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Notes for a balance sheet of ten years of reforms

Friday 20 July 2018, by Ariel Dacal Díaz

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I. Since, at the end of 2007, Raúl Castro called for a broad national debate, ten years have passed. It was a kind of "social catharsis" of all the problems of the country. This fact can be marked as the beginning of a transformation process that has affected all the spaces of economic, political, social and subjective life in Cuba.

During this decade, two important variables have been clarified:

1) what changes would be undertaken in the economic and social order; and

2) what would be the conception of socialism put into practice.

These references allow us to place the analysis on the reforms not in the ether of hypotheses, but in their concrete results, emphasizing the structural and conceptual changes, the contradictions and the complexities that they imply, as well as their perspectives.

While it is true that any modification of a part of the system affects it in its entirety, another important variable remains to be clarified: the political and legal framework of the relationship between old and new socio-economic actors. These adjustments, which were to be part of a constitutional reform process, would establish a new social contract in Cuba.

In February 2008, in taking the position of President of the Councils of State and Ministers, Raúl Castro presented what can be considered as the "main lines" of the "updates" that would be undertaken on the island:

• Ratify that the Communist Party of Cuba (PCC) is the guarantor of the unity of the nation and the heir of the historical leadership of the revolution. He added the condition that "if the people are firmly united around a single party, this party must be more democratic than any other, and with it the society as a whole."

• Develop the process of debate within society, because "the massive support for the revolution asks us to question ourselves about what we are doing to improve it (...) There is no reason to fear differences in a society such as ours. (...) From the profound exchange of divergent opinions are born the best solutions, if this exchange is channelled through serious proposals and with a sense of responsibility.”

• Make government management more efficient. What is necessary is "a more compact and functional structure, with fewer bodies in the central administration of the state and a better distribution of the functions they perform."

• Strengthen the economy as an "indispensable premise" for progress in any other area of society. "Productive work is the only source of wealth in society." We have to "plan well" without spending more than we have (...) in order to find the mechanisms and the means to eliminate all obstacles to the development of the productive forces and to exploit the important potential that resides in saving and in the good organization of work.

• To satisfy, as a priority, "the basic needs of the population, both material and spiritual, starting with the sustained strengthening of the national economy and its productive base."

Two five-year terms later, these lines were concretized thus:

• Reorganization of the processes of production, distribution, exchange and consumption. This includes the extension of the property management system and the diversification of economic subjects: socialist property of the whole people, cooperative property, mixed ownership, private property, property of political organizations, and of mass, social and other organizations of civil society. The transition from a policy of full employment to an expansion of the labour market. The diminution of the presence of the state in the sphere of distribution. The norm was to move from subsidizing products to helping people. The policy of full employment was abandoned. The role of the market in the distribution of goods and services, in employment and in daily life has been expanded on the basis of personal and family income.

• Definition of strategic sectors for development:

1. Socialist government that is effective and efficient and social integration;

2. Productive transformation and international insertion;

3. Infrastructure;

4. Human potential, science, technology and innovation;

5. Natural resources and the environment;

6. Human development, equity and social justice (Documents of the Seventh Congress of the PCC, 2017).

• Modification of mechanisms that are based on vulnerability, with a solid basis in fiscal policies. Efficient use of resources, oriented towards macroeconomic and financial stability.

• Adjustment of the functioning of the central administration of the state: more decentralization, clarity and stability in the functions of government; Strengthening the role of municipalities; better public information on government management. Election for all public positions of responsibility limited to two terms.

• Definition of the strategic axes of the national development plan:

1. Government, defence and internal security;

2. Environment and natural resources;

3. Sociocultural;

4. Territorial;

5. Demography;

6. Infrastructure;

7. Foreign trade;

8. Monetary, financial and fiscal;

9. Productive, technological and human potential (Documents of the Seventh Congress).

• Definition of the role of the socialist state as "the guarantor of equality and freedom, independence, sovereignty, popular participation and control, the development of the country" and which should also guarantee "the exercise and protection of economic, social, cultural, civic, political, individual and collective rights and duties (Documents of the Seventh Congress).

• Confirmation of the Communist Party of Cuba (PCC) as the only politico-partisan instance that is part of the model. Its permanent bodies meet periodically. During this period two congresses have been held, as well as the corresponding plenary sessions of its Central Committee and, for the first time, a national conference was convened. The policy adopted is aimed at the gradual separation of the administrative functions assumed by this organisation and the concentration of its work in the political/ideological field.

• Modification of the productive structure: state management dominates with 70 per cent. "Working on one’s own account" (employees, employers and self-employed) has increased, amounting to 567,982 people (12 per cent of the labour force). The 420 approved non-agricultural cooperatives have 112,000 partners and associates. 1,917,000 hectares of land have been granted to 222,000 natural persons. There are more than 250 companies related to foreign capital (companies with 100 per cent foreign capital, joint ventures and international economic association contracts).

II. The various adjustments in the policies and regulations of new forms of ownership and management have hampered the stability and development of the new structural/productive map – which generates uncertainty among the emerging economic actors. Moreover, measures of consolidation, expansion and promotion have been slow and no timetable has been established.

In addition to reaffirming the logic of a highly centralized and bureaucratic state order, the "Model..." seems to be based on the cohabitation of classes; it is conceptually reduced to coexistence in the dominant framework of the social ownership of the means of production. Such an understanding does not take into account the complexities and class contradictions that are manifested between different economic actors. It is an economist vision that forgets, both in conceptual analysis and in political practice, conflicts between capital and labour, employers and employees (private or state), citizens and producers.

In this context two phenomena are underlying, despite the decentralisation of the management of state-owned enterprises:

1. In the enterprises, there is a verticalist and salary-based logic;, managers are concentrating greater decision-making power in the productive processes. The initiative and creativity required of workers, as owners of the means of production, are reduced to technical questions and not to organizational or strategic issues within the productive units (Martín, 2015);

2. In the relations of the enterprise with the outside world, the authoritarian and centralizing management of enterprises by the state is materialized in inadequate and inefficient regulations (Torres, 2015).

The democratization of the relations of production does not appear as a tendency of this “model...“. Its fundamental approach and its normative political practice do not accord a central place to work (human beings directly producing goods and services) – which is what the socialist imperative demands in order to socialize production and power. Therefore, it does not promote a cooperative, complementary and solidarity-based subjectivity, linked to these political/productive processes.

This tendency is underlined by the fact that cooperatives face greater limits to be approved, which reinforces their exclusively experimental character. The "model..." does not mention co-management and self-management as pillars of socialization, nor the various forms of popular and solidarity-based economy, which could however be concretisations of social ownership in the community spaces for the production of goods and services.

The "update" does not only concern the economic model, but also social relations and their subjective, individual and collective re-dimensioning. In this regard, psychosocial investigations reveal that employer-employee subordinate relationships are perceived in many cases as exploitation, in which authority, intelligence and leadership are assigned to the employer while obedience and submission are assigned to the employee. Within the framework of these subjective norms, there are few desires for partnership with state institutions, for the development of cooperative processes or for actions in favour of social responsibility. On the other hand, it is more at the individual and family level that the respondents feel that they are participating in the transformations. (Pañellas, 2015)

Another aspect of the reforms should alert us: although it is indispensable to guarantee the economic sustainability of the Cuban social project and necessary to put an end to the weak harmonisation of social policy with the economy, in practice social policy tends to be subordinate to the economy.

As a manifestation of this logic, the problem of inequalities and social exclusion is not dealt with rigorously. The words inequality and poverty are no longer used: we talk about populations that are at risk or vulnerable, of disadvantaged groups, of assisted or protected poverty, of social disadvantage (Valdés, 2013 and Zabala, 2013). The non-recognition of this situation prevents the deployment of social policies as well as the economic transformations that would combat existing poverty and misery.

For example, the Gini index, which measures the inequality between 0 and 1, is enlarged at its lowest level: from 0.24 in 1980 to 0.38 in 2000. For 2015, it was estimated at 0.40. Similarly, the feminization, racialization and territorial character of inequality and poverty have increased (Espina, 2015).

Recent research reveals that "the social elevator" exists for young white men with higher qualifications and of intellectual social origin. On the other side of the coin are women, non-whites of worker and peasant origin, poorly educated, indicating the generational transmission of inequality (Espina, 2015). It should be noted that there are 33 per cent of women in the "self-employed" sector (Pérez, 2017) and that most of them are not owners, but wage workers, with average incomes lower than men.

The pillars of such a situation are, in the micro-social space, the lack or insufficiency of assets and their generational reproduction. At the macro level, there is the inability of economic mechanisms to generate sources of work with adequate remuneration, the weakening of the structural mechanisms of social inclusion, dependent on the fact of having a job, such as benefits and social security.

All this is reflected in the expansion of the "self-employed" sector and of micro-enterprises, without adequate public support and incentives for disadvantaged sectors (preferential microcredits, markets, training, legal and technical advice). This can generate the so-called informal, precarious employment that just makes it possible to survive and increases poverty levels (Espina, 2015). This insufficiency contrasts with the fact that the resources that could be used to promote initiatives or projects remain immobilized – for example the savings of the population that are deposited in the banks (Díaz, 2015) – and with the limitations placed on the deployment of projects of international cooperation.

In practice, the deficit of private and state sources of financing (subsidies or state aid) is only very insufficiently compensated for by family, friends and Cubans residing abroad. The transfer of money to Cuba is estimated at about 3 billion dollars a year, of which about 50 per cent is used as capital by the non-state sector (Rodríguez, 2017).

Another nuance of the same question is that credit policies are not aimed at empowering the individuals, groups and communities affected, which would involve taking advantage of the potential of the community and civil society to face up to this reality. It is worth mentioning the deployment of forms of social and solidarity-based economy, participatory budgets and direct access to the resources of international cooperation.

In this scenario, although the average wage in the public sector has increased, it still does not meet the basic needs. While its average is 740 CUP (Cuban pesos) – and 824 in the entrepreneurial sector (Rodríguez, 2017) – the amount of wages required to meet these needs is estimated at more than 2,000 CUP [Monreal, June 23, 2017]. The distribution of this average is uneven: Since 60 per cent of wages are below the national average, about 38 per cent are between 824 and 2,000 and only 1.7 per cent exceeds the latter figure (Rodríguez, 2017). Similarly, the average pension has risen, but faced with rising prices it does not cover basic food needs.

In the case of “self-employed” workers incomes are six times the average state wage and the gap is much greater depending on the professions in this sector (Mesa-Lago, 2017). Both among the "self-employed" and in co-operatives, there is a closer link between income and work, which stimulates productivity growth.

It should be added that the high prices were to be compensated in 2017 with a budget subsidy of 3,740,000 CUP for rationed products, while social expenditure amounted to 36,554,000 CUP. This expenditure includes the costs of health services, education, social security and assistance, as well as subsidized tariffs for electricity, gas, water, telephone and public transport (Rodríguez, 2017).

The health care system is maintained, thanks to the principle of universal and free treatment. Some indicators continue to progress (infant mortality is 4.3 for 1,000 births, the number of inhabitants for a dentist has been reduced by 35 per cent, vaccination has been increased for seven out of eleven vaccines). At the same time, access, the number of facilities, staff and the quality of services have decreased. The number of hospitals has decreased by 32 per cent and that of polyclinics by 8 per cent: all rural hospitals and rural and urban health centres were closed in 2011 (Mesa-Lago, 2017). This is happening while the aging population requires an increase in services, which are already so costly.

The educational system, which has also retained its universal and free character, has seen a decrease of 39 per cent in enrolment, and the teaching staff has been reduced by 13 per cent – especially in rural areas and for agricultural workers (Mesa-Lago, 2017). We can also observe areas where the quality of the available education is declining.

To remedy the situation, salaries have been increased in the sector, it has been made possible for retired teachers to be taken on again and the conditions for hiring and teaching have been revised. The current revision includes a "third improvement" of the education system, which is essentially aimed at bringing the curricula, texts and methodological guidelines up to date; as well as the organization of the educational project in each school according to its context, greater autonomy in the running of the educational centres and their relationship with family and community environments.

Although it is reaffirmed that the state guarantees free health and education services, the possibility has been opened up to determine centrally, in certain circumstances "the services for payment which can be offered to those who request them for reasons which do not correspond to essential or basic needs” (Documents of the Seventh Congress). This ambivalence opens up de facto the door to the commoditisation of these services, to the potential widening of the already increasing inequalities and undermines one of the main pillars of the legitimacy of Cuban socialism.

The expansion of the market and private enterprise has an impact on inequality. The same goes for state salaries and pensions that have "fallen behind" in relation to the levels achieved in other more dynamic domains: the wages of private enterprise, the incomes of “self-employed” workers and cooperatives, the remittances of emigrants and other "inflows" (legal and illegal).

Some analyses suggest that in order to move forward in a discussion on inequality, the primary distribution of value, which occurs in the production process and which ratifies various forms of income, should be analysed, wages in particular (Monreal, June 13, 2017). The minimum wage depends mainly on its equivalence with the cost of the "basic basket". It expresses the cost of "reproduction of labour". Therefore, it should not be directly dependent on the level of productivity that exists at the social level or in defined sectors where workers are employed. It should not be violated by bureaucratic whims (Monreal, 23 June 2017).

The analysis of wages that is used today remains focused on the effects and not on the cause. The controversies between "increasing wages to increase productivity" and "increasing productivity to increase wages" are crumbs of the same bread. In both cases, they start from social forces external to workers, who manage the means of production (the bureaucrats) or are the owners (the capitalists). Both reproduce themselves, with marked differences, by reducing the worker to sell his or her labour power and thus alienating their participation in all the social relations of production.

It is often obvious, in the criticism of the state’s wage policy, that the private sector (irrespective of the higher incomes it provides today) reproduces the old logic that the capitalists increase their power by appropriating a certain amount of unpaid labour from workers. The capitalist strives to reduce wages and prolong the working day, while the worker constantly pushes in the opposite direction. Even though this tension is regulated by law – the effect of the general political action of workers – the distribution of social wealth between capitalists and workers is increasingly uneven (the empirical observation of such reports emerging in Cuba confirms this).

In the debates, the proposals and the search for solutions to the wage problem in Cuba, we do not expect the wage system to be a relationship that limits the creativity, freedom and rights of the direct producers of goods and services. Similarly, it creates material conditions and social forms for its reproduction. As a result, the ongoing struggle for wage increases is only a palliative. For this reason, exhorts Marx, the conservative lemma of a "fair wage for a fair day’s work" must be replaced by the revolutionary slogan: "abolition of wages" (Marx).

This is one more reason for deep exploration of cooperative, solidarity-based and mutualist forms of production, where labour is not subject to the wage conceptions of the bureaucracy or of capital. Where it establishes its own mechanisms for an equitable distribution of wealth, in other words profits... always on condition of a new social relationship of production where labour imposes its centrality.

In general the traits, tendencies and tensions described above occur on the basis of economic results that are insufficient to achieve the take-off, development and durability of the "model..." Which adds more tension to the process.

For 2016, according to official data, the main source of economic income is tourism, which contributes 3 billion dollars a year. This sector can make a greater indirect contribution to the economy because of its "fallout" in terms of interactions (still far from its potential) and direct income for Cuban families. On the other hand, tourism has serious social and environmental consequences, since it requires the importation of food, beverages, fuel and luxury products in order to satisfy more than four million visitors.

All other fundamental economic sectors tend to be in deficit. Nickel production has been reduced and the sugar industry has decreased to 1,500,000 tonnes (400,000 less than expected). The sale of petroleum products fell by 68.9 per cent and imports of Venezuelan oil by 4.4 per cent. Electrical power production fell by 6 per cent. Total exports fell by 16.3 per cent. Exports of services (doctors and teachers) decreased by 11 per cent. On the other hand, imports of foodstuffs amounted to 1,688,000 million dollars, while those of goods fell by 3.3 per cent. In this scenario, the country paid 5,299,000 dollars of its foreign debt in order to continue to have credit (Almeyra, 2017).

The context of international credit is complex and there seems to be no way to move forward without dealing with this complexity. Although conditions have improved relatively over the last five years, from the restructuring of external debt, some authors underline as elements of this situation: the country is not a member of any relevant international financial organization, neither concessional nor compensatory; the deepening of the sanctions of the United States, and the sad history of Cuban credit, with several debt moratoriums. All this implies that the costs of issuing the debt are very high, to which it must be added that there are not many partners with whom to work. In this complexity it is necessary to include the perception that the debt puts the country in the hands of its creditors, without viable alternatives, who may try to push Cuba towards the adoption of measures that we have tried to avoid up to now (Torres, 2017).

It cannot be ignored that in the international financial concert, the major institutions do not have as a priority aid to development, but only the expansion and protection of financial capital, and this is not at all compatible with projects of sovereignty that try to protect the economy so that it can be at the service of the needs for development of the population.

In this tense scenario, foreign investment grew in 2016 to about 1,300,000 dollars, far from the annual growth required, between 2,000,000 and 2,500,000 dollars. The 2017 national economy plan anticipates that foreign enterprises will assume only 6.5 per cent of investment.

The slowness in approving new projects has hampered access to short-term resources and the expansion of production capacity to ensure an increased dynamism of the economy in the years to come. This is due to bureaucratic inefficiency, linked to the distortions of the national banking and financial system, as well as to the monetary duality (Terrero, 2017).

Some analysts suggest we should not only take into account large projects, which involve the disbursement of large sums, but that small and medium-sized enterprises should be considered, as well as the strengthening of the capacity to carry out the country’s investments in order to attract foreign capital (Rodríguez, 2017). As an alternative, the authorisation of a limited amount of investment on the provincial and municipal levels could be taken into account.

The truth is that foreign investment has a paradoxical character. On the one hand, it is perhaps the constituent element of the model of development on which we can act more effectively in the short term. And at the same time it carries the risks that international capital represents for any national project based on popular dignity in general and that of workers in particular. Undoubtedly, this is one of the greatest demands for political creativity in defence of sovereignty. Let us recall that, behind the sinuous slogan of “more stimulation to investment”, there hides the deregulation of capital which, in the most extreme cases, conditions the economic policies of developing countries.

III. When we try to conduct a thorough review of the reform process, the greatest uncertainties are to be found in the policy/regulatory area. While it is true that the "updating" documents have had more or less significant levels of consultation with different sectors and social institutions, these moments of democracy do not seem to herald the formation of structures of political dialogue with the social and economic actors in the country, who are more and more diverse.

The guidelines set out in relation to the political order do not go very far: to study how to reduce the number of members of the National Assembly of People’s Power without sacrificing the representativeness of the people, to analyse the usefulness of a permanent and professional body that would direct the electoral processes, and to carry out the programme of Perfecting the Organs of People’s Power approved by the leadership of the party (Penín, 2017).

The idea of a party that is "more democratic" in its role as a guide to the nation has not had any significant materialization. Proposals to increase, diversify and clarify the state’s dialogue with society do not produce any tangible results. Nor is there any progress in readjusting the PCC’s relationship with the legally constituted mass organizations, nor with the Cuban population in all its diversity.

However, and this is a significant part of the context, state and party bodies have lost their monopoly over questions and answers. On the contrary, the "density" of civil society has increased, as evidenced by the emergence of associative networks that defend various issues, autonomous and capable of influencing society and public agendas: religious communities, the LGBT movement, the movement for Black rights, various feminist collectives, alternative communication platforms, socio-cultural and productive community work, among others.

These groups of actors represent a broad ideological and critical gamut, which does not imply a break with "the revolutionary", but gives it meaning again. Many of these groups are largely overcoming the mistrust of traditional official sectors and gaining legitimacy and access to the public sphere (González, 2015).

IV. In the face of this reality, it is necessary to promote the redefinition of a new social pact, defining in particular the future modalities for the organisation of a permanent dialogue and strengthening social inclusion in the processes of definition, decision and control of public policy.

This road is already open and its continuation can be inferred from the "update" documents, but it is imperative to accelerate its construction. That is, to enlarge the normative processes that give it body and content. To this end, a revision of the conditions of "popular control" and "socialist civil society" mentioned in the reform documents would be necessary.

The more the "model update" progresses, the more adjustments become necessary. The law must serve everyone. The reforms open spaces for new actors who are not totally free of the regulated rights and duties that have enabled their creation, their recognition, the clarification of their functions and their organization, as at the same time economic, social and political actors.

In the productive sector, it would be desirable to adjust a transparent, predictable and non-discretionary legal framework that facilitates the development of the entrepreneurial world (Torres, 2015), state and non-state. It would be necessary to regulate non-state economic actors by law. They lack specific models in order to adapt so as to develop their activity and thus contribute to their recognition and their regulation. For example, small and medium-sized enterprises, whether as a natural person or a collective. And that does not only concern private enterprises, since state enterprises would equally benefit from adopting varied organizational and associative forms (Cobo, 2016).

The term "working on one’s own account" must be reconceptualized for its normative adjustment. It concerns both persons who carry out their work individually, others who invest their own or common capital and employ labour, as well as those whose incomes are more a rent than the result of their work.

Some employers operate as small and medium-sized enterprises, so the status of the contractor must be recognized and legislated for. In the same way, we must take into account the distinction between employers and employees, which must transcend the trade-union sphere, since the two do not occupy the same place, particularly in the private sector. Taking into account these peculiarities, it would be advisable to revise the Labour and Social Security Code.

As regards the necessary social pact with the new and old actors of civil society, we must consider the readjustment of the law on associations, the reform of the electoral law, the creation of a law of worship, a law on citizenship, a municipal law and a law on communication. Let us add the updating of economic, social, cultural, civic-political, individual and collective rights and duties, as well as the legal regulations that organize and ensure their implementation.

Almost as the culmination of these ten years, the elaboration, debate and final presentation of the "Update" documents concluded: Conceptualization, Development Plan and guidelines. Taken as a whole, this is a doctrinal corpus, a policy of broad-spectrum proposals. It is an integrative package that will make it possible, in the medium and short term, to have a frame of reference for debates, suggestions and adjustments. A programmatic instrument that we can have recourse to in the long and complex process towards a better country for all.

One of the aims of the fundamental content is economic development and the increase in the standard of living, based on prosperity, social justice and fairness and in harmony with the environment. The recognition of the equality of rights and duties of all citizens, and in particular of workers, in all forms of management and ownership, is envisaged. Rights and duties that should be effective in terms of inclusion, democratic participation in decision-making processes in economic, political and social life, and dealing with all forms of discrimination detrimental to human dignity (Documents of the Seventh Congress). All these contents are a potential basis for the social creation of politics.

Ten years have passed since Raúl Castro convened a broad debate on the country’s problems and their possible solutions. As a result, we have a country that has been transformed, even though we must not forget the complexities, the contradictions and the tensions. The truth is that the approach according to which nothing in Cuba has fundamentally changed is untenable. But it is equally true that these years have left many things that need to be unravelled.

A wide range of options has been opened, but even when presented with similar terms, they do not point towards the same horizon. In the productive sector, the priorities formulated by at least three tendencies are well known:

1. Higher prevalence of state enterprises with increasing productive and distributive efficiency;
3. Expansion of private property, in various forms, with the opening up to the labour market in order to increase production and income;
5. Priority for social, community and collective forms of production, with a focus on the cooperative, which directly links producers to income resulting from productivity.
Faced with a project of social, economic and political justice, as faces of sovereignty, independence and national dignity, three minimum keys would be needed to promote what is most encouraging and contain the dangers that these years have left:

Re-politicize society. We can choose to be a conscious and active subject. We are all the context, so we need to change what is implied by the question "Where is Cuba going?" into the citizen’s certainty "where I want to contribute that it goes".

Popular control. Increase popular participation as a political means to eliminate the crippling power of the bureaucracy and curb the predatory voracity of capital.

Autonomy and collective creativity. Accumulate experiences in the socializing management of property in the hands of those who produce, in an indispensable connection with the permanent democratisation of all the domains of daily life, public and private.

Havana, 11 December 2017

This article was first published on the site of the association “Cuba posible, un laboratorio de ideas”.


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• Zabala, María del Carmen. “Equidad social y cambios económicos en Cuba: retos para la atención a la pobreza y a la desigualdad”. Cuba: los correlatos socioculturales del cambio económico. Editorial Ciencias Sociales. Ruth Casa Editorial, 2015.

• Zabala, María del Carmen. “Los estudios sobre pobreza en Cuba. Un preámbulo necesario”. En Algunas claves para pensar la pobreza en Cuba desde la mirada de jóvenes investigadores. Publicaciones Acuario, Centro Félix Varela


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