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The socialist state enterprise is our principal source of wealth, well-being and prosperity

The First Secretary of the Communist Party of Cuba Central Committee and President of the Republic, Miguel Díaz Canel Bermúdez, held another meeting mid-October with executives of the state enterprise system, during which an analysis was conducted of implementation of the Reordering Task and results of measures adopted to strengthen these entities.

The First Secretary of the Communist Party of Cuba Central Committee and President of the Republic, Miguel Díaz Canel Bermúdez, held another meeting mid-October with executives of the state enterprise system, during which an analysis was conducted of implementation of the Reordering Task and results of measures adopted to strengthen these entities.

The state enterprise, as the main actor within the Cuban economy, is undoubtedly the principal source of wealth, wellbeing and prosperity in our society, and has therefore undergone major changes, economic and organizational adaptations in the most recent stage, as is appropriate for the operator of the fundamental means of production and services in our socialist system, which are the property of the people.

Beyond the U.S. government’s tightening of the economic, commercial and financial blockade of Cuba, the 243 measures imposed by the Trump administration and maintained intact by his successor Joseph Biden, as well as the impact of the COVID-19 pandemic, the fruits of these transformations are far from what was expected.

The socialist state enterprise has been the object of the principal policy transformations and measures adopted, but in many, neither managers nor workers have assumed their role as the main protagonists of these changes.

This fact was critically addressed by President Miguel Díaz-Canel; Prime Minister Manuel Marrero Cruz, and Deputy Prime Minister Alejandro Gil Fernández, Minister of Economy and Planning.

Also leading the exchange were Salvador Valdés Mesa, Vice President of the Republic, and Joel Queipo Ruiz, Party Central Committee Secretariat member and head of its Economic Department. Deputy Prime Minister Ricardo Cabrisas Ruiz, several ministers and other authorities also attended.

The centerpiece of the meeting was a presentation by Marino Murillo Jorge, head of the Permanent Commission for Implementation and Development of Policy Guidelines, who pointed out that in the months that have elapsed since the monetary reordering began, more than a few changes have been made.

During this period, he explained, more than 250 decisions have been adopted and 145 legal norms issued or modified as part of follow-up to implementation of the Task. These include measures linked to processes of adjustment and rectification of problems in the design and implementation, and address deviations derived from the difficult economic context caused by the tightening of the blockade and the pandemic.

Explaining the impact of the reordering on the enterprise system through the month of June – August in some cases – he reported, along with other information, that 488 companies had experienced losses.

Eighty-two percent are concentrated in the agricultural sector, the sugar industry (AZCUBA), provincial commerce, companies subordinate to territorial governments, the metallurgical group (GESIME) and the food processing enterprise group (GEIA).

Murillo Jorge commented that one of the fundamental problems in implementation of the reordering has been inflation, much higher than what was designed, which has meant that the population’s central complaint about the measure implemented January 1, this year, is the salary/price ratio.

The Implementation Commission’s analysis was followed by comments from several heads of enterprise groups regarding a “detail” which is not at all minor: Very comparable companies can be found among both the “losers” and the “winners” – which were the majority during the period. Why then, do some report earnings and others not, despite their similarity?

Referring to the positive results (including earnings) of the Cuban furniture industry, which has been able to manufacture a good portion of the furniture required by tourist facilities, given prior financing of the sector, the President stressed the need to produce furniture of this type for the population and sales in Cuban pesos (CUP).

The income generated in freely convertible currency (MLC) that this industry receives to re-provision itself should also serve to finance the manufacture of a variety of products for the domestic market, which could even involve utilizing by-products of the entity’s current operations.

Outlining a general concept for the entire state enterprise system, Díaz-Canel insisted, “The essences cannot be lost.” He clarified, “Measures adopted to provide socialist enterprises access to more foreign currency, including what is sold on the domestic market in MLC, are intended to support their provision of more goods and services to the population.

The President expressed the conviction that profitability and meeting the population’s needs of the population are not mutually exclusive. We must think about the future and also about the present, and reorganize ourselves to produce more for the market in national currency, he stated.

Going further into this thesis, he noted that exports are a necessity, but they must be viewed as a means to acquire foreign currency to increase national production for the domestic market.

These companies must, at the same time, he said, create productive chains within the economy to replace imports.

“This, however,” he continued, “requires that innovation be a priority within our companies. The strength of socialism lies in the socialist state enterprise, and we must set the tone, we must be inspiring.”

Who generates the most jobs in our system? State enterprises. Who makes the largest investments? State enterprises. Therefore, we must do more research, more development; we must be more innovative.

And the principal innovation that the socialist state enterprise needs is an organizational innovation. All this, he added, is outlined in the nation’s governing document, in the Constitution of the Republic, because the socialist state enterprise is part of our political system.

“We need to shake up the state enterprise sector,” stated Prime Minster Manuel Marrero Cruz, referencing the Central Report presented by Army General Raúl Castro Ruz at the 8th Congress of the Communist Party of Cuba and the closing speech by First Secretary Miguel Díaz-Canel Bermúdez.

He stressed that measures adopted giving state enterprises more autonomy and decision-making authority have provided their executives and workers with sufficient tools to move forward, but the process is not advancing as rapidly as needed.

The enterprise system has been provided the means to make profound transformations, but many of the decisions adopted are not being implemented, he acknowledged. We need to do things differently, Marrero insisted, and make sure that workers play a leading role in these changes, listen to them more, but we are not creating these opportunities, we continue with the bureaucracy, with the old methods.

Concluding the meeting, the First Secretary described the meeting with enterprise leaders as another step forward in meeting the objective of transforming, consolidating and strengthening the state enterprise system as the principal actor in the socialist economy.

Strengthening its role as a fundamental actor is a constitutional obligation, the President reflected, reading and commenting on four articles in the Magna Carta which establish guidelines for the functioning of the national economy, the property regimen, the participation of workers, the role of science, technology and innovation, and the economy’s prime mover.

Citing Article 18 of the Constitution of the Republic, which establishes that in Cuba “a system of socialist economy reigns, based on the entire people’s ownership of the fundamental means of production as the principal form of property,” he recalled that state enterprises represent the people in administering these fundamental means of production, and emphasized that we must internalize this article, seek and assume the implications it bears and means.

With regard to Article 20, which states, “Workers participate in the processes of planning, regulation, management and control of the economy,” and the law “regulates the participation of the workforce in administration and management of state enterprise entities and budgeted units,” the President commented that, if there is to be democratic participation and a contribution – which are very much needed – we must create adequate spaces for debate, in which workers can state their opinions, proposals, and dissatisfactions.

Once these spaces are created, Díaz-Canel continued, we must create others to implement what has been discussed, which cannot be accomplish with purely administrative decisions, but rather requires consciousness on the part of workers that what has been agreed upon, by all, must be carried out, and that everyone’s role in the process is clear.

A third condition necessary to ensure participatory management of a company, the First Secretary added, is that in these processes must be transparent, and transparency implies accountability, for those who direct a company and for the workforce, alike.

He added that these accountability processes also require transparency in terms of economic data and in the decisions that are made. When we articulate these three types of spaces (for debate, implementation and accountability) within a company, then, yes, participation exists.

Regarding Article 21 of the Constitution of the Republic, which establishes that the “State promotes the advancement of science, technology and innovation as essential elements of economic and social development,” Díaz-Canel argued that promotion and use of scientific research and innovation to solve problems continues to be insufficient in the state enterprise system.

The first person in a company to defend science and innovation, and the policy that exists on this matter, must be its director. To have a culture of innovation implies, in the first place, knowing what qualified personnel the entity has to take on the task, including young staff members, who arrive well trained and with plenty of enthusiasm, but sometimes, because of the way we treat them, they leave the company.

The second prerequisite is the creation of a technical-advisory council that has autonomy, that puts the contradictions existing within the company on the table and makes proposals, but to do so, audacious individuals must be included, people who are “uncomfortable,” as we say, people who question me as a company director, not just “saying yes” to everything I utter.

Research and innovation in a company also require financing for this activity, which is what will provide us with many solutions, he added.

With respect to Article 27 of the Magna Carta, which states, “The socialist state enterprise is the main subject of the national economy. It has autonomy in administration and management; plays the principal role in the production of goods and services, and fulfills its social responsibilities,” Díaz-Canel insisted that participants in the meeting conduct analyses of how their enterprises are complying with these precepts.

Referring to the concept of “social responsibility” and to the transformations taking place in neighborhoods, led by their own inhabitants with the support of government entities, he stressed that no company can be oblivious to the problems that exist in the communities where they are located.

Díaz-Canel asked: Can you be indifferent when many of the workers in your company live in these neighborhoods, near them or in others that have the same problems, and when many of your workers may be vulnerable? Can you be indifferent to problems when the company could support the community without violating anything established, projecting in your budgets actions that could improve the community? State enterprises are also representing the Cuban state in these places, he recalled.

Referring to the constitutional precept that “the socialist state enterprise plays the principal role in the production of goods and services,” the President asked exactly where everyone stood in fulfilling Article 27, regardless of the limitations, when the country faces a serious shortage of goods and services for the population.

Addressing the issue of autonomy for socialist state enterprises, another constitutional mandate, he pointed out that decisions have been made to favor this, but some elements are not functional since a adequate relationships between central state administration agencies, superior enterprise management organizations and enterprises have yet to be developed, but also – he said – because there are enterprises which are not taking advantage of the autonomy they have been afforded and are still waiting for guidance from “above.”

At the beginning of his closing remarks at the meeting with state enterprises system leaders, Díaz-Canel recalled that these gatherings have been conducted quarterly in other formats, but now they will be held at least monthly, with different compositions and addressing different topics.

If we are talking about the economy’s main actor – he said – everything we can discuss, all the consensus we can establish on the basis of everyone’s experience, with everyone’s opinions, is very useful and necessary, in order to make decisions that allow us to move forward in meeting the objective of continuing to transform, consolidate and strengthen the state enterprise sector.

Strengthening the state enterprise as the fundamental actor of our socialist socio-economic model – he added – is not only an economic principle, it is a political principle. Strengthening the role played by an actor that represents an important part of the concept of socialist state ownership of the basic means of production.

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