Castro Offers Tough Appraisal of Cuba’s Slow Progress on Economic Reforms

Castro Offers Tough Appraisal of Cuba's Slow Progress on Economic Reforms
Raúl Castro opens Communist Party congress with warning that country
must also remain wary of U.S.
By JOSÉ DE CÓRDOBA
April 16, 2016 7:21 p.m. ET

President Raúl Castro opened a four-day Communist Party congress
Saturday with a tough appraisal of the government's scarce progress in
implementing critical economic reforms, and a warning that Cuba must
remain wary of U.S. intentions toward the island despite the recent
detente between the two countries.

A month after President Barack Obama's historic visit to Havana during
which the U.S. president said he had come to bury more than half a
century of Cold War hostility, Mr. Castro warned there was evidence that
the U.S. had "changed its policies, but not its objective" to subvert
the Cuban regime.

"We must be alert today, more than ever," Mr. Castro said.

Analysts said there were few surprises in Mr. Castro's speech.

"A lot of this sounds to me as a defense of the economic reform process
from internal critics who see it as undermining the values of the
revolution," said William Leogrande, a Cuba expert at American
University. "It's not as if he is making new arguments, rather he is
defending the path that they are on."

Mr. Castro acknowledged that the ruling party, largely run by
octogenarians, faced daunting new challenges stemming from detente with
the U.S. and the country's changing economy, which is creating a complex
society more attuned to consumer values.

Mr. Castro devoted the first part of his speech to reviewing and
defending Cuba's slow process of economic reform, which the government
has been implementing since the last Communist Party congress in 2011.
He said only 21% of the 313 economic guidelines adopted five years ago
had been fully implemented.

But despite adverse conditions, Mr. Castro said, Cuba's economy grew
2.8% last year, helped by a boost in tourism which brought a record 3.5
million visitors to the island. Cuba's economy has been particularly
hurt by the economic meltdown of its biggest trading partner and close
ally, Venezuela, which provides oil at cut-rate prices in exchange for
the services of Cuban doctors and other professionals.

"We are advancing with careful steps, slowly but surely," Mr. Castro
said. He reiterated the government wouldn't implement any "shock
therapy" that would hurt Cubans.

Mr. Castro said the greatest obstacle to economic reform continued to be
the failure to integrate Cuba's dual-currency system. Cuba uses a
domestic currency where a dollar buys 24 pesos, as well as a convertible
peso, known as the CUC, which trades at 87 U.S. cents. The country's
tourist economy uses the CUC.

"This distortion should be solved as quickly as possible," he said.

Since the 2011 party congress, Mr. Castro has implemented a slow process
of economic reform that has allowed Cubans to open up small businesses
such as restaurants and work for themselves in 201 occupations ranging
from repairing bicycles to arranging flowers.

Economists say that in the last five years, about 25% of Cuban workers
have left government jobs for employment in the new private economy.
Many Cubans who run restaurants and boardinghouses for tourists and
drive taxis in the expanding tourism industry are doing well. Not so the
remaining 75% who work in a government sector for salaries of about $25
a month and have been hit hard by higher prices, economists say.

Mr. Castro said the Cuban state would continue to dominate the most
important areas of the economy, although he said nongovernment workers
have made "very necessary" contributions to the economy.

As part of Mr. Castro's reform process, Cuba also has cautiously invited
foreign investment, especially in tourism. On Saturday, he said such
investment was "strategic and necessary" for the country's development.

Mr. Castro reiterated he would step down as president of Cuba's Council
of State in 2018 and issued a call for the rejuvenation of the ruling
party's aged cadres.

Members of the Communist Party's Central Committee shouldn't be allowed
to enter the committee after their 60th birthday. Party members holding
important positions in the organization shouldn't be more than 70 years
old and should serve only two five-year terms, he said.

Write to José de Córdoba at jose.decordoba@wsj.com

Source: Castro Offers Tough Appraisal of Cuba's Slow Progress on
Economic Reforms - WSJ -
http://www.wsj.com/articles/castro-offers-tough-appraisal-of-cubas-slow-progress-on-economic-reforms-1460848872