Government seeks new forms of planning

A meeting of the Council of Ministers studied in advance the preliminary figures for next year’s plan and approved the bases to design a long-term socio-economic programme in order to resolve a historic weakness of Cuban socialism.

Cuba needs to expand the sources of financing as well as foreign investments to plan more solid economic growths.

The decision of turning planning into the backbone of the Cuban economy again came up at a recent meeting of the Council of Ministers. The government meeting carried out in May analysed in advance data for next year’s plan and approved the bases for a long-term socio-economic programme, unprecedented and more ambitious than previous experiences. The government thus placed on the table, more than the defence of a capital political principle, the need to resolve a historic weakness of socialism in Cuba.

When presenting the guidelines to draw up the plan for 2015, Economy Minister Adel Yzquierdo specified that they were preliminary figures whose aim was to achieve a greater economic growth.

Regarding another related topic, the vice president of the Council of Ministers and head of the process of changes called Updating of the economic model, Marino Murillo, commented on the intention of expanding foreign investments – up to two or 2.5 billion dollars – to raise the gross domestic product (GDP) growth to an annual level of between 5 and 7 percent.

On that occasion Murillo recognised that the growth rate in the last three years has not surpassed 3.2 percent. The prediction for 2014 is 2.2 percent, way below the minimum that the consensus of economists estimates as necessary to sustain the development of the nation: between 6 and 7 percent.

These statements were made by Murillo in early May during a meeting of the board of directors of the International Investment Bank (IIB). Its representatives approved in Havana a programme to modernise that entity, created in 1970 under the umbrella of the late Council for Mutual Economic Assistance (CMEA), a bloc led by the former Soviet Union. That bank continued working at half speed after the collapse of the CMEA in 1991 and is the only multilateral financial agency from which Cuba can apply for credits. Its current members are Russia, Bulgaria, Slovakia, Romania, Mongolia, Vietnam, the Czech Republic and Cuba.

The issue of the sources of financing came up a few weeks after the meeting of the Cuban ministers.

The island’s government analysed among the priorities for next year’s plan the production of food, power generation, investments, mercantile circulation and the employment trends.

But the meeting’s novelty was the approval of the bases to design a Socio-economic Development Programme that would cover the period from 2016 to 2030. Cuba would again boost, but with longer terms, the experience of the five-year plans, promoted not very successfully by the CMEA  and abandoned when the economic crisis known as the Special Period broke out in 1990.

This new plan’s characteristics include drawing up “a future scene that expresses, through long-term, concrete and measurable indicators, the objectives, strategic lines, sources of financing, goals and gaps to be overcome,” Murillo reported to President Raúl Castro and to the ministers and guests at the meeting.

In addition to pointing to a more solid GDP growth, “that ensures development with well-being, equity and social justice,” this 15-year programme would defend the foundations without changing the Cuban socialist model; in the first place, social ownership over the fundamental means of production.

According to the note published in the daily Granma, it would also seek efficiency in all sectors, by expanding science, technology and innovation; transforming the energy matrix with greater participation of renewable sources; recovering and modernising the country’s infrastructure; and ensuring demographic sustainability.

With these steps, the government aims to fulfil the objective of the document governing the transformations, approved in 2011.

Guideline one of the economic policy ratifies the planning system as “the principal means for the direction of the national economy,” a principle historically more respected by manuals and official statements than by government and entrepreneurial practice. In fact, that same Guideline recognises the need to change the methods of drawing up and controlling the plans, in addition to taking into account the market. (2014)

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