In the decade of the 80´s, the Chinese discovered something what the Cuban leaders are discovering now: “The communism is the longest way to reach the capitalism.”
Later, in the decades of absurd experiments created by Mao C´Tung in China, Deng Xiaoping entered the right way and set out a construction of “decadent capitalism,” though in slow and gradual form. Also the Vietnamese noticed this and the picturesque leader of Venezuela Hugo Chávez, who in my opinion, in spite of all the populist speeches, leads to a construction called “Socialism of Century XXI” and he does not dare to eliminate definitively independent economic control. These actors, some for their experience, others for conservative instinct, came to a conclusion that the centrally controlled economy is highly inefficient, and it terminates in loosing national wealth.
Some analysts of the Cuban reality consider that an era of changes begun in this Caribbean island and it inexorably has to lead from adoption of micro-businesses or small enterprises, which is called cuentapropismo, to a market economy in Asian style. Others, among who I include myself, we consider those so called reforms nothing more than a clumsy attempt of Castro´s Gerontocracy to gain time, and we have to suffer it. The thing which is not contrary to the criteria, in spite of the continuous spirit which accompanies those so called changes, as a consequence of a series of historical factors which I will reflect in this article, is that the transit to the market economy is inevitable. In the following, let´s test both theses.
Private enterprise, lights and shades
Although the Cuban president pronounced that the expansion of private businesses is irreversible and it forms a part of urgent economic transformations necessary for keeping the socialist system alive, the system which was set by his brother Fidel Castro half century ago, and whose Ministers of Work and of Finance have appealed and made clear that they “will not permit accumulation of wealth.” This is what underlines my thesis that the government does not copy the Chinese model at all, and there is no interest in extension of autonomous economical activity.
At this moment the government insists on opinion that nothing is laissez faire, everything is opposite. Mesa-Lago, one of the most respected academics in and out of the island, reminds us that in the actual project, in spite of everything, the central planned economy „has been failing for a half of century.“ The independent economist Oscar Espinosa Chepe agrees. Mesa also reminds that the authorities rejected the Chinese and Vietnamese examples “but without saying which model will Cuba adopt or what the role of market will be.” In a few words: “The recent economic measures concerning the private business in Cuba have limited effect, have technical errors and are motivated above all by a political logic.”
Some time ago there was the Sixth Congress of Communist Party of Cuba. Many people are asking: what will be changed? I dare to prophet that nothing. “The same leaders with the same ideas always produce the same or similar results,” somebody said and I think he was correct. In the document containing 32 pages, which the government put into circulation under a title Economic and Social Politics Adjustment Project, in which the new economic plans are described, it lets its position clearly fixed to the communist model, explaining that collectivism, state property of production resources, and centralized planning by the Party bureaucrats will remain the essential part of the economy.
For this reason, they have authorized 178 types of small business activities, the majority of them are have a marginal profit potential, that they evoke mockery of the entrepreneurs and devoted economists. It would be enough to illustrate the situation with following list of such activities and the level of governmental control. This State gave at disposition undertaking of activities such as button repair service, assistant to sick people, shoe polisher, or birthday clown.
Although the implementation of the micro-businesses intends to sign direct contracts with the employees, a special tax was established, which rises progressively and rises with the number of contracted manpower. Hence the more staff hired, the higher the taxes are. When the business is prosperous, it seems to be obligatory to keep it within a throttled limit, or in the opposite case, the weight of the taxes will issue invoices to you. In summary, the government´s objective is not to let the enterprises rise and generate profit, but to absorb the unemployed manpower which the government intends to fire soon.
What Do We Miss to Survive?
One of the major problems is the lack of resources and primary materials. The government promised to create a resources supply system for the small enterprises. They speak about 130 million dollars assigned for this year. 36 million of this will be allocated for food products. But it is announced that such a project may take years to be working. For the majority of the products will have to be imported, it is not clear whether the government will sell it for its costs of a bit more. The established companies will have to purchase the resources in the retail shops, where the goods are sold with 240 % tax. Another task will be to produce goods and offer services, paying the manpower and the state tax, which is at a criminal level, then manage the sale of the products to the citizens who have no purchasing power. To survive, the enterprises will surely have to run on the edge of legal activities, buying stolen materials at black market, bribe the police and corrupted inspectors, always praying for the mercy not to be confiscated or to suffer another evil.
Another problem of the private business license solicitors is lack of financial recourses, which the majority of the population does not possess, due to the inexistence of savings or access to credits. The State does not seem to be really interested in it, the new entrepreneurs have to rely on credits form the family or friends. Some of the new entrepreneurs have presented the necessity to permit direct investments from Cubans who live abroad, anyway, the regime refuses. Many people would permit the participation of these Cubans, because they could make investments and support technology transfers. But to make this happen, a jump over ideological prejudices will have to be done by the ones who can make such decision.
But What Is Probable?
One of the aspects which make me think of low probability of the last said thing is the high age of the actual leaders, who, namely Raúl Castro, have to stay on the throne for approximately five years. The upcoming thing is a generation of technocrats, bribed till the core, very informed about the evolution jumps in the world and with access to financial resources bleeding from the state treasury. This makes me think without criticism is most probably that they will choose a transmutation towards reformism. These do not carry any ideological compromise to irreconcilability. They neither possess a small piece of authority, which the historical ones still have, and who seem to be obliged to conduct the reforms much further than they had planned, all this is done to preserve their status of privileged class.
On the other side, the cement which hold the diverse pieces of our society together – I refer to the ideological element – has already expired and the only elements which now keep the governors together, are: firstly fear and repressions, secondly: the administrative corruption, which still guarantees the regime its format of a institutional structure created of individuals, and which group them like vultures to eat the carcass of the dead government. What comes later, and what makes me feel optimistic about the island´s visualization of the future, is that such structures are biodegradable, very close to the expiry date.
The Cuba´s resistance to en economic translation limits the extension, which would be introduced and would be functional by the private sector. This is why it slows down and impedes the touchable outputs of the economic recuperation. For all this mentioned, I think that the new leaders will not have any option for manoeuvres, because all the possible options were tried, the only way they could go, as a laudable alternative, is to walk towards Liberalism. Finally, after unsuccessful decades of pain and sacrifice, we will live for confirmation that all the stubborn patriarchs of Antilles communism followed the longest way to reach the capitalism at the end of the route.