Cuba’s new economic reforms


Following is an edited version of the resolution on Cuba’s new economic reforms, adopted by the 2012 National Convention of Socialist Action (U.S.). The original draft was prepared by the author.

The Dec. 1, 2010, announcement by the Cuban Federation of Labor that the jobs of some 500,000 workers would be terminated in the first quarter of 2011, and an additional 500,000 in the following two years, created quite a stir on the socialist left and in bourgeois circles, with some arguing that the decision represented a major step toward a market economy and perhaps the beginning of a process of capitalist restoration akin to the “Chinese model.” The initially proposed terminations represented 19.4 percent of Cuba’s workforce, 90 percent of whom were employed by the state.

The reforms indicate that the Cubans recognize the harsh reality of the economic distortions that have been wrought from their forced isolation from the world market due to the U.S.-imposed illegal embargo/blockade and related imperialist incursions. In a significant sense they are legalizing a reality—that hundreds of thousands of Cuban workers are already “employed” in tiny “business” ventures, trying to make ends meet, while they simultaneously receive subsistence wages from the state for their official job.

Some 178 areas where terminated workers can now operate as formally licensed small-scale business owners have been established. Prior to this the state regulated or prohibited all such employment. Regulation or not, legal or not, however, many of these small-scale businesses operated with impunity, sometimes via bribes to officials. The reforms largely aim at maintaining the impressive range of free or almost free social services that are absent in almost all other nations. They aim at reducing bureaucracy, corruption, and waste, however limited the means available.

The vision of the Cuban Communist Party, the real or effective government of Cuba, is far from turning workers into the streets to fend for themselves, as is the case in other countries subject to the present world capitalist recession/depression, in which unemployment and social cutbacks have reached the highest levels in decades. The capitalist restorationists in China much prefer turning the poorest sectors of society over to major multi-national corporations, half of which are U.S.-owned, or to Chinese capitalist corporations, where workers also labor for pennies and are denied virtually all social benefits.

Initial balance sheet after two years 

According to figures released by the Cuban government on Dec. 27, 2012, the number of workers in private concerns rose 23 percent for the year, while employment in the state sector dropped 5.7 percent. The government cut 228,000 public jobs in 2012, on top of 137,000 cuts in 2011.

Cuba, a country rich in agricultural resources, has imported up to 70 percent of its food needs. The reforms are aimed at achieving self-sufficiency under the most difficult of circumstances. Under the new laws anyone can solicit the government for 10 hectares of idle land, which can be held and farmed for personal profit for 10 years, with the opportunity for renewal. (One hectare is 2.47 acres.) The land remains the property of the state, and profits will be taxed, but contrary to the past, the new farmers can sell their produce directly to the hotel industries and private restaurants, almost all of which are operated out of the homes of Cuban families.

Over 1.2 million hectares had been distributed to more than 132,000 beneficiaries as of mid-2011, an average of nine hectares per person. Nevertheless, gains in production have been limited. Agricultural produce for the domestic market remained largely the same in 2010 and 2011, an indication of the still grave situation in Cuban agriculture. Bureaucratic abuse has been and remains widespread, including government and military personnel using state-owned trucks to steal or otherwise sequester food products from state or cooperative farms for sale on the black market.

We should emphasize that the openly discussed bureaucratic mismanagement and corruption that permeate Cuban society under conditions of perpetual shortages is qualitatively subordinate to, if not largely caused by, the blows struck against Cuba—the illegal imperialist embargo/blockade of the Cuban nation, and the restoration of capitalism in the USSR and the associated severe constriction of its markets and loss of hard currency and credits. To these we must add the imperialist-orchestrated fall in the price of sugar by 50 percent and the fossil-fuel-induced global warming that has raised the temperature of the Caribbean (and other oceans) and likely increased the number and frequencies of devastating hurricanes that cost billions of dollars in property damage and massive agricultural and livestock losses.

Yet the reforms have produced no layers of capitalists that have any influence over the heights of the Cuban economy. A July 11, 2012, Reuters report affirmed that the largest private-sector operation in Havana since the new reforms, with about 130 employees, was “El Cabildo, a recently opened entertainment center that is pushing the limits of the communist country’s still unfolding economic reforms.”

Cuba’s new economic guidelines limit the size of restaurants to 50 customer seats. El Cabildo (temporarily) got around this limitation by applying for three licenses and combining the space approved by the government. Within a month, the Cuban government, for reasons that are not entirely clear, closed down the El Cabildo operation. But if this experiment in “private enterprise” was, according to Reuters, the largest in Havana, it is not difficult to conclude that capitalism hasn’t made much progress to date—to say the least!

The new regulations allow Cubans to buy and sell homes, with the restriction that no Cuban can own more than two, the first a regular residence, the second a “summer home.” Before this, while Cubans did not formally “own” their homes, these were in all other respects their own. After the first 10 years, following the 1959 revolution when rent was limited to no more than 5-10 percent of one’s income, Cubans lived in their homes rent free. Many or most still do. Today they can sell their homes for a profit, but hardly the kind that constitutes the foundation of a new class of entrepreneurs.

While the new plan decreed that 500,000 state jobs in one year—that is, by the end of 2011—would be eliminated, with the 500,000 given small plots of land or granted licenses to run small private businesses or cooperatives, the Cuban labor federation later announced that this date had been substantially revised. “The goal is to reach a 500,000 mark by April 2015,” according to the federation. We should also note that since October 2010 there has been an increase of 230,000 jobs in the new sectors of the economy.

A July 16, 2012, New York Times article entitled, “Cuba Hits Wall in 2-Year Push to Expand the Private Sector” essentially confirms this data. Its opening sentence reads, “Nearly two years into the Cuban government’s economic overhaul aimed at slashing public payrolls and bolstering private enterprise, the reforms have slowed so much that many Cuban entrepreneurs and intellectuals are questioning the aging leadership’s ability—or will—to reshape one of the world’s last Communist systems and shift nearly half of the island’s output to private hands.” Of course, The Times much prefers capitalist austerity and social dislocation. Its Havana reporters neglected to name the Cuban “intellectuals and entrepreneurs” who bemoan Cuba’s failure to take the capitalist road at the expense of the Cuban people.

It appears that no one has been thrown into the streets in Cuba, not to mention the fact that laid-off workers are entitled to remain on government payrolls for several months, or longer, until they find employment. And further, we have seen no evidence that these barbers or street vendors or small restaurant owners, usually operating out of their own homes and family run, are combining with the small farmers to form a new capitalist class in Cuba!

Consultation with the people

In sharp contrast to the brutal and now completed capitalist restoration process in the USSR and China, orchestrated by the Stalinist bureaucracies that became the new capitalist class, and with billions, if not trillions of dollars in investments and technology from the world’s great ruling-class families and their corporations in the U.S. and Europe, Cuba’s modest and practical economic reforms aim at formally recognizing the reality that the Cuban people cannot construct the ideal or perfect socialist society in an isolated and beleaguered island nation.

The Cuban leadership’s constant efforts to engage the people in collective work to resolve the most difficult of problems, in this case, its ongoing economic crisis heightened by the overall crisis of the world capitalist system, cannot be considered empty rhetoric.

A Sept. 20, 2009, article by Roger Burbach, a Cuba specialist and director of the Berkeley, Calif.-based Center for Studies of the Americas, described the process by which the new reforms were promulgated in an essay, “Cuba Undertakes Reforms in Midst of Economic Crisis.” Burbach wrote, “Perhaps the most important early initiative of Raúl Castro was the call for a consulta (consultation) with and among the Cuban people. Barrio committees, factory workers, local party organizations, and others were encouraged to meet and register their thoughts and complaints. By August 2009, 5.1 million people out of a total Cuban population of 11.2 million had participated in the consultation. There were 3.3 million registered comments of which almost half were critical.”

Burbach continued, “The most recurring criticism was of limited food production and the daily problems people faced in securing three meals a day for their families. Comments on corruption in government enterprises were also prevalent.”

No doubt, “consultation” is not decision-making. But no government on earth engages its people in such a dialogue and consultation. Across the globe austerity measures are implemented with impunity.  The views of the working masses are never considered—only the profits of ever failing corporations.  In contrast, in Cuba the measures that are being implemented are aimed at improving the standard of living and the quality of life of all Cubans, at eliminating waste and corruption, at increasing efficiency while maintaining at great expense, almost every gain of the revolution.

Cuba spends 47 percent of its budget on health care and education. Few, if any nations can match this figure, although the extreme economic crisis has forced expenditure cutbacks in these areas amounting to 7.7 percent in 2011.

Similarly, according to the government newspaper Granma, an estimated 240,700 workplace cafeterias, that served lunch for free, have been closed down, with workers instead receiving 12 pesos daily to cover food costs. Granma reported that portions of the government-subsidized food previously provided to these cafeterias found their way to the black market—again, the inevitable and bitter truth in a beleaguered society plagued with constant shortages.

It is critical to add that the absence of institutionalized forms of workers’ rule in Cuba—soviet or workers’ council-type bodies with the power to decide and implement critical decisions—cannot be underestimated and weighs heavily on Cuba’s ability to deflect the blows directed against it by imperialism.

Socialism means workers’ rule—majority rule. In contrast to all previous class societies, in which a minority class of slave owners, kings and aristocrats, or capitalists have exercised real economic and political power, the socialist societies that revolutionaries struggle to bring into being are based on the institutionalized rule of the vast working-class majority.

Whatever measures have been taken against the well-recognized bureaucratic corruption are qualitatively less effective than workers themselves organizing and regulating society in their own interests.

While the CTC (Cuban Federation of Labor) originally announced the job terminations, the decision was undoubtedly made by the Cuban Communist Party and later approved by the National Assembly of Peoples Power, the formal but not actual governing body of Cuba. However much the Cuban Communist Party seeks out and encourages the input, consultation, and involvement of the trade unions, neighborhood organizations, and other substantial mass organizations, all critical decisions in Cuba are made by the Cuban CP.

Consultation and input are fundamentally distinct from the exercise of power by the working class itself. Workers’ democracy, as we define it and as the Bolsheviks under Lenin and Trotsky lived it, was the cornerstone of the revolutionary state set up in 1917, where the workers’ councils ruled, and not the Bolshevik Party, although the latter was the leading force in the original multi-party workers’ government.

Socialist Action remains staunch supporters of the Cuban Revolution. We consider the present leadership to be “revolutionaries of action,” a special term that has both positive and negative connotations—positive in the sense that the Castro team organized a social revolution that overthrew capitalism and established a workers’ state that still remains a heroic example to oppressed people around the world.

The term has a negative connotation in that we have not considered the Cuban leadership to be proletarian revolutionaries, that is, based on a consistent program for world socialist revolution and proletarian democracy at home.

At the same time, we reject any designation of Cuba as Stalinist—that is, a state in which the bureaucracy has become a crystallized parasitic and counterrevolutionary caste, whose interests are counterposed to those of the masses—which can only be maintained by resorting to mass repression and terror. While Cuba admittedly suffers from bureaucratic abuse, it is far from having reached the point where its important deficiencies cannot be remedied without recourse to the removal of the present leadership by the revolutionary action of the masses—that is, a political revolution.

Isolated and tiny Cuba has accomplished a small miracle in warding off the imperialist pressures that led the Stalinist regimes in the rest of the world to undermine and then obliterate the gains of the great Russian Revolution of 1917, and act as the key agents in the restoration of capitalism. Indeed, the “small miracle” becomes an unprecedented and heroic achievement when we factor in the 50-year embargo/blockade, the U.S.-backed invasion, innumerable acts of sabotage, bombings, the U.S. use of chemical and biological warfare, and material and financial aid to counterrevolutionary forces within Cuba.

When we add to this the effects of the sudden cessation of trade and aid from the former USSR and associated Eastern European states—some 75 percent of Cuba’s trade—the mere existence of the Cuban workers’ state represents a magnificent example in human dedication and achievement. We would be remiss in not including in these wonders the facts that Cuba leads the world in supplying doctors and teachers to poor nations, and that Cuba’s level of free public education, “from the cradle to the grave,” exceeds that of almost all nations on earth.

Cuba’s renewed efforts at economic reform are aimed at preserving a beleaguered and proud revolution that has advanced the interests of the Cuban people and won the respect and admiration of revolutionary fighters around the world.

Photo: Ismael Francisco / AP.  Members of Cuba’s National Assembly approve sending solidarity greetings to ailing Venezuela President Hugo Chavez, Dec. 13.

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