Lunes, 19 de Noviembre de 2018
Última actualización: 17:55 CET
Constitutional reform

Cuba: The Market, Simultaneously Recognized and Attacked

(ALEN LAUZAN)

In a few days, at a meeting of Cuba's "Parliament", the details of the revisions to the Communist Constitution will be announced, and the centerpiece has come into focus: the president of the Council of State will no longer be the head of the Government, but rather headed by a Prime Minister.

In this regard, a priori, the reform measures would resemble those of the state scheme adopted by the Soviet Union after Stalin's death, when the main positions were separated. A famous troika comes to mind: the president of the Supreme Soviet (Council of State), Nikolai Podgorny, was the head of state; the head of the Government was the prime minister, Alexei Kosiguin; but the country's real leader was Leonid Brezhnev, General Secretary of the Communist Party.

But this is no time to speculate, as soon we will know all the details. What it is essential to underscore is that the reformed document will ratify "socialist ownership, by all the people, of the fundamental means of production and planning, as the main component of management," with state companies as the central forces. Crystal clear.

Of course, it is says that the "role of the market and new forms of ownership, including private, will be recognized", in addition to "the importance of foreign investment". Poppycock. Everything is a well-calculated institutional model to sell to the world an image of greater pragmatism, and less Stalinism, in order to attract the foreign investment the island still needs. 

Castro's attack on "the role of the market"

If there really was any willingness to recognize the role of the market and of private property in the constitutional reform announced, there would not be so many steps being taken in the opposite direction at this time.

Instead of facilitating more opportunities for private initiative, a few days ago the regime published, in the Official Gazette, a new package of anti-market measures, featuring harsh restrictions on the private sector, and more taxes. The new straitjacket on productive forces will come into force in December of 2018, and private activities will be reduced from today's 201 to 123; truly a great "recognition" of private initiative. 

It is ludicrous to say that the reformed Constitution will recognize "the role of the market" when the self-employed have just been barred from operating more than one business. Those who today rent part of their homes to tourists, and also offer them breakfast and lunch, will not be able to do so, under threat of prison. And those who have a paladar (restaurant) in Miramar, and another in Central Habana, will have to close one of them.

These entrepreneurs will see their incomes drop, and pay less in taxes to the State. Everyone will end up losing, and poverty on the island will worsen.

Likewise, it will be prohibited to have self-employed workers who appear as owners of a business, but who only represent the real owner. They argue that this favors the "concentration of wealth." They will also be required to show, with documents, the origin of funds used to open any business. 

In addition, the regime will require private taxi drivers in Havana to use stops established by the State, and will cancel licenses for private drivers who do not accept government control.

At the same time, it is not only political repression that is being ratcheted up, but also cultural. Certain TV programs, thus far included in the "package", have been prohibited, as has the hiring of artists not controlled by the regime. 

A pretext to justify this retrograde offensive is that the new economic measures will prevent the use of products and "materials of illicit origin". This is false, as in Cuba there is no wholesale market, and retailers do not have supplies or materials. People have no choice but to get them any way they can. That's where the black market comes in – the only one that keeps Cubans fed and clothed.

That is, instead of recognizing "the role of the market", Castroism torpedoes it. According to official figures, there are 591,456 self-employed professionals in the country, employing some 700,000 employees. Altogether, 12% of the nation's labor force works in the "non-State" sector. This is very low for a country dramatically sunken in poverty. And, the way the political winds are blowing, it will not grow much more.

The more taxes and red tape there are, the less the GDP grows

The dictatorship does not report what proportion of the Gross Domestic Product (GDP) is generated by the private sector. What is unprecedented is that while it accounts for only 12% of the labor force, the regime wants 75% of the total State budget to come from the taxes paid by private companies, who are prohibited from producing industrial goods. They can only offer precarious, primitive services, not professional ones.

The PCC and the Military Junta do not manage to grasp an inexorable, inversely proportional relationship: the more a state wants to charge in taxes, the less GDP grows.

In China, ruled by the same Communist Party of Mao Tse Tung that killed 65 million people, the private sector generates almost 70% of GDP, which is the largest in the world, after the US. There, another criminal, Deng Xiaoping, who ordered the Tiananmen Massacre in 1989, after Mao died, opened the economy up to private capital and launched a subversive slogan in Cuba: "Getting rich is glorious." Not even Adam Smith, or David Ricardo, fathers of the liberal theory of capitalism, went that far.

In 2017, more than 90% of new jobs throughout China were created by private companies, according to the official news agency, Xinjua. Today in China there are 65.8 million individually owned businesses and 27.26 million larger private ones, employing a total of 340 million workers. Almost 80% of jobs in China, and 70% of technological innovation and new products, are thanks to the private sector.

In Vietnam, under the command of Ho Chi Minh's same Stalinist party, which starved the south of the country for 40 years, after his death, in 1986, initiated Doi Moi (Renewal), featuring capitalist-type reform, which has rescued millions of Vietnamese from feudal backwardness and poverty. 

Vietnam's private sector now generates 46% of the country's GDP. The last straw is that the Cubans actually taught the Vietnamese to harvest coffee, and today that country, with privately cultivated land, is the world's second leading coffee exporter, after Brazil, and ahead of even Colombia. Cuba, meanwhile, produces 11 times less coffee than it did 59 years ago.

Of course, the Cubans' future cannot be that of China or Vietnam, where tyrannies that violate human rights prevail. But, with the sad reality of a people mired more and more in poverty, the stark contrast between Castroism's elite and the rest of the Cuban people grows more and more outrageous. 

Living inside their own private bubble, like the rich in a capitalist state, the dictator and the regime's bigwigs deny Cubans their right to create wealth and escape from their dramatic poverty.

Enough "reform" designed to change things... in order to keep everything the same. The liberation of Cuba's productive forces is now a question of life or death.