Here’s a roundup of information coming out of the speeches and coverage
of this week’s National Assembly session.
Raul
President Raul Castro spoke mainly about economics, noting
stronger-than-anticipated growth (2.1 percent in the first half of 2012), a
still-lagging agricultural sector, and a 17 percent increase in sugar
production. The process of “reordering”
debt is contributing to a “gradual but sustained rescue of the credibility of
the Cuban economy,” he said.
He said that following a large pilot program in the creation of
non-farm cooperatives (more below), a new law governing these cooperatives will
be developed.
As for the pace of reform, he held to his often-expressed conviction
that the pace is right, steady but not rushed, proceeding with “decision,
serenity, and audacity.” He noted that
many outside Cuba, “not always with good intentions,” call for more rapid
action. He told delegates that it is no
accident that he and others refer to the lineamientos by number as they discuss their
implementation; the idea is to reinforce the commitment to implement them and
“not to permit that transcendental decisions for the future of the nation end
up once again as a dead letter.”
His words on migration policy surely disappointed. Rather than announce action on the commitment
to loosen restrictions on Cubans traveling abroad, he reiterated the commitment
to “reformulate” current norms and “proceed to their gradual application, taking
into account their associated effects and the international situation.”
The National Assembly elected a new vice president, Ana Maria Mari Machado, a lawyer and
supreme court judge.
She replaces
veteran Jaime Crombet, who resigned for health reasons.
Raul Castro gave Crombet a fond sendoff and
said he expects Crombet to work directly with him on modifications to Cuba’s
constitution.
Cooperatives
Economic reform czar Marino
Murillo explained that a large-scale trial run will begin later this year in
the conversion of state businesses into private non-farm cooperatives (
Granma,
Trabajadores).
Notwithstanding the contributions
made by the greatly expanded small entrepreneur sector, this is the initiative
that must succeed in order to meet targets for reducing state sector employment
and expanding the private sector. Cuba has
long had cooperatives in the farm sector; what’s new here is the application of
that formula to other areas of production.
The details, as presented by Murillo:
·
About 200 businesses have been selected, almost
half of which are farmers markets.
·
The legal norms are nearly finished, after which
the pilot projects will begin.
·
Some will start before year’s end, the rest will
follow in 2013.
·
Land and buildings will remain state property
and be rented to the cooperatives for up to 10 years.
·
The 2013 economic plan “foresees” providing $100
million in credits to support these cooperatives.
Taxes
The new tax law, approved but not yet published, was explained by deputy
Osvaldo Martinez. (Granma story here,
and the finance minister’s preview of the law in late 2010 is here.)
Martinez said the law’s objectives, beyond generating revenue, are to encourage
activities that “contribute to socio-economic development” and to discourage
those that do not, and to redistribute income to those in need.
Income tax will be levied on state sector salaries in the future, but
not as long as “current economic conditions” exist.
There is a slight tax rate reduction for entrepreneurs, between three
and seven percent for those in the three lowest brackets.
Agricultural producers will pay income tax, but at rates 50 percent
lower than those applied to other sectors.
Farmers who receive parcels of land from the state will be exempt from
income tax, property or tenancy tax, and tax on hired labor for the first two
years, and for the first four years if they have had to spend time clearing the
land of plants such as marabu.
Property taxes applied to housing and vacant land will not go into
effect until current economic conditions change and until property registries
are updated.
The tax that entrepreneurs pay for each worker they hire will be
reduced over the course of five years from the current 25 percent rate to 5
percent. The tax will continue to be
suspended altogether for those who employ fewer than six workers.
A series of taxes aimed at protecting the environment and natural
resources will go into effect for the use of beaches and bays, the right to use
underground waters and forest resources, and for other activities.
State enterprises
Reuters
describes a loosening of controls on state enterprises as follows:
Murillo, in a two-hour presentation
to the National Assembly, announced that an unspecified number of state
companies would be partially deregulated by the end of the year.
He said the companies, previously part of various ministries, would be able to
make day-to-day business decisions without waiting for government approval,
manage their labor relations and set prices. After meeting state contracts,
they will also be able to sell excess production on the open market.
The companies will be self-financed, including through bank credits, and
expected to cover their losses, versus handing over all profit to the state and
receiving financing and subsidies from the treasury.
Instead of being micro-managed by the ministries, Murillo said the companies
would be evaluated by “four or five indicators” such as earnings, the relation
of productivity to salaries and their ability to meet the terms of state
contracts.
Here are additional stories from AP and EFE.
