Cuba moving towards demand-led decentralised state economy

Cuba appears to be moving slowly towards a more demand-led system of decentralised state controlled economic management.

An article appearing in Granma has indicated that recent experiments in the provinces of Mayabeque and Artemisa have offered ‘an extraordinarily beneficial model for Cuba’. The reports, quoting the President of the Cuban National Assembly, Esteban Lazo, suggest that ‘the separation and delimitation of different functions’ when informed by local opinion, has led to significantly improved economic management and outcomes.

The report said that at a meeting in Mayabeque province Lazo linked improved efficiency and the provision of quality services to stronger links with local opinion and firmer controls and audits, whenever local administrative councils tackled the problems that had been identified.

His comments came shortly after details of Cuba’s 2018 economic priorities emerged in accounts of the meetings of the Commissions of the Cuban National Assembly, which had met from June 2-4 (Cuba Briefing June 4, 2018).

Reporting on the outcome of the Economic Affairs Committee of the National Assembly, Cuba’s state media noted that members had heard from the First Deputy Minister of the Economy and Planning, René Hernández, that the principal economic objectives for 2018 were: the restructuring of debt created by expired and expiring letters of credit from 2017 and 2018; increasing foreign investment, so as to encourage economic development; the exercise of stricter control over implementation of national planning; and full delivery of the state plan.

Hernández said that the 2019 Plan required coherent and sustainable solutions that take account of “priorities within the priorities”. This would require, he said, delivery of the 2018 plan, full recovery from the damage caused by all recent hurricanes; greater import substitution; and the delivery of national investments in exports and infrastructure, including in energy, tourism, the Mariel Special Economic Development Zone, and the development of rail transport.

He identified as among the key shortcomings that needed to be addressed were a lack of in-depth and well-founded market feasibility studies by state enterprises; unmet demand; and deficits of raw materials caused by outstanding debts to suppliers. Other concerns centred the negative influence debts incurred by Cuban enterprises were having on the national economy.

In an indication of the significant task Cuba faces in returning to economic growth in 2018, Hernández listed a range of other equally complex priorities. These included: guaranteeing the 2018-19 sugar harvest and the production of food; increasing the supply of wholesale and retail goods in circulation; prioritising the availability of products in the greatest demand; increasing the production of construction materials at a provincial level; ensuring the delivery of the country’s pharmaceutical programmes; and continuing to ensure the delivery of education, health and basic services.

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