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Cuban State Companies in Times of “Temporary” Crisis

“Cuba’s economic system works like a medieval economy right bang in the 21st century”, states the renowned Cuban economist Emilio Morales in an interview with Havana Times. “They are heading towards disaster in any of the possible scenarios, the system just doesn’t work,” he insists.

HT: President Diaz-Canel has repeated that “Socialist state-led companies are the vital link and most important agent in Cuba’s economic system.” Is this economic entity damned? Why isn’t it efficient?

EM: Company development is based on a concept of State monopoly capitalism. Every state-run retail chain sells the same products for the same price. Publicity is limited to the store or sales point only, as a result, communication channels with customers are very limited. Whether they sell more or less products, Cuban workers will receive the same salary, which is an incentive for them to steal from warehouses and adulterate prices, retail commerce drives the black market. So, their own work force becomes a threat and risk to the company itself.

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