A chronology of Cuba’s economic reform

2006

July – On July 31, 2006, Fidel Castro temporarily delegates power, and Raul Castro takes over provisionally as President of the Council of State and head of the Cuban Communist Party.

 

2007

May – Private taxi drivers notice that police are no longer stopping them to check to see if they are licensed.

July – Raul Castro’s first major speech as acting President gives a glimpse of his reform ideas, calling for “structural changes and changes of concepts” and placing a priority on agriculture. He quotes his brother Fidel: “Revolution is a sense of the historical moment, it is to change all that must be changed.”

December – The under-the-table pay supplements that foreign companies have long provided in hard currency to Cuban workers are legalized. Companies must keep records of such payments and the workers must pay income tax on them.

 

2008

February – Raul Castro is elected as Cuba’s chief executive, President of the Council of State, a post he held provisionally since 2006.

March – Following Raul Castro’s promise to remove “unnecessary prohibitions” that affect citizens’ lives, a series of consumer restrictions are lifted. Computers and DVD players are permitted for sale to the public, Cubans are permitted to have cell phone accounts in their own name (previously, they typically enlisted a foreign visitor to open
an account in the visitor’s name), and Cubans are permitted to stay in tourist hotels and to rent cars previously available to tourists only.

April – Raul Castro announces that the Council of State commuted death sentences of “a group of convicts” and left them with 30-year or life sentences. This action left only three inmates on death row, all convicted of terrorism-related charges. Two of these three, both citizens of El Salvador, had their death sentences commuted by the Supreme Court in 2010; the court changed their sentences to 30-year jail terms.

July – A program of agricultural land grants that had been under way for months was formalized in Decree-Law 259, providing for the distribution of idle state lands to individual farmers and cooperatives. Grants are made in usufruct in ten-year terms for individuals and 25-year terms for cooperatives.

July – The transportation ministry announces that it will soon begin granting new licenses for private taxis.

August – A new labor policy removes ceilings on individual earnings in the state sector and directs state sector employers to develop sliding pay scales that reward productive workers with higher pay.

 

2009

January – Regulations are published to enable licensing of new private taxis, and their numbers double within six months.

April – Following an announcement in December 2008 that the government was conducting “experiments…to lighten the state’s burden in the provision of some services,” the government begins turning over small barber and beauty shops to their workers, who pay rent and utilities and otherwise run the shops as their own business.

June – A new decree permits Cubans to hold more than one job, except for persons holding high-level jobs, teachers, and health sector personnel.

August – Raul Castro tells the National Assembly that Cuba might have to do without some “beneficial and even laudable activities” that generate spending that “simply is not sustainable.” He confirms the gradual closure of public boarding schools that combine study and farm work, which generations of Cubans attended starting as early as seventh grade. The Catholic church applauds it as a “positive step” that will keep families together.

August – The Office of the Comptroller is established, headed by Gladys Bejerano, to strengthen auditing inside state entities. The office goes on to figure in several investigations of corruption involving arrests of both Cuban and foreign businessmen.

September – Granma reports that as part of efforts to achieve “economic rationality,” the government will begin the process of closing 24,700 workplace cafeterias, beginning in four ministries in Havana. Affected workers will receive 15-peso daily stipends. The article notes that the cafeterias operate at an annual cost of $350 million, and some of their inventories find their way to the black market.

October – A signed editorial in Granma argues that the monthly household food ration book should be replaced by a system of subsidies that go only to the needy.

 

2010

May – A meeting between Raul Castro and Cardinal Jaime Ortega begins a process, also involving the government of Spain, whereby 166 political prisoners would be released from jail, including the 52 remaining from the 75 arrested in the spring of 2003. Of those released, twelve decided to remain in Cuba and the rest accepted offers to go to Spain with family members.

August –To encourage outside investment in the tourism sector, the maximum term for land leases to foreign companies is extended from 50 to 99 years, a move welcomed by developers of prospective golf course/real estate projects.

September – A statement by the Cuban labor union federation announces that half a million state sector workers will be laid off by April 2011, with a “parallel increase in the non-state sector.”

October – Regulations affecting small private entrepreneurship, which Raul Castro calls “one more employment option” for workers that will no longer be working in the state sector, are substantially liberalized. Licensing offices, which for years had approved very few applications, assist applicants and generally grant licenses within a week. A new tax system for entrepreneurs is instituted. State newspapers, radio, and television explain requirements and procedures. In the first month, 29,000 new entrepreneurs are licensed.

October – A signed editorial in Granma likens the government’s finances to those of a family confronting the truth that “you can’t spend more than you bring in,” and points out the need for spending cuts, including in social benefits. It notes that education and health care, both free to the public, account for 47 percent of the government’s spending.

October – A news article in Granma reports on the “rationalization” of health care delivery in Havana through consolidation of clinics and specialized services, removing them from areas of low usage, and through reduction of personnel.

November – The “Lineamientos,” the economic and social policy guidelines that are the basis for the reform process in each sector, are published in draft form and subjected to nationwide discussion.

December – Finance Minister Lina Pedraza, addressing the National Assembly, anticipates that 1.8 million workers will join the “non-state” sector by 2015 and describes the elements of a new tax policy under discussion: sales taxes, taxation of private farmers’ income, and a tax on people who are able to work and do not work, in order that they contribute to the cost of social services.

 

2011

February – State media announce that sugar is being phased out of the monthly household ration book, leaving consumers to buy sugar in state stores at eight pesos per pound (about $0.32, half the U.S. retail price), rather than at the ration book’s deeply subsidized price. Similar announcements have been made regarding other products, as the ration book is slated for eventual elimination.

March – The plan to lay off a half-million workers by April 2011 is shelved; layoffs proceed but at a slower pace.

April – The newspaper Juventud Rebelde lists agenda items for a January 2012 national conference of the Communist Party, including “to plan the work of the Party, leaving behind prejudices toward the non-state sector of the economy.”

April – The Communist Party Congress elects Raul Castro to its top position, First Secretary, a post he held provisionally since 2006.

May – Following approval by the Communist Party Congress, the “Lineamientos,” the economic and social policy guidelines that are the basis for the reform process in each sector, are published in final form.

May – To help entrepreneurs get on their feet and to spur job creation, certain taxes and regulations affecting entrepreneurs are eased.

July – The Ministry of Education laid off 3,415 employees in the just-concluded academic year, relocated 3,667, and was moving to lay off 6,877 more.

October – Car sales are legalized. Previously, Cubans could only sell pre-1959 cars.

November – The Ministry of Sugar is dissolved and replaced by AZCUBA, an entity that will manage business units that previously belonged to the ministry.

November – A new decree permits Cubans and foreigners legally residing in Cuba to buy and sell residential real estate, with a limit of one residence and one vacation home. The measure streamlines the process of real estate transfers and encourages owners to update their property titles.

December – The government releases 2,900 prisoners serving sentences for non-political offenses.

December – Cuban banks begin to offer loans to entrepreneurs, small farm producers, and persons needing funds to fix up their homes. Cuban media promote and explain the new credits.

December – New regulations allow all agricultural producers to sell directly to hotels and restaurants in the tourism sector. Previously, tourism businesses could only buy from a state enterprise. A Granma article explains that the idea is to reduce spoilage, “to simplify the links between the primary producer and final consumer,” and to allow tourism installations to “take better advantage of the potential of all the forms of production at the local level.”

December – At a National Assembly session, officials set a goal for 23,000 new homes to be built by Cubans’ “own effort” in 2012. To facilitate do-it-yourself construction and repair, government retail stores are beginning to supply building materials, and consumers no longer need a government agency’s permission to buy them. State media criticize the stores for moving too slowly; officials say only half the planned number of construction supplies showed up on store shelves in 2011. In January 2012, profits from these sales were being used to provide low-income home repair grants, and Cuban media report that more than 200 grants were made in the first month.

 

2012

January – The Ministry of Public Health announces that its outlays were 7.7 percent less in 2011 than in 2010.

January – The Scarabeo 9, a moveable drilling platform for offshore oil exploration, arrives in Cuba and begins exploration north of Havana, 28 miles from U.S. waters. The exploration, conducted by a consortium led by the Spanish oil company Repsol in conjunction with the Cuban oil company Cupet, gives rise to hopes that Cuba could become self-sufficient in energy.

March – Cuban media report on a Council of Ministers meeting that approved pilot projects for the creation of private cooperatives in three provinces in sectors other than agriculture.

April – Cuban labor federation official Raymundo Navarro, in an interview with the EFE news agency, says that state payrolls have been reduced by 140,000 in 2011 and will be reduced by a further 110,000 in 2012; the goal is to reach a 500,000 reduction by 2015. The original goal, announced in September 2010, was to reach the 500,000 mark by April 2010.

April – The number of Cubans working in the entrepreneurial sector, including both entrepreneurs and employees, reached 371, 200, an increase of 230,000 since October 2010.

April – Granma reported that in the first three months of 2012 there were 2,730 sales and 10,660 donations of homes, and 8,390 sales and 6,780 donations of cars.

May – Repsol concludes its exploration and announces that it found no oil. The exploration rig will be passed to other companies, starting with Malaysia’s Petronas, to continue exploration in Cuba’s Gulf waters.

June – Radio Rebelde reports that from January through April, 92,500 homeowners registered the titles to their homes, and 140,000 did so in 2011, according to the Ministry of Justice. This step, the story says, “guarantees greater legal security to property owners.” If a property’s title is not updated and registered it cannot be sold or otherwise transferred.

August – In an apparent effort to sensitize consumers to the cost of free health care, Granma published lists of medical procedures and their costs every day for two weeks.

September – The government announced 17 measures to improve the performance of its chronically underperforming UBPC (Unidad Basica de Produccion Cooperativa) farm cooperatives, including giving more autonomy to the cooperatives and their managers and ending the practice of using state funds to prop up those that operate at a loss. The UBPC’s were created in 1993 from the breakup of large, heavily mechanized state farms. Of the 1,989 in operation, 540 were found to be in a “favorable economic and productive situation” while 327 were in such trouble that they were deemed to have “no possibility of recuperating.”

October – News reports indicate that parcels of idle state land have been distributed to nearly 170,000 private farmers and cooperatives. (The 10-year renewable grants are in usufruct, which allows use but not ownership of the land.) The Gaceta Oficial carries an announcement that farmers will be permitted to build housing on the land.

October – A new tax law is announced in the Gaceta Oficial. Under it, state salaries remain tax-exempt; income tax rates applied to entrepreneurs are modestly reduced, “agricultural producers” are to be taxed at half the rate charged in other sectors; farmers who receive land grants face no tax on income, land use, or labor for their first two years (the exemption lasts four years for those who have to clear their land to make it usable); and the per-employee tax that entrepreneurs pay will continue to apply only to those who hire six or more employees, with an 80 percent rate reduction in this labor tax over the next five years.

October – Official statistics report that 397,167 licensed entrepreneurs are in operation, including 5,500 who rent their premises from the government.

October – The National Statistics Office publishes data on continued consolidation and cost-cutting in the health sector, showing 12,738 locations for health care delivery – including everything from the biggest hospital to the smallest one-doctor consultorio – 465 fewer than before, and 161 hospitals operating, 25 percent fewer than before

November – Cuba’s National Statistics Office announced that 1,431,589 cellular phone lines were in use at the end of 2011, representing 27 percent growth from the previous year.

December – New laws take effect permitting creation of private cooperatives outside the farm sector through conversion of state enterprises and by citizens who apply for permits to create new cooperatives. Unlike the small entrepreneurial sector, cooperatives are open to professionals and there is no list of permitted lines of work. The cooperatives will be self-governing businesses, not connected to any state institution, and free to do business with government entities, state enterprises, and private entities.

 

2013

January – The new travel and migration law takes effect, doing away with the requirement that citizens obtain an exit permit (tarjeta blanca) to travel abroad, and permitting travel for all who hold passports. Granma reports that the law intends “to strengthen [Cuba’s] relationship with its émigré community” and was decided “by a sovereign decision” that “does not respond to the pressures or impositions of anyone.” Some citizens are barred from obtaining passports; these include those in criminal justice proceedings, those subject to military service, key economic and government personnel, and those barred for “reasons of defense and national security” or “other public interest reasons.”

March – Cuban phone monopoly Etecsa again reduces the initiation fee for cell phone accounts, to 30 Cuban convertible pesos, one fourth the fee in 2008.

July – The labor ministry announces that 429,458 licensed entrepreneurs are operating in Cuba. In late 2010, the figure was 143,000.

July – Data on 2012 farm production show mixed results that are not enough to reduce food import costs significantly. Production of root vegetables was up 4.5 percent over 2009, plantains up 32 percent, garden vegetables down 17 percent, grains up 15 percent, beans up 15 percent, citrus down 51 percent. Sugar production remains low by historical standards at 1.4 million tons, but that amount is grown on one third the land in sugar production a decade ago and the yield per acre is higher than at any time in the past 20 years.

July – The pilot project phase for non-farm private cooperatives is proceeding, with 197 approved to run farmers markets, take over bus transportation, provide construction
services, and more. Most are converted state enterprises, but 12 were formed by self-employed workers, state media report.

Posted in Front Page Archive