Identifier
Created
Classification
Origin
08HAVANA444
2008-06-11 20:07:00
CONFIDENTIAL
US Interests Section Havana
Cable title:
GOC ANNOUNCES SALARIES WILL BE BASED ON PERFORMANCE
how-toVZCZCXRO0535 OO RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC DE RUEHUB #0444 1632007 ZNY CCCCC ZZH O 112007Z JUN 08 FM USINT HAVANA TO RUEHC/SECSTATE WASHDC IMMEDIATE 3351 INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY RHMFISS/CDR USSOUTHCOM MIAMI FL PRIORITY RUEAIIA/CIA WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
C O N F I D E N T I A L HAVANA 000444
SIPDIS
E.O. 12958: DECL: 06/11/2013
TAGS: ECON PGOV CU
SUBJECT: GOC ANNOUNCES SALARIES WILL BE BASED ON PERFORMANCE
REF: HAVANA 144
Classified By: COM Michael E. Parmly for reasons 1.4 (b) and (d)
C O N F I D E N T I A L HAVANA 000444
SIPDIS
E.O. 12958: DECL: 06/11/2013
TAGS: ECON PGOV CU
SUBJECT: GOC ANNOUNCES SALARIES WILL BE BASED ON PERFORMANCE
REF: HAVANA 144
Classified By: COM Michael E. Parmly for reasons 1.4 (b) and (d)
1. (C) SUMMARY: In an understated article located in the
middle of the Communist Party mouthpiece Granma, the GOC has
made public a new pay for performance plan that stands some
of the fundamental precepts of the revolution on their head.
2. (U) The Granma article cites an interview with Vice
Minister of Labor Carlos Mateu Pereira who discusses
Resolution 9 of 2008 entitled "General Regulations Concerning
Forms and Systems of Payment." According to Mateu, the
purpose of Resolution 9 is to bring the salary practices
already used by the companies in the Business Optimization
(Perfeccionamiento Empresarial) Program to all productive
enterprises in the country.
3. (U) That the GOC was planning this move is not news.
Indeed, we had heard about the existence of Resolution 9 some
time ago, but were unable to obtain a copy. With the
publication of the Granma article, the Gazeta Oficial issue
containing Resolution 9, dated April 3, suddenly became
available on the internet. The Resolution itself is dated
February 2, about the time we first heard about its possible
existence.
4. (U) Basically, Resolution 9 obligates employers (in
practice this means government managers of state enterprises)
to begin paying higher salaries and bonuses to employees who
produce more and/or better quality goods and services. There
are some exceptions, including government ministries and
service providers, whose "products" cannot be measured as
easily as a factory or retail outlet. There are also some
unanswered questions about where the resources for additional
compensation will come from if, in spite of increased
productivity, revenue does not increase.
5. (C) COMMENT: Resolution 9 clearly fits in with Raul
Castro's desire to increase productivity in all sectors. As
with other measures that already have been announced or
hinted at, it is a necessary but not sufficient response to
the execrable state of the Cuban economy. Perhaps most
noteworthy was the language used by Mateu in the press
article. He says that "In general, there has been a tendency
to give everyone the same pay, and this egalitarianism is not
convenient. This is something that we have to resolve
because at times there is too much paternalism and (managers)
who can't be bothered simply say 'I'll pay everyone the same
and no one can complain,' but this is not just."..."One has
to guarantee a good design of (the salary system) and its
appropriate control so that there is a correct distribution
of salaries and people get more if they produce more." While
couched in perfect Marxist terminology, these statements and
the resolution itself, fly in the face of everything Fidel
Castro tried to do for the last 50 years. Perhaps more than
any other measure taken to date, this announcement is
indicative of how far Fidel is fading in Raul's rear-view
mirror.
PARMLY
SIPDIS
E.O. 12958: DECL: 06/11/2013
TAGS: ECON PGOV CU
SUBJECT: GOC ANNOUNCES SALARIES WILL BE BASED ON PERFORMANCE
REF: HAVANA 144
Classified By: COM Michael E. Parmly for reasons 1.4 (b) and (d)
1. (C) SUMMARY: In an understated article located in the
middle of the Communist Party mouthpiece Granma, the GOC has
made public a new pay for performance plan that stands some
of the fundamental precepts of the revolution on their head.
2. (U) The Granma article cites an interview with Vice
Minister of Labor Carlos Mateu Pereira who discusses
Resolution 9 of 2008 entitled "General Regulations Concerning
Forms and Systems of Payment." According to Mateu, the
purpose of Resolution 9 is to bring the salary practices
already used by the companies in the Business Optimization
(Perfeccionamiento Empresarial) Program to all productive
enterprises in the country.
3. (U) That the GOC was planning this move is not news.
Indeed, we had heard about the existence of Resolution 9 some
time ago, but were unable to obtain a copy. With the
publication of the Granma article, the Gazeta Oficial issue
containing Resolution 9, dated April 3, suddenly became
available on the internet. The Resolution itself is dated
February 2, about the time we first heard about its possible
existence.
4. (U) Basically, Resolution 9 obligates employers (in
practice this means government managers of state enterprises)
to begin paying higher salaries and bonuses to employees who
produce more and/or better quality goods and services. There
are some exceptions, including government ministries and
service providers, whose "products" cannot be measured as
easily as a factory or retail outlet. There are also some
unanswered questions about where the resources for additional
compensation will come from if, in spite of increased
productivity, revenue does not increase.
5. (C) COMMENT: Resolution 9 clearly fits in with Raul
Castro's desire to increase productivity in all sectors. As
with other measures that already have been announced or
hinted at, it is a necessary but not sufficient response to
the execrable state of the Cuban economy. Perhaps most
noteworthy was the language used by Mateu in the press
article. He says that "In general, there has been a tendency
to give everyone the same pay, and this egalitarianism is not
convenient. This is something that we have to resolve
because at times there is too much paternalism and (managers)
who can't be bothered simply say 'I'll pay everyone the same
and no one can complain,' but this is not just."..."One has
to guarantee a good design of (the salary system) and its
appropriate control so that there is a correct distribution
of salaries and people get more if they produce more." While
couched in perfect Marxist terminology, these statements and
the resolution itself, fly in the face of everything Fidel
Castro tried to do for the last 50 years. Perhaps more than
any other measure taken to date, this announcement is
indicative of how far Fidel is fading in Raul's rear-view
mirror.
PARMLY