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Translation: Guidelines debate 3, Enterprises

Cuba's Granma newspaper reported on March 17 the decision of the Council of Ministers to allow the self-employed to hire workers in all 178 permitted categories of self-employment. Since October, when self-employment was broadened and a new tax system was introduced, legal small private businesses had been restricted to 83 of the 178 self-employment categories. "The Council of Ministers agreed to extend to all of the non-state sector activities the approval to hire employees and continue the process of easing the restrictions on self-employment," Granma reported.

Below I continue 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 that has been published together with the final version of the Guidelines adopted by the Cuban Communist Party Congress in April.

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. My translation of the explanatory notes for the first 10 guidelines, dealing with the general features of Cuba's economic management model, is here.

Enterprise sector

11. The powers and financial mechanisms used by [state] enterprises to manage, organise and carry out the production of goods and services will be defined.

The powers and financial mechanisms used by [state] enterprises to manage, organise and carry out the production of goods and services will be defined. The social objectives of enterprises will be made more flexible in order to maximise their potential. (13)

Includes making the social objectives more flexible, 880 opinions nationwide. Eliminates "organise and carry out", since these are included in "manage".

12. External entities cannot intervene in the internal finances of enterprises. This can only be done through the legally established procedures. (Maintained as guideline 14)

New guideline:

Enterprise Improvement will be integrated with the policies of the Economic Model in order to achieve more efficient and competitive enterprises. (15)

Added as a new guideline considering 146 opinions in 14 provinces.

[Enterprise Improvement (Perfeccionamiento Empresarial) was launched in enterprises run by Cuba's armed forces in the 1990s and is gradually being implemented in other state enterprises. A comprehensive modernisation programme, Enterprise Improvement grants more autonomy to state enterprises within the framework of the plan. This decentralisation allows more scope for worker participation in management — translator's note.]

13. Enterprises decide on and administer their working capital and investments up to the limit established in the plan and according to the regulations that will be established.

Enterprises decide on and administer their working capital and investments up to the limit established in the plan. (16)

Considering that the plan is the governing mechanism, "according to the regulations that will be established" is deleted.

14. Enterprise management oversight will be based principally on economic-financial mechanisms rather than administrative mechanisms, eliminating the current burden of administrative oversight of enterprises.

External oversight of the management of entities will be based principally on economic-financial mechanisms rather than administrative mechanisms, without excluding the latter, reducing the current burden of administrative oversight and making the compiling of performance data more rational. (11)

Includes this guideline under the Enterprise Sector heading. Broadens its content to include [budgeted] entities. Specifies that it deals with external oversight and the need to make data compilation more rational, 585 opinions in 15 provinces.

15. The increased responsibility and power of enterprises makes it necessary to strengthen their systems of internal control to achieve the hoped-for results in terms of the fulfilment of their plans and goals with efficiency, order, discipline and the strict observance of legality.

Their increased responsibility and power makes it necessary to demand the ethical conduct of the entities and their directors, as well as the strengthening of their systems of internal control to achieve the hoped-for results in terms of the fulfilment of their plans and goals with efficiency, order, discipline and the strict observance of legality. (12)

Includes this guideline under the Enterprise Sector heading. Broadens its content and adds the ethical conduct of the directors of entities and all the activities of the entities, 89 opinions in 14 provinces and the Congress debates.

16. State enterprises with sustained financial losses, insufficient working capital, that cannot honour their contractual obligations through their activities or that fail financial audits will be summonsed to a process of liquidation, complying with what will be established in this regard.

State enterprises or cooperatives with sustained financial losses, insufficient working capital, that cannot honour their contractual obligations through their activities or that fail financial audits will be summonsed to a process of liquidation or may be transformed into other forms of non-state management, complying with what will be established in this regard. (17)

Incorporates into the liquidation process the possibility of converting enterprises and cooperatives into other forms of non-state management [of social property such as state-owned farmland or commercial premises — translator's note], 126 opinions in 12 provinces and the Isle of Youth.

17. Enterprises will not, as a norm, receive budgetary financing for the production of goods and services.

Subsidies for loss-making enterprises will be eliminated and, as a norm, enterprises will not receive budgetary financing for the production of goods and services. (18)

The Congress agreed to incorporate at the beginning of this guideline the first part of draft guideline No. 21, which read: "Subsidies for loss-making enterprises will be eliminated".

18. Enterprises, from their earnings after payment of taxes and complying with other commitments to the state, will be able to create funds for development, investments and incentivising the workforce, after having satisfied the established requirements.

Enterprises, from their after-tax earnings, complying with their commitments to the state and with the other established requirements, will be able to create funds for development, investments and incentivising the workforce. (19)

Improves the wording.

19. The incomes of the workers in state enterprises will be linked to the final results obtained.

The incomes of the workers and directors of state enterprises and the non-state forms of management [of social property] will be linked to the results obtained. (20)

Broadens the content of the Guideline, adding all forms of non-state management and "the directors" to clarify that all incomes are linked to results, 98 opinions throughout the country. The word "final" is eliminated to allow for cases in which piecework payment is applied, as proposed during the Congress debates.

20. Enterprises will pay a centrally-determined municipal tax to the Municipal Administrative Councils in which they operate their establishments to contribute to local development.

Enterprises and cooperatives will pay a centrally-determined municipal tax to the Municipal Administrative Councils in which they operate their establishments to contribute to local development, setting the tax rate according to the particularities of each municipality. (21)

Incorporates cooperatives in the payment of local taxes and "the particularities of each municipality", 267 opinions in 14 provinces.

21. Subsidies for losses will be eliminated; enterprises will set aside part of their after-tax earnings to contribute to a fund, established by the superior enterprise management entity, to compensate for financial imbalances.

Enterprises will set aside part of their after-tax earnings to contribute to a fund, established by the superior enterprise management entity, for compensation to cover for financial imbalances. (22)

The word "cover" is added as proposed by a National Assembly deputy. The Congress debates agreed to transfer the first part of the draft Guideline ["Subsidies for losses will be eliminated"] to the current Guideline 18.

22. Enterprises will be free to approve their own payrolls [i.e. number of employees].

Enterprises will be free to approve their own payrolls, complying with the indicators established in the plan, which will contribute to preventing unnecessary increases in payrolls. (23)

To prevent a return to inflated payrolls, "complying with the indicators established in the plan" is added, 922 opinions throughout the country.

23. Within the framework of pricing policies set by the competent authority, enterprises will approve with flexibility and transparency the prices of the products and services they provide, and may lower prices when they consider it necessary. (Integrated with guideline 68)

To avoid repetition, this guideline is integrated into guideline 68, which establishes the policy for the centralisation or otherwise of prices.

24. Research centres that serve production and services must be incorporated into the enterprises or superior enterprise management entities in all cases where possible, in such a way that their research is effectively linked to the corresponding production.

Maintained and numbered as in the draft document.

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