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HavanaJournal.com: Cuba Business

Cuba to review black market economy

Posted October 26, 2006 by publisher in Cuba Business.
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BY FRANCES ROBLES | Miami Herald

In the wake of an unusual investigation by Cuban state journalists into public employees who regularly cheat customers, Havana has announced an even more surprising response: a study of what’s wrong with the entire system.

But the study won’t be all. New rules aimed at cracking down on widespread fraud at state businesses will take effect Jan. 2, the Communist Party newspaper Granma reported Wednesday.

Together, the two announcements appear to hint at what some experts say could be a significant change in policy in the wake of Fidel Castro’s surrender of power—an acknowledgement that perhaps the root cause of Cuba’s workplace fraud is a flaw with its socialist system.

POLICY SOLUTION

‘‘This is different. They are not saying it’s greed’’ that causes corruption, said Cuba expert Philip Peters, of the Lexington Institute, a Virginia think tank. ``They are saying it’s not just a few bad apples. It’s the system. They are putting the public on notice that they are looking for a policy solution.’‘

Ra�l Castro, who assumed his brother’s powers after Fidel Castro announced July 31 that he had undergone emergency intestinal surgery, has been portrayed by some Cuba-watchers as willing to reform the island’s communist system.

This week’s announcements came on the heels of a three-part series in the Communist youth newspaper, Juventud Rebelde. In a remarkably unusual piece of journalism for Cuba’s state-controlled media, reporters went undercover to restaurants, taxis and shoe repair shops to show how customers were routinely cheated. Beer mugs were not filled to the top, sandwiches were light on ham, taxi fares were too high and repair shops charged more than state-set prices.

While the Oct. 1 article did not stress the meager wages that often drive Cubans to pilfer from their state employers, it quoted workers as saying it was unfair to judge them when the government failed to provide the supplies needed to conduct business. The shoe repairman, for example, was buying his own thread and adjusting prices to make up for his investment.

On Tuesday, the newspaper followed up with a story reporting that a group of Cuban experts would study the issue of ‘‘socialist property’’—the communist system under which the government owns and operates virtually all enterprises on the island.

The study will be led by specialists from the Cuban Philosophy Institute ‘‘as a scientific, multidiscipline investigation that cannot be economic alone,’’ the newspaper added. It did not say when the study would be completed.

‘‘I think we are probably at the verge of a new policy shift,’’ said St. Thomas University economics professor Maria Dolores Espinosa. ``Maybe they are looking at mixing some amount of market and moral incentives. Right now the only reason to work in Cuba is to steal. Otherwise, people would not be working.’‘

Florida International University professor Jorge Salazar-Carrillo cautioned, however, that the Cuban government periodically criticizes itself with great fanfare—and then does little to address the problem.

‘‘It’s the same old thing: `We have to stop this somehow,’’ ’ Salazar-Carrillo said. ``They try to control it, and it gets worse and worse and worse.’‘

He said Cuba’s black market economy is so strong that it would take impossibly drastic measures to stop it.

‘‘I don’t think this is going to fly at all,’’ he said. ``It’s not going to happen.’‘

NEW RULES

But the Cuban government seems determined to crack down on the internal theft and other labor inefficiencies that have plagued state enterprises for decades.

Wednesday’s Communist Party newspaper Granma said rules will take effect Jan. 2 ``intended to strengthen the established order, educate the workers and deal with indiscipline and illegalities in the performance of labor.’‘

Among the rules: No wasting time on the job. Workers must report theft, damages and losses and should work their whole shift. No pornography or games can be downloaded on work computers.

‘‘There must be a scientific method to organize society economically and politically so it may function better,’’ the paper quoted Ernesto Molina, consulting professor of the Department of Economic Disciplines and Management Techniques at the Superior Institute of International Relations, as saying. ``What we must not do is to allow the market to transform the economic structure of this country all by itself.’‘

Miami Herald translator Renato P�rez contributed to this report.

Member Comments

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On October 26, 2006, sidneygilbert wrote:

The world is about to see if Cuba is a principled socialist society or in fact a dictatorship, serving the old military elitists. Fidel has long held that it is and was a peasant revolt. Now the next generation will get an indepth look at the results of 47 years of unfettered personal control of their country.

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On October 28, 2006, J. Perez wrote:

Cubans are a smart and imaginative people, some form of market economics must be instituted to take advantage of this “natural resource”.

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On October 28, 2006, sidneygilbert wrote:

Some how Cuba must and will recognize the simple fact: Socialism can only work if the cash flow of the private sector is great enough for a 30% tax base.