Tag Archives: Economic Institutions

Armando Nova Gonzalez, “Cuban agriculture and the current economic transformation process.”

DR. ARMANDO NOVA GONZÁLEZ, Centro de Estudios de la Economía Cubana, Universidad de la Habana, APRIL 1, 2012

Complete Original Here: Armando Nova,  Cuban agriculture and the current economic transformation process 2012  in Cuba Study Group WWW.FROMTHEISLAND.ORG INTRODUCTION

The Cuban economy has begun an interesting and important process of economic transformation, which has been identified as: the “Updating of the economic model.” It covers all economic sectors, with important implications for economic, social and political sectors of the nation. These changes have been reflected in the Guidelines of the Economic and Social Policy of the Party and the Revolution, adopted during the Sixth Congress of the Communist Party Congress held in April 2011 and ratified at the recent Conference of the CPC held in February of this year.

We must keep in mind that the Guidelines are only a guide and that the implementation process itself will lead to updates, enhancements and introduction of new issues and measures, which will be recom­mend by practice itself.

One may note that the most profound and important transformations have been initiated in a sector that is economically vital and strategic for the Cuban economy, as is the agricultural sector (AS). At the same time, it implies recognition and restitution of the important role of this sector in the economic-social-political development.

The insufficient domestic food production (see Nova 2010), is an issue that has been prevalent during the last fifty years in the national economy, increasing the country’s dependence on foreign food, making it more vulnerable and resulting in high expenditure of foreign currency for food imports (see Table 1), when most of these could be produced domestically under competitive conditions.

The Current Issue of the agricultural sector could be summarized as follows: agricultural and livestock pro­duction is down, there are records of significant quantities of idle agricultural land, and food imports continue to grow, to cover the shortfall in domestic production. This leads to obvious signs that the productive forces are still frozen and the need to transform systemically production relationships, and to the need to analyze how to solve the issue of ownership of the land and the changes needed to achieve it2.

The current situation of dependency in the area of food products is paradoxical, given the fact that the agricultural sector (AS) shows a significant number of unused areas (more than 2.0 million of idle Has). Results obtained from various scientific and technical institu­tions, indicate that there is a material basis (although undercapitalized largely by years of economic crisis, but it exists and can be improved and used) and has a significant human

WHAT ARE THE FACTORS THAT HAVE A NEGATIVE INFLUENCE?

Sometimes the reduction in agricultural and livestock production is attributed to the effects caused by drought, and to some extent this is a contributing factor, but this is a variable that must always be kept in mind instead of waiting for this to happen. It is necessary to prepare early for this effect and reduce the current vulnerability

This requires creating the necessary food reserves during the spring or rain period. This retranslates in the production of grains (corn, soy­bean, sunflower), in dry periods and throughout the year, and in the rescue of sugar cane production, not only destined for the production of sugar, but to the production of a number of side products such as molasses, yeast, bagasse, etc. used as animal feed. There is a need to rescue the necessary integration of the agro-industry and sugar cane production for food destined for cattle and pigs feed. Should also include the production of sugar cane used for livestock feed and forage base.

However, the most important aspect is the delay in implementing reforms in the agricultural sector, formal­ized in the Economic and Social Guidelines adopted at the Sixth Congress of the Communist Party of Cuba (CPC) and the systematic failure to apply them.

1. Delay in delivery of land to farmers under the framework of Decree Law 259 and its regulations (primar­ily bureaucratic aspects).

2. An insufficient offer of supplies, insufficient means of labor and production, with high prices (recent mea­sures have been taken recently aimed at reducing prices) and not adjusted to the demands, requirements, quality and specifications of producers and regions, usually modular. Not taking into account the actual existence of the market objective and role.

3. Need to amend Decree Law 259, to eliminate the uncertainties that it contains and which do not favor the permanence of the producer.

4. The failure to implement comprehensive measures for the decentralization of the marketing and elimina­tion of the Government inventory system.

5. The issue of prices paid to producers that are not satisfactory (despite the price increases in some cat­egories), particularly those products that replace imports, while willing to pay high prices for imported products and not to the local producer.

6. Late delivery of loans and technical assistance.

In summary reaffirmed by the results achieved at the end of 2011, there are still three aspects that have not been settled:

• Limited rights of the owner of the property: the producers should be allowed to make their own decisions throughout the cycle production-distribution-consumption-change.

• Failure to recognize the real and objective existence of the market and its complementary role with planning.

• Lack of systemic approach in the design and implementation of measures.

Given this repeated situation it is evident that the productive forces of the agricultural sector are still detained and required to remove the obstacles that still hinder its development, which implies continuing fast as pos­sible the transformation of production relations, which is a strategic economic sector for the Cuban economy.

Armando Nova Gonzalez

 

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Centro de Estudios de la Economía Cubana (CEEC)

By Arch Ritter

Centro de Estudios de la Economía Cubana (CEEC)

The University of Havana’s Centro de Estudios de la Economia Cubana has made itself the foremost research institution on the Cuban economy since its establishment in 1989.  Its faculty includes many of the best-known analysts on the Cuban economy, including both senior and newer faculty members. The work of the Cuban Economy Team is especially impressive and is certainly worth careful study by anyone interested in Cuba. I have often thought that Cuba would benefit immensely if some of the members of CEEC were in key Cabinet positions in the Government of Cuba responsible for the management of the economy.  I expect that this in fact will happen before too long! Cuban Economy Team: Dr. Juan Triana Cordoví, Dr. Omar Everleny Pérez (Director), Dr. Armando Nova González, Dr. Hiram Marquetti Nodarse, Dr. Jorge Mario Sánchez Egozcue, Dr. Pavel Vidal Alejandro, Ms. Betsy Anaya, Ms. CamilaPiñeiro Harnecker, Ms. Ricardo Torres Pérez and Lic. Saira Pons Pérez Enterprise Management Team: Dr. Orlando W. Gutierréz Castillo, Dr. Humberto Blanco Rosales, Dr. Rosendo Morales González, Dr. Jorge Ricardo Ramírez, Dra. Aleida Gonzalez-Cueto, Dra. Dayma Echevarría León, Dra. Ileana Díaz Fernández, Ms. Mercedes González Sánchez, Ms. Maria Isabel Suárez González,  Lic. Dayrelis Ojeda Suris and Lic. Mariuska Cancio  Fonseca The CEEC publishes a number of “Boletínes” each year that usually include valuable analyses of various aspects of Cuba’s economy and economic policy. Here are the Tables of Contents of the last three issues. The “Boletínes” are hyper-linked to the CEEC Web Site and some of the essays are linked to the PDF files for rapid access.

Boletín Agosto 2011

El sistema de gestion y direccion de la economia hoy. Ileana Diaz,  Dra.Ileana Diaz Experiencias noruegas relevantes para la agricultura cubana, Dr. Anicia Garcia La propiedad en la economia cubana. Armando Nova,  Dr.Armando Nova Los sistemas de direccion  de la economia  1961- 1975,  Dra.Ileana Diaz Turismo de salud en Cuba. David Pajon Dr. David Pajon

Boletín Abril-Agosto 2010

Competitividad e innovacion, donde esta Cuba. Ileana Diaz, Dr. Ileana Díaz El impacto del postgrado en la educacion superior Cuba- Venezuela. Rosendo Morales Dr. Rosendo Morales El mercado y el estado, dos partes que forman un todo. Armando Nova, Dr. Armando Nova González Entre el ajuste fiscal y los cambios estructurales, se extiende el cuentapropismo, Dr. Pavel Vidal y Dr. Omar Everleny Pérez Fuerzas favorables y restrictivas a la dirección estratégica de la empresa. Dayrelis Ojeda y Humberto Blanco Lic. Dayrelis Ojeda y Dr. Humber

Boletin Enero-Mayo 2010

El mercado libre agropecuario en 2009. Armando Nova, Dr. Armando Nova González El sector energetico cubano entre 2005 y 2009. Ricardo Torres_0 Ms. Ricardo Torres Pérez La política fiscal actual. Pavel Vidal_0 Dr. Pavel Vidal Alejandro Estrategia. Mito o realidad. Ileana Diaz y Roberto Cartaya_0 Dr. Ileana Díaz y Dr. Roberto Cartaya La producción agricola y ganadera en 2009. Armando Nova_0 Dr. Armando Nova González La universidad, la economía y el desarrollo. Juan Triana_0 Dr. Juan Triana Cordoví Los cambios estructurales e institucionales. Pavel Vidal_0,  Dr. Pavel Vidal Alejandro

Universidad de la Habana, “Alma Mater”

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Cuba legalizes sale, purchase of private property

PAUL HAVEN, Associated Press; Nov. 3, 2011 8:08 AM ET
Original Article available here: Cuba legalizes sale, purchase of private property

HAVANA (AP) — Cuba announced Thursday it will allow real estate to be bought and sold for the first time since the early days of the revolution, the most important reform yet in a series of free-market changes under President Raul Castro.

The law, which takes effect Nov. 10, applies to citizens and permanent residents only, according to a red-letter headline on the front page of Thursday’s Communist Party daily Granma.

The brief article said details of the new law would be published imminently in the government’s Official Gazette. Authorities have said previously that sales will be subject to taxes and the rules will not allow anyone to accumulate great property holdings.

The change follows October’s legalization of buying and selling cars, though with restrictions that still make it hard for ordinary Cubans to buy new vehicles.

Castro has also allowed citizens to go into business for themselves in a number of approved jobs — everything from party clowns to food vendors to accountants — and has pledged to streamline the state-dominated economy by eliminating half a million government workers.

Cuba’s government employs over 80 percent of the workers in the island’s command economy, paying wages of just $20 a month in return for free education and health care, and nearly free housing, transportation and basic foods. Castro has said repeatedly that the system is not working since taking over from his brother Fidel in 2008, but he has vowed that Cuba will remain a Socialist state.

Cubans have long bemoaned the ban on property sales, which took effect in stages over the first years after Fidel Castro came to power in 1959. In an effort to fight absentee ownership by wealthy landlords, Fidel enacted a reform that gave title to whomever lived in a home. Most who left the island forfeited their properties to the state.

Since no property market was allowed, the rules have meant that for decades Cubans could only exchange property through complicated barter arrangements, or through even murkier black-market deals where thousands of dollars change hands under the table, with no legal recourse if transactions go bad.

Some Cubans enter into sham marriages to make deed transfers easier. Others make deals to move into homes ostensibly to care for an elderly person living there, only to inherit the property when the person dies.

The island’s crumbling housing stock has meant that many are forced to live in overcrowded apartments with multiple generations crammed into a few rooms. Even divorce hasn’t necessarily meant separation in Cuba, where estranged couples are often forced to live together for years while they work out alternative housing.

The new law will eliminate a state agency that regulated the exchange-by-barter of homes, meaning that from now on sales will only need the seal of a notary, according to Granma.

The government has also dropped hints in recent months about the new property law, saying it will allow family members to inherit homes even if they are not living in the property.

Cubans who can afford it will be allowed to own one home in the city and one in the countryside.

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Mark Frank: “Cuba to grant much larger plots to farmers”

By Marc Frank;  Wed Oct 19, 2011

HAVANA (Reuters) – Cuba will greatly expand the amount of land granted to private farmers, an agriculture official said on Wednesday, as the Communist-run country struggles to boost productivity in the sector.

Under new regulations expected to be approved this year, productive farmers will be eligible for temporary land grants covering as much as 165 acres (67 hectares), up from the current maximum of 33 acres (13 hectares) mandated in a 2008 decree, said William Hernandez Morales, the top agricultural official in the eastern province of Santiago de Cuba.

“Those persons or lease holders that have really shown they can produce will be able to increase their land to five caballerias,” he said on state-run radio. A caballeria is an old land measure still used in Cuba equivalent to 33 acres (13 hectares).

The state owns more than 70 percent of the arable land on the Caribbean island, of which some 50 percent lies fallow and the remainder produces less than the private sector.

A local agricultural expert said private farmers produce 57 percent of the food on only 24 percent of the land.

President Raul Castro has made increasing food production a top priority since taking over from his brother Fidel Castro in 2008, but with poor results.

In one of his key reforms, the government has turned over 4 million acres (1.6 million hectares) of land to 143,000 farmers and would-be farmers since October 2008, but farmers have complained that the small size of the plots and other restrictions hampered production.

They said bigger plots and a recent measure that makes it easier to employ laborers were positive steps.

“This is special. They should redistribute all the fallow land that’s been overrun with brush,” Roberto Hernandez, a farmer who leased 33 acres in 2009, said in a telephone interview.

“Now the land produces nothing, when it should be producing root vegetables, beans, rice or what have you,” he added.

Central Camaguey farmer Jorge Echemendia agreed.

“This is what they have to do without waiting any longer. I don’t know how they do it, but when the state gives the land to the people they manage to clean it up, even if with their fingernails, and put it into production.”

Castro has also decentralized decision-making, increased prices paid for produce, opened stores where secondary farm supplies such as clothing and tools are sold and promised farmers more freedom to grow and sell their crops.

Agriculture output increased 6.1 percent through June, compared with the same period in 2010, a year that saw a 2.5 percent decline despite the reforms.

Food production remains below 2005 levels and food prices at farmers markets have increased 7.8 percent this year, according to the government. (Editing by Jeff Franks and Mohammad Zargham)

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The “Home Hardware” Cooperative Model and its Relevance for Cuba

By Arch Ritter

As Cuba moves towards a mix of economic institutions with a greater role for the market mechanism as a means of social control over economic activity as well as for private ownership, various forms of co-operative organization have some appeal. Among the many forms of cooperative enterprise that exist and could be considered by Cuba, the Home Hardware variety may have a useful role to play. Already some academic analysts in Cuba are exploring the varieties of cooperative and their relevance for Cuba. ( See New Publication from Cuba: Cooperativas y Socialismo: Una Mirada DesdeCuba).

The Home Hardware Cooperative Model

Home Hardware, is a dealer-owned cooperative, in which about 1000 individual hardware store-owners also own the larger enterprise.  Membership in the cooperative permits the store owners to obtain major economies of scale in terms of purchasing and shared buying power, advertising, comprehensive inventory management and product delivery, and store management techniques. The cooperative has permitted small owner-operated hardware stores to remain viable in small towns and urban neighborhoods. It has permitted them to survive and thrive in the face of the competition from the massive “Big Box” hardware stores such as Rona (in Canada), Home Depot,  Lowe’s Companies Inc., or even Wal-Mart.

Original Home Hardware Store, now “Home Furniture”, St. Jacobs Ontario

The establishment of the Home Hardware co-operative was spear-headed by Walter Hachborn starting at the Hollinger Hardware store in the small town of St. Jacobs Ontario in 1938, working as a stock boy for $8 per week. When Gordon Hollinger died in 1948, Walter took over many of his responsibilities, and purchased the store in partnership with Henry Sittler and Arthur Zilliax in 1950. Hachborn then undertook the difficult task of persuading his fellow retailers to join forces in the Home Hardware’s cooperative – a task requiring diplomacy and determination. (Hachborn, who – full disclosure –  is my Father’s cousin, was awarded “The Order of Canada” as well as the “Queen’s Golden Jubilee Medal” in tribute to his business achievements and community service.)

Relevance for Cuba – and Any Country

The Big Box chains exist because of their economic advantages, namely economies of scale in purchasing, marketing and advertising, and management systems plus bargaining power in their relationship with their workers. However there are also a variety of major disadvantages of the Wal-Mart type of Big Box model of retailing or of the “Starbucks” model of service provision.  Among these are:

1.      Major concentrations of income and wealth in the hands of the few owners of the chains. (The Walton family members have estimated assets of $US 92 billion making then the wealthiest family in the world. )

2.      Damage to local communities and neighborhoods as commercial live gets sucked out of them to the sites of the Big Box stores.

3.      Environmental costs as long distance driving to the big stores replaces closer access to community stores.

4.      Exclusion of smaller scale local sources of products in favor of massive low-cost purchases for all their stores from single sources – usually from China, thereby helping to kill off local producers.

5.      Unpleasant shopping experience, (e.g. wandering around large spaces looking for a particular item with no assistance or guidance to be found.)

Already Cuba has a number of state-owned chains of stores,restaurants and hotels such as Tiendas Universo (CUBANACAN S.A.), Tiendas Panamericanas (CIMEX S.A.), Tiendas Caracol (HORIZONTES  Hoteles S.A.), Tiendas y Supermercados de la Sociedad Meridiano S.A. (CUBALSE Corporation; closed in 2009), Tiendas TRD Caribe (GAVIOTA S.A. owned by the militayr), and Tiendas de Habaguanex. If these were to be privatized under concentrated ownership, some of the problems of the Wal-Mart or Starbucks types of conglomerate would be generated or continued.

Tienda Cimex

In the years ahead, it is likely that Cuba will continue to move towards greater private ownership in many areas. If a future government wishes to avoid some of the disadvantages of the Mammoth Enterprise Chain syndrome, it could consider providing encouragement to Cuban-owned cooperative networks or independent enterprises in various activities in retailing and service provision. Possible areas where such a form of organization could be useful might include hardware stores (of course), food stores, bars, coffee shops, variety stores, barber shops, estheticians services and clothing stores, among others.

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New Publication from Cuba: Cooperativas y Socialismo: Una Mirada DesdeCuba

A collection of essays on Cooperatives has just been published in Cuba, compiled by Camila Piñeiro Harnecker of the Centro de Estudios sobre la Economia Cubana. Ms. Camila Piñeiro comes with an impeccable political pedigree, with parents Manuel Piñeiro Losada (a Revolutionary from 1952 onwards and a 32 year veteran of the Central Committee) and Marta Harnecker, (a Chilean sociologist,  leading ideologue and prolific author.) The volume was made available courtesy of ASCE and Joaquin Pujol

The complete document is available hyperlinked here: Cooperativas y Socialismo: Una Mirada DesdeCuba, La Habana: Editorial Caminos, 2011

Compiladora: Camila Piñeiro Harnecker; Coordinador editorial: José Ramón Vidal

Edición: Mayra Valdés Lara; Diseño: Olmer Buchholz Espinosa

The Table of Contents is reproduced below.

Índice

Prólogo Camila Piñeiro Harnecke, 7

Parte 1 ¿Qué es una cooperativa?

1.       Una introducción a las cooperativas, Jesús Cruz Reyes y Camila Piñeiro Harnecker, 31

2.       La construcción de alternativas más allá del capital,  Julio C. Gambina y Gabriela Roffinelli, 55

Parte 2 Las cooperativas y los pensadores socialistas

3.       Cooperativismo y autogestión en las visions de Marx, Engels y Lenin,  Humberto Miranda Lorenzo 71

4.       Cooperativismo socialista y emancipación humana. El legado de Lenin, Iñaki Gil de San Vicente, 103

5.       El Ché Guevara: las cooperativas y la economía política de la transición al socialism, Helen Yaffe 132

6.       Las bases del socialismo autogestionario: la contribución de István Mészáros, Henrique T. Nova, 167

Parte 3 Las cooperativas en otros países

7.       Mondragón: los dilemas de un cooperativismo maduro, Larraitz Altuna Gabilondo, Aitzol Loyola Idiakez y Eneritz Pagalday Tricio, 191

8.       Cuarenta años de autogestión en vivienda popular en Uruguay, El “Modelo FUCVAM”,  Benjamin Nahoum, 219

9.       Economía solidaria en Brasil: la actualidad de las cooperativas para la emancipación histórica de los trabajadores/ Luiz Inácio Gaiger y Eliene Dos Anjos, 245

10.   Autogestión obrera en Argentina: problemas y potencialidades del trabajo autogestionado en el contexto de la poscrisis neoliberal, Andrés Rugge, 272

11.   De las cooperativas a las empresas de propiedad social directa en el proceso venezolano Dario Azzellini, 301

Parte 4 Las cooperativas y la construcción socialista en Cuba

12.   Las cooperativas agropecuarias en Cuba: 1959-presente,  Armando Nova González, 321

13.   La UBPC: forma de rediseñar la propiedad estatal con gestión cooperative, Emilio Rodríguez Membrado y Alcides López Labrada, 337

14.   Notas características del marco legal del ambiente cooperativo cubano,  Avelino Fernández Peiso, 366

15.   Retos del cooperativismo como alternativa de desarrollo ante la crisis global. Su papel en el modelo económico cubano, Claudio Alberto Rivera Rodríguez, Odalys Labrador Machíny Juan Luis Alfonso Alemán, 397

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