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These Are Official Economists' Proposals to "Unblock" the Cuban Economy

They suggest that the government separate state and business functions, and decentralize foreign trade.

La Habana
An agricultural market in Cuba.
An agricultural market in Cuba. afp

The members of the National Association of Economists and Accountants of Cuba (ANEC) presented Miguel Díaz-Canel with its proposals for the revitalization of the Cuban state economy, which include plans for a future Law of Companies on the island.

The suggestions came in response to an express request by the government, and range from separating state and business functions, to decentralizing foreign trade, to creating greater financial incentives for export and import substitution, according to the regime's weekly publication Trabajadores (Workers).

The official economists also proposed changes in the banking system that favor greater support for companies, transparent and legitimate relations between all economic actors, and a more specific policy to select, train and motivate managers as competent businessmen professionals.

The experts also called for the redesigning of the system of indicators to assess compliance with each company's plan, with a greater emphasis on management. Through this they seek to promote greater business autonomy, so that entities can choose their management model, define their suppliers and customers, prices, salaries, and their own charges, without fixed figures.

They also endorsed a greater capacity to motivate workers, as well as to manage financial resources, voluntary reserves and investment processes.

Other suggestions have to do with approving greater incentives for innovation, and creating spaces for managerial experimentation, different structures by sector, and a revision of the criteria to group, constitute, or consider companies as basic business units; as well as studying state activities that may give way to other forms of management.

The proposals, formulated by some 20 researchers and business executives, "began with a study of the obstacles faced by the state socialist company, and possible solutions," says the report.

According to Dr. Francisco Borrás, one of the authors of the proposals, Díaz-Canel stated that the study makes it possible to "organize thinking" about issues that affect business performance, and asked for "more in-depth conceptual definitions, and even more specificity" about how to unblock entities' economic management.

The Cuban economist Pedro Monreal described the proposal as "welcome", but complained that "on a crucial issue like 'the business environment' the proposal does not seem to address reform of central planning."

"The absence of references to the possible replacement of the centralized planning system may be a problem in the journalistic article, but, in the end, business's margin for action depends on the planning scheme," he noted in a string of comments on his Twitter profile.

"One of the lessons to be drawn from other centralized planning model reform processes is the hapless temptation to believe that technical improvements in management make it possible to shirk fundamental reform in the model," he noted.

Regarding the term "unblocking", which Díaz-Canel frequently uses when calling for economic changes, Monreal pointed out that this "could generate a kind of 'engineering' vision of the economy, one suggesting specific gears that are stuck, when reforming a central planning model requires a vision of 'complexity': processes whose components interact in a changing and unpredictable way."

Díaz-Canel has stated that 2020 has to be the year in which "everything that is necessary to implement to unleash the productive forces is proposed, but he also cautioned that  "this cannot be confused with privatization, because that is not our way."

While the island is suffering through one of the deepest economic crises of the last 20 years, with a decrease in revenues from tourism and "medical missions" abroad, two of the government's main sources of funds, the president has been repeating that it is necessary to "unleash productive forces," though without mentioning the measures to do so.

In fact, since the beginning of his management, obstacles to the functioning of the private economy have increased.

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