[Marxism] "Cuba determined to perfect statist economy."

Fred Feldman ffeldman at bellatlantic.net
Mon Jun 23 15:49:44 MDT 2008

Journalist Marc Frank has spent the last 20 years in Cuba.
Fred Feldman

Cuba determined to perfect statist economy By Marc Frank in Havana
Published: June 23 2008 19:04 


At the recent metal workers’ union congress in Havana little seemed to have
changed since Fidel Castro, former Cuban president, became ill almost two
years ago, temporarily handing power to his brother Raúl before resigning
and leaving the country’s leadership to him last February.

There was no jockeying among cadres for a piece of privatised industry pie.
There was no talk of competition, markets, strikes or other action against
management, or turning state-owned businesses into co-operatives. Speeches
calling on members to work harder for Cuba, Fidel, Raúl and revolution
resounded through the hall as they have for decades.

“The key is in perfeccionamiento empresarial” – perfecting the state company
system – read the banner headline in Workers, the trade union federation’s
weekly newspaper.

The union meeting was the latest evidence that a debate fostered by Raúl
Castro has for now been settled in favour of those who want to improve one
of the world’s most statist economies – not dismantle it – using a business
model developed when the president was defence minister to improve the
performance of armed forces suppliers.

Perfeccionamiento empresarial is based on adopting modern management and
accounting practices, often gleaned from the study of private corporations,
for state-run companies.
It grants management more authority over day-to-day decisions and imposes
more discipline on workers while also increasing their participation in
decisions and incentives for labour.

“Perfeccionamiento empresarial has no exact analogy in capitalist economies
and is not borrowed from other socialist countries’ models of reform,” Phil
Peters, an expert on Cuba at the Lexington Institute in Virginia, wrote in a
study of the military’s economic model.

Raúl Castro signed a 200-page law last August ordering all 3,000 state-run
companies to adopt the model. He also promoted General Julio Casas Regueiro,
who was in charge of the military’s businesses, to defence minister and top
spots in the Communist party and government when he officially became
president on February 24.

The policy does not contradict Raúl Castro’s recent moves to lift
restrictions on the use of mobile phones, computers and other goods and
services, nor partnerships with foreign companies and more private
initiatives. The bulk of the economy and its core industries and finances
will remain in state hands.

Raúl Castro is not waiting for all companies to adopt his model – a lengthy
process of sorting out bad books, Soviet-style management and paternalism.

Cuba’s economy is on a better footing than in the 1990s. Foreign exchange
earnings are relatively strong due to the export of medical and other
professional services – mainly to Venezuela – as well as tourism, high
nickel prices and soft Chinese loans.

But the state has had problems investing these revenues through its many
companies, many of which suffer from poor accounting and management.

“Perfeccionamiento does not aim to turn Cuba into a China or Taiwan in terms
of level of development and integration into globalisation. In the end, the
objective is political,” said Frank Mora, Cuba expert at the War College in

“Raúl Castro needs to defuse the social, economic and political pressure of
rising expectations and increasing food costs by implementing and broadening
a set of very focused economic reforms.”

Copyright The Financial Times Limited 2008

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