The Cuban eConomy - Cuba Study Group

Carmelo Mesa-Lago

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and the growth of social services must be adjusted “to the real possibilities of financial resources generated by the country’s economy” requiring a “redesign of current policies” including the “reduction or elimination of excessive social expenses” (PCC 2010: 12, 19). Several specific recommendations necessary to ensure the sustainability of social services are noted below.

health Care. Maintain the public health care system but with the fo-llowing changes: prioritize potable-water and sewage infrastructure; reallocate resources from continued reduction in infant mortality (a problem resolved many years ago) toward said infrastructure, medicine imports, decreasing ma-ternal mortality, and other areas of greater need; discontinue high-education scholarships as well as health care aid to other countries unless they pay the cost of such services; convert maternity and pediatric hospitals with low occupancy rates into geriatric hospitals and senior living facilities; increase the ratio of nur-ses per physician to improve efficiency and reduce costs; charge the full cost for private hospital rooms to citizens in the country’s highest income strata; attract more foreigners to seek medical attention in Cuba; authorize self-employment of health professionals as well as health-care cooperatives that compete with state services. The PCC Guidelines do not include any of the preceeding suggestions, but rather ask for: reduction of unnecessary expenses, particu-larly excessive personnel; strengthening promotion and prevention actions; encouragement of a more rational use of medication and placing maximum attention on the development of natural and traditional medicine.18

education. Preserve the public education system but with the following modifications: shift a portion of elementary-school resources (taking into account the decreased birth rate and the population in primary-school age) to pay better salaries to teachers; place more emphasis on the higher-educa-tion disciplines geared toward development, like business administration, as well as vocational education; reduce excessive enrollment in margi-nal disciplines through stricter admission standards;19 increase the ratio of graduates per registered students; allow the operation of non-state

18 The health sector has 600,000 employees, many of whom will be dismissed or relocated; hospitals, health centers, and clinics with scant users will be closed totally or partially. Granma has reported significant “irrationalities”: maternal homes with only 3–5 beds but an average payroll of 20 employees, and municipalities with a single ambulance served by 30 workers (De la Osa 2010). 19 In 2009/10 there were significant cuts in enrollment in several disciplines: 50% in medicine, 29% in economics, and 23% in humanities and social sciences, but also 17% in agronomy and 7% in technical sciences (ONE 2010).

Social Services in Cuba: Antecedents, Quality, Financial Sustainability, and Policies for the Future

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universities following proper norms and requirements; authorize self-employment of teachers and professors; eliminate existing obstacles to the entrance of foreign scholars and researchers (hopefully as reciprocity for President Barack Obama’s relaxation of U.S. visas to Cuban scholars). Some of these suggestions were incorporated in the Guidelines: increased quality and rigor in elementary and secondary levels through improved use of existing resources, alocating them according to demographic changes (decline in young population), and cutting transportation and meal costs; adjust enrollment of university disciplines based on economic needs, aug-menting it in technological and basic-science; and increasing the percentage of graduates related to enrollment in the previous five years. Additionally, they stated that workers who want to study at the higher level must do so on their own time and without state subsidies.

Social Security Pensions. Reform the current system with the following measures: establish salary contributions for all non-state busi-nesses with a minimum number of employees, incorporating them into the social security system; charge self-employed workers, instead of the current 12 percent, the same 5 percent that salaried workers pay gradually or grant low-income self-employed workers a state subsidy to replace their lack of employer contribution; integrate into the general pension system the costly armed forces and internal security pension programs (based on seniority independent of age, which results in lower retirement ages and higher replacement rates); close the current general pension sys-tem to new entrants, make the state responsible for ongoing pensions, and create a new public system for young workers already insured in the old system as well as new workers, with a reserve that is invested to generate capital returns and help in the long-term financing and improvement of pensions; raise pension levels and adjust them to the cost of living. The Guidelines do not refer to any of these recommendations but call for a reduction in fiscal subsidies by expanding workers’ contributions in the state and non-state sectors; new rules have raised the self-employed contribution from 10 percent to 25 percent.

housing. A radical reform is required: facilitate the population’s access to construction materials to repair and build housing; authorize the inves-tment of foreign remittances in these activities; eliminate the current sys-tem of exchange (permuta) and authorize the buying and selling of housing with adequate regulations; permit the use of individuals’ owned houses

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