Cuba ponders how to fix socialist economy

Cuba ponders how to fix socialist economy

By Marc Frank
Reuters
Monday, October 23, 2006; 5:03 PM

HAVANA (Reuters) - Cuba has begun debating how to correct rampant theft
and inefficiency in state-run services, from pouring beer to shining
shoes, that could signal a step toward economic reform under acting
President Raul Castro.

In a scathing three-part series on graft in shops and bars entitled The
Big Old Swindle, the Communist Youth newspaper Juventud Rebelde said on
Sunday a team of university experts will investigate ways to improve
services.

The articles uncovered bar employees stealing from the state by serving
less beer than stipulated and taxis drivers overcharging passengers, but
stopped short of recommending the privatization of such services.

"The current irregularities in the country's services, in the midst of
the search for a better economic model, has meant Cuba still does not
have a retail and services sector that satisfies people's expectations,"
the newspaper said.

The debate comes amid growing questions about the future of one of the
world's last communist societies since its leader Fidel Castro underwent
emergency surgery in late July and disappeared from public view.

"The important thing, to me, is that they are asking the questions. "Why
doesn't it work?" a European diplomat posted to Havana said.

"My doubt is whether they are brave enough to start asking themselves
questions without trying to confine the answers to Marxist philosophy,"
he said.

Cubans have long complained in private about poor state services, from
deficient public transport to bare shop shelves. Many see privatization
as the best way forward.

Since Raul Castro temporarily took over the government from his ailing
brother on July 31, foreign and local experts have speculated that the
younger Castro, aged 75, is more pragmatic and could move Cuba toward a
more open Chinese economic model.

Cuban officials rule out following the example of China, which opened
its economy to capitalist enterprise while retaining political power
under the Communist Party.

SETS SERVING AMOUNTS

Cuba's economy, modeled on Soviet communism that ultimately failed, is
overwhelmingly state-controlled. The state provides supplies and sets
serving amounts and prices for everything from a cup of coffee and ham
sandwich to watch repairs and shoe shining.

"The theory that came from the Soviet Union was skewered," economist
Luis Marcelo Yera of the National Economic Research Institute told
Juventud Rebelde. He advocated giving workers more power to decide the
running of state enterprises.

Yera was one of a number of academics quoted in the paper who stated
systemic problems, including over centralization, hampered economic
development and could not be dealt with simply by more regulation and
discipline.

Juventud Rebelde, like other media often used by the government to place
topics up for debate, stopped short of calling for restoration of
private property, though some Cuban intellectuals say it would be the
best way, even if in the form of collective private property, to improve
the retail sector.

Fidel Castro, who is said to be recovering from intestinal surgery,
warned a year ago that corruption could undermine the society born of
his 1959 revolution.

Earlier this year, Castro sent thousands of young social workers and
communist militants, as well as retirees, into work places to root out
corruption and waste.

They discovered, among other examples, that half the gasoline and diesel
fuel pumped in the country was stolen. Cuba then proceeded to replace
all service station employees.

Earlier this year the media carried a series of reports on
irregularities in the state-run produce-distribution system, but stopped
short of offering solutions.

Juventud Rebelde inferred that much more was needed, considering that
criticism by academic experts were published on Sunday that were almost
certainly approved at the highest levels of government.

"We live in a society with many distortions; that's why many things have
to be guaranteed through cohesion and control, but not everything can be
accomplished that way," Ernesto Molina, from Cuba's top school for
international relations, told the paper.

"We need a scientific plan to organize society politically and
economically so it works better," he said.
© 2006 Reuters

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