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The emancipation of the working class will be the task of the workers themselves

Cuba: A Turning-Point Raul Castro’s Government Introduces Counter-Reforms

by Andreu Camps
February 2011
(La Vérité/The Truth n° 70)

On Tuesday, 4 January 2011, Raul Castro’ s government began to implement the measures, announced some months ago, for cutting jobs in the civil service and state enterprises.

Over the next six months, 500,000 jobs are slated to disappear, with 1,300,000 slated within three years – some 25 percent of the public sector. Let us remember that this sector employs 95 percent of the country’s employees.

The government has announced that a limited number of job-offers will be shifted to sectors such as agriculture and construction. The rest will move to the private sector. The government forecasts that some 100,000 workers could become self-employed.

A commission of experts under the auspices of the Cuban Workers Confederation (CTC) [1] has been set up at each workplace, to determine the number of “surplus” and “incapable” workers currently holding a position.

The measures have started to be implemented in the ministries responsible for the sugar industry, agriculture, construction, public health, and in the tourism sector.

The state press has hinted that very strong conflicts and tensions are developing among workers under threat of redundancy.

On 2 January, the government also decided to reduce the number of vital commodities that can be obtained using a ration card. Already last year, potatoes, peas, cigarettes and salt had disappeared from the ration card. Today, soap, toothpaste and washing powder have also gone.

In the market, the price of these products has already increased 25-fold. It should be understood that the ration card allowed the whole of Cuba’ s population to have access to basic products at extremely low prices that were in line with their wages.

On 1 January, Cardinal Jaime Ortega, head of the Catholic Church in Cuba, said in his homily that “the process of economic reform proposed by Raul Castro should be supported”, calling on Cubans “to become involved in the changes currently underway, without abandoning their ability to be critical. This involves all of us, and carrying out these changes does not only depend on the authorities and their decisions, but also on the understanding of the people.”

According to one Cuban economist, this is a restructuring process “equivalent to an IMF Structural Adjustment Plan”.

Since the 1959 Revolution carried out under the aegis of the 26 July Movement, Cuba has expropriated capital, constituted a workers’ state which, due to the exclusion of the working masses from power, is bureaucratically deformed, and has introduced a planned economy.

After 1962, when U.S. imperialism tried to bring down the new regime by force, the Kremlin bureaucracy brought Cuba under its control in order to use it as a bargaining chip in its policy of “peaceful coexistence” with imperialism.

The Cuban economy has been “protected” by short-lived agreements with the Soviet Union. In 1991, the collapse of the USSR left Cuba unprotected from the world market. Today, it is suffering the full extent of the general crisis of the capitalist system and the consequences of the fact that the Cuban economy is dependent on the prices fetched by the raw materials it exports – such as zinc – while being obliged to import 80 percent of the vital commodities it requires.

This is a new practical demonstration that socialism in one country is nothing more than a reactionary utopia. The gains of the Cuban Revolution, which are under attack and in danger, depend more than ever on the development of independent organisations by the Cuban workers and on the surge in the revolutionary processes in the Latin American continent.

The convening of the Cuban CP’s Sixth Congress is announced

On 9 November 2010, Cuban President Raul Castro used a meeting held in Havana to commemorate the tenth anniversary of the full co-operation agreement between Cuba and Venezuela – which paved the way to the creation of ALBA [2] – to publicly announce the decision to hold the Sixth Congress of the Cuban Communist Party (CCP) “in the second half of April 2011”.

The congress will deal exclusively with “the process of updating the socialist economic model”. The last congress took place in 1997, despite the fact that the CCP’s statutes say that a congress should be held every 5 years... The Sixth Congress had been announced previously on several occasions. It should have taken place in October 2009, but it was postponed.

According to Raul Castro, the CCP’s Sixth Congress must approve “the guidelines for the economic and social policy of the party and the revolution”. R. Castro published a long 32-page document containing 300 points on this topic, a document that has been publicly distributed throughout the island since 10 November 2010.

The first copy of this document had been given to Fidel Castro and the second to Hugo Chavez, President of Venezuela, who was present at a public meeting where the announcement was made.

The process of preparing the congress had to begin immediately. A timetable was organised for discussions in which the whole population was invited to participate. Thus, that same week, a seminar was held for cadres at the CCP’s Higher School. Maino Murillo, Minister of the Economy and Planning, stated In front of 523 party leaders: “There are no reforms, rather an updating of the economic model. Nobody can believe that [state] property will be given up, we will administer it in a different way.” According to Granma (the CCP’ s newspaper), one of the biggest questions relates to Point 16 in the Guidelines, which explains that “national enterprises which suffer successive losses will be liquidated”. Analysis of the Guidelines (see below) shows that we are dealing with a veritable counter-reform. And in order to do this, the CCP apparatus must also be reorganised.

This is why R. Castro has announced the holding of a national conference, after the Sixth Congress, to deal with “matters of an internal character”. We shall return to this.

Let us recall that Raul Castro replaced Fidel Castro on 31 July 2006, after illness forced the latter to relinquish power. The convening of this congress happened at a time when the economic adjustments decided by R. Castro on 1 August 2010 started to be implemented. Therefore, measures have already been put in place before the congress will even be held.

Where has this plan for counter-reforms come from?

On 1 August 2010, during the plenary session of the National Assembly, President Raul Castro had announced the imminent adoption of a whole series of measures characterised as “labour reform” with the aim of giving a massive boost to self-employment, in order to “streamline” the civil service.

Today in Cuba, 95 percent of workers are state employees (civil service and public enterprises). In a country with a population of 11 million, of whom 4,950,000 are employed, 600,000 people work in the private sector, of whom 143,800 are self-employed and 250,000 members of co-operatives.

Among other things, Raul Castro told the National Assembly: “We must erase forever the notion that Cuba is the only country in the world where you can live without working.” The scope of the measures that were to be proposed by the Cuban government was still vague, and the whole affair was covered with statements to the effect that their aim was to bring Cuban socialism up to date.

The Council of Ministers meeting on 16 and 17 July 2010 (with the participation notably of leaders of the CTC, CCP and the UJC) [3] had decided “to spread the practise of self-employment by removing the existing bans and granting new authorisations through making contracts flexible”. Self-employed people will have to pay income tax and make social security contributions, and will have the possibility of taking on other employees.

Raul Castro presented these decisions to the National Assembly. On 3 August 2010, the State Council decided to convene an extraordinary session of the National Assembly of People’s Power (a body that brings together the different organisations and revolutionary defence committees) for 7 August. Also early that month, Granma, the organ of the Cuban Communist Party’s Central Committee, announced the imminent holding of an extended plenary Assembly of the CTC’ s National Council, without specifying a date.

The current decision by the Political Bureau and the draft Guidelines undoubtedly tend towards speeding up the adjustment plan.

What is the content of the new economic programme?

In his latest affirmation indicating that the intention is not to give up on the system of socialist planning, Raul Castro stated that he was proposing “to update the economic model in order to make it more efficient and more productive, and to move it away from ‘paternalism’ .”

The document’ s introduction gives a relatively clear idea of the programme’ s orientation. It talks of the existence of a systemic structural crisis, without saying which system it refers to... It also says that “Cuba has an open economy that is dependent on its external economic relations (...). Factors that have been present include low efficiency, a de-capitalisation of the productive base and infrastructure, an ageing population and stagnation in the birth-rate.”

On pages 6 and 7, it also says: “Eliminate the ‘inflated payroll’ in every sphere of the economy and organise a restructuring of employment, including the use of non-state solutions (...). Increase labour productivity, increase discipline and the level of motivation through wages and incentives, eliminating egalitarianism in the mechanisms for sharing and redistributing income. As part of this process, it will be necessary to do away with undue gratuities and excessive personal subsidies.”

So it is a question of lowering wages and linking wage-levels to productivity, as part of a move towards individualising wages and working conditions. Thus it says: “Work is both a right and a duty, it is every citizen’ s motive for personal achievement, and should be remunerated in line with its quality and quantity.”

What difference is there between this and the structural adjustment plans put forward by the IMF?

In a second series of measures, it is a question of changing the management model. It says: “The system of socialist planning (...) must be transformed in its methodological and organisational aspects, in order to make room for new forms of management and control of the national economy.”

“It is a question of transforming socialist planning in order to open the way to new forms of management and introduce market mechanisms into the state enterprise system for buying and selling.”

Further on: “Wholesale supply markets without subsidies will be developed for the system of enterprises, co-operatives (...) and self-employed workers.”

In point 16 on page 9, one can read: “State enterprises that continuously show losses in their financial balance-sheets (...) will be put through a process of liquidation”.

Regarding the health and education systems, point 154 on social security explains in particular that “it will be necessary to reduce the relative participation of the state budget in funding the social security system, (...) and continue to increase the [individual] contribution of the workers”.

Regarding education itself, “budget allocations will be reduced to the minimum needed for achieving the functions that have been assigned, and priority will be given to the criterion of making the maximum possible savings in personnel costs and the state budget, at the level of material and financial resources.”

On international trade, it is a question of “achieving a balance of external trade through a surplus in the current account of the balance of payments, supported by the performance of the real economy”. Looking behind this language, in fact he is talking about reducing imports and increasing exports by giving guarantees to international capital. To this are added decentralisation measures, in other words the transfer of state competencies to local authorities. Point 37 indicates: “The development of local projects, especially in the production of food, should constitute an employment strategy for food self-sufficiency at the municipal level”.

In point 105 of the document, there is an insistence on the need to attract international investment and to “promote multilateral collaboration, especially with UN institutions”. Let us not forget that Cuba had provided and still provides doctors and teachers at low cost to several countries in Latin America, and recently to Haiti. To promote acceptance of this being under UN control means placing it under the control of imperialism.

The draft document also talks of promoting the creation of “special development zones” and high-end tourism...

Overall, the document entitled “Economic and Social Policy Guidelines” constitutes a veritable programme of economic reforms which puts into question state property, the workers’ protection system and, long-term, the unity of the country. The document insists on the need to give guarantees to international capital by proposing a rescheduling of the debt repayment, in order to be able to meet the commitments that have been given.

Among the first measures taken a few months ago, there is the cutting of 500,000 jobs in the civil service, a first instalment that has to be completed by 31 April, out of the 1.3 million job-cuts planned for the next few years.

The closure of workers’ cafeterias has already started, although they still exist on a symbolic basis in some Ministries.

It has also been announced that ration cards will be ended. But due to resistance among the population, they are being phased out very gradually. Thus, things like sugar, chicken, fish, eggs, rice, coffee, bread and pasta – basic needs for feeding 11 million Cubans – can still be bought at a nominal price.

Faced with these measures, what is the position of the Cuban Workers Confederation?

On 13 September 2010, a statement by the CTC’ s National Secretariat was published and distributed widely. We should emphasise that this was a statement by the Secretariat and not the enlarged National Council (see box).

This statement has a novel character. Raul Castro had announced that more than 1 million workers in the civil service and state enterprises were surplus to requirements, and the same day, the government announced that the plan for “adjusting” the economic model by making it sustainable would involve an immediate and radical restructuring of the employment system. The first step would be to reduce the nationalised sector by 12 percent in 2011 – amounting to 500,000 jobs, with 1.3 million jobs to be cut within three years.

Faced with this extremely sudden adjustment, the CTC’ s National Secretariat concluded: “We commit to and will ensure the strictest observance and application of the principle of demonstrable suitability in determining who has the greater right to occupy a position, as well as transparency in the way this must be carried out. The trade union must carry out in its sector a systematic monitoring of the progress in this process with a high level of strictness and maintain this from start to finish, and must adopt the corresponding measures and inform its senior bodies and the CTC.”

At the Eighth Congress of the trade union for transport and the ports, held on 18-19 September 2010 in Havana, Confederation General Secretary Salvador Valdes Mesa stated in his closing speech: “As Raul Castro says, the revolution will not leave anyone by the wayside, but there is no question of making the state responsible for finding jobs for everyone, for making job offers and guaranteeing wages for an indefinite period. The first person who has an interest in finding a socially useful job is the citizen himself.”

On 20 September, the same CTC General Secretary stated during a meeting in Holguin that “by defending the revolution, we are defending the workers”, explaining that since 15 September, several mass meetings (200) had been held to explain the measures, meetings during which “the workers expressed their support for the government’ s decisions”. Since Tuesday, 8 November 2010, the CTC’s newspaper Trabajadores (Workers) has welcomed the content of the new guidelines and declared the need to discuss and implement them.

The agreement with Venezuela and the significance of ALBA

The fact that the convening of the CCP’ s Sixth Congress was announced in the presence of Venezuelan President Hugo Chavez has a particular significance. First of all, Venezuela has become Cuba’ s leading trade partner. The trade in goods and services in 2009 is estimated to have been worth US$3.6 billion. According to Chavez himself, the agreement with Venezuela, reached on the tenth anniversary of ALBA ’ s creation, has consolidated an unprecedented system of integration. Clearly, every worker and every militant activist who supports the sovereignty of the peoples can only welcome the sovereign trade agreements between the Cuban and Venezuelan governments, agreements that are outside of the direct control of US imperialism.

This shows that the perspective of a free union of sovereign Caribbean nations, free from all oppression and exploitation, would open the way to a genuine struggle for socialism. But it would be an illusion to think that those agreements are the realisation of socialism.

To be precise, Venezuela supplies Havana with some 100,000 barrels of oil per day. In exchange, 40,000 Cuban volunteers work in Venezuela. Of these, 30,000 are in healthcare (doctors and nurses) and the others are teachers and army officers.

The oil agreement forms part of a regional agreement under which an enterprise named Petrocaribe supplies oil at a low cost to a whole series of countries in the region, including Cuba but also Haiti (however, thanks to the existence of Preval’ s puppet government, those agreements provide no benefit whatsoever to the Haitian population).

In the 10 years since ALBA was set up, several trade agreements have been reached which remain on the level of a barter economy. One does not find in Venezuela the kind of state economic planning on the basis of population that exists in Cuba on different levels, although this could be done in Venezuela. This demonstrates the limitations of the measures taken by the Chavez government in relation to imperialism and its local agents.

It is no accident that the United States government has stated that President R.

Castro’ s plan was positive. Arturo Valenzuela, Assistant Secretary of State for Western Hemisphere Affairs, stated on 10 November 2010: “Freeing the political prisoners and opening up the economy to the private sector and foreign capital represent an important step.”

Valenzuela confirmed what the then Spanish Foreign Minister, Miguel Angel Moratinos, said: “The Cuban government’ s decision to free all political prisoners would allow a new stage to be opened in diplomatic relations between Cuba and the European Union. What is more, it would have consequences in relation to the United States.” According to the Minister, “this would lead to the lifting of the embargo that Washington has maintained since 1962”.

Moratinos went further: “Freeing the prisoners is not just a humanitarian gesture, but something that is very important and will have repercussions on the reform process in Cuba.”

Political reform after the economic reform

R. Castro has announced that following the CCP’ s Sixth Congress, a national party conference will be held to deal with internal matters. Saying that meant declaring that the Congress would be a crucial event. In effect, it will undoubtedly be the last congress of the historic generation of the 1959 Revolution. Fidel Castro is 84 years old, and Raul Castro 79. No doubt he is working on replacing the CCP’ s leading apparatus, and hence the state’ s central apparatus. But behind that renewal process lies something altogether different.

It must be said that over the last 4 years, Raul Castro has restructured a big proportion of the state’ s central apparatus. According to Spanish daily newspaper El Pais, Castro has replaced 60 percent of his government members. The latest reshuffle to date saw the firing of Basic Industry Minister Y adira Garcia, who was responsible for trade with Venezuela.

Let us recall that in 2009, Foreign Minister Felipe Perez Roque and Vice President Carlos Lage were removed from power over an obscure issue. These two officials were regarded as Fidel’ s heirs apparent. Other ministries which saw changes at the top and among senior staff are Economy and Planning, Agriculture, Transportation, Sugar Industry, Domestic Trade, Finances and Prices, Food and Fishing, Work and Social Security, and Light Industry. The governmental position of ministers linked to the army – like Commandante Ramiro Valdes and Generals Abelardo Colome and Julio Casas – has been strengthened. Indeed, Raul Castro has surrounded himself with men from the military apparatus, in recognition of the fact that the army directly controls 30 percent of the country’s economy.

Cuba at the crossroads

The launch of the “Economic and Social Policy Guidelines” continues and develops the implementation of the plan entitled “Process of transferring and reducing inflated payroll”, a plan which above all is focused on cutting 500,000 jobs in the public sector.

Let us recall that around that time, in the two pages it dedicated to the topic, Granma notably wrote (28 September): “If today there exists a large mass of workers in unproductive activity, this is the result of bad economic planning that has brought us an increased economic imbalance, but is also due to the international financial situation, bringing with it an increase in import prices and a fall in export prices”. [4]

The Cuban economy cannot survive outside of the world market. Since the 1960s, relations with the USSR partly “protected” a Cuban economy that was suffering from the embargo imposed by the United States. Practically speaking, Cuba was living off the subsidies (or protected prices) from the USSR. The collapse of the USSR has led to a catastrophic situation. Over recent years, the “barter” agreements with Venezuela have given Cuba a certain respite, but this is far from sufficient. What is more, the uncertainty of the political situation in Venezuela weighs heavily.

From the very beginning, the Cuban regime turned its back on linking the fate of the Cuban Revolution with that of the international revolution, and that of the Latin American continent in particular. Since Guevara’ s departure, within the framework of international policy imposed by the Kremlin, Castro allied himself with a whole series of reactionary regimes in Latin America. In particular, we should not forget his support for the PRI regime in Mexico at the time of the massacres in 1968, and more recently, his efforts since 1979 to ensure that the Sandinista regime in Nicaragua did not engage in a process of expropriating the bourgeoisie.

A complete balance-sheet of Castro’ s foreign policy is needed. His international activity was pursued consciously within the framework of “peaceful coexistence”, within the Kremlin’ s framework, and hence against the development of the world revolution. But the gains of the Cuban Revolution that remain depend on the development of the struggle by the continent’ s workers and peoples, and on the degree of independent organisation by the Cuban working class.

As institutions of the regime, the CCP and CTC are major obstacles to that process of organisation. The CTC is the force that is preparing to implement the measures: “The CTC, through its trade unions, plays a key role in each workplace. This is why we will have the measures applied by cadres who will be prepared and briefed to the very last detail. Similarly, the party and the UJC must check that this is done in line with the principles of justice and the Revolution.” [5]

Without any doubt, the Castroite regime is gambling its future. Opening up to the world market and seeking an agreement with Obama are things that are being done behind the backs of the workers, and to their detriment. However, nobody can say that Cuba’s fate is sealed and everything is settled. The working class in Cuba and at the continental level have not yet had their last word.

As far as the Fourth International and its sections is concerned, defending Cuba against imperialism and calling for the lifting of the embargo remain unconditional demands, going beyond our characterisation of the regime and its current policy. In any case, defending the gains of the Cuban Revolution, linked to the development of independent organisation by the workers, is an issue at the continental level, in other words in relation to the progress in mobilising the workers and peoples of Latin America.

Statement by the National Secretariat of the Cuban Labor Council (CTC)


“(...) Cuba is facing the urgent need to move forward economically, to better organise production, increase productivity, improve discipline and efficiency, and this will only be possible through our people’s dignified and dedicated work. Today, the duty of the Cuban people is to work and to work hard, seriously and responsibly, and to achieve a better use of the resources available to us in order to thus satisfy our needs.

In keeping with the process of updating the economic model and the economic forecasts for 2010-2015, the Guidelines foresee for the coming year a reduction of more than 500,000 workers in the state sector and, at the same time, an increase in the number of workers in the non-state sector. The timetable for carrying this out is set by the official bodies and enterprises to run up to the end of the first quarter of 2011.

For the trade union movement and the workers, paying the greatest attention to reducing staffing levels, to the process of labour availability and employment, and achieving adequate use of human resources, is a task that cannot be ignored. It is known that there are more than one million people working in surplus posts in the budgeted and state enterprise sectors.

Our state cannot and should not continue maintaining enterprises and productive, service and budgeted entities with inflated payrolls and losses that hurt the economy, which end up being counter-productive, which generate bad habits and distort the workers’ behaviour. We must increase production and the quality of services, reduce inflated social spending, and eliminate undeserved benefits, excessive subsidies, [university] studies as a source of employment, and early retirement.

The success of the process that is currently starting will depend on the political assurance that, starting with the trade union movement and under the party’s leadership, we trade union leaders give prior to the action that must be taken, and on the social consensus that we are reaching on the economic and political relevance of this change. These labour availability measures seek to identify posts that are not indispensable, and to reassign the workers who occupy them to other jobs where this is necessary and possible, or retrain them for other professions.

As far as dealing with workers who have been released is concerned, the current range of options is being broadened and diversified with new forms of non-state labour relations as employment alternatives. These include tenant farming, usufruct [farming state land privately on long-term leases], co-operatives and self-employment, towards which hundreds of thousands of workers will move in the coming years (...).

These changes in employment policy will be implemented gradually and progressively, they will begin immediately and will affect every sector through their importance and impact (...). A subject of singular importance is that of wages. We must revitalise the socialist principle of distribution, of paying each person according to the quality and quantity of the labour supplied. The system of payment by results being applied in centres with better-adjusted payrolls will continue to be the means used to increase productivity, and, as a result, the workers’ income. (...)”

La Havana, September 13, 2010

Footnotes

[1The CTC is the only trade union Cuban workers can join officially.

[2ALBA: Bolivarian Alternative for the Americas. See La Vérité/The Truth issue no.68, April 2010.

[3UJC: Young Communist League.

[4From a more fundamental point of view, this demonstrates the impossibility of building “socialism in one country”. It thus demonstrates the relevance today of the programme of the Fourth International, and the correctness of what Trotsky wrote about the USSR in Revolution Betrayed (Chapter 8), that “in the last analysis the safety of the workers’ state itself could be guaranteed only by the growth of the world revolution.”

[5Granma, 28 September 2010.

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