Cubans discuss economic changes: `It is the people who will decide'

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

November 19, 2010 – Granma – The 6th congress of the Communist Party of Cuba will take place in April 2011 and the only topic of discussion will be the analysis of the country's economic and social model. Prior to the congress, from December 2010 through February 2011, a process of popular debate will unfold based on a fundamental party document entitled "The Economic and Social Policy Development Project", which is already in the hands of the people, a sampling of whose opinions Granma offers.

‘This is genuine socialist democracy'

Dr José Rubiera, head of the Meteorological Institute's Forecast Center: "How do we want our society and our lives to be? Herein lies the paramount importance for all Cubans of this process of openly discussing the directives of the Economic and Social Policy Development Project. What is important is that it will not only be a discussion within the party membership but within Cuban society as a whole. As has happened on many occasions, the people will again be the great protagonist, contributing opinions and suggestions, actively participating in the search for solutions to problems, one more example of our genuine socialist democracy."

‘Much-needed guide for the future'

Yamilka Rodríguez, athlete: "All of Cuba's people should be aware of the importance the 6th congress will have; it will serve as a guide during the coming years. It will be fundamental to the definition of our future, not just economically, but socially as well. For sports specifically, it means defining future strategies, in order to maintain our stature and continue to perform at a high level."

‘Continuing to perfect socialism'

José Alfonso Piñeiro Loredo, ship captain in the Revolutionary Armed Forces: "Discussing the Economic and Social Policy Development Project will give us the opportunity to perfect our socialism and rectify errors that we may have committed and it will be reflected in the betterment of our people and in the consolidation of the Revolution. With the collective intelligence of our people and the guidance of Fidel and Raúl, we have always advanced and we will continue to advance."

‘We have to change our mentality'

Jorge Luis Riancho, machinist at Cuban Steel Works: "Having the opinions of the population makes our system stronger and strengthens the foundation upon which we have built our socialist society. We know that, from the clash of opinions and fruitful exchange, alternatives more attuned to current circumstances will emerge. This process demands significant changes in our mentality, only in this way will we fully assimilate the transformations."

‘Economic reorganisation is necessary'

Reyquiel Suárez, welder at the Cuban Steel Works: "It's up to young people to directly involve themselves in all of the discussions, confident that the Revolution will not leave anyone abandoned, while these changes are necessary in order to move forward, because the work of one worker cannot be done by three, because wages need to allow us to meet our basic needs, and we can achieve all of this with efficiency and productivity. That must be our analysis."

‘A greater contribution from the sciences'

Lilliam Alvarez, doctor of physical-chemical science and a member of the Cuban Academy of Science: "The country is living through a time of profound change and the ideas expressed by the Communist Party membership and the people in general will enrich the policy development project and contribute to making sound decisions during the congress. Within this context, science and technology are called upon to become the driving force of economic progress and to take on a much more active role in food production, the development of new products and services, the substitution of imports, the expansion of exports and environmental care."

‘Stronger than ever'

Pablo Gattorno Gónzalez, Villa Clara mechanic: "The Revolution will emerge from this process stronger than ever. The updating of the Cuban economic model is an unavoidable necessity, which every Cuban must support. The future of the homeland over the coming years depends on us. We have an historic leadership, led by Fidel and Raúl, which has brought us this far victoriously and, with these measures, I am sure that we will have socialist revolution for ever."

‘The congress needs to emphasise changes already begun'

Marcelo Marcial, retired and a member of the party in Matanzas: "I am convinced that this great event will give direction to the country's future and set standards, basically, in the economic and the social areas. And that from prior discussion of the directives, essential ideas will emerge and contribute to the enrichment of the principal document at the congress, an event much anticipated by Cubans."

‘Seek solutions without looking elsewhere'

Eduardo Hernández Ortega, campesino in Habana province: "The 6th congress will consider issues related to the agricultural sector given their relevance to the solution of current economic problems. We have to seek solutions to our problems without looking elsewhere, as we have done in our cooperative. Little by little, we have diversified, as the country has directed, the use of our lands. In this way we can assure ourselves of fresh milk and of fattening bulls. And we take care of the feed for our animals here, too.

‘The Revolution will be strengthened'

Eduardo Cueto, National Association of Economists and Accountants in Camagüey: "The Revolution will emerge stronger from this process. It has to update the economic model and get in tune with current conditions and with our own particularities, craft a made-to-order suit in search of greater efficiency. This process has a precedent in Camagüey, when Raúl called on us to be more productive and efficient, to use material and financial resources more rationally.

"At that time, people began to be asked about how we wanted our model of development to function. This dialogue is ongoing and will gain momentum with the party's 6th congress, as an eloquent example of democracy."

‘It is the people who will decide'

By Yaima Puig Meneses and Leticia Martínez Hernández

November 19, 2010 – Granma – The first national seminar to discuss the Economic and Social Policy Development Project took place November 11-14 at the Ñico López Advanced Studies School of the Communist Party of Cuba.

Clarifying debates characterised the first national seminar on the Communist Party of Cuba’s Economic and Social Policy Development Project which, according to Cuba's President Raúl Castro, began the 6th congress and gave an idea of just how fruitful the people's discussion of proposals will be.

Castro said that, in this respect, diversity is fundamental, that life is enriched when there is disagreement and that this must be a maxim within the Communist Party. Massive participation will be an essential element of the success of the 6th congress of the Communist Party of Cuba, which takes place in April 2011.

Everything will be decided based on explanations given, he said on another occasion. It is not about convincing people of what is contained in the document, but of explaining the issues and meticulously gathering all opinions because, within this process, it is the people who will decide.

The Cuban president called on leaders and experts at the seminar to fully acquaint themselves with the distinctive characteristics of each area of the country in order to lead the discussions adequately. He emphasised, therefore, the importance of their questioning members of the working commissions who prepared the document about issues that could be difficult to explain to the population. Given that the seminar sessions proved very useful, Castro proposed organising a second seminar in the coming days to extend the experience to others and strengthen the participation of provincial delegates.

"It's not that we are going to become economists", he said, "but, in order for the party to exercise its authority, it must be knowledgeable. In order to confirm how what has been established is being undertaken, we have to be well prepared. It is essential that the party schools restructure their study plans."

The National Association of Economists and Accountants (ANEC) also needs to play a more active role, as well as the country’s lawyers, who need to offer better counsel. "Many errors are made because what is established is ignored; often legislative decisions are made and then they're shelved. We must get used to abiding by the lawful documents", Raúl Castro commented.

As for the measures to be taken to solve problems within the Cuban economy, which will be at the centre of the 6th congress debate, the president said there is no other alternative beyond implementing them. He was clear that Fidel Castro's ideas are present within each of the proposed directives.

A fruitful debate

In the seminar's first session, Marino Murillo Jorge, vice-president of the Council of Ministers, analysed the condition of the Cuban economy, identifying external and internal events which have played a role in the situation.

In terms of external factors, he described the systemic structural crisis in the international arena, which has fundamentally manifested itself in Cuba in the instability of prices of products that the country buys and sells. Between 1997 and 2008 alone, these variations accounted for a net loss of 7.9 billion pesos, as compared with 1997 levels.

The minister of economy and planning said that the country has also been impacted by the intensification of the US economic, commercial and financial blockade, which has meant significant losses.

Nevertheless, since the end of 2004, new opportunities for international trade have opened up within the framework of the Bolivarian Alliance for the Peoples of Our America (ALBA), and trade is also increasing with other countries, particularly China, Vietnam, Russia, Angola, Iran, Brazil and Algeria.

He reported that the losses suffered as a result of 16 hurricanes between 1998 and 2008 amounted to more than US$20.564 billion and those caused by drought, between 2003 and 2005 alone, were in excess of $1.35 billion.

On the other hand, he emphasised that the Cuban economy has suffered from internal factors such as inefficiency, lack of investment in the productive base and infrastructure, the aging of the population and stagnation in its growth.

‘Only socialism'

Marino Murillo said that the economic policy followed by the country has to offer solutions to these problems. He said the policy must follow the principle that only socialism is capable of overcoming these difficulties and preserving the accomplishments of the Revolution. He emphasised that the updating of the economic model will give primacy to planning, not to the market.

As a result, he emphasised that there will be no economic reform, as some foreign press media outlets would have it. "There is no reform; it is an updating of the economic model. Nobody should think that we are going to give away property; we are going to administer it in another way."

Murillo gave as one example the distribution of unused land in usufruct, within which the state, in the name of the people, remains the proprietor. He described as imperative the development of greater efficiency in primary sectors such as agriculture and the investment process, so that the economy produces. He said that investments which promote saving through the replacement of imports and increasing exports, and which provide rapid returns, will be prioritised.

As the discussion began and participants raised questions about the creation of cooperatives in other sectors, Murillo responded that "few of us have seen them outside of agriculture and that, in fact, the law does not recognise them elsewhere". Updating the model will also mean modifying various legal regulations. Murillo offered the opinion that cooperatives have a place in small industry and in the service sector "given that there are things that do not function well when they are governed by state formulas. This should be done, however, in an orderly fashion".

Seminar participants were interested, for example, in how links between research institutions and businesses can be made more effective. The minister said that science must rapidly become more involved with production; that whenever possible, research centres should be part of enterprises which hire them for their services, "since the state cannot assume financial responsibility for research which is then never applied".

Among other topics, he spoke of the increased authority of businesses, which, as was explained in the seminar, means greater responsibility. For this very purpose, it was clarified that provincial taxes paid by businesses will be collected by the Municipal Administrative Councils (CAM) in order to support local development.

Along these lines, on the first day of the seminar, Raúl Castro reported the decision to grant more authority to municipal councils in order to strengthen local development, which implies higher expectations of everyone at every level. It cannot be that presidents of local governments have to wait for an allocation or help from the central level to resolve a local problem. Now they will have more resources available, but they will also have to manage them within the municipality.

One topic of discussion was the process of negotiation, drafting, agreement and fulfillment of contracts among entities, which is one of the most serious problems within the economy. Marino Murillo offered the observation that within the system, contracts are signed sporadically. "What contracts are signed to guarantee production?", he asked. Rodrigo Malmierca Díaz, minister of foreign trade and foreign investment, commented, "Not only are contracts not signed, but when they are signed, sometimes they are not even fulfilled."

In another area, one of the directives which prompted many questions was Number 16, which states that if a state enterprise repeatedly reports a loss, it could be subject to a liquidation process. "It's not possible for an enterprise to show a loss for 10 years with the state having to assume the costs", Marino Murillo noted.

Faced with many questions about the consolidation of the country's two currencies, he explained that this fundamentally depends on an increase in labour productivity because, "eliminating the two-currency system, in and of itself, will not solve current problems; they can only be solved by getting the real economy to produce efficiently".

He said that what is being done in the restructuring of the economic model has to resemble a future without two currencies. Giving an example, he said, "Self-employed people are now paying their taxes in Cuban pesos."

Seminar participants welcomed the explanation offered as to the creation of Special Development Zones (ZED) which, according to Malmierca Díaz, are not duty-free zones. The ZED will allow for an increase in exports, the real substitution of imports, highly technological projects and local development, and will provide new sources of employment.

As one example, Raúl Castro highlighted the investment being made in the port of Mariel. He pointed out that Havana's port will see limited commercial activity, since modern ships are very large and, given the depth of the bay, cannot enter port. As he explained, the one in Mariel, being built with financing provided by Brazil, will have cutting edge technology and will revolutionise the country's port facilities, currently in very poor condition.

Education

Another topic which engendered much discussion was linking university studies to the developmental needs of the economy and society. Raúl Castro reiterated the need to eliminate the mismatch between numbers and reality.

Miguel Díaz-Canel, minister of higher education, reminded participants that Article 51 of the Cuban constitution clearly states that study opportunities are to be in accordance with students’ aptitude, social demands and the country's socioeconomic development needs. "Over the past 10 years we have not met the need for degrees in the exact, natural, technical, agricultural or educational sciences. Nevertheless, there has been a surplus within the humanities", he said, a reality which has now led to questions about quality and meeting the country's needs.

José Ramón Fernández, vice-president of the Council of Ministers, referred to steps being taken in every province to train the technical workforce needed for their development. He spoke of an increase in the number of mid-level technicians and skilled workers enrolled; of the revitalisation of agricultural studies in technical colleges within highly agricultural municipalities; the re-emergence of staff meetings, workshops and laboratories, and the opening up of classrooms annexed to cooperatives and workplaces, where students can have more opportunities for practice.

Wages

The question as to when people who are genuinely working will receive higher wages was raised repeatedly by participants, since this topic is expected to be one prompting the most debate within the population. In response, Marino Murillo explained that the funds needed to restructure wages are to be found in the elimination of inflated rosters in workplaces, by withdrawing the state from activities beyond its purview, by eliminating excessive subsidies and unearned allowances, and by improving the productivity of labour. "Within the success of the proposed economic reorganisation which we have presented, lies the key to increasing wages", he concluded.

The third day of the National Seminar on the Economic and Social Policy Development Project of the Party and the Revolution focused on agro-industrial, industrial, energy, tourism, transport, construction, housing, water resources and trade policies.

Most of the morning session was devoted to the subject of the sugar industry. According to the minister of economy and planning, the challenge is to increase the efficiency of the sugar harvest, where the principal problem is the availability of cane which, moreover, has been planted at a distance from the mills in most provinces.

Corroborating that, Orlando García Ramírez, minister of the sugar industry, stated that sugarcane cultivation has not been given due attention, given that it is not planted with sufficient density. However, he emphasised that it does have the necessary technical package to increase yields, but due to a lack of exigency better results have not been achieved, while work is underway to recoup the situation in this sector. A new price for sugarcane is currently being considered, which will constitute an incentive for producers.

Asked about cattle farming, Gustavo Rodríguez Rollero, minister of agriculture, explained that the country’s cattle ranches are gradually recovering. To facilitate this, steps have been taken to secure sufficient feed by sowing 80,000 hectares of pasture and forage closer to the farms; increasing prices paid to producers of milk and beef; the implementation of the current bull fattening program, among others.

Rodríguez Rollero noted that currently, one of the major problems in cattle farming is the low birthrate, standing at 60%, although the country has the genetic base to remediate that situation.

Referring to milk prices, María del Carmen Concepción, minister of the food industry, gave the example of a study undertaken in various provinces, which confirmed repeated violations of quality standards, despite the fact that campesinos were being paid as if they were following those parameters.

As a result, Ulises Rosales, vice-president of the Council of Ministers, warned of the need to check product quality when prices are increased. "We cannot have motivation based on higher payments without also controlling the quality of the final product."

Transport, water, housing

Regarding the transportation sector and questions concerning its restructuring, Marino Murillo said, for example, that a lot of fuel is spent on administrative activities, for which reason the volume of fuel allotted to this kind of activity is to be reduced by 20%, which will lead to savings of more than $60 million.

"Updating the economic model will prompt business sector managers to make more efficient use of the resources that they have, of which transportation is one", according to César Arocha Masid, minister of the sector. He added that, as a result of the reorganisation, a considerable number of inefficient vehicles have been grounded to date this year, which has saved more than 28,000 tons of fuel.

Antonio Enrique Lussón, vice-president of the Council of Ministers, stated that the problems of heavy transportation are not confined to this sector, but also cover those demanding the service. Transportation could be doubled, but before that, it is necessary to recover discipline, organisation and high expectations.

Leaders and specialists attending the seminar asked questions about the current structure of commerce. The minister of economy and planning reported on modifications taking place in the structure of the wholesale and retail trade, related to the changes in the economy.

Jacinto Angulo Pardo, minister of domestic trade, considered that work in the retail sector should be directed toward diversifying the quality and range of products on sale to meet the demands of different segments of the population.

Another issue discussed was that related to the use of water, as those attending the seminar were interested in the rehabilitation program for networks, aqueducts and sewers to promote the saving of this resource.

"Currently, 58% of water distributed to consumers is being lost, stated René Mesa Villafaña, president of the National Institute of Water Resources, adding that 600 gigawatts per year are used for pumping water, which makes this activity the second-highest consumer of electricity in the country.

He said that rescaling water tariffs with the aim of gradually reducing the subsidy as well as reducing waste is being studied; and in this way water reserves will constitute the instrument of planning via which state and private consumption will be measured.

Finally, referring to housing directives, Fidel Figueroa de la Paz, minister of construction, stated that the housing problem will not have an immediate solution. And he commented on the importance of maintenance and rehabilitation work on buildings, of which 38% are currently in substandard or poor condition. He noted the leading role that the population has to play in constructing their homes, for which the state has to provide the materials for sale.

In this context, Ramiro Valdés Menéndez, vice-president of the Council of Ministers, noted the urgent need to restore the regulatory role of the physical planning system so that new construction complies strictly with urban regulations.

The issue of the unordered growth of cities was taken up by the Cuban president on the last day of the seminar. Raúl Castro said that the purpose is not to prohibit construction, but to decide on the basis of studies where housing should be built, and more so now when people are to be encouraged to build for themselves. But in order to achieve that, discipline at all levels is needed, even if that means asking for problems.

Necessary changes to the tax and public health systems

The final day of the national seminar was devoted to updating participants on the coming changes in the taxation and public health systems, as part of the reorganisation the country is embarking on. The 523 participants received a detailed explanation from Marino Murillo, vice-president of the Council of Ministers and also from Health Minister Roberto Morales.

Murillo explained that the current taxation law dates back 15 years, the reason why many of its regulations do not respond to the new economic situation. In addition, that law is essentially expository and has not been implemented with the gradual application of taxes as defined in it. Thus, a working group responsible for studying the taxation policy of Cuba and those of certain other countries is to be created in order to draw up new legislation which, according to the official, "will be very Cuban, designed by us".

For that, it must comply with principles such as guaranteeing sufficient levels of income to support social spending; foment a tax-paying culture and greater social responsibility; guarantee a redistribution of income within those sectors which have greater economic capacity, and protect people with lower incomes; encourage local government involvement in the search for income for development projects in the provinces; and implement a control system to ensure strict compliance with tax regulations.

During the debate, Raúl Castro emphasised the necessity of ensuring that the population knows why it has to pay taxes. He called for high school and university students to be given a basic explanation of these reasons so that coming generations can think carefully about the importance of tax contributions, given that they are the state’s principal source of income for financing its costly social spending, which includes healthcare, education, defence, sport and culture.

Castro also noted that there has to be strict discipline in the payment of taxes and in the fight against corruption. "We have to avoid impunity, which is the very worst of crimes", he added.

For his part, health minister Roberto Morales explained that the measures adopted within this sector will not translate into a reduction of the services provided, but will function to improve the ones that exist. Economic rationality and quality must determine the work of public healthcare and all other sectors, he added. He also underlined the importance of recovering the practice of clinical diagnostics and epidemiology as a principal guarantee of better medical attention, given their possibilities for a correct diagnosis, without resorting to other unnecessary and very costly tests which could even be damaging to patients’ health.

The Economic and Social Policy Development Project of the Communist Party and the Revolution is directed at recovering those principles in the daily activities of Cuban society.

As President Raúl Castro stated, the national seminar is the first step toward the 6th congress. All of the debates to take place from now on will contribute to the success of updating our economic model.

Economic and social guidelines and the projection of Cuban economy

By Oscar Sánchez Serra

November 19, 2010 – Granma – Based on the analysis of the Draft Guidelines of the Economic and Social Policy of the Communist Party and the Revolution, as key subject of the 6th party congress to be held next April, we propose an approach on several aspects which, in our view, touches on the very core of this document.

First, it is crucial to make clear that the draft guidelines do not constitute the answer to the problems we are facing, but the way or manner to get to their solution, based on the country's economic projection up to 2015, which was approved on May 7 and 8 by Cuba's Council of Ministers.

This projection and the guidelines are so far-reaching that only to implement the bulky payroll reduction process and to expand and make flexible self-employment it took the modification of 22 juridical rules published in the Official Gazette on October 25 this year, in numbers 11, 12 and 13 of that publication, which included General Regulations issued by the Council of State, the Council of Ministers and its executive committee, as well as the documents that complement those general regulations, which were the resolutions issued by the ministries of labour and social security, finances and prices, transport, agriculture, the Cuban central bank and the National Housing Institute.

For this reason, the document to be discussed by the Cuban people is based on that projection as a line of policy that will be progressively developed.

Planning

In keeping with this, the proposed way of action has key points throughout the document. One of them is planning, which is present from the very first guideline as it is stated that in the updating, the Cuban economic model will prevail and not the market in the planning. As Marino Murillo Jorge, vice-president of the Council of Ministers and minister of economy, said: "There is no better control than the efficient meeting of the plan of expenditures." And President Raul Castro stressed that "the plan is sacred".

Planning will be in all the pages to be analysed, if not, how can we approve an investment without foreseeing its recuperation within the same sector, how can we think of strengthening production forces and increasing salaries, without designing ahead of time where it will take place, how and when will we get what we need without expecting it from outside? It means achieving it with our own resources. Or how can we increase labour productivity in crucial sectors such as transportation, industry, agriculture, science and food if we do not coordinate with the education sector in the training of skilled forces?

Some people think, for instance, that you can deal with everything related to increasing salaries overnight. It is necessary to say that the projection of the economy, already referred to, includes such gradual increase up to 2015, because we are expected to achieve an appropriate relationship between labour productivity and the average salary, which today is at a critical point, since the first factor is way below the second. This means that we are consuming what we have not yet created.

The need to fully work eight hours and increase the production of goods led to the planning of the process to reduce bulky payrolls and identify redundancies, expanding self-employment and making it flexible, while the future tax legislation, which is particularly aimed at distributing better and in a larger quantity the wealth we are able to produce.

The draft guidelines are based on a harmonic development that would lead to an external and internal balance of our economy.

To illustrate this idea we could ask: what should we do if tourism offers a good service, increases the number of vacationers, including usual visitors and conquers new tourist sources, if the industry and agriculture are not able to produce to prevent expenses in terms of imports in that sector? It is simple, the lack of productivity in both areas and their inefficiencies make the economy transfer inefficiencies to the tourist sector. This would lead to more expenses, or what is the same: increase the unbalance. Therefore, the debates in each sector must adjust to their own problems and must be made with an integral approach to the economy from every working post.

Prices and wages

The people are concerned about the subject of prices, for instance. The only thing that can regulate prices is the increase of goods and services. What would happen if prices are lowered by decree? We would be increasing the purchasing power of those who have more money; we would not encourage productivity, and pay according to results would fall off a cliff, since the salary would not play its crucial role in personal aspirations; consequently, it would mean a mortal blow to all our aspirations. Cuba would continue to be the only country in the world where work is not a need.

It would be much better, as stated by the economic projection and the guidelines, to increase average salary on an annual basis, so that as a result of each worker's productivity, meets the personal needs.

This is the golden rule of socialism: from each, according to his or her capacity, to each according to their work.

Leaders' role

Nothing or no one, no matter who he or she might be, can ignore what has been established because if that happened he would be ripping this policy or what is the same, desecrating the resources and efforts of the people. In this direction, the leaders play the most important and decisive role, for the institutionalisation is achieved with responsibility and control. Those who are leaders must make more emphasis than anybody else on meeting what has been agreed to; they must be capable of taking decisions in tune with these guidelines, about where it is more important to allocate resources; they must justify any investment and be responsible for its results, according to what was supposed to be the outcome of it to get approval. But at the same time leaders have to explain, support and make clear what this policy entails, either to their workers or to their neighbours.

But the most important thing about the debates has to do with all the information we can provide and explain well, listening to everyone, and apply this proverb of Chinese wisdom that reads: If you listen to the parties, light will shine; if you listen to only one, you will remain in the dark.

There is much wisdom in the Cuban people as well as much commitment. We must never forget that since November 17, 2005, when Commander in Chief Fidel Castro called us to think about our inefficiencies as the only way to make our revolution irreversible, we have to maintain a vertical line in tune with that element of thought; let's recall the over 4 million Cubans who issued more than 1 million suggestions following the speech given by President Raul Castro on July 26, 2007, in eastern Camaguey, and those suggestions are present too, both in the economic projection and in these guidelines.

At present, those same leaders tell us again how much they trust us; so, let's get ready to join our leaders and make the words of the main principle of this document a reality, "it is the people who decide".