Cuba won't abandon socialism just yet

from the November 13, 2006 edition

Cuba won't abandon socialism just yet
By Paolo Spadoni
WINTER PARK, FLA. – Has Cuba finally realized that its socialist
economic system suffers from serious flaws, and even more important,
that substantial market- oriented reforms are needed to overcome such flaws?

Last month, Cuba's Communist Youth newspaper, Juventud Rebelde, ran a
three-part story on illegalities in the Cuban society that disclosed the
results of an investigation by its undercover reporters into state
businesses in the capital, Havana. The overall picture was one of
rampant theft, widespread fraudulent practices, and extreme inefficiency
in most retail stores and services of the Cuban capital.

The newspaper also revealed that a local team of academic specialists
would begin studying the issue of "socialist property" in Cuba in search
of ways to improve the current economic model.

The latest debate within Cuba about the problems of socialism has
sparked optimism among some US experts. They now expect major changes on
the island that would result in the adoption of market reforms, rather
than the usual calls by the Castro regime for more discipline and control.

This view is mainly justified by the fact that the Cuban debate is
fueling criticism of the entire economic system. This criticism has been
almost certainly approved at the highest levels of government.
Interestingly, while Juventud Rebelde stopped short of advocating
privatization, a Reuters dispatch noted that "some Cuban intellectuals
say it would be the best way, even in the form of collective private
property, to improve the retail sector."

However, there are reasons to believe that the aforementioned optimism
remains largely unfounded under the current conditions.

Here's why.

Since Fidel Castro introduced the socialist system into Cuba almost 50
years ago, the economic policies pursued by his government have
exhibited several shifts away from and toward the market.

A reduced emphasis on the role of the state and pragmatic acceptance of
market reforms generally occurred in the wake of economic crises or
sluggish growth, when the government temporarily put aside its
commitment to state control, equality, and moral incentives in favor of
liberalizing measures aimed to boost the economy.

But today, the island's economy is in better shape than it has been in
years. So why would Cuba support market reforms that would mean a loss
of control for the government, and generate social effects such as
growing income inequality deemed unacceptable by its leadership?

In effect, Cuba has been moving exactly in the opposite direction in
recent years. Havana's authorities have rolled back some of the timid
capitalist-style reforms that they had implemented between 1993 and 1994
to ensure the survival of a system that was then on the verge of collapse.

They have also stepped up state control over all enterprises, including
the tiny group of licensed private entrepreneurs running businesses,
such as room rentals, home-based restaurants and cafeterias, appliance
repair shops, and beauty salons.

The number of private workers, which peaked at 209,000 in 1996, has now
dropped below 140,000, indicating the government's uneasiness at leaving
even minor services to individual initiative.

Finally, problems of theft, waste, and petty corruption in Cuba are
nothing new, as the title of the Juventud Rebelde story, "The Old Big
Swindle," clearly suggested. What has really changed is the scope and
intensity of Havana's response to such practices in the context of
robust economic growth, greater availability of financial means for
state investment, and increased search for efficiency.

The drive against economic crime, one of the elements of the "battle of
ideas" launched by Mr. Castro in 2000, has gathered pace since late 2005
when Castro himself recognized the urgent need to tackle the threat to
Cuba's socialism from vice and the pilfering of state resources by
adopting the necessary countermeasures.

What are these countermeasures? As usual, they involve more discipline
and state control.

During the past year, Cuban officials have recruited and trained
thousands of inspectors to detect "irregularities" in both the public
and private sectors. And on Oct. 25, only three days after the last part
of the Juventud Rebelde story was published, the Communist Party
newspaper, Granma, announced that new rules for all state enterprises
"aimed to strengthen order, educate the workers, and deal with lack of
discipline and illegalities in the performance of labor" will take
effect in January 2007.

Cuban academic specialists have yet to complete their study of what is
wrong with the island's socialist system. The Castro government,
however, has already decided what to do about it.

• Paolo Spadoni is a visiting professor of political science at Rollins
College in Winter Park, Fla.

http://www.csmonitor.com/2006/1113/p09s01-coop.html