Between illusions and doubts

By Elsa Claro

If there’s a surplus of anything in Cuba, it is a surplus of opinions, and – as expected on the topic of changes as extensive as those proposed by the government headed by Raúl Castro – opinions are universal from the usual coffee-shop theoreticians and the citizens accustomed to stating their views on any corner, even if they insist that they’re living under duress.

A brief sample of the reactions to the announcements of self-employment and the development of PYMES [small and medium enterprises] shows that information is lacking. Many complain there are not enough data on the possibilities of joining the innovative companies. The same happens with the possible legalization of work now performed surreptitiously, even with the added incentive that the self-employed worker will receive retirement guarantees, just like any salaried employee.

It was suggested that the personal income tax will range from 10 to 40 percent, depending on the type of activity, but the detail is half-hidden between news and circumlocutions. When will it be 15 or 30? The truth is that details are missing for those people interested. Information is missing even in the offices that will issue permits to about 250,000 people in the coming months. The predicted figure is an estimate that, if confirmed, would allow a significant increase in tax revenues of nearly one billion dollars by the end of 2011 – if everything works out right, of course.

If this comes to pass, the income will be no small change, because a higher tax revenue, along with the savings in wages, means a lot of cash going into state coffers, which urgently need this income to continue providing free services and establishing material factors that will allow a good performance by inner-city or agricultural cooperatives, or the individual exercise of various trades.

There is fear that the supplies necessary to give life to or maintain those small businesses or trades will not be available. Also in the air are a couple of issues: the delay in knowing when and in what amount the National Bank shall grant loans, and the non-existence of wholesale stores. The absence of both can hinder that first impulse required for all businesses, however small.

Regarding credits, some windows might be opened. In an article titled “China can help Cuba’s reforms and benefit from them,” written by Heiko Khoo of the Xinhua agency, the author outlines the Asian giant’s ability “to satisfy without any problems all the needs for consumer products posed by the Cuban people, and to do so at low cost.” According to Khoo, “there should be no limit to boldly take on [China’s] collaboration, investment and cooperation with Cuba.”

Similarly, “the European Commission is willing to accompany and facilitate the process of economic reforms, if the government so wishes, and in the modalities jointly defined, which could be very varied,” said Javier Niño-Pérez who represents the EU in Cuba and, according to press reports, is weighing to deliver US$2.8 million in credits. Spain, in particular, offered US$5.5 million under favorable conditions and with a similar purpose.

Far as is known, the Cuban authorities are cautious about such offers, but are open to those made by countries in the region, including Brazil, whose foreign minister, Celso Amorim, promised advice for the development of small and medium enterprises.

Some Cuban economists (Pavel Vidal and Omar Everleny Pérez) believe that if the supplies to be marketed by the state risk being insufficient, it would be advantageous to promote microcredits with international cooperation, because “that would mean a flood of foreign exchange that would enable the self-employed to gain access to imports.”

This chapter has many potential paths and it is expected that, short-, medium- or long-term, the proposals mentioned above will have an echo. Those who recommend implementing them cite the deficits created by the problems Cuba has had in the past two years: huge expenses to repair the damage and compensate the people affected by three major hurricanes in 2008, the brutal decline in the price of nickel in the international markets, and other major impacts of the global crisis.

All that forced Cuba to reduce imports and resulted in a delicate financial situation that, fortunately, is slowly improving. Of course, we cannot rule out surprises from official circles, which might be similar to or better than the measures suggested by the academics.

In an article for the magazine Lay Space of the Archdiocese of Havana, the above-mentioned experts, referring to the slowness of the changes that were started and are just taking shape, considered that: “The macroeconomic and financial decline since 2008 forced [the government] to bring adjustments to the fore, and relegate structural changes to the background. Another element is the complexity of unraveling and designing activities to unleash the productive forces in a handcrafted economy, where discretion has priority over the rules, institutions and respect for regulations.”

They also consider that “several reforms have been studied and experimented upon, but it seems that this has ended up being more complex than initially thought.” It may be, not just because, as Raúl Castro warned, there are some within the structures who are opposed to changes that involve even non-state forms of ownership, but also because some officials choose not to copy the experiences of other countries. Besides, not even at a theoretical level are there alternatives to serve as a beacon or prior contribution to certain guarantees.

José Ramón Vidal, coordinator of the Program of Popular Communication of the Martin Luther King Center in Havana, also stated that if the changes are implemented “from technocratic positions, without a real consensus that takes into account as far as possible the legitimate interests of various social sectors, [the changes] can be lethal to the socialist project.”

There is a right to appeal if the person laid off considers the process by which he lost his job to be inappropriate, and there is a fear of widespread mechanistic experiments conducted by functionaries who use a-priori percentages to determine how many workers should be laid off from a company or sector, without a thorough analysis. Such actions might trigger so many lawsuits that the process of change could be slowed down rather than speeded up.

To sum up, the highest expectations continue to revolve around the lack of information, whether or not there will be enough supplies to start newly legalized activities, and whether the amount of loans for anyone who wants or needs them can start up an enterprise. Many fear that if they don’t get that first push, their only option will be to attach themselves to people who have already accumulated fortunes, often ill-gotten.

Another question deals with qualification. In a country that has the continent’s highest rate of university graduates and technicians, it is natural to want to open areas of activity that so far have not been contemplated. In other words, we’re asking for a broadening of the self-employment options, Professor Everleny told Progreso Weekly. Not an easy issue to resolve, among other factors because most of the technical and professional workforce in the country consists of women. Anyway, the point is that the 178 current possibilities do not include some skills and some job descriptions are confusing.

Every change involves rejections and adjustments, sometimes strong. For Cuba, which last year had the lowest unemployment rate in the world (1.7 percent) and on only two items, health and education, invests 46.7 percent of the state budget, to make the changes necessary to update a social project it refuses to abandon, this can be hard. Miracles, to our knowledge, are nonexistent or capricious. Still, even the worst critics of the steps taken consider that the rejuvenation we are experiencing, through very complex pathways, is mandatory.

Among the encouraging news is the visit of Ricardo Cabrisas, vice president of the Council of Ministers, first to China, prompting comments such as the one quoted above, and to Russia, where he discussed with Deputy Prime Minister Igor Sechin the programs to restore the capacity of rail and sea transport and the development of civil aviation in Cuba, and – very important for the purpose before us – an emphasis on materials and equipment for electrical and automotive energy, including spare parts, and agricultural support programs and construction on the island

The projects described today or earlier are not the only projects, including the investment plans, being discussed for the island. But that will be the topic for a separate commentary, after the ongoing changes are confirmed. Details the people are waiting for to plan their future to best advantage.