The Achilles heel of 2010

By Mercedes Varona Graupera

Thetis, a divine mother with understandable concerns, submerged her beloved son in the fountain at Thesalia hoping to make him invincible. She plunged his body into the magic waters, but her protective instincts caused her to hold the baby by the heel to keep him from disappearing in the depths to which she exposed him.

A comparison with the economic plan projected by Cuba for 2010 is not idle. The Cuban state, justly preoccupied with protecting its achievements, keeps a firm hold on the economy when it states that the productivity problem is not likely to be reverted next year. Lack of productivity led to a decline in growth of 1.1 percent in 2009.

The changes that will create a reanimation of the productive forces and the ensuing growth of productivity can only be instituted by a central political will. This issue – no other – is key to the actualization of the Cuban economic model.

Direct causes of the decline in productivity are padded payrolls, underemployment, and an increase of workers in unproductive jobs. Without a doubt, these three problems are of vital importance and will have to receive special attention, although their solution may mean only partial relief.

The outreach of the measures that can be implemented in this area will be limited by the protection the state has always devoted to the workers who are made redundant, for example, when payrolls are deflated or a sugar mill is closed. Part of the unproductive labor is a consequence of the state’s concern over the material and spiritual well-being of its citizens.

The increase in labor productivity is both the origin and the result of the growth in productive forces and the system of interests. The question is to liberate those forces from the restrictions that bind them and to acknowledge the system of interests that exists in society. This will allow a reversion to the trend that raises productivity to the levels demanded by the economy.

The steps taken in agriculture regarding the granting in usufruct of idle lands, and some measures regarding the sale of surpluses in the open markets, as well as the revision of some prices, are factors (albeit insufficient) that have a positive effect in the issue that concerns us. The agricultural sector grew by 4.5 percent last year.

Industry, on the other hand, decreased by 2 percent in the same period. This fundamental sphere of the economy was an important part of the causes that determined the low growth of the GDP in 2009, which reached only 1.4 percent. To liberate the productive forces in this sector means to extract from man his productive potential despite the material limitations, taking into account the real existence of his individual and collective interest in improving the standard of living.

In this regard, an increase in the nominal salary (which rises as the real salary decreases) is not as important as establishing a true and direct correspondence between what a worker receives and what he produces. The essence of productivity is that the worker achieve values that are greater than the salary he receives. It will be up to the worker himself to make his output greater and more efficient; that way, efficiency will stop being only a slogan.

Returning to mythological Greece, we might wonder why Thetis did not dip her hands in the fountain, knowing (as we do now) that having an unprotected heel caused Achilles his death. Luckily, we still have time to get our hands wet.

A change in the ownership of small state-run companies that provide nonstrategic goods and services to collective ownership with a majority participation by the state could give true stimulus to the productive forces and labor productivity. This way, man’s desire to improve his standard of living would match the state’s interest in improving the well-being of society as a whole.

In addition to the measures already adopted in the agricultural/cattle sector, we could organically link distribution to production, so the producer’s interest will extend to the realization of the product that goes to the supply-and-demand market.

This could lead to an increase in the agro surplus and might mean a reduction of the prices, as the producer is brought nearer to the final consumer. The funds set aside for this sector in the economic plan for 2010 could serve for this purpose.

It is important to find ways for an increase in jobs despite the financial limitations ahead. New jobs in the productive sphere could mean a relief to the funds budgeted by the state for subsidies.

To this end, the state should study the granting of licenses for self-employment and the granting of privileges to those foreign investors who contribute to that end. The possibility of granting them access to the domestic market, in national currency, should be evaluated.

The outlines of the economic plan for 2010 have been wisely drawn, in terms of exports, import substitution, the investment process, organizational changes in the agro sector, and others.

In the words of Lenin, “the most important factor, the decisive factor for the triumph of the new social regime is, in the end, productivity.”

Mercedes Varona Graupera, a Cuban citizen, holds a degree in economics.