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A Lot Done but Much More to Do: An Assessment of the Cuban Economic Transformation So Far
Abstract
The aim of this paper is to provide a brief summary of the last two years of the process of transformation in Cuba from a primarily economic perspective. It consists of five parts: an introduction, which makes it clear that the changes are not merely economic; a first section that deals with the urgent needs of economic development; a second section that seeks to highlight how the process has been gaining in depth and scope and now focuses more on how to define the paths of development than on survival; a third section that evaluates the results in two perspectives, from the dynamics of the process of change and from the country's economic performance in recent years (although with restrictions due to data availability); and conclusions.
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The results of which are ‘inputs’ into the decision-making process.
It should be remembered that in the middle of the 1990s a similar exercise was carried out and the number of state institutions with the rank of a ministry was reduced from 50 to 25.
Of the five million workers in the country more than 50 per cent are concentrated in the budgetary sector.
Also in the 1990s there was an explicit plan to separate the state functions from business, which was not achieved, although it should be noted that the Ministry of Tourism managed a way to run very close to that goal, which was unfortunately lost in later years.
The differential between wages paid by foreign companies to the Cuban employment offices and the salaries those offices pay to the Cuban employees of the foreign firms, is a brake on the expansion of real demand. It also has other costs associated with the ‘rentier’ character of the measure, as well as issues associated with corruption, etc. Moreover, the overall change in the scenario of the country, with the impetuous dynamic of a non-state sector, especially the self-employed, concentrated in activities of low productivity that can earn large incomes (between 50 and 100 Cuban pesos per day), while the workers in the foreign companies, almost all located in strategic sectors (with salaries that do not exceed 700–800 Cuban pesos per month) questions the economic and political desirability of maintaining such a situation.
The role of planning is not being questioned here, it is only being affirmed that it will remain one of the basic elements of future socialism and, as such, requires a defined institutional framework.
Of which, the promotion of productive chains is only part.