Cuba: As the State Cuts the Ropes
Daisy Valera
HAVANA TIMES — Every decline in the dynamic of an authoritarian power reveals the illusory character of the community that once unanimously supported it.
The leasing of state-owned storefronts to food service workers is the most recent conceptual decline.
Who were the people that supported the nationalization of everything including tiny corner food-stands in the first place?
The answer is us, the same people who are now indifferent or even applauding this recycling process?
My grandmother found out about all this just a few months ago and it shocked her to the point of dizziness.
I never knew Pablo, her uncle (practically her father), but the story about his suicide used to come up occasionally in family discussions. “He never did get over them taking away his bodeguita (little corner store). He got all depressed,” relatives would say.
Pablo sold beans, lard and a little meat, and in that way he supported his family, something without the faintest shadow of enrichment or exploitation.
Then, voila! The state did its magic. Even though some people don’t think we’ve gone backwards or forward in 50 years, it’s not that simple.
The restructuring in this service sector suggests quite a few things.
For one, this act of a forced shift from government employment to self-employment is something many people won’t be able to manage since they’ve spent decades performing symbolic work in exchange for symbolic wages.
I don’t think the workers in the more than 1,000 establishments slated for this transformation will all of a sudden be capable of overcoming two major hurdles: Firstly, they’ll face the operating expenses that private businesses require; and secondly, there are the costs of repairing and renovating those severely deteriorated old facilities.
In addition, they’ll be operating at a clear competitive disadvantage with respect to those individuals who voluntarily decided to start food-service operations and had the seed money in hand for their start-up businesses.
If products as basic as milk and eggs already seem to be playing hide and seek with us consumers, then how are these new “owners” going to obtain the necessary products if almost the only things the all-powerful state can supply are rum and cigarettes?
These issues obviously imply increases in the level of unemployment; the further hoarding of goods (which will worsen the situation of the general population); and a subterranean struggle between those who are economically capable of securing “strategic” formerly state-controlled businesses and those who aren’t.
Finally, I do think the new measure has one small positive element.
The leasing of space as well as collective payments for the costs of water, electricity and other services could be catalysts for cooperative working relations.
This could also mean the transition away from of a way of life based on following orders and complying with regulations drafted in ministerial offices, towards a new culture based on workers’ empowerment in the workplace.
Let’s be a little optimistic and fairly objective. As the government cuts the ropes, what’s ahead will be critical times for many families on the island.
An interesting look at the Cuban economy and the false hopes that the current round of reforms will do anything to fix the crisis:
“The New Cuban Economy: What Roles for Foreign Investment?”
THE WORLD’S HEAVIEST TAX ON LABOR
The most unusual characteristic of the Cuban FDI regime is the labor contract system . FDI firms are not generally allowed to directly hire labor . Rather, a state employment agency—typically a dependency of the relevant sectoral ministry (e.g., tourism, light industry)—hires, fires, settles labor disputes, establishes wage scales, and pays the wages directly to the workers . The FDI pays the wage bill to the state employment agency which in turn pays the workers . But there is a very special twist to the Cuban system: the FDI pays wages to the employment agency in hard currency and the employment agency turns around and compensates the workers in local currency, an effective devaluation or tax of 24-to-1 . Thus, if the firm pays the employment agency $500 a month and the employment agency pays the workers 500 pesos, over 90 percent of the wage payment disappears in the currency conversion; the effective compensation is instantly deflated to $21 per month . This could be the world’s heaviest labor tax . It provoked one Cuban worker to remark to the author: “In Cuba, it’s a great myth that we live off the state . In fact, it’s the state that lives off of us.”
http://www.brookings.edu/research/papers/2012/12/cuba-economy-feinberg
Daisy, your wisdom with regard to this new leasing policy is remarkable. You’ve broached both the negative and the positive aspects. Thanks.
This article brings me back to an idea that I shared before about the international progressive community providing financial start-up capital for working-associate owned commercial and industrial cooperatives in Cuba. This sort of thing was done before, during the Japanese invasion of China, in support of the worker-owned Gung Ho cooperatives.
If the people in various countries who support the advancement of socialism in Cuba should form such an organization, perhaps many of the difficulties of worker-owned food service businesses could be overcome.