Non-farming cooperatives, legalized in December 2012, are the preferred mode of non-state ownership  in the “self-employed”, micro-enterprises, mixed enterprises and cooperatives sector , according to the Cuban government.
This statement can be found in the article Cuba’s non-farming cooperatives: Progress and challenges one year on of the magazine CubaSí, Summer 2014 edition, published in England by the Cuba Solidarity Campaign.
The formation of cooperatives by Cuban workers must be understood in the context of the approval by the National Assembly of Cuba held in December 2010 of a plan to dismiss a million workers from state owned enterprises and the privatization process of these companies. Cooperatives are a way to combine these two movements, because many of them are formed by the conversion of privatized state owned enterprises.
According to the magazine mentioned, there are two types of cooperatives:
“Those formed from scratch by groups of workers and those formed converting state workplaces into worker cooperatives. So far the majority are of the second type: conversions from state workplaces.
As examples, the magazine cites “state food markets, state restaurants and taxi firms.” But not only small and medium enterprises are being privatized and transformed into cooperatives. “Havana’s (the capital) bus services are expected to follow suit.”
Nor only the service sector is involved because “some industrial workplaces have converted, for example, into clothing manufacturing and small workshops making spare parts.”
The government has given various incentives to expand the sector, such as reducing taxes and credit opening, but so far the “impact of cooperatives is limited. There are today 4.2 million workers in Cuba. Of these about a quarter are in non-state sectors: about 500,000 are in farming cooperatives and around 450,000 are in self-employment and micro-enterprises.”
According to the general secretary of the Confederation of Workers of Cuba (hence also an official voice because the Confederation is an appendix to the CCP), “it is expected that a third of Cuba’s workforce will be in non-state employment by 2016. So far, only about 15,000 are working in 270 non-farming cooperatives.”
Privatization and unemployment
According to the report submitted by the Minister of Economy, Adel Yzquierdo Rodriguez, to the Cuban National Assembly convened in December 2012 (so when the non-farming cooperatives law was not approved yet) the number of non-state enterprises had grown 23% in 2012, while the state sector fell 5.7%. Unemployment hit a record high of 3.8%, a figure that do not include Cubans who claimed not to be looking for work.
If to this figure – which corresponds to about 250,000 workers – are added the estimated one million who say they are not looking for jobs, the percentage of unemployed rises to the astronomical figure of 18.5%, equivalent to European countries devastated by the economic crisis. This value takes into account the information by the Minister of Economy that there are 6.8 million “potential” workers in Cuba, a bigger number than the 4.2 million reported by the magazine CubaSí.
The reason for that mass unemployment is the dismissal of State workers. In 2011 137,000 jobs were cut and in 2012 over 228,000. The number is expected to grow further in 2013 to reach the target (or exceed) a million layoffs in the state sector.
Thus, there is a pressing need to open jobs to absorb part of the “potential” workforce, a role that would be fulfilled by non-farming cooperatives. The reasons for the government, however, are not humanitarian. As the Cuban constitution guarantees free health care and education, subsidized food and housing and other rights won by the socialist revolution of 1959, there is a need to withdraw these gains after the capitalist restoration carried out in the 90’s, but this requires to ensure some kind of survival for these workers to avoid a social explosion.
Attack on workers
Neither the government intends to ensure the cooperatives to deliver such benefits to their employees. According to the magazine CubaSí “Cuba’s new [labor] legislation places a limit so that the cooperative doesn’t live by exploiting the labour of others … the legislation imposes two limits. Firstly, hired labour can only be hired for 3 months, and must thereafter be offered membership of cooperative, or released.”
The new Labour Code, adopted in December 2013, regulates for the first time work in the private sector (although it has existed for at least 20 years!). Again according to the magazine CubaSí the code states that “employer and employee must establish a contract that details duties and length of employment. It also establishes minimum rights that the employer must guarantee: a eight-hour working day with no more than 44 working hours per week, pay equal or above the minimum wage, a day off at least once a week, and at least seven paid vacation days a year.”
We therefore have a set of attacks on the Cuban working class much deeper than in most capitalist countries with some labor organization. First comes the competition among workers to form cooperatives who will accept downgraded working conditions to run “their own business.” Then those employed by cooperatives would work for only three months, causing a huge turnover in the industry, and as a result of competition, lowering wages. To prevent excessive decrease of wages it is established a minimum wage, whose average value is about US$ 20 a month!
Add to this the right to paid “vacations” of seven-days a year and we see a paradise for capitalist development through the cooperatives. Thus, in this race to the bottom, the most “fit” cooperatives will survive and the weaker will be “swallowed” by the bigger, leading to the concentration of capital as in any capitalist country.
Not only the defenders of the dictatorship of the Castro brothers in Cuba say socialism still exists, but some Trotskyist organizations claim that the island is still a “deformed workers’ state.”
Accordingly, there appears to be a concordance between Castroist organizations (which includes the PCs of all stripes, Bolivarian organizations and the neo-Stalinism) and such Trotskyist parties: the possibility of peaceful coexistence in the same country between socialism (for the former) or the workers’ state (for the second) and capitalism.
The magazine CubaSí says that the “authorities consider that there is no contradiction between socialism and private initiative. And some officials believe that later could cover 40% of the country’s economy while the state and public sector maintain 60%.”
But the figures are more “realistic” than these politic-driven and masked estimates because the investments of “state and public sector” are formed largely by foreign capital.
According to C.P. Harnecker, from the Center for the Study of the Cuban Economy, University of Havana, it is expected that the non-state sector, without regard to foreign investments and joint ventures (ie, private companies with mixed capital with the Cuban government), absorb 35% of the workforce and accounts for 44.5% of GDP by 2015. (http://pt.slideshare.net/BildnerCenter/camila-pineiro-final)
If we add foreign investments and joint ventures – the heavyweights of foreign capital – it is clear that the project of the Cuban government is that private capital has a majority stake in Cuba, and that such participation is associated with the sector of the Communist Party imbedded in the Armed Forces (all the joint-venture agreements are made with the Armed Forces) turned into the new Cuban bourgeoisie, and on top Fidel and Raúl Castro.
If we add the economic reality of the island, laws favoring foreign investment, labor code typical of capitalist countries, the new “special areas” as the Mariel Port, where capitalism reigns without intermediaries, 18% unemployment, wages of misery remains the question: where is the socialism? Only in the fantasies of Castroist organizations, the “friends of the Castros”, as the magazine CubaSí or in the dreams of some Trotskyist organizations.
Therefore it is necessary to reaffirm the need for a social revolution in Cuba to topple the dictatorship of the Castro brothers (actually a military dictatorship) and expropriate private capital to restore the achievements – being lost – taken by Cuban workers with the 1959 revolution.