Cuba To Move Half Of State’s Economic Activity To “Non-State” Sector

Private businesses and tax revenues will soon make up nearly 50 percent of Cuba’s economic activity, said a senior Communist party official over the weekend, as the government attempts to move gradually towards a market socialism model for the economy.

Private businesses and tax revenues will soon make up nearly 50 percent of Cuba’s economic activity, said a senior Communist party official over the weekend, as the government attempts to move gradually towards a market socialism model for the economy.

Speaking in an address to the Havana city government, which was broadcast by state-run television on Sunday, long-time Communist Party political bureau member Esteban Lazo Hernandez, said that the Cuban government had been seeking ways to replicate the success of other ex-socialist states such as China and Vietnam; and were looking to move secondary economic activity such as farming and retail services out of the state’s control.

[quote]“Today, almost 95 percent of gross domestic product is produced by the state. Within four or five years between 40 percent and 45 percent will result from different forms of non-state production,” said Lazo, as cited by Reuters.[/quote]

The vice-president of the Cuban Council of State added that the shift to increased private businesses would also prompt the local government to improve its own efficiency, while allowing the private sector to work hand in hand with state-run operations.

“Such a shift means not just tiny mom-and-pop operations and small businesses such as restaurants and hostels, but mid-sized companies operating as cooperatives and individually owned,” told a local economist to Reuters, who asked to not be named.

The announcement is likely to be in line with a 311-point document released last year by the Communist Party that outlined its plan to revamp the economy.

Back then, the document had called for authorities to support and encourage “mixed-capital companies, cooperatives, farmers with the right to use idle land, landlords of rental properties, self-employed workers and other forms that contribute to raise the efficiency of social labour.”

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However, some analysts are still sceptical on whether the Cuban government can really implement its plan, particularly in such a short-time frame.

“I think a shift of this magnitude in such a short time period would be highly unlikely for Cuba,” said William Messina, agricultural economist with the Food and Resource Economics Department at the University of Florida.

[quote]”Even though Raul is trying to implement a number of changes that could move the country in this direction, the bureaucratic resistance that there appears to be (at least within agriculture) will certainly slow the process.”[/quote]