President Raúl Castro Affirms Importance of Cuba’s Private Sector       

On July 14, Raúl Castro Ruz, Army General, First Secretary of the Communist Party of Cuba Central Committee and President of the Councils of State and Ministers, addressed a session of Cuba’s legislature (the National Assembly of People’s Power).[1]

He first noted that despite “difficult circumstances, encouraging, modest [economic] results have been achieved. The Gross Domestic Product grew by 1.1% in the first half of the year, which indicates a change in the economy’s direction as compared to last year. Contributing to this result were agriculture, tourism, and other exports of services, construction, sugar production, and the transportation and communications sectors.”

Castro then affirmed the importance of the private sector of the Cuban economy in these extensive remarks.

He reported that the Council of Ministers recently had authorized “the expansion of self-employment and the experiment with non-agricultural cooperatives . . . with the purpose of gradually freeing the state from responsibility for activities that are not strategic, creating jobs, supporting initiative, and contributing to the national economy’s efficiency in the interest of developing our socialism.”

This “past June, these forms of property management were recognized as among those operating within the Cuban economy, in an extraordinary session of Parliament dedicated to analyzing and approving programmatic documents for our Economic and Social Model.”

“We currently have more than half a million self-employed workers and more than 400 non-agricultural cooperatives, which confirms their validity as a source of employment, while contributing to an increase and greater variety of goods and services available, with an acceptable level of quality.”

On the other hand, there have been “violations of the legal regulations in effect, such as the utilization of raw materials and equipment of illicit origin, under-declaration of income to evade tax obligations, and insufficient state control at all levels.” To meet these problems, the Council of Ministers has adopted measures that soon will be announced.

The Council, however, has “not renounced the expansion and development of self-employment, or the continuation of the experiment with non-agricultural cooperatives. We are not going to draw back or stop, nor will we allow the non-state sector to be stigmatized or face prejudice, but it is imperative that laws be respected, progress consolidated, positive aspects – which are more than a few – generalized, and illegalities and other deviations from established policy resolutely confronted.”

The “pace and scope of the changes we need to make to our model must be conditioned by the capacity we have to do things well and rectify any misstep in a timely manner. This will only be possible if adequate prior preparation is ensured – which we haven’t done – training and comprehension of established regulations at every level, follow-up and guidance of the process – aspects marked by a fair dose of superficiality, and an excess of enthusiasm and desire to move more rapidly than we are truly capable of managing.”

“What is a state, especially a socialist state, doing administering a barbershop with one chair, or two or three, and with one administrator for a certain number of small barber shops – not many. I mention this example because it was one of the first steps we took.”

The errors of implementation of these changes are mainly “ours, we leaders who developed this policy. . . . This is the reality. Let’s not try to block the sun with a finger. Mistakes are mistakes. And they are our mistakes, and if we are going to consider hierarchies among us, in the first place, they are mine, because I was part of this decision. This is the reality.”

Conclusion

As has been noted in previous blog posts, the Cuban government and people have recognized that entrepreneurs in the private sector are playing increasingly important roles in the Cuban economy and society and that developing a mixed economy is not an easy project.[2]

This is why it is so important for the U.S. Congress to adopt bills confirming the freedom for Americans to travel to Cuba on individual person-to-person trips that are important customers for businesses owned by Cuban entrepreneurs.[3] 

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[1] Castro Ruz, We will continue to advance along the path freely chosen by our people, Granma (July 17, 2017) (official English translation of the original Spanish).

[2] See posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[3] See This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 23, 2017); Open Letter to U.S. Congress About U.S. Freedom To Travel to Cuba (July 16, 2017).