24 January 2007

Economic "Debate" in Cuba

Now that I predict that changes in Cuba are inevitable, here’s the totally opposite perspective.
It seems that the Cuban military who has been “running” the tourist industry under the direction of Raul since the 90’s has other ideas for Cuba’s (their) economy.

Of course, since they get to pilfer and skim the people’s money, they want no part of any privatization that would cut into their take, you know how mobsters are about things like that.

Cuban army weighs in on economic policy debate

HAVANA, Jan 23 (Reuters) - Cuba's armed forces, which run the Communist
country's most efficient companies, joined a nascent public debate on future economic policy on Tuesday and appeared to take a stance opposed to full free-market reforms.
Col. Amando Perez Betancourt, the head of the Cuban military's effort to make state-run companies more profitable, said profits, wages and productivity had been raised in more than 800 companies by applying methods known in Cuba as "perfeccionamiento empresarial" -- roughly translated as perfecting of the (state) company system.
"If you ask me what the most important task facing the state companies is, I would say it is better organization and the way to do that is through perfecting the state company system," Perez told the Communist Party newspaper Granma.

Col. Perez's comments contrasted with those of more reform-minded Cuban economists who believe greater opportunity for private initiative is the way
forward for Cuba as Fidel Castro fades slowly into the background.

Some Cuban economists believe that only by adopting China's model of a capitalist market under Communist political control, or at a minimum by decentralizing and developing private cooperatives in nonstrategic sectors, can internal production be improved.

'Perfeccionamiento empresarial' is not a free-market reform and it is not privatization. But it would benefit Cuba's economy to carry out the process fully," said Phil Peters, an expert on Cuba at the Lexington Institute in Virginia.

Col. Perez said productivity at more than 800 companies under the new anagement
system was 42.4 percent above that of other state companies and wages were 22.5
percent higher than average. Only 7 percent operated at a loss in 2006 compared with 38 percent in the economy as a whole.

"There is no question Raul wants improvements, but that does not mean he will go outside the existing system if he thinks it can work better," a Cuban economist said, asking not to be named.

Read Article Here

While it probably sounds like there is a “debate” about economic policy in Cuba, there isn’t.
There’s no way that the Cuban regime is going to privatize any of its bread and butter industries like tourism or agriculture. The two debate points are not mutually exclusive. The government will continue to run everything only more efficiently, and it will add small private businesses.

They will allow small family business to take economic pressure off society and give people a chance to make some convertible pesos. And these efforts will be taxed, so the government will get their cut.

The regime wins, the people stay the same.

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