Party rank-and-file to discuss major new reforms

Hundreds of thousands of rank-and-file members will discuss, in the run-up to the Sixth Communist Party Congress, whether and how Cubans should be allowed to buy and sell homes, whether Cuba should create China-like zones for export industries, whether cooperatives should be allowed to expand beyond agriculture and form clusters, and whether the government should cede direct control over state companies, according to a 32-page guidance document published by the Communist Party of Cuba that began to circulate on Tuesday.

President Raúl Castro on Monday announced a long-delayed rank-and-file congress for late April 2011; run-up discussions will be held from Dec. 1 through February.

The large gathering, supposedly held every five years, is expected to ratify a slew of long-term economic reform measures aimed at purging the economy of fundamental challenges such as dismal salaries, low productivity, and widespread black-market activities. Some of these measures are already underway, including a gradual phase-out of the food ration card, providing long-term leases of state land to private farmers, the eventual merger of Cuba’s two currencies, opening up space for private microbusinesses and cooperatives, and allowing more freedom for foreign investors to invest in tourism projects.

The 291-point “Outline of the Economic and Social Policy Project” adds new aspects, such as

•the creation of “special development zones” for foreign companies in export and high-tech industries, reminiscent of a Chinese strategy of the 1990s;

•allowing the formation of co-op clusters that could create a vertically-organized cooperative sector;

•”applying flexible formulas for the barter, purchase, sale, and lease of residences;” and

•”new forms of management and leadership in the direction of the national economy,” under which state companies would only report their financial results to the government and gain more autonomy, including decisions over hiring and salaries and borrowing. State companies will be allowed to keep excess profits beyond their basic commitment to the state, using them to create development or investment funds, or to pay premiums to employees.

Under the current system, by far most Cubans own the homes they live in, but they are not allowed to sell their property. Member-owned cooperatives are restricted to agriculture and don’t interact with each other. And government ministries and the military exercise tight control over all state companies, whose losses are currently subsidized to the tune of billions of pesos, swallowing 25 percent of Cuba’s annual budget.

Sending the signal that the government wants to get rid of debt moratoria and frozen hard-currency accounts, the Party document emphasizes “the strict compliance with contract commitments.”

The base document emphasizes that “central planning will be paramount, not the market,” and cautions that “in the new non-state management forms, the concentration of property in judicial entities or natural persons will not be allowed.”

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