Economic factors of Cuban socialism

Highly sensitive definitions and long-term programmes discussed at the 7th Congress of the Communist Party of Cuba outline the route for the changes of the nation’s economic model.

Re-elected as First Secretary, Raúl Castro critically analysed the delays to implement the legislative changes in the economy.

Foto: ACN _Omara García

The most important Cuban political meeting, the Congress of the Communist Party, agreed to continue with the programme of economic transformations approved five years ago in the country. The principal documents and decisions even propose expanding or making in-depth changes that imply the consolidation, modification or emergence of new actors and structures on the national scene.

This time the 1,000 delegates to the 7th Congress not only renovated the Guidelines of the Economic and Social Policy. While the construction of this programme had absorbed almost all the attention of a similar meeting in 2011, this time other conceptual and longer-term ones were also projected. Political, cultural and social matters, less dealt with in the previous convention, took up the delegates’ time, in addition to enriching or making clearer the route of a process that Cubans identify as Updating of the Economic Model.


The conclave confirmed the socialist state-run enterprise as the pivot of national development, but explicitly added a new non-state variable: private enterprise.


The authorities and official media avoided that term, but Raúl Castro, re-elected as First Secretary of the Party for another five years, demanded “to call a spade a spade and not take refuge in illogical euphemisms,” and recognised the existence of “medium-size, small and micro private enterprises” in the Cuban sphere.

The commission that assessed the “Conceptualisation of the Cuban Economic and Social Model of Socialist Development” confirmed highly sensitive points like the role of the market in socialism and the need to regulate it.
The commission that assessed the “Conceptualisation of the Cuban Economic and Social Model of Socialist Development” confirmed highly sensitive points like the role of the market in socialism and the need to regulate it.


The previous Congress had endorsed four forms of non-state management, which acted in Cuba since previous decades: the farmers, self-employed workers, foreign investments and cooperatives, expanded since that year to the non-agricultural activity. The most recent meeting added the fifth non-state variable, already present in the Cuban economy, but which has operated without legal status, barely governed by the regulatory framework designed for the contracting of workforce in small-scale private or family businesses.


“Private enterprise will act in well-defined limits and will be a complementary element of the country’s economic fabric,” Raúl Castro said in the Central Report to the 7th Congress.


The transformations and conflicts regarding the ownership of the fundamental means of production emerged during the consultations and analyses of the document titled“Conceptualisation of the Cuban Economic and Social Model of Socialist Development.” It was one of the most debated subjects and which aroused the most concerns, said the organisers.


In response, another document assessed by the Congress delegates, the Updating of the Guidelines for the period of 2016-2021, maintains the policy of preventing the concentration of ownership in the forms of non-state management; and adds the regulation of neither allowing the concentration of wealth.


The Central Report insists on the definition of the social state enterprise as the “principal form of management in the national economy.” But it admits that those entities are facing today disadvantages compared to the non-state and private structures, given the ongoing problems and imbalances of the economy that the process of Updating has not been able to resolve.


According to data presented to the Congress, out of the 313 guidelines approved five years ago, only 21 per cent of them had been totally met. Seventy-seven per cent of them are in the stage of implementation, and two per cent have not been initiated. The dual currency and exchange is one of the conflicts pending solution and that most sets back the state-run entrepreneurial economy. In the words of the Cuban president, it is “the most eloquent sign of the complexity of the process of implementation.”

The Congress of the Communist Party assumed the challenge of injecting prosperity and sustainability to the Cuban socialist model.
The Congress of the Communist Party assumed the challenge of injecting prosperity and sustainability to the Cuban socialist model.


The 7th Congress studied the programme undertaken for the strengthening of the enterprises owned by the State. The government is promoting it while opening a space to the non-state forms of management. One of the most recent actions is Resolution 6 of the Labour and Social Security Ministry (MTSS). It came into force two weeks before the start of the Party Congress in order to correct and perfect the systems of payment by results applied in the enterprises since 2014 with that ministry’sResolution 17.


The government has carried out an intense and unusual legislative activity during the five-year period to coordinate and give coherence to the changes planned in the Guidelines. The 130 policies approved during this stage were followed by 344 new legal regulations, the modification of 55 and repeal of 684. But the president of the country, and First Secretary, expressed his dissatisfaction for “the slow start up of the juridical regulations”; this has prolonged, he said, the implementation of the approved policies.


This problem has become visible in the state-run enterprises. Resolution 17 of the MTSS did not advance the same way in all the sectors and entities. The regulation that replaces it, Resolution 6, proposes perfecting now the wage systems to raise incomes from work as well as productivity. Both objectives are pivotal to re-launching the state-run enterprises in a scenario where the competition of the very varied private sector is appearing and growing, for example competition because of the qualified workforce.


The Updating of the Economic Model has also advanced toward the restructuring and decentralisation of the state-run business system, another way of injecting energy and capacity.


The leaders of enterprises are gradually acquiring greater authority in decision-making in the face of a market whose nature is not interpreted as opposed to socialism. “The introduction of the rules of supply and demand is not against the principle of planning,” Raúl Castro affirmed when presenting the Central Report, a principle already assumed at the previous Congress of the Party.


The documents discussed and the fact that the 7th Congress agreed to shortly take them to public debate before finally submitting them to Parliament, recognises the role of the market but warns about the need for it to be regulated. The issue unleashed strong debates before the meeting and during its sessions because of the signs of speculation and lack of control that have led to the hike in prices of agricultural products since last year.


No less ambitious, another of the titles that the Party analysed and that public opinion will also assess, “Bases of the National Plan for Economic and Social Development until 2030,” completes the vision of the country. The first long-term plan the nation will have proposes the pivotal points and strategic sectors of development.


The sum of all the documents seeks to define in a more precise way the bases of prosperity and sustainability raised by Raúl Castro in person for the socialism that Cubans have set themselves to remodel according to their identity and history. (2016)

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