Cuba Allows Cooperatives in Various Economic Activities

Cuba Allows Cooperatives in Various Economic Activities / Yoani Sanchez
#Cuba
Translator: Unstated, Yoani Sanchez

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This Tuesday a new Decree-Law went into effect in Cuba, gradually
expanding cooperatives. In a preliminary state it is expected to
contribute to the creation of more than 200 associations of this type
throughout the country. Since the last session of the National Assembly,
in July of this year, we have been awaiting the implementation of a
measure that is expected to invigorate the island's ailing economy.
Until now, this kind of management has only been allowed in the
agricultural sector. But starting now it will also include restaurants,
transport, personal and domestic services, the recovery of raw materials
and construction, among other sectors.

This measure is part of a plan of increased flexibility and economic
adjustments approved by the Sixth Congress of the Communist Party of
Cuba in 2011. According to official propaganda is part of a process of
"updating the current model" rather than dismantling it. However, some
critical sectors had advocated for less nationalization and more
cooperatives, as an alternative to privatization.

This Tuesday's edition of the newspaper Granma said that it is a
decree-law that establishes the "experimental constitution" of these
associations. It also announced that the lease of state-owned premises
shall preferentially be offered to those workers who work in them now.
Of course, when these workers "voluntarily determine to form a
cooperative." To form the cooperative the applicants will have to
present a request to the municipal organs of People's Power and these
submit them to various committees.

Initially "first degree" associations will be authorized, with up to
three employees. It is also expected that "second degree" associations
will be permitted, made up of two or more cooperatives, although right
now they still will not be implemented. A General Assembly, where each
partner will have one vote, will be directed by each of these groups.

The official organ of the Communist Party clarifies that the the prices
of products and services marketed will be governed by the laws of supply
and demand. Although it warns that there will be some exceptions in
which the State will determine the sales prices. During the session of
the National Assembly in July, Vice President Marino Murillo said the
government was working on the preparation of a General Law of Cooperatives.

Among the best received points of the new Decree-Law is the fact that
these new entities will have a legal existence. They will not be
administratively subordinated "to any state entity" although it's been
made clear that they should "conform to the guidelines set forth by the
governing bodies" of each activity. For example, in the case of a group
of workers who form a construction cooperative, they will have to abide
by the quality standards dictated by the appropriate Ministry.

The new Decree-Law is also related to the Law No. 113 of the Tax System
to take effect this coming January. This grants tax incentives for
cooperatives compared to other state forms of management.

The economic adjustment plan driven by Raul Castro still has major gaps.
Complaints from the self-employment and cooperative sector center on the
inability to get bank financing and the lack of a wholesale market. The
government has said the latter will be gradually implemented beginning
in 2013, but this announcement has not quieted suspicions. However, a
brief glimmer of autonomy is being opened with the Decree-Law that goes
into effect on this second Tuesday of December.

11 December 2012

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