Private Property Returns to Cuba

HAVANA, May 1, 2016-- Cuban leader Raul Castro, center, the Second Secretary of the Communist Party of Cuba Jose Ramon Machad
HAVANA, May 1, 2016-- Cuban leader Raul Castro, center, the Second Secretary of the Communist Party of Cuba Jose Ramon Machado (R, center) and the First Vice President of Cuba Miguel Diaz-Canel, left center, watch the parade in Revolutionary Square in Havana, Cuba, on May 1, 2016. More the 500,000 locals and foreigners took part in Cuba's International Workers' Day parade here on Sunday, also celebrating the 90th birthday of Cuban revolutionary leader Fidel Castro. (Xinhua/Joaquin Hernandez via Getty Images)

Private property will no longer be considered a capitalist disease, according to a draft document published by the ruling Communist Party to be ratified in 2017. In the Fundamental Law of the Republic, enacted a month after seizing power in January 1959, the revolutionary government recognized the existence and legitimacy of private property, but the Constitution of 1976 states that the economic system is based on the socialist property of all the people.

The Constitution will be amended to legalize Raul Castro's sluggish measures, intended to deal with the economic crisis, and to establish the rules for the heirs of the historic leadership, before stepping down from State and Minister Councils in 2018. Private property will be recognized as a complement to socialist property, but an opening to individual Cubans (cuentapropistas) to increase their businesses is dubious. The government seems to favor the Non Agricultural Cooperatives. Yet the advantage of demonstrating an updated legal environment in the path to end the American embargo, and guaranties to foreigners and Cuban-Americans already investing through relatives and friends, probably were incentives to Fidel Castro's forgetfulness and Raul Castro's pragmatism.

Private property returning to Cuba became international news since the draft of the Conceptualization of the Cuban Economic and Social Model of Socialist Development was published on May 24th. But earlier in April, on his report to the VII Communist Party Congress, Raul Castro had mentioned the reluctance of some delegates to recognize the existence of private property, fearing that it would be the first steps toward restoring capitalism in Cuba; the increase of cuentapropistas and their hiring of personnel had let to medium, small and micro enterprises, functioning under the legislation for an individual and his family; and limits to their property and richness would remain.

Currently there are 507,342 cuentapropistas. Self-employment in 117 activities, not comprising university graduates, was permitted in 1993, as a result of the economic meltdown caused by the fall of the Soviet bloc, and in 1995 surpassed 200,000 individuals. By 2000 they had decreased to 100,000, in the process of reverting the squalid economic opening, that had been reluctantly allowed by Fidel Castro, as soon as the huge assistance from Chavez started. In 2006, Raul Castro inherited an isolated country with an economic chaos, clinging to a shaky Venezuela. Two years later the president began his reforms. In 2010, cuentapropistas expanded to 178 occupations, and family businesses could hire some workers, although laws, inspections and taxes prevented their growth. The original aim was that self-employment would relieve the government from 1.3 million unproductive employees, but fears that economic independent people would demand political rights led to a halt.

Tight government control had to be assured, so Non Agricultural Cooperatives were devised. Thousands of State-owned barbershops, beauty parlors, repair shops, restaurant and cafeterias were handed over to their workers as cooperatives. They had no choice: either they accepted or lost their jobs within a month. That was the solution to unprofitable small businesses taken from their owners through the Socialist Offensive in 1968 (when private property was backed by the Fundamental Law), not firing thousands of workers, improving services and raising wages.

Moreover, fancy restaurants (paladares) and cafeterias, bakeries, ice cream parlors, houses and apartments for rent, beauty parlors, gyms, art galleries, music and theater halls, and high-quality flower, fruit and vegetable growers flourished. It is well known that Cubans on the island do not have the economic means for such investments. Cuban-Americans and foreigners actually own them with the quiet acceptance of the government. For a long time, economists, such as Oscar Espinosa Chepe, advised to stimulate their investments following China and Viet Nam experiences, and officials disdainfully answered that Cuba was neither of them.

The Communist Party in the draft strongly reiterated that the defense and security of the revolution continues to be the main task, and it created a new concept: socialist civil society; the so called NGOs, such as the Committee for the Defense of the Revolution. Independent civil society is labeled as an enemy led and paid by the United States and repressed. Isolation of Cubans with different opinions from visitors, especially entrepreneurs and those arriving in the framework of president Obama's people to people policy, is a principal aim.

Hopefully private property will be recognized beyond the communist party's papers. Cubans living on the island have been discriminated against, while the New Investment Law is only for foreigners. The legislation must not only refer to medium, small and micro enterprises. Raul Castro promised to work hard drafting the new Constitution. In fact, it must be very clear and comprehensive with actual respect and rights for all.

Miriam Leiva

Independent journalist

Havana, June 1st, 2016