Raul Castro: No reform but Cuba economy control to ease

[dipsydoodle]

Cuban President Raul Castro has ruled out large-scale market reforms to revive the communist island's struggling economy.

But Mr Castro said the role of the state would be reduced in some areas, with more workers allowed to be self-employed or to set up small businesses.

Urgent measures would aim to cut the "overloaded" state payroll, he said.

Speaking to Cuba's National Assembly, Mr Castro nonetheless insisted the socialist system was "irrevocable".

http://www.bbc.co.uk/news/world-latin-america-10834192

[Judi Lynn]

1. Interesting to see how the government will adjust itself. As we have heard,

they have always said Cuba's revolution is a constant process. It's meant to change.

Thanks for the information. Recommending.

[dipsydoodle]

2. I dread to think

what will happen if sooner or later US companies are allowed to set up there.

Hopefully the Cuban government will have sense to only allow them to operate only as minority interests in joint ventures with the government. I don't really see any alternative that will keep them in line.

[flamingdem]

3. The current rule is that no foreign concern can own more than 49% of a concern

and the profits? Not totally sure how that works!

[bherrera]

4. I think I do know about the way this works

The foreign company is allowed to take more than 50 % of the profits if the investment requires it. We don't know the details, but it is easy to organize a joint venture in which the state holds 51 % of the stock, and the foreign investor with 49 % of the stock takes 90 % of the profits. It is all based on the amount of capital and loans given to the joint venture by the two parties.

The use of the joint venture format is like a smoke screen created by governments to hide these business deals under a cover. It is done in Cuba, and I believe they are being copied by the other so called socialists in Latin America (I don't think they are truly socialists like our government in Spain, wich is socialist, I think they tend to be communists).

In the real world, it is just a blanket to cover the true nature of the business deal. A more reasonable arrangement is to use the profit sharing agreement, rather than the joint venture, because the profit sharing agreement caps the rate of return for the foreign investor. These guys need somebody intelligent to give them some lessons.