Last week, the Cuban leadership proceeded with significant economic and social reforms (a total of 176 provisions organized into 23 categories). Following an extraordinary session of the Central Committee of the Communist Party of Cuba, the National Assembly approved measures affecting all sectors of the economy. These were presented as a response to the extremely difficult situation created by the brutal US embargo, which has been in place for more than 60 years, and, in particular, by the energy blockade imposed since January of this year, which has placed immense pressure on the Cuban people.
The measures approved are a continuation of the guidelines and reforms adopted following the 6th Congress of the Communist Party of Cuba in 2011. A central feature is the promotion of foreign private capital investment across all sectors of the economy and the adoption of market mechanisms as a means of allocating resources. Among the most significant changes are the following: state-owned enterprises will enjoy greater autonomy and, like private enterprises, may be converted into joint-stock companies, while all entities —including individuals and foreign investors— will be able to hold shares in as many companies as they wish.
Private employers will be permitted to hire more than 100 workers and engage directly in foreign trade; in other words, the state’s monopoly on foreign trade will be abolished. Furthermore, the existing wage-scale system in state-owned enterprises will be abolished and replaced by a minimum wage that takes inflation into account. Ultimately, wage levels will be determined through negotiations between employees, trade unions and enterprises, and will depend on each enterprise’s financial capacity.
The provisions also introduce changes to ownership relations and recognize the distinction between ownership and management, while at the same time maintaining that “social ownership of the basic means of production remains”.
Within this framework, substantially greater powers are being granted to provincial and municipal authorities to develop the so-called local economy and public utility services by encouraging, as emphasized, direct foreign investment.
A key element of the reforms is the restructuring of land management and land use for all economic actors. The real right of usufruct over land will be granted to state-owned, private, and mixed entities, as well as to natural and legal persons, for an indefinite period and over an area corresponding to the project submitted. This will apply to all agricultural, forestry, and tobacco-producing units, as well as to ecotourism and agritourism development projects. Agricultural cooperatives will also be able to engage directly in foreign trade in order to export their products and import agricultural inputs and technologies.
The reforms also provide for the establishment of private financial institutions, including banks and foreign exchange bureaux, which will operate under the supervision of the Capital Market Commission (BCC) on the same regulatory basis as state-owned banks.
In addition, the tourism sector is being opened up further to private investment through real estate development, while the so-called insurance market is also being opened up. These measures are accompanied by changes to oversight mechanisms, a reduction in the number of ministries and public agencies, and adjustments to the institutional and legal framework through the necessary legislative amendments.
Furthermore, private and foreign capital will be allowed to participate in the importation and trade of fuels, including through the retail network.
The country’s Prime Minister and member of the Political Bureau of the Central Committee of the Communist Party of Cuba, Manuel Marrero, argued that all these changes do not represent a retreat from the state’s social responsibilities, but rather “incorporate the recognition of market mechanisms as means for the efficient allocation of resources”. He added that “the measures do not constitute a deviation from the socialist plan, but rather are in line with the logic of its development”.
However, the further strengthening of commodity relations and the market, together with the erosion of social ownership of the means of production, central scientific planning, and workers’ control —which constitute the fundamental principles of socialist society— has, as the historical experience of the overthrow of socialism in the USSR and other socialist countries tragically demonstrated, profoundly negative consequences for the peoples. Likewise, the predominance of capitalist relations in China have had far-reaching negative consequences.
A critical examination of the changes being promoted in Cuba and the ongoing debate surrounding them must go hand in hand with the duty of communists to stand firmly alongside the heroic Cuban people, express their unconditional solidarity with them, demand an end to the long-standing and barbaric blockade imposed by US imperialism, and support the Cuban Revolution.
Published in Rizospastis, organ of the CC of the KKE