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    Socialist state enterprise?

    Socialist state enterprise?
    FERNANDO DÁMASO | La Habana | 20 Abr 2016 – 1:34 pm.

    In the years of the Republic, in Cuba there was a large number of small,
    medium-sized and large businesses that produced some 10,000 different
    products and articles, covering a large portion of domestic demand,
    thereby averting the need for many imports. 85% of these companies were
    in Cuban hands and only 15% belonged to foreigners, or these partnered
    with Cubans.

    During the many expropriations and nationalizations carried out in the
    1960s, however, they all fell into the hands of the State, becoming
    “socialist state enterprises.” After being miserably managed, their
    necessary maintenance being neglected, and new investments not made to
    ensure their technological modernization, they fell apart. The few that
    remain operate using substandard facilities featuring obsolete
    machinery, having been operated for 60 or 80 years or more. A few,
    benefitting from foreign investment and operated as joint ventures, look

    Several years ago, facing the dismissal of about 400,000 state workers
    in order to reduce inflated payrolls, Cuba authorized so-called
    “self-employment,” which is nothing more than entrepreneurship cloaked
    in another name. However, it was authorized only for a few trades,
    barring professionals from exercising their professions, and with
    excessive and absurd regulations that limit growth and development, in
    accordance with the concept that it should be “a way to survive, but not
    to get rich,” as the authorities often repeat.

    Given the difficult economic situation, the Cuban authorities today are
    crying out desperately for foreign investment, essential to develop the
    country and boost its Gross Domestic Product (GDP). This means
    cutting-edge technology, productive modernity, the meeting of needs,
    replacing imports, quality, and access to global markets. Its
    advertising gimmick has been called the Mariel Special Development Zone.
    However, thus far the results have not been what was expected: there
    have been many visits, and lots of talk, but little investment. There
    are two problems hampering investment: the legal security of the capital
    invested is not clear enough, and workers cannot be hired directly by
    the investor, but only through state agencies.

    In this problematic context, the authorities repeat incessantly that the
    “socialist state enterprise” is and will be the cornerstone of the Cuban
    economy, to develop “a prosperous and sustainable socialism,” adding
    that for this purpose it will be necessary to improve efficiency, boost
    the quality of management, follow through on plans, and enjoy good
    economic health – something that has never been achieved during its 55
    years in Cuba, or in the former Soviet Union, or in the remaining
    socialist countries. In fact, the main features of the “socialist state
    enterprise,” wherever it has been implemented, have been administrative
    disorganization, unrealized plans, low productivity, technological
    backwardness, and poor production quality. Apparently our authorities
    like to stumble on the same stones. Over and over. The “socialist state
    enterprise” and, even worse, the “great socialist state enterprise” are
    nothing more than totally unworkable, pie-in-the-sky dreams. Expecting
    from them efficiency, profitability, high productivity, quality and
    profits is like asking seeking water from a stone.

    Foreign investment (which will never be socialist, although the
    authorities continue to repeat that it entails no modification of the
    existing system), in addition to investments by Cubans, outside and
    inside the country, (today still officially banned and challenged, but
    which should come to the fore in their own right), along with the
    progress of the self-employed (without limitations or absurd regulations
    so that they can grow and develop their businesses) will ultimately
    prove the real forces driving new small, medium-sized and large
    enterprises that will ensure development and jobs so that young people
    do not have to leave the country, in addition to creating and
    consolidating the powerful middle class that the Cuban authorities
    dread, and that the country direly needs.

    Source: Socialist state enterprise? | Diario de Cuba –