Cuba announces a new period of economic reforms

Opposition and analysts describe vice-president's measures as "cosmetic"

Raúl Castro speaking in Havana last Sunday.
Raúl Castro speaking in Havana last Sunday.M. VÁZQUEZ (EFE)

Gradually deregulating state-owned companies and stimulating foreign investment to attract technology, funding and jobs are just some of the "more complex" reforms that the Cuban government will implement over the next year and a half.

"For the remainder of 2013 and 2014, we will work on the deeper transformations," said Cabinet Vice-President Marino Murillo, who also chairs the committee in charge of implementing the new social and economic policies defined by Raúl Castro in 2010.

"The first period of reforms has fundamentally entailed eliminating the prohibitions in society," said Murillo during a talk with news correspondents in Havana, as reported by the agencies Reuters and AP.

Murillo announced that some of the future changes in the pipeline include giving state companies greater autonomy. "We must eliminate all the hurdles that are holding them back," he said, clarifying that "the model that the revolution and its leaders support will be based on social ownership, not private enterprise."

According to Murillo, the decentralizing process will let state companies keep 50 percent of their income after taxes and reinvest it in their production processes; until now, all revenues have been managed by the government, which also controls spending and the distribution of resources.

"When it comes to contributing to GDP, the Socialist state company will continue to play a determining role, with a little more efficiency," said Murillo. According to the government news agency Prensa Latina, this transformation process also foresees "the extinction, merger, remodeling or transformation into a different management style of any company that operates on a loss for more than two years," with the aim of "improving corporate efficiency and dealing with the chain of payment defaults that is dragging down the national economy."

Foreign capital also plays a pivotal role in this plan. "We know that the island must attract more foreign investment," admitted Murillo. But the doors will open only for companies that are willing to bring financing, market share or jobs to the island economy.

After five decades of controlling Cuban society with an iron fist, the administration has introduced small reforms such as more flexible migration policies that used to prevent Cubans from traveling abroad, and lifting restrictions on small business ownership and land cultivation by individuals. Yet all of these changes have been described by analysts and an incipient internal opposition as "cosmetic reforms" that do not truly imply a real economic or political aperture.

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