Cuba Is Not Privatizing its Economy

Cuba Is Not Privatizing its Economy
October 15, 2013 | Print |
By Progreso Weekly

HAVANA TIMES – Cuba is not turning its state-owned-and-managed property
into private property, says economics czar Marino Murillo.

Addressing Cuba's National Assembly of Popular Power, the head of the
Commission on Implementation and Development of the Guidelines made
several important points about the reforms in the nation's economic
structure that are known as "actualization" or updates.

The address was delivered on July 7 but was publicized this week by the
official website Cubadebate to coincide with the opening of the First
International Congress on Economic Management and Development being held
in Havana.

Cubadebate presents the speech as "excerpts, an encapsulated version of
the statements" by Murillo. The summary carries "no exact quotes, so as
to better inform" the members of ANEC, the National Association of
Economists and Accountants of Cuba, which is hosting the Congress. The
translation below is by Progreso Semanal.

Among the statements attributed to Murillo by Cubadebate:

"It is not correct to say that in Cuba today a transformation of
government property into private property is taking place. The
actualization of the Cuban economic model presupposes, above all, that
social property is above the basic means of production. To actualize the
model does not change the structural foundation of property over the
basic means of production. A change in property is not taking place. [...]

"Do not mistake transformation of property for modernization of
management. They are two different things. The actualization of the
Cuban economic model [...] presupposes modernizing management, making
property efficient and developing the productive forces. It does not
mean a change in the structure of property.

"The economic model in gestation acknowledges and promotes the
development of non-state formulas for property management, such as
foreign investment, self-employed labor, cooperatives. It acknowledges
and promotes different actors in the economy, among which it assigns a
leading role to the socialist state enterprises.

"[Economic] Guideline No. 2 acknowledges the diversity of the actors in
the economy and refers to other forms that, as a whole, must make [the
economy] more effective. That means that, in terms of management, we
must do the necessary to make the economy more efficient. But this, in
turn, has limits, the limits of social property over the basic means of
production, which define our system.

"Planning continues to be the fundamental method of management of our
economy, principally in search of macroeconomic balance. An economy
without such balance slows down the development of the productive forces.

"We have to look for a midway point where planning will be the principal
instrument of direction of the economy, but we must also leave space for
mercantile relations and the existence of the market itself. The
acknowledgment of non-state formulas implies that there must be a space
for redistribution via the market.

"In the actualization of the Cuban economic model, the main role will be
played by the socialist state enterprise, not in an environment like
today's but in another one, where it truly plays the role it deserves in
the economy, being more efficient, with other methods of income
distribution.

"Planning, as a rule, has been associated with the levels achieved in
the previous period and growth in the following period. We must have a
long-term development program where the goals are well defined. An
annual economic plan is not the same as a long-term development program.
The structural programs of the economy are not solved from year to year,
with a short-range vision. [...]

"A balance must be found between a budgetary deficit and the way to
finance it, because if everything is financed with a primary emission
[of currency] the effect could be inflationary. When discussing the
budget deficit, we must also discuss how it's going to be financed and
the effects this might have on prices and other aspects. [...] Monetary
emission, budget deficit and structure of budget expenditures are issues
on which much work remains to be done. [...]

"This year, the financing of the budget deficit has a different
structure. Forty-nine percent will be financed with bank credits from
commercial banks (which is money in circulation, not emission) and the
rest will be financed with emissions. [...]

"Credits have been granted to the population, most of them for the
construction of housing, but the guarantees [collaterals] are used
little. Sometimes, people go to the bank and say they were not granted
credit because they couldn't show good collaterals. There is a legally
established list of all the collaterals the people may use to back a
loan. We have to work on that.

"The demand for services offered by self-employed workers is growing,
both in the population and the economy. In terms of credit and
financing, rules were approved that allow legal persons (government
enterprises and entities) to hire those services, under the reasoning
that, if something they need can be obtained in the country, better to
acquire it here than abroad. In such relations, there is no reason to
hinder those who manage property under non-state formulas.

"What's always questionable, regardless of who is being paid, is the
irrationality of the expenditure, not the connection between legal
persons and non-state formulas. We won't question self-employed workers
because they render a service, but we will question the director,
manager, or government representative who incurs in an irrational
expenditure."

Source: "Cuba Is Not Privatizing its Economy - Havana Times.org" -
http://www.havanatimes.org/?p=99436