Thursday, June 16, 2011

Translation: Guidelines debate 9, Pricing policy

Here is Part 9 of my translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document published together with the final version of the Guidelines adopted by the Cuban Communist Party (PCC) Congress in April.

In Cuba's centrally planned economy most prices are set by planning authorities rather than the market. In the new socialist-oriented economic model outlined in the Guidelines, the state will continue to regulate prices where this is deemed necessary while allowing the market to establish others. There will be greater scope for state enterprises to set the prices of their products and services within certain limits established by the plan. The aim is to harmoniously combine central planning, decentralised planning at the level of state enterprises and municipalities and market mechanisms. Guideline 1 states that "the socialist planning system will continue to be the principal means to direct the national economy."

The format is as follows: number and text of the draft guideline, followed by the text and number of the corresponding guideline approved by the Communist Party Congress, followed by the drafting commission's explanation for the change. You'll find it easiest to read on my blog where the amended guidelines are in bold.

Pricing policy

New guideline:

Establish pricing policies in correspondence with the updating of the economic model. (66) 

Added, considering that there must be norms for the setting of prices. In response to 1,742 opinions nationwide and one National Assembly deputy.

61. The pricing system will be subject to an integral revision to make it possible to accurately measure economic activity, encourage efficiency, promote exports and import substitution and eliminate excessive subsidies and gratuities.

Comprehensively revise the Pricing System to allow economic activity to be measured accurately, encourage efficiency, increase exports and substitute imports. (67)

Improves the wording, clarifying doubts about its content given 2,294 opinions in 14 provinces, the Isle of Youth and six National Assembly deputies. The reference to "eliminate excessive subisides and gratuities" is dealt with in the new guideline 69.

62. The centralised character of the setting of pricing policies, and the determination of the prices of products and services that are in the state's interests to regulate, will be maintained.

The centralised character of the setting of prices for those products and services that need to be regulated for economic and social reasons will be maintained, decentralising the rest. (68)

Combines the original guidelines 62 and 63 for better comprehension, taking into accoun 1187 opinions nationwide and one National Assembly deputy.

63. Mechanisms to allow enterprises to set other prices more flexibly will be established, ensuring that the national interest prevails over those of enterprises, sectors or localities without covering up inefficiencies and on the basis of foreign trade prices, all of which will require more rigourous auditing.

Incorporated with guideline 68 for clarity, given 79 opinions in 9 provinces.

New guideline:

Continue to gradually eliminate excessive subsidies and gratuities in relation to products and services, setting retail prices on the basis of costs without covering up inefficiencies, taking into consideration the income levels of the population. (69)

Excised from the original guideline 61 to highlight the gradual character of the elimination of subsidies and gratuities, "taking into consideration the income levels of the population". In response to 4,798 opinions nationwide and one National Assembly deputy.

New guideline:

Improve, in the network of state-owned consumer goods stores, the relationship between price and quality for similar products or services, avoiding unjustified price differences. (70)

Incorporated, taking into account 4,052 opinions nationwide and five National Assembly deputies.

New guideline:

Measures will be adopted to promote, as far as possible, the stability of prices of goods and services offered by the non-state sector, especially in those activities linked to basic necessities of the population, taking into account the economic situation. (71) 

Added, taking into consideration that if the state is going to promote price stability via various mechanisms, this does not imply a policy of administratively fixing the prices of goods and services offered by the non-state sector. Given 32,171 opinions nationwide and four National Assembly deputies.

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