Shape up or shut down, Havana warns businesses
Unproductive and/or inefficient state-run enterprises were warned that they could be shut down or turned over to self-employed workers if they didn’t mend their ways.
The warning came in an article Monday (Jan. 13) in the Communist Party daily Granma, written by the newspaper’s Camaguey correspondent, Miguel Febles Hernández, and undoubtedly cleared by the party’s leadership.
Titled “The heavy ballast of economic losses,” the article reminds readers that the 2011 Economic Guidelines of the Party and Revolution provide that “the state-run enterprises or cooperatives that consistently show financial losses in their balance sheets or an insufficient labor force, that cannot pay with their assets the obligations they have contracted, or that present negative results in financial audits, will be submitted to a process of liquidation or can be transformed into other forms of non-state management.”
Although almost three years have passed since the Guidelines were approved by the Sixth Party Congress in April 2011, “there are still enterprises, especially in the farm sector, whose economic-financial status is pitiful,” the article says, “and in some cases, despite repeated warnings, do not show a radical change in the short run.”
Some executives are still relying on government subsidies to bail them out, “as if the State were a life preserver to set aright their failure to execute the plans and control their business expenditures.”
“Always waiting for deliverance ‘from above’ that might pull the chestnuts out of the fire, many management teams fall into immobility, routine, negligence, mediocrity and lack of initiative, phenomena that negatively affect the performance of any organization,” the article continues.
Those managers clearly have no idea “of how to come out of their quagmire. They only propose temporary fixes that barely serve to suspend the problems, without solving them once and for all.”
“This state of affairs will change little if we don’t eliminate the unproductive personnel that still abound in the companies, the payment of wages for no productivity, the inadequate handling of bank loans, the idle inventories, the cost of lost animals or harvests, and the unending chain of unpaid bills.”
“The issue goes beyond a simple rearrangement,” the article explains. “It is a question of linking the revenues to the results obtained, to raise productivity, diversify production and services, to improve efficiency and seek new alternatives and variations to get the most of the potential of each entity.”
“Only […] with greater autonomy and greater responsibility, the companies can ‘oxygenate’ their accounts and generate profits that ensure self-generated development, comply with the tax laws and contribute to the progress and social welfare of the localities where they operate.”
The article ends by saying that “the socialist state enterprise is and will be the very heart of the country’s structural base. To make it into a strong and organized entity should therefore be everyone’s greatest endeavor.”
