In a recent communiqué issued by the Cuban government, the ruling Communist party’s central committee suggested that it was time to formalize their country’s informal sector and actively reduce corruption. While notionally aimed at reducing the instance of theft, this statement may reflect a realization by those in power that citizens need to have stake in what they produce. In short, the Cuban government is realizing that its citizens need property rights.
After assuming power in his brother Fidel’s absence, Raul Castro embarked on a series of economic reforms, beginning in 2008 with the decentralization of agricultural production and the leasing of inactive state property to private actors. Facing a severe balance of payments crisis and production totals grown limp from the government’s stranglehold, Mr. Castro’s revamped economic cabinet is now saying that the previous reforms did not gone far enough: “The remainder of the economy must adapt to a form of property better suited to the resources available.”
Nearly 20% of all retail supplies in Cuba wind up stolen and approximately 40% of Cubans work in the informal sector. These two statistics are not unrelated. As one Cuban economist noted, “The only way to stop theft is to give workers an incentive not to steal and to work, and that means they have to have a real interest through a co-operative form of property or small business.”
Instituting a system of property rights in Cuba is undoubtedly a work in progress. Yet, with an acceptance of basic property rights comes a claim to individual responsibility, as well as the formal institutions that safeguard opportunity. In this, the private sector can dis-incentivize theft and incentivize initiative, becoming an engine for growth and reform. Raul Castor has come out in support of the disaggregation of the economy toward individual ownership and a “search for new formulas that free up productive potentials.” Perhaps there is hope for the gradual institution of a system of property rights in Cuba, which elsewhere serves as the “foundation for growth, freedom, and overall well-being.”
Published Date: September 04, 2009