The Prime Minister of Cuba, Manuel Marrero Cruz, uncovered an alleged strategy by corrupt leaders in Cienfuegos, who allowed state service companies to deteriorate in order to later justify their privatization.
The scoop was offered last Saturday during a government visit to that province, in which Marrero Cruz called for a tougher stance against those who commit crimes and illegalities and criticized the owners of certain SMEs, whom he accused of becoming "millionaires" at the expense of public funds and spreading corruption throughout the country.
In his speech, the prime minister also referred to an alleged strategy by corrupt officials in Cienfuegos, who would have intentionally left state-owned companies undercapitalized, in order to later justify their privatization based on their low returns and inefficiency.
In that sense, he referred to the "de-commercialization" suffered by establishments that used to offer "the best gastronomy in Cuba," which ended up being rented out to private tenants.
"We let them deteriorate, under the excuse that there are few resources, and despite all the policies we have approved for self-management and everything, it self-destructs. An intentional strategy to then justify the need for privatization," said Marrero Cruz, as captured by the cameras of the Cuban Television News (NTV).
The report only showed a brief fragment of a few seconds with the words of the prime minister and did not expand on the information. Without mentioning investigations, suspects, or those convicted for these events, Marrero Cruz once again cast a shadow of suspicion of corruption over leaders and "new economic actors" in the country.
"What has been done? What has been done? Whoever made a mistake, should take responsibility. Whoever that may be. That has always been the government's policy," emphasized the Prime Minister of Miguel Díaz-Canel's government.
The opaque and growing process of privatizations in Cuba
The arrival to power of General Raul Castro, following the illness that ended the 47-year rule of his brother, the dictator Fidel Castro, led to the gradual transformation of the communist model of the Cuban regime, with minimal openings to private initiative and market logic in the operation of state-owned enterprises.
However, Raúl's "guidelines" reformism ended up only allocating a minimal percentage of idle lands to tenants, mostly linked to the Revolutionary Armed Forces, allowing the creation of new forms of self-employment, typically in modest jobs and trades, or partially privatizing the public transportation sector.
At the end of May 2014, the Cuban regime approved a development program until 2030, which maintained "social ownership of the fundamental means of production" and ruled out privatizing companies during that period.
Marino Murillo Jorge, known as the "czar" of Raúl Castro's economic reforms, presented the plan for 2016-2030 emphasizing the will to "maintain social ownership over the fundamental means of production and achieve a socialist development model, with efficiency."
Since those days (a decade has passed), the Cuban regime was already talking about "promoting and stimulating science, technology, innovation and its generalization; transforming the energy matrix with a greater participation of renewable sources and recovering and modernizing the country's infrastructure," goals that are still present in the discourse of the current ruler.
Initially, ten years ago, the Cuban regime ruled out privatizing companies, at least until 2030.
The arrival to power of the "continuity" of Díaz-Canel and the privatization process
In December 2019, having been in power in Cuba for over a year, Miguel Díaz-Canel insisted that privatizing companies was not the way to go. "We are going to remove obstacles to boost state-owned enterprises," he claimed back then.
Meeting with his Council of Ministers, Díaz-Canel stated that 2020 had to be the year in which everything necessary to unleash the productive forces was proposed. However, he insisted that this should not be "confused with privatization, as that is not our path."
Directed by Marrero Cruz, the meeting served to analyze what needed to be unblocked from the state sector and what from the private sector, "so that the Cuban economy becomes more harmonious and is revitalized."
"We will remove obstacles to enhance state-owned enterprises and carry out the real business restructuring that the country needs," Díaz-Canel stated.
However, in March 2021, the Ministry of Internal Trade of Cuba (MINCIN) approved regulations that allowed for the privatization of the management of state establishments in commerce, gastronomy, and services with or without activity.
The requirements demanded from self-employed workers who aspired to manage state-owned premises were outlined in Resolution 48/2021, published in the Official Gazette of Cuba on March 23 of that year.
Initially, the regulations governed the leasing, not transfer, of a property that only residents in the province where the restaurant, cafeteria, hair salon, or any other type of establishment was put up for bidding could aspire to.
Raúl had transformed 258 state restaurants into cooperatives. However, that figure represented a tiny part of the 1,900 establishments that the Cuban State was in charge of in those years, considering that in 1959, all small and medium-sized businesses and gastronomic establishments had been nationalized.
In November 2020, Reuters reported on the plans of the regime to privately manage the majority of the 7,000 state-owned restaurants at the time, with only a dozen of them remaining under the management of MINCIN.
The decision to privatize state-owned restaurants had been made at the Communist Party Congress of 2011 and its famous "guidelines of the Economic and Social Policy of the Party and the Revolution," but in 2021, ten years later, it had still not been fully implemented.
In February 2023, the official press was already celebrating the opening of a soda shop-burger joint at the Zapata and 12 Complex as an example of "productive linkage" between the state-run Provincial Food Industry Company (EPIA) and a private company. By then, privatizations of establishments in the gastronomy sector were commonplace and practically completed.
The so-called "productive linkages" were beginning to proliferate in the desolate landscape of services in Cuba, as part of an economic policy promoted by the "continuity" government that further opened the doors to the privatization of goods and services.
The yes but no of "continuity"
"Those who accuse us of being neoliberals should inform themselves a little," Diaz-Canel said in October 2023. "For someone who has a conviction of socialist construction, based on the greatest possible social justice, defending sovereignty, and seeking prosperity for the entire population, it is offensive to be told this."
Indignant with the "manipulation" of the enemy, the ruler appeared on the Roundtable to reaffirm that his economic policies were socialist and would not cease to aspire to communism.
"We continue sharing a basic basket with everyone... We have continued maintaining and developing social programs that were designed by the commander in chief at another moment of the revolution," defended the leader of the "continuity."
Interviewed by his "companion for all times," journalist Arleen Rodríguez Derivet, the ruler stated that "if we had applied neoliberal formulas here, we would have solved the problems of 1% of the population... and the rest, 'every man for himself.' No, we are in a very difficult situation, but we continue to share a basic basket with everyone... even with those who do not need it."
“How can one think that what we are implementing is neoliberalism?” an angry Díaz-Canel said to critics of the “package” of measures announced then by his government. “It is a strong desire to continue improving socialism and building socialism with what we can make possible today, within the circumstances we are living in, without denying or compromising the future of the socialist construction that we will achieve at a moment when we overcome this... this circumstance."
And he concluded: "Here the fundamental means of production continue to belong to the people, represented by the State. The main means of production are not in the private sector, nor are they managed by the private sector. They are managed by state-owned enterprises, they belong to our people, and there will be no privatizations of these fundamental means of production here."
And in the meantime, Gil Fernández...
"Planning for losses is a strategy that cannot continue, because the design established for the state enterprise system requires it to be profitable, efficient, operating with profits, reasonable and fair gains," indicated the ousted Minister of Economy and Planning, Alejandro Gil Fernández in March 2022.
Without specifying whether the Díaz-Canel government was considering a plan to privatize inefficient state-owned companies, the minister insisted that "the situation of loss-making companies has to change, for the better. As has been indicated to us and is in the guiding documents of the country, this has to be a year for transforming state-owned enterprises, moving towards efficiency," he added.
In order for the socialist state-owned company to shake up and produce favorable results for the economy, it will be necessary to make decisions, mainly related to reducing indirect expenses, cutting costs, and seeking greater efficiency," proposed the minister ousted by his own doctoral thesis advisor.
In August 2020, following the news of an Anglo-Cuban business merger that gave rise to the firm BioFarma Innovations, economist Elías Amor stated: "The necessary privatization of the Cuban economy and the establishment of a stable legal framework for the protection of property rights is a path that will have to be traversed mandatorily for the country to start working again."
Therefore, privatizations must be adjusted to open, transparent, and informed procedures and under no circumstances be based on collusion and crony capitalism," he concluded.
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