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Posted June 24, 2008 by publisher in Business In Cuba

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By Marc Frank in Havana | Financial Times

At the recent metal workers union congress in Havana little seemed to have changed since Fidel Castro, former Cuban president, became ill almost two years ago, temporarily handing power to his brother Raúl before resigning and leaving the country’s leadership to him last February.

There was no jockeying among cadres for a piece of privatized industry pie. There was no talk of competition, markets, strikes or other action against management, or turning state-owned businesses into cooperatives. Speeches calling on members to work harder for Cuba, Fidel, Raúl and revolution resounded through the hall as they have for decades.

“The key is in perfeccionamiento empresarial” - perfecting the state company system - read the banner headline in Workers, the trade union federation’s weekly newspaper.

The union meeting was the latest evidence that a debate fostered by Raúl Castro has for now been settled in favor of those who want to improve one of the world’s most statist economies - not dismantle it - using a business model developed when the president was defense minister to improve the performance of armed forces suppliers.

Perfeccionamiento empresarial is based on adopting modern management and accounting practices, often gleaned from the study of private corporations, for state-run companies.

“Perfeccionamiento empresarial has no exact analogy in capitalist economies and is not borrowed from other socialist countries’ models of reform,” Phil Peters, an expert on Cuba at the Lexington Institute in Virginia, wrote in a study of the military’s economic model.

Raúl Castro signed a law last August ordering all 3,000 state-run companies to adopt the model. The policy does not contradict his recent moves to lift restrictions on the use of mobile phones, computers and other goods and services, nor partnerships with foreign companies and more private initiatives. The bulk of the economy and its core industries and finances will remain in state hands.

Cuba’s economy is on a better footing than in the 1990s. Foreign exchange earnings are relatively strong owing to the export of medical and other professional services - mainly to Venezuela - as well as tourism, high nickel prices and soft Chinese loans.

But the state has had problems investing these revenues through its many companies, many of which suffer from poor accounting and management.

  1. Follow up post #1 added on June 25, 2008 by abh with 244 total posts

    My goodness.  “Perfeccionamiento” is the new word?!  thank you to the Cuban government for another weird euphemism.

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