Cuba won't abandon socialism just yet

Has Cuba finally realized that its socialist economic system suffers from serious flaws, and even more important, that substantial market- oriented reforms are needed to overcome such flaws?

Last month, Cuba's Communist Youth newspaper, Juventud Rebelde, ran a three-part story on illegalities in the Cuban society that disclosed the results of an investigation by its undercover reporters into state businesses in the capital, Havana. The overall picture was one of rampant theft, widespread fraudulent practices, and extreme inefficiency in most retail stores and services of the Cuban capital.

The newspaper also revealed that a local team of academic specialists would begin studying the issue of "socialist property" in Cuba in search of ways to improve the current economic model.

The latest debate within Cuba about the problems of socialism has sparked optimism among some US experts. They now expect major changes on the island that would result in the adoption of market reforms, rather than the usual calls by the Castro regime for more discipline and control.

This view is mainly justified by the fact that the Cuban debate is fueling criticism of the entire economic system. This criticism has been almost certainly approved at the highest levels of government. Interestingly, while Juventud Rebelde stopped short of advocating privatization, a Reuters dispatch noted that "some Cuban intellectuals say it would be the best way, even in the form of collective private property, to improve the retail sector."

However, there are reasons to believe that the aforementioned optimism remains largely unfounded under the current conditions.

Here's why.

Since Fidel Castro introduced the socialist system into Cuba almost 50 years ago, the economic policies pursued by his government have exhibited several shifts away from and toward the market.

A reduced emphasis on the role of the state and pragmatic acceptance of market reforms generally occurred in the wake of economic crises or sluggish growth, when the government temporarily put aside its commitment to state control, equality, and moral incentives in favor of liberalizing measures aimed to boost the economy.

But today, the island's economy is in better shape than it has been in years. So why would Cuba support market reforms that would mean a loss of control for the government, and generate social effects such as growing income inequality deemed unacceptable by its leadership?

In effect, Cuba has been moving exactly in the opposite direction in recent years. Havana's authorities have rolled back some of the timid capitalist-style reforms that they had implemented between 1993 and 1994 to ensure the survival of a system that was then on the verge of collapse.

They have also stepped up state control over all enterprises, including the tiny group of licensed private entrepreneurs running businesses, such as room rentals, home-based restaurants and cafeterias, appliance repair shops, and beauty salons.

The number of private workers, which peaked at 209,000 in 1996, has now dropped below 140,000, indicating the government's uneasiness at leaving even minor services to individual initiative.

Finally, problems of theft, waste, and petty corruption in Cuba are nothing new, as the title of the Juventud Rebelde story, "The Old Big Swindle," clearly suggested. What has really changed is the scope and intensity of Havana's response to such practices in the context of robust economic growth, greater availability of financial means for state investment, and increased search for efficiency.

The drive against economic crime, one of the elements of the "battle of ideas" launched by Mr. Castro in 2000, has gathered pace since late 2005 when Castro himself recognized the urgent need to tackle the threat to Cuba's socialism from vice and the pilfering of state resources by adopting the necessary countermeasures.

What are these countermeasures? As usual, they involve more discipline and state control.

During the past year, Cuban officials have recruited and trained thousands of inspectors to detect "irregularities" in both the public and private sectors. And on Oct. 25, only three days after the last part of the Juventud Rebelde story was published, the Communist Party newspaper, Granma, announced that new rules for all state enterprises "aimed to strengthen order, educate the workers, and deal with lack of discipline and illegalities in the performance of labor" will take effect in January 2007.

Cuban academic specialists have yet to complete their study of what is wrong with the island's socialist system. The Castro government, however, has already decided what to do about it.

• Paolo Spadoni is a visiting professor of political science at Rollins College in Winter Park, Fla.