15 proposals

Via Kaos en la Red, we have an interesting set of ideas about economic policy from Pedro Campos, a retired diplomat and researcher at the University of Havana’s Center for the Study of the United States. His “15 concrete proposals to revive socialism in Cuba” respond to the Cuban communist party’s call for debate over Raul Castro’s July 26 speech, which itself called for “structural changes.”

Campos’ ideas are not revolutionary in our sense of the word.

But they are “revolutionary” in Cuba’s context in two ways: they fit within a discussion that the leadership has started, and they buck the tendency of recent years by arguing for decentralization and a degree of private initiative.

Campos believes his measures would “guarantee the continuity of the revolution, the deepening of socialism, and wide public support.”

They include:

• Ending the dual-currency system, making Cuba’s convertible peso the single currency, keeping hard-currency retail prices unchanged while adjusting the prices for goods and services now bought in Cuban pesos. [Could Cuba’s central bank pull that off?]

• Returning the convertible peso to par with the U.S. dollar and charging only minimal exchange fees to stimulate tourism, remittances, and “controlled foreign investment.” [This would end a penalty of nearly 20 percent paid since 2005 by those exchanging dollars for convertible pesos.]

• In Cuban enterprises, allowing the election of management, allowing enterprises to debate and determine their plans and operations, instituting profit sharing, and allowing enterprises to contract with each other across sectors.

• Liberalizing agricultural policy, distributing land to individuals and new small cooperatives, creating banks to lend to farmers, and “full liberalization of the internal market” for all farm and fishery products. [The last suggestion would end the state’s monopoly on beef, dairy products, shellfish, and many other items.]

• Ending the libreta (ration book), which now provides heavily subsidized staples to every household, and replacing it with subsidies for the needy only.

• Addressing the transportation problem through new enterprises and cooperatives and by bringing private taxis into cooperatives.

• “Free issuance of all licenses for self-employment,” elimination of the current non-refundable monthly tax payment (cuota fija mensual), elimination of all tax for those earning less than 100 convertible pesos monthly, and reducing the rates in the progressive tax schedule that determines how much small entrepreneurs now pay at year’s end.

It’s not clear to me how his ideas for state enterprises would play out in practice.

As for the rest, I believe that the currency unification, if feasible, would be immensely popular.

The ideas on agriculture policy and self-employment would generate increased production, a reduction in black market activity, and most likely an increase in tax revenues.

The political impact would be equally interesting. At minimum the measures would generate a sense of relief and change in direction in Cuba, probably increasing political support for the government. In Miami and Washington, some of the issues discussed here would come into play.