• Submitted by: manso
• Editorial Articles
• 12 / 21 / 2010

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During a frank, four-day exchange with deputies of the national parliament about economic reform projects, Raúl Castro and Marino Murillo, Cuba’s point man of the reform, said that loss-making state companies are running out of time and will be gradually stripped of subsidies.

“We have companies in Cuba that have had 10 years of losses,” Murillo told the deputies. “Either they get out of their losses or we shut them down. It’s not possible to have four or five consecutive years of a company making losses and the state subsidizing the losses. This makes no sense.”

The discussions in the run-up of a rank-and-file congress of the Communist Party in April were unusual. The year-end session of the Asamblea Nacional del Poder Popular included four days of plenary sessions, compared to typically one or two
days. Also, in contrast to its typically ceremonial meetings, the parliament had a true working session, with Murillo giving an extended PowerPoint presentation about the outlines of the reform, and deputies asking questions,challenging and making proposals.

The Asamblea Nacional de Poder Popular discussed the five-year plan using the 291 points of an “outline” that had been previously approved by the Politburo of the Communist Party and the Council of Ministers. According to Murillo, beginning in May, the outline was prepared by Raúl Castro and Politburo member Julio Casas Regueiro and 11 work groups consisting of Central Committee staff, Economy Ministry staff, and other economic experts, coordinated by Murillo. The groups came up with four work versions. On Sept. 29, the Executive Committee and Politburo of the party approved the current version.

In addition to Murillo and Finance Minister Lina Pedraza, Raúl Castro himself threw his whole weight behind the session, confronting resistance, providing hands-on economic information, speaking frankly, telling anecdotes and even making jokes. Granma published verbatim transcripts of the session.

In one instance, Castro told the joke that just after its war with the United States, an impoverished Vietnam asked Cuban coffee experts to help set up coffee production. Three decades later, Vietnam has become a coffee exporter while Cuba has become a coffee importer. So a Vietnamese expert asks a Cuban colleague what happened. “What did the Cuban expert respond?”, Castro asked. “The blockade.”

Other reform outlines mentioned during the session:

• State companies will gain more autonomy, Murillo explained, by curtailing the involvement of government ministries and city or provincial councils. State companies will be allowed to use part of their profits to set up funds aimed at company development, investment and providing stimulus payments,performance-oriented salaries and other benefits to employees. At the same time, Murillo emphasized that the “socialist state enterprises” will continue to be central to the economy and still be subject to central planning.

“The socialist state enterprise will determine the economy,” Murillo said. “What happens is that we must put it to work within a planning process and an economic management model that won’t tie it down, and that gives it all the possibilities to be efficient.” High value-added state companies, he said,will be given special treatment within the new economic arrangement. He probably referred to tourism-related, nickel, oil or biotech companies.

• In another significant announcement, Murillo and Castro said that the government will not regulate prices private businesses will charge their clients. ”Regulating the relations between state and individuals” will continue to be a mainstay, President Raúl Castro told deputies of the National Assembly during the year-end session. “But the state doesn’t have to interfere in the relations between individuals; neither the government nor anyone else,” he added, to the applause of the parliament.

• Another reform cluster is aiming at empowering municipalities. The largest share of the new income taxes generated by the new private companies will be collected by cities, not the national government, the economy minister said.

• For the first time, the government publicly discussed details about the future role of member-owned cooperatives. Five points of the outline concern cooperatives, Murillo said, suggesting that they will be expanding beyond agriculture, be allowed to join forces to form coop-owned cooperatives that offer services, enjoy income tax breaks, and not be allowed to lease their property to third parties. He said the idea behind allowing second-grade cooperatives is not to create large-scale entities but to allow agricultural co-ops to take advantage of economies of scale, for example in servicing machines and vehicles. Non-agriculture co-ops will be allowed to become active in “all activities that are needed,” Murillo said, adding that gastronomy and retail services are first priority.

CUBA STANDARD:This entry was posted on Sunday, December 19th, 2010 at 11:14 pm

Source: http://groups.yahoo.com/group/CubaNews/message/119735