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World

Cuba Releases New Economic Guidelines Without Major Changes

The 274 rules say concentration of property and wealth will not be permitted and promise to advance internet service only "gradually, according to our economic possibilities"

Havana, Cuba, photo: Cuartoscuro/Adolfo Vladimir
1 year ago

Cuba’s ruling Communist Party released a new set of economic guidelines Tuesday that emphasize the slow-moving and limited nature of the country’s reforms amid a sharp national economic downturn.

The guidelines “recognize the objective existence of market relationships,” but they also restate Cuba’s commitment to a centrally planned economy.

The 274 rules say concentration of property and wealth will not be permitted and promise to advance internet service only “gradually, according to our economic possibilities,” in one of the world’s least-connected nations.

They update a document that laid out President Raúl Castro’s vision of economic reform at the Cuban Communist Party’s twice-a-decade congress in 2011. Those reforms have allowed growth of tens of thousands of private businesses ranging from self-employed cobblers to high-end restaurants and small boutique hotels.

But the spread of private enterprise has failed to save the government from cash shortages and economic stagnation due to a cutback in subsidized oil from Venezuela.

Then-Economy Minister Marino Murillo said last month that Cuba saw 1 percent growth in the first half of 2016 despite an explosion in tourism set off by the declaration of detente with the United States in December 2014. Murillo said the country would have to reduce electricity consumption by 6 percent, with the majority of the reduction directed at the state sector.

The government and state-run enterprises see less activity during the summer, when many Cubans take long vacations. This summer has been particularly slow, with more employees than usual taking longer vacation and leaving the office by early afternoon. Air-conditioning has been cut back in state buildings, and gas stations are frequently closed because they have run out of fuel or are ostensibly undergoing repairs.

Cuba has so far not seen frequent or sustained power outages, shortages or other dramatic effects of the slowdown.

There is, however, widespread popular frustration with the government’s failure to increase state salaries or allow the faster growth of private enterprise.

Another Communist Party document released in May laying out the party’s vision for the country until 2030 mentions a new legal recognition of small- and medium-sized business. Private businesses are currently allowed only under a special category of self-employment, leading to problems for businesses that run afoul of a bureaucracy that doesn’t officially recognize them.

The new guidelines contain no details about that reform, casting doubt on whether it will go into effect anytime in the foreseeable future.

Frustrated by the lack of opportunities and worried that the U.S. will end special privileges for Cuban immigrants, Cubans have been leaving the island of 11 million people in growing waves. The rate of emigration has more than doubled since the declaration of detente and more than 90,000 Cubans have entered the United States through border crossings. More than 10,000 more have left in rafts and thousands of others have gone to other countries.

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