba, has finally announced the date for the all-important congress of the Cuban Communist party, the first since 1997, to take place in the second half of April next year.

The congress, modelled on that of the old Soviet Union, is supposed to take place every four years but it has been endlessly postponed as a result of the "special period" proclaimed at the time of the Soviet collapse. The politics of economic survival, discussed within the party's inner councils behind closed doors, have taken precedence over the relatively open debate that occurs at a party congress. April 2011 will be the 50th anniversary of the CIA-backed invasion of Cuba at the Bay of Pigs as well as the first proclamation by Fidel Castro of Cuba's socialist vocation.

There may also be an important political element to be considered at the congress: the future of Fidel Castro as the first secretary of the party. When illness forced Castro to resign as president of Cuba in 2008 in favour of his brother, he retained his all-important post at the party. Will he now judge that it is the moment to go, or, now that he is partially recovered, will he choose to go on?

Raúl Castro has already announced a series of far-reaching economic reforms this year, which some have perceived as a retreat from socialism. It had been widely expected that the congress would be held this month to ratify the changes that have already been widely debated, both within the trade union organisation and in the wider society.

People interviewed at random by journalists appear to express a range of opinions, from enthusiasm to scepticism and alarm. The speed of change in Cuba is always glacial, and with an extra six months' grace there will be time to ensure that the presentation of the reforms is efficient and well-prepared.

Typically, Castro's announcement took place in the presence of Cuba's closest ally, Hugo Chávez of Venezuela, who has been in Havana to celebrate 10 years of a friendship treaty signed in the year 2000, and to sign new agreements. Chávez provides cheap oil to Cuba (replacing the subsidy once granted by the Soviet Union), in exchange for several thousand Cuban doctors who work in the shanty towns and rural areas of Venezuela.

The two countries are also the promoters of Alba, the Bolivarian Alternative for the Americas, established in 2004 to promote trade and co-operation within the continent without the participation of the US. Announcing his plans for the April congress, Castro gave Chávez a copy of the economic themes to be discussed.

Some of the changes were already outlined in September after an announcement that half a million state employees would be laid off in the next few months, indicating that Cuba is by no means exempt from the economic crisis that has affected most of the rest of the world. A list was published of 178 activities that individuals would be permitted to engage in "on their own account", and in 83 of these new private businesses the employment of salaried workers would be allowed.

This "privatisation" of a number of hitherto state-controlled jobs, including such things as looking after parks and washrooms, would be the most important economic change for most individuals since the private sector was effectively closed down in 1968. Other changes envisaged include the possibility of owning houses and apartments for rent, while the existing family-run restaurants, paladares, permitted since the 1990s, will be allowed to increase their clientele from 12 to 20.

Will these new measures be sufficient to soak up the hundreds of thousands of individuals soon to be thrown out of work? The government certainly hopes so. In preparing these reforms, it has looked very closely at the experience of China and Vietnam, countries that have moved away from socialist economics yet retained the tight political control of a single party. Venezuela is also an example of a country where socialist rhetoric and a fiercely anti-imperialist foreign policy is coupled with an economy that permits consumer choice and still rampant capitalism to flourish.

In consonance with past practice, Cuba will not slavishly copy these models, but will seek to follow its own path. The holding of a party congress is an indication of the government's awareness that it needs to take the people with it as these important changes take hold.