Ariel Terrero is one of Cuba's most prominent economic commentators. He has a regular column in Cuba's Bohemia current affairs magazine and a spot on Cuban TV. In this commentary he takes up the concern expressed by many Cubans about the proposal to gradually eliminate the ration book system, through which all Cuban households receive a monthly quota of highly subsidised basic goods in special stores. The ration book system subsidises everybody equally, including those with higher incomes and those who receive substantial remittances from relatives living outside Cuba.
With the income stratification that has opened up during the past two decades of the post-Soviet Special Period — and that will be consolidated as revolutionary Cuba moves away from a paralysing egalitarian paternalism by reasserting the link between income and the individual's or work collective's labour contribution to society — the ration book no longer serves social justice, but reinforces social inequality by draining state coffers of money that could be targeted to those who really need subsidies.
When
By Ariel Terrero
Bohemia, January 24, 2011
Translation: Marce Cameron
Rarely has a programmatic document advanced so many proposals in so few words. Although it is reiterated in the debate that this or that sector or activity deserves explicit mention, the Draft Economic and Social Policy Guidelines for the Party and the Revolution propose measures and challenges for the Cuban nation that are numerous, coherent and precise, worthy of a book of Asiatic aphorisms or a military manual. But this document inevitably gives rise to more questions than answers.
How to achieve this or that? How long will it take? What will be the consequences? When will this or that decision be taken? When will the sun rise [i.e. when will these reforms bear fruit]? When? The popular debates express, in particular, the uncertainty regarding timeframes.
The Draft Guidelines define principally strategies: what to do. The timeframes and tactics to advance in the directions that will be given final approval by the Communist Party Congress [in April] will be elaborated later on, at every bend in the road, by the economic protagonists. This is how it will be done.
It's more difficult to anticipate timeframes. The introduction to the document proposes the 2011-15 five-year period for the resolution of severe problems — from the utilisation of [idle] agricultural lands and excessive [state-sector] payrolls and low labour productivity, for example, to the recovery of the role of wages. It also identifies a short timeframe for the achieving financial equilibrium and "resolving those problems with greatest immediate impact on economic efficiency", and a longer timeframe for solutions to achieve sustainable [economic] development.
In other cases, the Guidelines are necessarily more cautious: in the next five years only "carrying out studies" or advancing towards the elimination of monetary duality are promised.
The questions raised in the debates [convened in workplaces and neighbourhoods throughout Cuba] often express anxiety multiplied by negative two: they want to see, feel and consider the results of measures that have been initiated or announced in agriculture or in relation to wages, for example, and are apprehensive regarding other, more gradual changes.
After half a century under the empire of the ration-book store and rationing, many compatriot's hackles go up when they read in Guideline No. 162: "Implement the gradual elimination of the ration book, as a normative and egalitarian form of distribution at subsidised prices..."
The doubts, and above all the difficulties of imagining a future without the ration book, act as ballast against public support for its elimination, despite it symbolising shortages and feeding the black market. How will consumption be affected by the withdrawal of rationing? When will it be phased out [completely]? Repeatedly in the debates there are appeals for a gradual phasing out, very gradual.
Personally, I'd be happy if it disappeared tomorrow, as I think that the burial of the ration book could only be a sign of economic health, advance and the existence of conditions that we need urgently: a solid expansion in food production and supply and a generalised increase in wages — in step with a parallel growth in productivity — so that we Cubans can cover the cost of the basic basket of consumer goods without the help of state subsidies.
The Cuban system of rationing and food subsidies protects equally — another example of paralysing egalitarianism — the family who needs it and citizens with higher incomes; those that work and those that don't [i.e. who are capable of working but choose not to]. A revolution should subsidise people rather than products. This would allow the state to target more effectively the onerous expenditure that is currently dedicated to the network of rationed goods stores.
Today, the government recovers only one eighth of the 26 billion pesos [about US$1.1 billion] of total spending this implies. This means that, without subsidies, an adult consumer in the capital would have to pay some 140 pesos for their monthly quota [of subsidised rationed goods], instead of the around 17 pesos they have to spend today.
When we consider that 140 pesos is about a third of the average salary in Cuba and the current quota is insufficient to cover nutritional needs, it's impossible to even contemplate the elimination of the ration book this year. Change towards a distribution [of basic goods] without subsidies must go hand in hand with a recovery of the national economy and transformations in other areas — labour policy, for example — that would stimulate wage increases. And all of this will, undoubtedly, take some time, however much some would wish, and others fear, the contrary.
With the income stratification that has opened up during the past two decades of the post-Soviet Special Period — and that will be consolidated as revolutionary Cuba moves away from a paralysing egalitarian paternalism by reasserting the link between income and the individual's or work collective's labour contribution to society — the ration book no longer serves social justice, but reinforces social inequality by draining state coffers of money that could be targeted to those who really need subsidies.
When
By Ariel Terrero
Bohemia, January 24, 2011
Translation: Marce Cameron
Rarely has a programmatic document advanced so many proposals in so few words. Although it is reiterated in the debate that this or that sector or activity deserves explicit mention, the Draft Economic and Social Policy Guidelines for the Party and the Revolution propose measures and challenges for the Cuban nation that are numerous, coherent and precise, worthy of a book of Asiatic aphorisms or a military manual. But this document inevitably gives rise to more questions than answers.
How to achieve this or that? How long will it take? What will be the consequences? When will this or that decision be taken? When will the sun rise [i.e. when will these reforms bear fruit]? When? The popular debates express, in particular, the uncertainty regarding timeframes.
The Draft Guidelines define principally strategies: what to do. The timeframes and tactics to advance in the directions that will be given final approval by the Communist Party Congress [in April] will be elaborated later on, at every bend in the road, by the economic protagonists. This is how it will be done.
It's more difficult to anticipate timeframes. The introduction to the document proposes the 2011-15 five-year period for the resolution of severe problems — from the utilisation of [idle] agricultural lands and excessive [state-sector] payrolls and low labour productivity, for example, to the recovery of the role of wages. It also identifies a short timeframe for the achieving financial equilibrium and "resolving those problems with greatest immediate impact on economic efficiency", and a longer timeframe for solutions to achieve sustainable [economic] development.
In other cases, the Guidelines are necessarily more cautious: in the next five years only "carrying out studies" or advancing towards the elimination of monetary duality are promised.
The questions raised in the debates [convened in workplaces and neighbourhoods throughout Cuba] often express anxiety multiplied by negative two: they want to see, feel and consider the results of measures that have been initiated or announced in agriculture or in relation to wages, for example, and are apprehensive regarding other, more gradual changes.
After half a century under the empire of the ration-book store and rationing, many compatriot's hackles go up when they read in Guideline No. 162: "Implement the gradual elimination of the ration book, as a normative and egalitarian form of distribution at subsidised prices..."
The doubts, and above all the difficulties of imagining a future without the ration book, act as ballast against public support for its elimination, despite it symbolising shortages and feeding the black market. How will consumption be affected by the withdrawal of rationing? When will it be phased out [completely]? Repeatedly in the debates there are appeals for a gradual phasing out, very gradual.
Personally, I'd be happy if it disappeared tomorrow, as I think that the burial of the ration book could only be a sign of economic health, advance and the existence of conditions that we need urgently: a solid expansion in food production and supply and a generalised increase in wages — in step with a parallel growth in productivity — so that we Cubans can cover the cost of the basic basket of consumer goods without the help of state subsidies.
The Cuban system of rationing and food subsidies protects equally — another example of paralysing egalitarianism — the family who needs it and citizens with higher incomes; those that work and those that don't [i.e. who are capable of working but choose not to]. A revolution should subsidise people rather than products. This would allow the state to target more effectively the onerous expenditure that is currently dedicated to the network of rationed goods stores.
Today, the government recovers only one eighth of the 26 billion pesos [about US$1.1 billion] of total spending this implies. This means that, without subsidies, an adult consumer in the capital would have to pay some 140 pesos for their monthly quota [of subsidised rationed goods], instead of the around 17 pesos they have to spend today.
When we consider that 140 pesos is about a third of the average salary in Cuba and the current quota is insufficient to cover nutritional needs, it's impossible to even contemplate the elimination of the ration book this year. Change towards a distribution [of basic goods] without subsidies must go hand in hand with a recovery of the national economy and transformations in other areas — labour policy, for example — that would stimulate wage increases. And all of this will, undoubtedly, take some time, however much some would wish, and others fear, the contrary.
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