Havana frees up markets -- with a caveat

Posted on Tuesday, 11.09.1
Havana frees up markets -- with a caveat
BY JUAN O. TAMAYO
jtamayo@ElNuevoHerald.com

The Cuban Communist Party's guidelines for its next congress say central
planning, not market forces, will rule the economy.

Cuban guidelines

These are key points in a document published Tuesday to frame the debate
leading up to the VI Congress of the Communist Party of Cuba:

Cuba should expand ``new forms of non-state enterprise'' such as
self-employment, cooperatives, leases of public lands to private farmers
and rents of state-owned shops, such as bakeries, to their employees.

The new private enterprises should have access to government-run
wholesalers, where they can buy supplies at moderate prices, and to bank
credits so they can grow their businesses.

The government should scale back its ``current burden of controls'' on
state enterprises to allow them to become more efficient, but shut down
those that don't improve sufficiently.

Income and other taxes and fees should rise according to revenue and
will be expanded ``to help ameliorate inequalities among the citizens.''

Tourism will be increased through foreign investments in golf resorts
and marinas and housing developments surrounding them.

The government should unify the two official currencies, the peso and
the CUC.

The food ration card should be slowly eliminated to reduce government
subsidies.

Article:

Cuba's food rationing card will be eliminated. Private economic activity
and foreign investments will be allowed to expand, and the government
will reduce controls of agriculture and state enterprises.

But communist-styled centralized planning, and not capitalist market
forces, will guide the future of Cuba where ``only socialism is capable
of . . . preserving the gains of the revolution.''

That's part of the take-away from a 32-page document published Tuesday
as a guide for the grass-roots debate that will lead up to the first
Congress since 1997 of the Communist Party of Cuba in April.

Cuban ruler Raúl Castro already has launched many of the changes
proposed in the document -- warning that a withering economic crisis is
pushing Cuba to the edge of a ``precipice'' -- and the Congress is
expected to give them its official seal of approval.

The Congress in April ``will be more about preserving the system and the
party, not about announcing change,'' said Irving Louis Horowitz, who
has co-edited a dozen volumes of the academic journal Cuban Communism.
``It's important to the nation and the party only because there are no
other parties.''

But the gathering may well be the last for the generation that has held
power since the Cuban revolution in 1959. Castro, 79, succeeded his
ailing brother Fidel, 84, in 2008.

The Communist Party is required to hold congresses every five years to
set mayor policy directions, but it has not held one in 13 years as the
island struggled through hard economic times and later the Castro
leadership change.

The guidance document, sold on street stands Tuesday for one peso (about
three U.S. cents), makes it clear the party will not abandon the
Marxist-Leninist ideology that Fidel Castro put in place.

`THE PRINCIPLE'

Cuba's economic future ``will be in accordance with the principle that
only socialism can overcome difficulties and preserve the gains of the
revolution, and that in the updating of the economic model, [central]
planning will be paramount, not the market,'' it declares.

Titled Project for Guidance on the Economic and Social Policy, the
document ticks off a long string of proposals for jump-starting an
economy mired by low productivity, dismal wages centralized planning and
the theft of state resources.

Among the changes already started or proposed by Raúl Castro are an
expansion of private economic activity, such as self-employment and
cooperatives, and encouragement of foreign investments and tourism.

The guide added that Cuba should assure ``the strict fulfillment of
contract commitments,'' referring to the 2009 decision to freeze foreign
assets in Cuban banks and halt payments on some foreign debts.

The government also should move toward the unification of Cuba's two
currencies -- pesos used to pay salaries and CUCs (worth about 28 pesos)
that are needed to buy most imported goods. But such a move is complex
and will need ``rigorous preparation,'' the document noted.

The ration card, which provides 10 days' worth of food per month at
dirt-cheap prices, will be ``eliminated in an orderly fashion'' as part
of the campaign to cut back massive government subsidies, the guide said.

Also for the first time, the guide broached the possibility of opening
up the real estate market, which is now tightly controlled by the
government. But it warned that ``the concentration of properties'' won't
be allowed.

Castro said the guidelines were submitted before publication to Fidel,
who is first secretary of the Communist Party, while he remains second
secretary.

The Communist Party, which has 820,000 by-invitation-only members in a
country of 11.2 million people, is described in the constitution as
``the superior directing force of society and the state.''

During his announcement Monday that the Congress would be held in April,
Castro said the party will hold seminars later this month to teach its
officials how they can ``guide the massive discussion.''

The debates will take place from Dec. 1 until the end of February, he
said, and the party will gather the opinions and present them to the
Congress in the last half of April.

Castro announced in early 2008 that the congress would be held in the
last half of 2009.

But in July of 2009 he postponed it indefinitely because of the economic
crisis.

The island imports an estimated 60 to 80 percent of all its food and the
average monthly salary stands at $20, not enough to make ends meet
despite free healthcare and education.

PAST CONGRESSES

The IV Communist Party Congress in 1991 began with similar calls for a
grass-roots debate on Cuba's future, but the debate was abruptly cut
short amid an outburst of complaints against the system. The debate that
preceded the V Congress in 1997 was much more controlled.

In 2007, Castro urged Cubans to express themselves ``with valor, with
sincerity'' after he delivered a brutally frank diagnosis of Cuba's
economic ailments during a speech that July.

The speech was debated in neighborhoods, schools and work places
throughout Cuba and more than one million comments were gathered,
according to government announcements. It's not clear clear what
happened to them.

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