• The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba. It includes analyses and observations of the author, Arch Ritter, as well as hyper-links, abstracts, summaries, and commentaries relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
    Commentary, critique and discussion on any of the postings is most welcome.
    This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' original blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement:
    "... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

LATIN AMERICA LEADERS URGE SUMMIT PARTICIPANTS TO REJECT CUBA’S NEXT HANDPICKED RULER

BY NORA GÁMEZ TORRES

Miami Herals, April 11, 2018 06:05 PM

Original Article: Latin America Leaders Urge Summit Participants To Reject Cuba’s Next Handpicked Ruler

LIMA, PERU

Former Latin American presidents on Wednesday urged participants in the upcoming VIII Summit of the Americas to reject the new Cuban government scheduled to take power next week.

The former leaders of Costa Rica, Miguel Ángel Rodríguez, and of Bolivia, Jorge Quiroga, issued the statement on behalf of the 37 former heads of state and government that are part of the Democratic Initiative in Spain and the Americas.  They urged summit participants to “reject the presidential elections called by the dictatorship” and “refuse to recognize as legitimate the newly elected members of the National Assembly, the Council of State and its president because they do not represent the will of the people.”

The declaration, read from the halls of the Peruvian congress, also demands an end to the Cuban government’s repression of opponents and the release of political prisoners.

The former government leaders also endorsed a proposal for a binding plebiscite on whether Cubans want “free, just and pluralistic elections” pushed by the Cubadecide coalition headed by Cuban opposition activist Rosa María Payá.  Latin American leaders who will meet at the Summit of the Americas on Friday and Saturday “have a commitment to democratic stability in the region,” Payá said. “It is time for democracies in the Americas to pay their historical debt to the Cuban people.”

Several Cuban opposition activists, including Ladies in White leader Berta Soler, as well as Guillermo Fariñas, Antonio Rodiles and Jorge Luis García “Antúnez,” also urged Latin American governments earlier this week to repudiate “the Castro dictatorship and its dynastic succession.”

They also demanded the release of political prisoners and official recognition of the Cuban opposition as legitimate political players, and asked for more economic and political sanctions against the Cuban government. Quiroga and former Colombian President Andres Pastrana traveled to Havana last month to receive the Oswaldo Payá Liberty and Life prize, but were turned away by authorities at the airport. The prize was organized by the Latin American Network of Youths for Democracy, headed by Rosa Maria Payá, daughter of the late opposition activist.

Cuban activist Rosa María Payá with the former president of Costa Rica, Miguel Ángel Rodríguez, in Lima, Peru

The selection of a new Cuban ruler when the island’s National Assembly meets April 19 is nothing but a “dynastic succession … a change of tyrants in a dictatorial system,” Quiroga told el Nuevo Herald. “How can an election be democratic with 605 candidates for 605 seats and a single party?”
Cuban leader Raúl Castro is expected to be replaced next week as head of state and government by First Vice President Miguel Díaz-Canel, although he is also expected to remain head of the Communist Party.
The former Bolivian president added that Peru’s invitation to Castro to attend the summit was “incoherent” because Venezuelan President Nicolás Maduro’s invitation was withdrawn.
“My only complaint to those who decided to exclude Maduro from the upcoming summit is that a narco-tyrant, who has been in power for 18 years and wants another six, is excluded because he’s about to turn Venezuela into a new Cuba, while those who have destroyed democracy in Cuba for 60 years are welcome.”
Before the news conference, Rodríguez, Quiroga and Payá met with the president of the Peruvian congress, Luis Fernando Galarreta Velarde.

“The Venezuelan problem has a starting place that many people at times forget, and that starting place is Cuba, Galarreta said. There’s a risk for the region “if we continue to avoid looking directly at the situation in those countries.”
Asked whether Peru would refuse to recognize the new Cuban government, Galarreta said that the country’s foreign policy was handled by the foreign ministry, not the legislature, but added that Congress would forward the former Latin American president’s petition to the executive branch.

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RAÚL CASTRO’S UNFINISHED LEGACY IN CUBA

BY WILLIAM M. LEOGRANDE | APRIL 9, 2018

CASTRO’S ATTEMPTS AT REFORM REMAIN UNFULFILLED. WHAT CAN CUBANS EXPECT FROM HIS SUCCESSOR?

 Original Article: Raúl’s Unfinished Legacy

 Raúl Castro and Miguel Díaz-Canel,

This month, Cuba’s Raúl Castro will leave office at the end of his second term as president, having set in motion changes to the island’s economy, politics and social relations more sweeping than any since the revolution in 1959. As he steps down after a decade at the helm, those changes are still a work in progress. The far-reaching economic reforms he launched in 2011 are at best half-finished and the pace of change has slowed. His efforts to strengthen Cuba’s political institutions are about to face the stress test of a generational leadership transition. And the Cuban public is clamoring for a better life and a greater voice. Will Miguel Díaz-Canel, Raúl’s likely successor, be able to carry these changes through to completion?

Throughout Fidel Castro’s 57 years as Cuba’s líder máximo, Raúl was second in command, in the shadow of his charismatic sibling. But behind the scenes, he proved to be an effective manager, turning the rag-tag Rebel Army into the most effective and respected institution in the country. Cuba’s armed forces scored impressive victories in Africa, and then took on domestic economic responsibilities with an efficiency that surpassed most civilian enterprises.

Raúl recognized the inherent shortcomings of the hyper-centralized socialism Cuba adopted from the Soviet Union. As armed forces minister, he mandated the use of market-oriented business practices in the military enterprises under his command and sent officers abroad to business school. When the collapse of the Soviet Union threw Cuba into deep recession, Raúl pushed for the pragmatic use of market mechanisms to jump-start the economy. He overcame Fidel’s reluctance by framing economic recovery as a matter of national security, declaring, “Beans are more important than cannons.”

Updating the economy

Within months of assuming office as acting president in 2006, Raúl let loose a blistering attack on economic inefficiency. “We are tired of excuses,” he told the National Assembly that December. “No one, no individual or country, can afford to spend more than what they have,” he said repeatedly.

The drumbeat of criticism foreshadowed his most ambitious and potentially transformative initiative, the updating of Cuba’s economy. The reforms sought to transform the economy by unleashing market forces, demanding that state enterprises make a profit or close, promoting a significant private and cooperative sector, and welcoming foreign direct investment (FDI) to stimulate growth. The goal: a model of socialism that combined the efficiency and productivity of markets with the social benefits of free health care and education, and minimized inequality.

The reform process has been slow going. As of 2016, only 21 percent of the 313 reforms adopted in 2011 had been completed. Subsidies to failing state enterprises still consume some 20 percent of the state budget – almost as much education. After a period of rapid growth during which the number of registered private sector businesses expanded five-fold, new state regulationsrecently reined them in. While Cuban officials aspire to attract $2.5 billion annually in FDI, they are still well short of the goal. Progress has been slowed by officials who fear the reforms represent a slippery slope toward capitalism, not to mention a threat to their own job security.

State-building

On the political front, Raúl’s changes have been less dramatic, but equally important for the system’s sustainability. Fidel chaffed at the restrictions formal institutions imposed on his political instincts and impromptu decision-making. Raúl has moved Cuba away from a system built around the charismatic and unquestioned authority of the líder máximo to one that relies increasingly on the strength of institutions and collective decision-making. “It is vitally necessary to reinforce the country’s institutions,” he told the Communist Party’s Central Committee in 2008. Only strong institutions could “ensure the continuity of the Revolution when its historic leaders are gone.”

A central tenet of this project has been to fill leadership positions with people who have proven track records of achievement, rather than following Fidel’s penchant for elevating young, inexperienced protégés who quickly crashed and burned – people Raúl mocked as “test tube leaders.” Miguel Díaz-Canel, Raúl’s likely successor, has a decades-long record of effective leadership within the Communist Party and government at both the provincial and national levels.

To underscore the idea that no one is indispensable, Raúl proposed term limits of no more than two five-year terms for all senior party and government posts. When aging leaders stay in power too long, the results are “never positive,” he observed, pointing to the gerontocracy than ran the Soviet Union into the ground. He set the example himself, declaring in 2013 that he would step down in 2018 at the end of his second term.

Raúl also established a more collective leadership style, inviting debate and seeking to build consensus on major issues. In fact, he may have been collegial to a fault, allowing skeptics to slow the implementation of the economic reforms.

Lacking Raúl’s authority as one of the historic leaders of the revolution, Díaz-Canel will most likely have to give even greater deference to the views of others in the leadership, making it tougher to come to decisions on contentious issues.

The expanding public sphere

For someone who spent most of his life running Cuba’s national security apparatus, and battling U.S. efforts to create a fifth column of internal opposition, Raúl has presided over a significant expansion of personal liberty and access to information that has spilled over into political expression. In his inaugural speech as president, Raúl pledged to do away with the “excess of prohibitions and regulations” through which the state controlled a wide range of social interactions. He legalized personal cell phones and computers. He allowed people to sell their cars and houses without going through the state. He repealed the prohibition on Cubans staying in tourist hotels, and abolished the tarjeta blanca exit permit required every time a Cuban wanted to travel abroad.

In 1961, Fidel defined cultural policy as, “Within the revolution, everything. Against the revolution, nothing.” During Raúl’s presidency, the boundaries of what is “within the revolution” have expanded, allowing more space for critical cultural expression, often with political overtones. The expansion of internet connectivity has given Cubans access to a world of information, with only a few dozen sites blocked by censors. Cuban blogs, discussion forums and independent news services have flourished, initiating vigorous online debates on a wide range of issues.

Some senior Cuban officials have voiced concerns that expanded Internet access poses political risks, especially since the United States has repeatedly tried to use it as a means of waging information warfare. Just two months ago, the Trump administration formed a Cuba Internet Task Force as part of its policy to undermine the Cuban government. Nevertheless, Cuban leaders understand that connectivity is a prerequisite for building a 21st Century economy, despite the risk.

The state still represses small dissident groups that advocate overturning Cuba’s socialist system. Instead of the long prison terms meted out during Fidel Castro’s days, however, the state’s current strategy is harassment and disruption. When dissidents try to meet or demonstrate, they are arrested, held for a few hours, and then released.

Díaz-Canel’s attitude toward critics is uncertain. In 2013, he publicly defended a group of students whose critical blog was banned by a university administration. In February 2017, however, he gave a speech to a closed Communist Party meeting attacking prominent online critics as counter-revolutionary. At the very least, that speech signals the continuing influence of party leaders intolerant of critical expression.

The Washington roller coaster

For the last two years of Barack Obama’s presidency, it appeared that normalizing relations between the United States and Cuba would be one of Obama’s and Raúl’s most important legacies. After December 17, 2014, when the two presidents made simultaneous television broadcasts announcing they had decided to re-establish diplomatic relations, their governments made rapid diplomatic progress, reopening embassies and signing two dozen bilateral agreements. The number of U.S. visitors to Cuba more than doubled and U.S. businesses lined up to sign commercial deals with Havana.

But President Donald Trump’s announcement in June 2017 that he was canceling Obama’s policy of engagement has cast doubt on the permanence of the new relationship. Last October, the administration used unexplained injuries suffered by U.S. government personnel in Havana as an excuse to reduce staffing at the embassy so dramatically that it can barely function. Then the administration expelled an equal number of Cuban diplomats from Washington.

For Raúl, the decision to normalize relations was driven by economic imperatives. In the past two decades, tourism has become a pillar of Cuba’s domestic economy, and no country sends more tourists to the Caribbean than the United States. Likewise, Cuba needs $2.5 billion a year in FDI to sustain a decent rate of growth, and no country sends more FDI to the Caribbean than the United States.

But Raúl’s decision was not without risk. From the outset, others in the leadership had doubts about the wisdom of it. Suspicious of U.S. intentions, they worried that defending the revolution from Obama’s soft power might be harder than defending it against open hostility. Those worries went public after Obama’s trip to Cuba in March 2016, when Fidel wrote a critical article for Granma, giving political cover for others to articulate an even tougher line against engagement.

The Trump administration’s hostility reinforces Cuban conservatives who argued from the beginning that Washington could not be trusted. That, in turn, makes it harder for the next Cuban president – and the next U.S. president – to get normalization back on track.

Unfinished business

The timely and constitutionally prescribed succession of leaders signals the institutional strength of the Cuban regime. That said, Díaz-Canel inherits a formidable agenda of tough issues: fundamental economic changes that are desperately needed but still incomplete, a rapidly evolving public sphere in which Cubans are better informed and more outspoken but have few ways to hold leaders accountable, and an uncertain relationship with Washington that is likely to get worse before it gets better.

If Díaz-Canel can successfully carry through to completion the transformations Raúl began, Raúl will be remembered as Cuba’s Deng Xiaoping – the revolutionary Chinese founder who achieved détente with the United States and began the transition from a failed centrally planned socialism to an economically viable market socialism. But if relations with Washington remain mired in animosity and the economic reforms fail, Raúl will be remembered as just one more reform communist who could not force the system to change despite his best efforts.

LeoGrande is Professor of Government at American University in Washington, DC, and co-author with Peter Kornbluh of Back Channel to Cuba: The Hidden History of Negotiations between Washington and Havana (University of North Carolina Press, 2015).

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CUBA’S COMMUNIST PARTY ADMITS ERRORS, SLOWDOWN IN REFORMS

HAVANA (Reuters) MARCH 27, 2018

Sarah Marsh

 

Cuba’s Communist Party admitted a slowdown and errors in its implementation of Raul Castro’s market-style reforms, just weeks before he steps down from the presidency, but vowed to continue updating the Soviet-style command economy.

The party central committee held a plenary session to discuss the state of reforms undertaken during Castro’s 10-year presidential mandate to open up the ailing economy and give the private sector and foreign investment greater roles. Castro, who steps down as president on April 19, presided over the plenary which took place this week. The 86-year old will remain head of the party, the country’s guiding political force, until 2021.

“Despite the errors and insufficiencies recognized in this plenary, the situation is more favorable than a few years ago,” Castro, 86, was quoted as saying by party newspaper Granma.

Reforms were implemented swiftly in the first three years since being agreed in 2011, the head of the party’s reform commission Marino Murillo was cited as saying.

The number of self-employed workers in the Caribbean island nation of 11.2 million residents has more than tripled to around 580,000 workers.

But implementation has slowed in the last two years due to the complexity of the process, mistakes in oversight, a lack of financial backing and low engagement of the bureaucracy, Murillo said. The party was also deliberately implementing reforms slowly to ensure they would not marginalize anyone.

The government last year froze the issuance of licenses for an important set of private sector activities as it sought to root out malpractices such as purchases on the black market and to improve regulation.

The 142-member central committee discussed the lack of a fiscal culture and accountancy tools to make a serious economic analysis in Cuba as well as difficulties communicating the complex process.

Many Cubans, whose expectations were raised by Castro’s reforms, have felt frustrated by the slowdown that they believe means Havana is not truly committed to updating the economy.

The government said late last year, for example, it would limit licenses to one per person going forwards – a move that could limit Cubans’ entrepreneurial ambitions.  Yet it did not address key private sector concerns like the lack of a wholesale market or ability to import or export.

Havana has also backtracked on reforms in the key agricultural sector over the last few years, once more assigning resources, setting prices and controlling most distribution.

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IS CUBA’S ECONOMY READY FOR THE 2018 LEADERSHIP TRANSITION?

Pavel Vidal Professor, Pontificia Universidad Javeriana Cali

CUBA STUDY GROUP, February 2018

Complete Article, English:  Pavel_Is Cuba’s Economy Ready English

Complete Article, Spanish:  Pavel En qué condicion llega la economia cubana a la transicion generacional

Introduction

Cuba has changed considerably in these last ten years of economic reforms, though not enough. Family income, tourist services, food production, restaurants, and transportation depend less on the state and much more on private initiative. The real estate market, sales of diverse consumer goods and services, and the supply of inputs for the private sector have all expanded, in formal and informal markets. Foreign investment stands out as a fundamental factor in Cuba’s development. The country has achieved important advances in the renegotiation of its external debts.

Nevertheless, many other announced changes were defeated by internal resistance, half-heartedly implemented, or put in place in ways that replicated mistakes of the past. The bureaucratic and inefficient state enterprise sector, tied down by low salaries and a strict central plan, impedes economic progress. Cuba’s advantages in education and human capital continue to be underexploited. Neither has the international environment provided much help. The U.S. trade embargo remains in place, the Trump administration has returned to the old and failed rhetoric of past U.S. policies, and Cuba continues to depend on a Venezuelan economy that does not yet seem to have hit rock bottom.

As a consequence, the growth of GDP and productivity has been disappointing, agricultural reform has produced few positive results, and Cuba is once again drowning in a financial crisis. The reforms implemented to date did not create sufficient quality jobs, and, all told, half a million formal positions were eliminated from the labor market.

The second half of 2017 proved especially challenging due to the impacts of Hurricane Irma and new restrictive measures announced by the U.S. government. To these difficulties one must add the decision of the Cuban government to freeze (temporarily) the issuance of licenses to the private sector.

Even so, the National Office of Statistics and Information (ONEI) reported that the economy has not fallen into recession. There are reasons to doubt these statistics, however. Such doubts only multiply when we take into consideration the decision to delay, or altogether avoid, the publication of reports on individual sectors of the economy and the state of the national accounts. For 2018, the government has proposed a rather optimistic economic growth plan (2% increase in GDP) that once again does not appear to appropriately evaluate the complexity of Cuba’s macro-financial environment.

Three highly significant events are anticipated this year: the generational transition within the government, new norms for the private sector, and the beginning of the currency reform process. These three issues have raised expectations on the island, but each may be tackled in a disappointing fashion.

…………………………………..

Conclusions:

Two Other Changes that Could Disappoint A generational transition in the Cuban government will take place on April 19, 2018. Beyond indications that Miguel Díaz-Canel will be the future president, there are no signals as to who will be vice president or who will direct principal ministries such as the Ministry of the Economy or the Ministry of Foreign Relations. Nor do we know where politicians of the “historic generation” will end up.

The new government will want to demonstrate continuity with the former in order to assure its position with various spheres of political power. It appears that the new government will not have its own economic agenda. We can expect that documents approved by recent Congresses of the Cuban Communist Party—which define the limits of reform, the desired development strategy, and the social and economic model to which Cuba aspires—will continue to serve as economic policy guides.

Whatever the composition of the incoming government, in the short term, Cuba’s new leaders will need to convince other state actors that they have the authority and will to, first, achieve the objectives laid out in the “Guidelines for Economic and Social Policy” (Lineamientos), and then deepen the process of reform, overcoming internal forces resistant to change. The new government will thus have to carefully assess the political costs and benefits of implementing reforms to different degrees and at varying speeds, but it will start with low initial political capital due to less popular recognition and a lack of historic legitimacy. Cuba’s new leaders, moreover, must confront these challenges at a time of renewed conflict with the U.S. government. The task is by no means easy, and we will have to wait to see how they handle it.

Another change we can expect this year is the publication of new rules governing the operations of the private sector, and thus unfreezing the issuance of licenses. A greater degree of control over tax payments, as well as efforts to more strongly “bank” the sector, appear to be two basic objectives of the forthcoming rules.

It is very important that the private sector contribute to the Treasury in proportion to its earnings. This is impossible to guarantee if private sector operations are not registered in banks. An effective and progressive tax system provides net dividends to all. The state budget would benefit, exorbitant gaps in income distribution could be avoided, and the societal image of the private sector would be improved. It will be much easier to defeat political and ideological resistance to expansion of the private sector when its income also serves to finance expenses in education and healthcare, and when individual contributions are in line with variable levels of income.

We still do not know if the new rules for the private sector will focus only on fiscal and banking control, or if new policies will address some of the many complaints that the private sector itself has made—high tax rates, the struggle to obtain inputs, and the difficulty of linking operations to foreign trade, for example. A draft of the rules that has circulated does not contain answers to these problems, but rather suggests a focus primarily on more control and penalization.6 If the rules that are ultimately implemented do not differ much from what appears in this draft, depleted prospects for the private sector will be the first disappointment Cubans face in 2018.

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EL PAQUETE: CUBA’S UNDERGROUND NETWORK IS LIKE NETFLIX AND SPOTIFY, WITHOUT THE INTERNET

“Quartz Obsession”

March 16, 2018 at 3:46:38 PM

Cuba has one of the lowest rates of internet usage in the Western Hemisphere, and access to media is strictly restricted—but that doesn’t stop Cubans from watching Game of Thrones. Their secret is El Paquete Semanal (“The Weekly Packet”), a clandestine in-person file-sharing network that distributes hard drives and flash drives full of media.

Nobody quite knows how El Paquete, which has thrived since the mid-2000s, is created or how it makes its way across the country every week. But Cubans have come to rely on the pervasive distribution of music, TV, and movies—not to mention pirated software and e-commerce platforms.

Ultimately, the uniquely Cuban tech phenomenon is proof that just like life in Jurassic Park, information always finds a way—especially when you’re jonesing for the latest episode of a subtitled South Korean soap opera and the closest open internet is an ocean away.

BY THE DIGITS

  • 5.6%: Cuban households with dial-up connections, at speeds of 4–5 kB/s
  • 386%: Cost of household internet service in Cuba as a percentage of per capita GDP
  • 0.007%: Cuban broadband internet penetration (8,157 connections for 11 million people)
  • 2018: Year the Cuban government has promised to offer mobile internet service
  • $2: Cost per hour of public Wi-Fi hotspot access, equivalent to 10% of the average monthly salary
  • $3: Estimated cost of one week’s Paquete, accessed on a Monday
  • $1: Estimated cost on a Wednesday

 

How does it work?

There are a lot of question marks about El Paquete—more accurately, Los Paquetes, as there are reportedly several versions—but this much is clear: At the end of each week, its creator(s) compile the most in-demand media of the week—roughly 15,000 to 180,000 files, 1 terabyte in total. The provenance is murky, but the most likely source is a mix of illicit broadband internet access, secret satellite dishes, and hard drives and flash drives smuggled in from overseas.

From there, it’s top-down distribution. A network of Paquete wholesalers (many based in street-level phone repair and DVD shops) copy the contents onto their own hard drives and flash drives, which are then copied many more times. The last links are the door-to-door Paquete delivery guys, who will bring it to individual residences, copying over select files or the entire thing to customers.

The network is based in the capital Havana, but El Paquete also makes its way to most Cuban towns, with a noticeable time lag. El Paquete is most expensive early in the week; by Thursday or so, prices will have dropped by 50% or more.

 The kingpins of El Paquete

Former engineering student Elio Hector Lopez is one of the people credited with starting El Paquete around 2006, where it built on longstanding clandestine networks used to distribute physical media like books, videotapes, CDs, and DVDs.

“At the beginning we saw this as a way to make money—but after having penetrated the entire country we see it more as a responsibility,” he told NBC in 2015.

“For the time being, El Paquete replaces the Internet for those who don’t have it,” Lopez told Reuters. “If tomorrow El Paquete disappears I don’t know what people would do, it’s like water, or a pill for the Cuban body.” According to the CBC, as of 2016 Lopez had moved to the United States.

“El Paquete was founded by several people, each with a desire to find a way to entertain their towns,” he told Polygon last year. “We wanted to find a way for the island to see the world in ways outside of politics, showing them culture, sports, entertainment, economy and society, showing them all the things going on in the world that weren’t making it to our TVs.”

 Cuba’s make-do culture

El Paquete is a distinct phenomenon of the internet age, but according to Nick Parish, author of a fascinating in-depth study,there’s an interesting precedent in Cuban history. After the collapse of the Soviet Union in 1989 left Cuba reeling, “the military issued a book called “Con Nuestros Propios Esfuerzos” (With Our Own Efforts) that served as a chronicle to survival through shared knowhow, with everything from horticultural knowledge and recipes to herbal medicines to public health to transport, featuring tips submitted by ordinary Cubans.”

“The make-do culture in Cuba, known locally by the term “resolver,” and the propensity for Cubans to bring a unique isolated, constrained lens to solving problems is important to bear in mind as we see some of the features and systems that make el paquete a unique Cuban solution.”

This week’s list

A volunteer site, Paquete de Cuba, lists the weekly contents, though they’re not available for download.

In the absence of actual internet access, techies in Havana and elsewhere have created a homebrewed network called SNET “that reproduces much of the consumer internet we know in the free world,” according to Wired. It includes copycat versions of Facebook and Instagram—and facilitates dissemination of El Paquete.

 

How does advertising work?

There are classifieds in El Paquete. According to a report from the Yugoslavia-based Share Foundation: “If you send an SMS to a certain number, the content of the message will appear in the El Paquete folder ‘classifieds’ in form of a jpeg image that has your message on one half and some advertisement on the other half.”

But local ads are also embedded directly into the content: Users might also see video advertisements for local services embedded at the end of a trailer for a Hollywood movie, or ads sandwiched between magazine pages.

There’s even an e-commerce supplement: “a 199-page PDF catalog with interlinked product pages and ordering instructions, so people can purchase handmade products such as purses, shoes, boots, backpacks, and belts,” according to Nick Parish.

 So, does the government know?

Cuba’s authoritarian government is known for its censorship and intolerance of dissent, which has prompted many conspiracy theories about El Paquete: Is it all a government scheme to placate the masses with the opiate-like effects of western mass media?

There’s perhaps one telltale clue that Raul Castro’s government chooses to tolerate the existence of El Paquete: It contains no porn or political speech, or even western news accounts that might run afoul of the country’s communist party.

“There exists a kind of established agreement in which El Paquete must not reproduce content critical of the government, propaganda, or pornography, and in exchange the state turns a blind eye,” one Paquete distributor told Cubanet.

At least, that was true until recently: Cubanet reports a new folder called “Tremendo lío” (“tremendous mess”) recently appeared in El Paquete, which contains videos from some Cuban social media stars who voice anti-government views, along with those who support it. Is this a brave new era for El Paquete, or a signal that a government crackdown is coming?

“In a country where materials, shopping, and consumption are limited to food and maybe clothing, El Paquete becomes a luxury, a form of asserting one’s independence from the state’s attempts to suppress individuality.”

— “El Paquete: A qualitative study of Cuba’s Transition from Socialism to Quasi-Capitalism,” an undergraduate thesis by Princeton sociology major Dennisse Calle.

“Prefiero gastar un dólar que estar como un zombi. (I would rather spend a dollar than be a zombie.)”

 El Paquete customer Alejandro Batista

 

 

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EL PODER POLÍTICO ES EL RESPONSABLE DE LA CORRUPCIÓN GENERALIZADA

LA IMPUNIDAD ES LO ÚNICO QUE ALCANZA MAGNITUDES TAN COLOSALES COMO ESTOS DELITOS, QUIZÁS MAYORES

MIRIAM CELAYA, La Habana | Marzo 01, 2018

La prensa oficial cubana recientemente ha publicado un extenso artículo, de la autoría del periodista Lázaro Barredo, donde se aborda el tema de la corrupción en la Isla, sus disímiles formas, su propagación, la profundidad que ha alcanzado –afectando incluso instituciones públicas, altos cargos administrativos del Estado y funcionarios de diferentes niveles del sistema jurídico– y sus efectos para la economía y la sociedad.

La relación de la alarmante corruptela nacional –que también contiene ejemplos de “procesos confiscatorios” y de juicios seguidos contra varios implicados en delitos de esta índole– pretende una actualización de datos y cifras oficiales que no suelen ser del dominio público y a los que solo podrían acceder, previa autorización o encargo expreso, sujetos fieles y confiables con una hoja de servicios al castrismo suficientemente probada como es el caso de Barredo.

No obstante, los detalles ofrecidos y el pavoroso cuadro descrito no sorprenden. Cualquier cubano común está perfectamente familiarizado con la magnitud y profundidad que ha alcanzado la corrupción en Cuba puesto que forma parte de la realidad cotidiana y abarca prácticamente todas las esferas de la vida.

   Raúl Castro, Miguel Díaz-Canel, Machado Ventura y Ramiro Valdés. (EFE)

Tampoco causan sorpresa las omisiones en la enumeración de corruptos que presenta el texto. No se menciona, por ejemplo, a los agentes de la Policía Nacional Revolucionaria y los funcionarios del Cuerpo de Inspectores ni sus habituales prácticas de extorsión a infractores o la aceptación de sobornos, delitos que cometen con la mayor naturalidad y absoluta impunidad.

Si Barredo es cubano y quiere parecer honesto, no puede ni debe descartar el grave hecho de que la corrupción ha calado tan profundamente que socava también a las instituciones oficiales llamadas a combatirla en la primera línea de fuego.

La corrupción en Cuba es como una hidra imbatible que debe su éxito y persistencia a su doble función, aparentemente contradictoria. Por una parte corroe las bases morales de la sociedad, mientras por otra, su papel como proveedora la convierte en un recurso esencial de supervivencia en un país sesgado por las carencias y las precariedades de todo tipo.

Sin ánimo de justificar el delito ni de minimizar lo pernicioso del daño que ocasiona, la corrupción en Cuba es un mal inevitable, al menos en las condiciones actuales. No porque la población de esta Isla tenga una propensión natural a transgredir la legalidad o una voluntad espontánea de delinquir, sino porque la corrupción es un rasgo inherente al (también pernicioso) sistema sociopolítico y económico impuesto seis décadas atrás, y cuyos hacedores todavía detentan el poder político absoluto.

Este es uno de los vacíos que sobresalen del texto de Barredo cuando asegura que, a diferencia de otras naciones del mundo donde la corrupción “es causa de crisis moral y de descréditos de gobiernos y partidos”, en el caso de Cuba “este flagelo se concentra en lo fundamental en la gestión empresarial y administrativa”.

En el texto se da por sentada la inmaculada integridad de nuestros dirigentes, y en especial del liderazgo político, falacia que constituye también una manifestación de corrupción por parte de su autor, toda vez que entre las funciones esenciales de la prensa honesta están, entre otras, el cuestionamiento de los poderes políticos, la responsabilidad o la movilización de la opinión pública a partir del apego a la verdad.

Así, desde el discurso del autor, el Palacio de la Revolución no solo descuella como el último reducto de pureza que va quedando en la Isla sino que, además, a la cúpula verde olivo no le cabe responsabilidad alguna en el caos y la podredumbre que hoy minan el país hasta los cimientos.

Quizás esto explica el llamado a que sean las masas –a la vez víctimas-beneficiarias de la corrupción– quienes libren otra trascendental batalla en abstracto en la cual el enemigo no es –o al menos no directamente– el “imperialismo norteamericano”. Ahora se trata de una subespecie mucho más peligrosa que, en nuestra propia casa, amenaza la existencia del “modelo” sociopolítico cubano.

Esta es una batalla realmente surrealista y perdida de antemano, teniendo en cuenta lo difícil que resulta imaginar –pongamos por caso– a una humilde madre de familia delatando a la revendedora ilegal que le provee leche a un precio más módico que el de las tiendas de las redes minoristas en divisas, para el desayuno de su hijo al que le han suprimido la asignación de la cartilla de racionamiento no más arribó a los siete años de edad. O que alguien decida “combatir” a punta de conciencia al especulador que le garantiza la imprescindible medicina para un familiar enfermo que falta en los anaqueles de la red de farmacias.

Las aguerridas huestes de “ciudadanos honestos” incorruptibles –esto es, una categoría inexistente– deberían enfrentar enérgicamente, según el texto, a los corruptos: funcionarios ambiciosos, cuentapropistas enriquecidos, notarios y jueces que falsifican documentos o aceptan sobornos, revendedores callejeros, comerciantes de productos del agro, dependientes de tiendas en divisas y de moneda nacional, sub-declarantes que evaden los impuestos, empleados de servicios gastronómicos, médicos que aceptan pagos, y otros etcéteras.

El recuento de bribones de Barredo (con significativas ausencias, vale aclarar) resulta casi tan infinito como las causas de la proliferación de la corrupción, que discretamente calla. Enumeremos algunas: incompatibilidad entre los salarios y el costo de la vida, oferta comercial muy inferior a la demanda de productos de consumo –desde alimentos hasta cualquier otro género–, desempleo, pobreza generalizada, freno gubernamental a la iniciativa privada y a las capacidades productivas de los ciudadanos, demonización de la prosperidad y la riqueza, alta dependencia de la sociedad respecto del Estado, centralismo excesivo, ausencia de libertades…

En consecuencia, no se precisa ser un genio para concluir que, si bien la corrupción implica a toda la sociedad, las causas de su existencia conciernen solo a quienes deciden la política del país, de manera que la solución del problema depende esencialmente de ellos.

Lástima que en Cuba la impunidad del poder político es lo único que alcanza magnitudes tan colosales como la corrupción, quizás mayores. Razón por la cual el principio del fin de la corrupción solo se producirá cuando desaparezca el sistema que la potenció y que la sostiene. Por el momento todo indica que tendremos corrupción para rato

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AS CASTRO PREPARES TO LEAVE OFFICE, TRUMP’S CUBA POLICY IS A ROAD TO NOWHERE

By Jon Lee Anderson

The New Yorker, March 18, 2018

Original Article: As Castro Prepares to Leave 

The year 2018 is a seminal one for Latin America: two-thirds of the region’s people will choose new national governments, and the citizens of Communist Cuba will be among them. Last Sunday, the island held parliamentary elections to elect a new roster of deputies for the National Assembly of the People’s Power, Cuba’s parliament. It was the penultimate step in a series of complex voting exercises that make up Cuba’s version of political democracy. Twelve thousand ward delegates had already been chosen in a public ballot in November. Next, in a historic final step, scheduled to take place on April 19th, the six-hundred-and-nine-person National Assembly will vote for a leader to replace Raúl Castro, who is now eighty-six and intends to vacate the Presidency. (He has served two five-year terms, which he has declared to be the limit for the office.) Once he does, someone other than a Castro will rule the island for the first time since 1959; In 2006, Raúl succeeded his ailing brother, Fidel, in office, and officially assumed his duties in 2008. Castro’s likely successor is the Vice-President, Miguel Díaz-Canel, a fifty-seven-year-old, second-generation Party stalwart. It’s always possible that someone else will emerge; a number of Castro heirs presumptive have fallen in the past. But it seems improbable now. Díaz-Canel has been in his job for five years, following stints as a provincial Party chief, so his selection would telegraph a message of steadiness to Cuba’s citizens and to the outside world.

In any event, Castro will remain the secretary-general of the Communist Party, meaning that he will continue to be the maximum arbiter of political life in Cuba. Given his age, however, he may not stay in the post for long. He is said to be planning to move to the city of Santiago, on the eastern end of the island, not far from the farmlands where he and his brother were born. Fidel’s ashes are encased in a boulder in a cemetery in Santiago, and Raúl’s final resting place will be in a mausoleum in the nearby Sierra Maestra mountains, where the Castros fought the guerrilla war that brought them to power.

………………………………….

Conclusion:

For much of the past two decades, many of nation’s economic needs were provided for by oil-rich Venezuela, but that supply has been dropping, and, particularly if Maduro loses power sometime soon, Cuba will need a new partner. Coinciding with Trump’s pullback, the Russians, for one, have exhibited a growing interest in revitalizing their own presence on the island. Moscow has resumed oil shipments to Cuba, for the first time this century, and other export and infrastructure deals are under way.

Trump’s bullying only makes it more likely that the Cubans, with or without a Castro, will do what they have done for the past fifty-nine years: exhibit stubborn pride and, if necessary, forge tactical alliances with any of America’s geostrategic foes who might be willing to watch their back.

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CUBA ABRE SU PRIMER MERCADO MAYORISTA DESTINADO SOLO A COOPERATIVAS PRIVADAS

EFE,  17 de marzo de 2018 01:15 PM

Original Article: MERCADO MAYORISTA

LA HABANA

Mercabal, el primer mercado mayorista de Cuba, abrió el sábado sus puertas en La Habana destinado inicialmente solo a cooperativas privadas no agropecuarias y con la promesa de extenderlo a los demás trabajadores autónomos de la isla, informa el diario oficial Granma en portada.

El mercado cuenta ya con 35 clientes, que tienen acceso a un descuento del 20 por ciento del precio de venta minorista en productos como frijoles, cigarros, refrescos, cervezas, azúcar, sal, confituras, hamburguesas y salchichas, muy demandados en los restaurantes, cafeterías y bares del sector privado.

El pollo, uno de los alimentos más consumidos, se rebajará hasta un 30 por ciento respecto a su precio en la red minorista, indica Granma, que reconoce que el gobierno cubano responde así a “uno de los reclamos más reiterados de quienes ejercen las nuevas formas no estatales de gestión en el país”.

Localizado por ahora solo en la capital del país, los próximos mercados mayoristas abrirán “de forma paulatina” en el resto de la isla, “una vez que esta propuesta inicial esté en óptimo funcionamiento y en dependencia de los lugares donde más trabajadores por cuenta propia existan”, señaló la ministra.

En Cuba existen hoy más de medio millón de trabajadores privados o “cuentapropistas”, acogidos a las categorías de trabajo permitidas por el gobierno cubano.

Más de 12,000 son socios de cooperativas no agropecuarias, que ya suman unas 420 en todo el país, en su gran mayoría dedicadas a la gastronomía, el comercio, los servicios, la construcción y la industria.

Ubicado en el municipio habanero de Plaza de la Revolución, Mercabal abrirá de lunes a sábado con productos de diez proveedores directos, que reabastecerán el mercado según los pedidos mensuales de los clientes.

Para poder contratar los servicios de la nueva instalación los autónomos deben tener actualizada su ficha de cliente y poseer una cuenta con tarjeta magnética, emitida por el estatal Banco Metropolitano.

La ampliación del trabajo privado -donde se incluyen las cooperativas no agropecuarias- en el 2010 ha sido una de las reformas clave del gobierno del saliente mandatario cubano Raúl Castro para actualizar el modelo socialista y reducir las abultadas plantillas del sector estatal.

Desde agosto, la isla comenzó un proceso de reordenamiento del “cuentapropismo”, dentro del que paralizó temporalmente la entrega de licencias a restaurantes privados y casas de renta turísticas, entre otras actividades, para frenar ilegalidades, “desviaciones” y “corregir deficiencias”.

Las licencias congeladas son, precisamente, las más demandadas del sector.

A pesar de que prometió que no mantendría “por un período de tiempo muy largo” esta medida, el Gobierno cubano aún no ha retomado la entrega de autorizaciones a los autónomos cubanos, que ya representan el 12 por ciento de la fuerza laboral del país.

  

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CARMELO MESA-LAGO. UNA APOSTILLA SOBRE SALARIOS, PENSIONES Y ASISTENCIA SOCIAL EN CUBA

Original Article:  SALARIOS, PENSIONES Y ASISTENCIA SOCIAL EN CUBA.

ELESTADOCOMOTALMARCH 10, 2018

He leído con interés y provecho el artículo de Lázaro González y Yisel R. Pérez: “El sol no se puede tapar con un dedo,” y concuerdo con la mayoría de sus puntos y recomendaciones. El motivo de este artículo es aportar evidencia estadística que refuerza sus argumentos demostrando el declive en el salario y la pensión reales (ajustadas a la inflación), así como el recorte en la asistencia social en términos de beneficiarios y gastos.

Salario medio real en el sector estatal

 Las estadísticas y la mayoría de los artículos que se publican en Cuba se refieren al salario medio nominal en el sector estatal, no ajustado a la inflación (índice de precios al consumidor: IPC), muy diferente al salario real, ajustado de esa forma. Esto da la ilusión que los salarios han crecido consistentemente desde su punto más bajo en 1993, en el peor año de la crisis económica de los años 90. Si comparamos el salario nominal ese año (182 CUP) con el de 2016 (740 CUP), habría aumentado cuatro veces. A más del problema de la falta de ajuste, este cálculo toma el punto más bajo de la curva y, por supuesto, siempre aumenta. Aunque no exactamente igual, la CEPAL en su último informe regional, comienza la serie del salario medio real en 2010 y Cuba salta 54,8% entre ese año y 2016, con creces el mayor aumento en América Latina. (1). Pero otro resultado se obtendría si se hiciese una comparación mucho más larga, por ejemplo, entre 1989—el año anterior al comienzo de la crisis—y 2016. Esto es lo que justamente hacemos abajo.

 

Aquí mostramos la serie completa del salario real entre 1989 y 2016, el último año en que tenemos el salario nominal medio estatal y el IPC. Puede observarse que en 1993 el salario era un décimo del nivel de 1989; después con la recuperación aumenta consistentemente, pero todavía en 2016 era 39,3% del nivel de 1989, o sea, un 60,7% menor, esto quiere decir que el poder adquisitivo se contrajo en ese porcentaje. Si se observa el año 2010, usado como base por la CEPAL, el salario aumenta de 27,1% a 39,3% pero esta es una visión a corto plazo que no se conforma con una mirada a largo plazo (2). Cuba es el único país en América Latina donde el salario en el sector estatal (la enorme mayoría en el país) se fija centralmente; la ley no estipula su ajuste al IPC y concede gran discrecionalidad al gobierno para hacerlo.

El salario medio estatal mensual de 687 CUP en 2015, equivalía a 27 dólares, insuficiente para cubrir las necesidades básicas (excluyendo educación y salud), mientras que el salario mínimo de 225 CUP era una cuarta parte del ingreso necesario para cubrir necesidades básicas. (3)

Pensión media real

Las mismas observaciones hechas al salario valen para las pensiones. El gráfico abajo presenta la evolución de las pensiones reales.

 

La ley no determina el ajuste de la pensión al IPC (uno de sólo cuatro países en América Latina) y, como en el caso del salario, el gobierno tiene amplia discreción para hacerlo. En 1993, la pensión real era 16% del monto de 1989; 22 años después se estabilizó en la mitad del nivel pre-crisis. La pensión media nominal en 2016 era de 277 CUP mensuales, (4) equivalente a 11 dólares, insuficiente para cubrir las necesidades básicas alimenticias. Los jubilados y pensionados se encuentran entre los grupos más pobres en la población; (5) para subsistir deben recibir remesas, ayuda de familiares o trabajar como cuentapropistas.

Prestaciones de asistencia social

 Aunque ONEI no publica estadísticas de pobreza (el único país latinoamericano que no lo hace), esta ha crecido en el último decenio por varias razones: el salario medio estatal real cayó 61% y es insuficiente para cubrir las necesidades básicas; la pensión media menguó a la mitad y no satisface las necesidades alimenticias básicas; el racionamiento se ha reducido por la extracción de la libreta de bienes a precios subsidiados que se venden en el mercado a un precio dos o tres veces superior; el aumento de precio en las TRD que tienen una ganancia en torno al 200%; el incremento del precio de los servicios públicos (electricidad, agua, gas, transporte), así como de los alimentos en los mercados libres; la eliminación de comidas subsidiadas en cafeterías para trabajadores (los cuales reciben una suma insuficiente para comprar un almuerzo); y el deterioro en el acceso y la calidad de los servicios de salud. (6). Por tanto, la asistencia social debió de expandirse a fin de proteger a la población vulnerable contra esos problemas. Sin embargo, ocurrió lo opuesto como se muestra abajo.

 

Entre 2006 y 2016, el gasto de asistencia social como porcentaje del presupuesto se contrajo a menos de un cuarto, de 2,2% a 0,5%, mientras que el número de beneficiarios como proporción de la población decreció a menos de un tercio, de 5,3% a 1,6%. Esto, en parte, se explica por un “Lineamiento” aprobado en el VI Congreso del PCC en 2011 que terminó la asistencia social a los beneficiarios con una familia capaz de ayudarles. Detectar y eliminar la asistencia a los que no la necesitan es una política universal pero, en el contexto cubano de expansión de la pobreza y un nivel generalizado de necesidad, dicha política no parece razonable. El Cuadro 1 muestra otros recortes en la asistencia social. La asistencia a adultos mayores y discapacitados disminuyó en 62%, a las madres con hijos discapacitados en 51%, y a los que necesitan atención a domicilio en 65%.

¿Por qué estos recortes que provocan efectos tan adversos?

Las autoridades cubanas repetidamente han reconocido que los salarios actuales en el sector estatal, que comprende 75% del empleo, son insuficientes para satisfacer las necesidades de la población. En un intento de paliar este problema en 2010-2011 se estimó el empleo innecesario en el sector estatal (“nóminas infladas”) y se anunció que dicho excedente sería despedido: 500,000 en 2010, 1 millón en 2011 y un total de 1,8 millones en 2015. Los afectados encontrarían empleo en el sector no estatal (cuenta propia, usufructo de la tierra y cooperativas urbanas-CNA) que se extendería. En total se despidieron alrededor de 500.000 empleados estatales superfluos, y en 2016 se anunció oficialmente la terminación de los despidos.  Ocurrió una expansión del sector no-estatal, pero no suficiente para dar empleo a los  desocupados: el cuentapropismo creció de 147.000 a 567,000 entre 2010 y 2017, mientras que los usufructuarios llegaron a 174.000 y los miembros de las CNA a unos 11.000 (no se conoce el número de empleados de los últimos dos grupos, pero no es sustancial), en total no agregaron mucho más de 800.000 nuevos puestos. Por ello queda alrededor de un millón de excedentes. (7). En vez de acelerar el tamaño del sector no estatal, en 2017 se hizo lo opuesto, imponiendo restricciones a su crecimiento. En vista a ello los salarios en el sector estatal siguen a la zaga.

La reducción de las pensiones y la asistencia social es en gran medida el resultado del recorte substancial del gasto social  (pensiones, salud, educación, vivienda y asistencia social). Este alcanzó su cénit en 2007-2008 cuando equivalió a 55,4% del presupuesto estatal y 36,6% del PIB. En 2016 había menguado a 47,1% y 28,1% respectivamente, o sea, un declive de 8,3 puntos porcentuales menos del presupuesto estatal y 8,5 puntos del PIB. El gasto de pensiones también menguó con la reforma de 2008 que aumentó las edades de retiro para ambos sexos en cinco años (de 60 a 65 años para los hombres y de 55 a 60 años a las mujeres), con lo cual atrasó el retiro y mermó el número de nuevos pensionados (el total se ha reducido porque las muertes superan a los nuevos jubilados). Invirtiendo el aumento progresivo de jubilados por decenios y a pesar del agudo proceso de envejecimiento, en 2015 bajó el número de jubilados en 8.358. (8). La disminución del gasto social también afectó a las prestaciones de asistencia social. En este caso ayudadas por la medida explicada de los Lineamientos.

En conclusión, no es posible reducir más los salarios, las pensiones y las prestaciones de asistencia social, por lo que es imprescindible aumentar la producción y la productividad. El único camino es acelerar y profundizar las reformas estructurales (cambiando las restricciones impuestas en 2017),  a fin de obtener los recursos necesarios para implementar políticas salariales y sociales que alivien la situación actual. Este es el reto más serio que enfrentará la nueva dirigencia del país cuando ocurra el cambio generacional el próximo abril.

Carmelo Mesa-Lago, Catedrático Distinguido Emérito de Economía y Estudios Latinoamericanos Universidad de Pittsburg, profesor/investigador visitante en 8 países y conferencista en 39. Autor de 96 libros/monografías y 318 artículos/capítulos de libros publicados en 7 idiomas en 34 países; fundador y editor de Cuban Studies por 18 años. Libros más recientes: Buscando un Modelo Económico en América Latina ¿Mercado, Socialista o Mixto? Chile, Cuba y Costa Rica (Caracas: Nueva Sociedad, 2002); Cuba en la era de Raúl Castro: Reformas económico-sociales y sus efectos (Madrid: Colibrí, 2012); Sistemas de Protección Social en América Latina: Cuba (Santiago: CEPAL, 2012); coautor de Voces del Cambio en el Emergente Sector No Estatal en Cuba, La Habana, Cuba Posible, 2016).

NOTAS

1 CEPAL, Balance Preliminar de las Economías de América Latina y el Caribe, 2017, Santiago (cuadro A-21).

2 El salario estatal se basa sólo en el peso nacional (CUP) y excluye desembolsos en pesos convertibles (CUC) y otros pagos extra, por lo que subestima el monto. Pero la inflación está también subestimada pues se basa sólo en los bienes y servicios en CUP y excluye el CUC.

3 P. Monreal, “El salario en Cuba: los falsos paradigmas y la terca realidad”, Cuba Posible, enero 2016, p.1-16.

4 ONEI, Anuario Estadístico de Cuba 2016, Edición de 2017, La Habana cuadro 7.14.

5 M. Espina Prieto, Políticas de Atención a la Pobreza y la Desigualdad. Examinando el Rol del Estado en la Experiencia Cubana, Buenos Aires, CLACSO-CROP, 2008.

6 C. Mesa-Lago, “El estado actual del bienestar social en Cuba”, Cuba Posible, La Habana, 2017.

7 C. Mesa-Lago, R. Veiga, L. González, S. Vera y A. Pérez-Liñán, Voces del Cambio en el Emergente Sector No Estatal en Cuba, La Habana, Cuba Posible, 2016, 2 Vols.

8 ONEI, Anuario Estadístico, 2016, cuadro 7.14.

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CUBAN DRAFT RULES PROPOSE CURTAILING FLEDGLING PRIVATE SECTOR

Sarah Marsh  FEBRUARY 22, 2018 / 7:08 PM

HAVANA (Reuters) – A draft of new Cuban economic regulations proposes increasing state control over the private sector and curtailing private enterprise, a copy of the document seen by Reuters showed.

The tightening may signal that the ruling Cuban Communist Party fears that free market reforms introduced eight years ago by President Raul Castro may have gone too far, amid a broader debate about rising inequality.

The draft document, circulating among Cuba experts and private entrepreneurs, goes beyond proposed restrictions announced in December. For example, it would allow homes only one license to operate a restaurant, cafeteria or bar. That would limit the number of seats per establishment to 50. Many of Havana’s most successful private restaurants currently hold several licenses enabling them to have a seating capacity of 100 or more.

There is uncertainty over the direction of economic policy generally as Cuba prepares in April to mark the end of six decades of rule by Castro and his older brother Fidel, who stood down formally as a leader in 2008. That has been heightened by U.S. President Donald Trump partially rolling back the Obama-era detente with the United States.

The head of the Communist Party’s reform commission, Marino Murillo, announced restrictions on the private sector in December, some of them included in the new document. But the draft regulations go into greater detail and show how far the push back could go.  “The decree strengthens control at a municipal, provincial and national level” over the private sector, according to the 166-page document, dated Aug. 3, 2017 and signed by Marcia Fernández Andreu, deputy chief of the secretariat of Cuba’s Council of Ministers.

The document said resolutions were drafted by the reform commission and were being sent to provincial and national organs of administration for consultation. Reuters could not independently verify its authenticity. Cuban authorities did not immediately respond to a request for comment.

Some analysts said they suspected the draft was leaked to gauge public opinion and could be revised.

The regulations state that measures that will apply to infractions will be more “rigorous.”

The government has increased criticism of wealth accumulation over the past year and gone on the offensive against tax evasion and other malpractices in the private sector.

The number of self-employed Cubans soared to 567,982 as of the middle of last year, versus 157,731 in 2010 at the start of the reform process designed to boost Cuba’s centrally planned economy.  Private sector workers now make up roughly 12 percent of the workforce, but the prosperity of some Cuban entrepreneurs, particularly those working in the tourist sector and receiving hard currency, has become a source of tension. The average state monthly wage is $30, the same sum a B&B owner can charge for a night’s stay.

The restrictions unveiled by Murillo in December included limiting business licenses to a single activity per entrepreneur.

Some entrepreneurs had hoped they could get around that by transferring business licenses, for activities as diverse as manicures or bookkeeping, to family members.

It was unclear from the draft document whether the measures would be applied retroactively.

Murillo said in December the number of categories in which self employment would be permitted would be reduced and in some cases consolidated. For example, manicurist, masseuse and hairdresser would fall under an expanded beauty salon license.  The draft lists 122 categories, down from approximately 200 previously.

The document calls for a new division under the Ministry of Labour to administer and control self-employed work.

 

 

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