Thursday, August 30, 2007

Empresas en Perfeccionamiento and the Sinification of the Cuban Economy

Over the course of the last decade, and under the very nose of the American foreign policy elite Cuban economic organization has been undergoing a slow but fundamentally important change. While Americans continue to believe that time has stood still in Cuba, Raul Castro and his circle in the Fuerzas Armadas Revolucionarias (FAR) have been slowly, patiently and methodically reorganizing the deployment of Cuban productive capabilities form the old and inefficient Stalinist state overseen morass to the more efficciency based Chinese model of state owned corporations more (though still not substantially enough) responsible for their own economic performance.

FAR has been at the forefront of the creation of a corporate restructuring of economic organization in Cuba. From a mass of undifferentiated but centrally controlled production units, FAR has begun to reorganize state economic productivity on corporate lines. The state retains control of these enterprises, but they are run as separable entities on a more competitive basis. A recent report. The Cuban Military in the Economy, Focus on Cuba, Cuba Transition Project, Issue 46, Aug. 11, 2007, nicely describes both the extent of FAR's corporate holdings, and the Sinification of its corporate techniques. The report tends to view what it describes as the "militarization" of the Cuban economy unenthusiastically. Yet it was this step that made China's engage with globalization possible, and the step most likely to permit the reorganization of the Cuban economy with the least amount of disruption. It is, for that reason, perhaps, that American critics of Cuba might view the transformation negatively. Certainly, from a global engagement perspective, the adoption of a rule fo law regime based on the creation and respect for independent economic entities capable of bearing responsibility for their actons (and interactions with global economic actors) would tend to strengthen efforts to bring Cuban economic activity into the global stream.

The FAR has been in the vanguard of introducing modern industrial and management techniques to Cuban industry. Among the techniques being tested in the recasting economic organization in Cuba, without sacrificing the Marxist Leninist basis of state organization, is the Sistema de Perfeccionamiento Empresarial (SPE). The purpose of this program is to permit facilitate companies to use modern management techniques in their operations.
The SPE has been penetrating into countryside companies more quickly since Fidel Castro's incapacitation. Thus, for example, a report from a state news organ for Ciernfuegos recently reported on the successes of entities in that province adopting SPE organization. "En las entidades que aplican el SPE los niveles de calidad crecieron en sentido general, e incluso en once de ellas lograron avalar los procesos con la norma de calidad ISO 9 000, un estándar internacional que mide la excelencia de las producciones." (Thos eentities applying SPE quality levels generally grew and 11 of them attained ISO 9000 quality standards, an international standard that measures production quality). Empresas en perfeccionamiento runden utilidades,, Aug. 3, 2007. The story laments, though that only 38 of the 114 state enterprises in Cienfuegos has yet to adopt and qualify for status as an SPE. Id.

But the pace of change may be accelerating. FAR leaders appear to be ready to pressure the non-military part of the economy to begin to more aggressively change their organization to mimic the changes in the FAR sector. A recent speech, Carlos Lage Dávila, a member of the Political Bureau and and Secretary of the Executive Committee of the Council of Ministers, analyzed the difficulties of expanding application of the SPE program more broadly, suggested a number of reasons for the failure (including most significantly a failure of leadership, inattention, and poor planning) urged the greater use of the SPE model as the basis for economic development in Cuba. See
Discurso de Carlos Lage Dávila, miembro del Buró Político y secretario del Comité Ejecutivo del Consejo de Ministros, en la clausura del Seminario Nacional con los directores de empresas que aplican el perfeccionamiento empresarial, efectuada en la Sala Universal de las FAR, el 29 de agosto deL 2007 (" Necesitamos que las empresas en perfeccionamiento sean un ejemplo, una vanguardia en la batalla por el de-sarrollo económico del país. " Id.). But in a mark of the lossening of the opposition of Fidel Castro to Sinification, Lage Dávila made the surprizing statement: " El socialismo es en la historia del hombre un sistema social joven. La experiencia más avanzada, la de la URSS y el llamado campo socialista El socialismo es en la historia del hombre un sistema social joven. La experiencia más avanzada, la de la URSS y el llamado campo socialista fracasó. Los países que hoy se plantean la construcción del socialismo en distintas partes del mundo, lo hacen desde condiciones económicas y políticas muy diferentes a las nuestras. Sus aciertos y tropiezos deben enriquecer nuestro camino, pero la construcción del socialismo en Cuba solo es posible como fruto de nuestra propia experiencia.." Id. ("Socialism is the histroy of a young social system. The most advanced experience of the Soviet Union andf the so-called socialist camp, failed. Today states in different parts of the world in which the construction of socialism is fostered do it under economic and political conditions very different from our own. Their successes and failures should enrich our own way, but the construction of socialism in Cuba is only possible as the fruit of our own experience."). As important, corporate directors of state enterprises will owe a strong fiduciary duty to its principal shareholder--the state. In that sense, Lage Dávila tells us, corporate directors serve both a pblic and private purpose: "El director de una empresa al frente de un eslabón esencial de la economía del país es también y ante todo un representante del Partido y del Gobierno ante sus trabajadores. Es un dirigente económico, pero también político cuya primera tarea es defender, difundir y hacer prevalecer las ideas de la Revolución." Id. ("The director of a vanguard company that is an essential link of the nation's economy is also and first of all a representative of the Party and the Government to his workers. He is an economic leader, but also politician whose principal task is to defend, to spread and cause the success of the ideas of the Revolution.") These are statements worthy of Deng Xiaoping and point to an intensification of the campaigns to change the face of economic organization in Cuba. Expect more , and soon.

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