This is a new work that I recently sended to the Ideas for Cuba contest. This is the first of a series of 5 articles.
After decades of intense debate and questioning, the private sector continues to be the key to growth and wealth with its roles as employer, investor, source of financing, driver of competitiveness and training, and the development of human capital. Beyond this essential role of providing opportunities for people to improve their economic conditions, companies can contribute to the resolution of particular development issues. The private sector can serve as a source of valuable experience, resources and capacity that helps to find solutions for society by adequately engaging with public institutions. It is clear that it is the driving force of economic development, despite the obstacles that it faces in our country, widely known and that will be addressed later on.
The principle of freedom of enterprise means that all citizens have the possibility of freely promoting and directing business of any kind (agricultural, commercial, industrial, financial, etc.) by applying the means of production (their own or those of others) that they consider convenient and assuming the risks of the activity, with the consequent right to the benefit that may be obtained by its management.
The private sector plays an important role in the development of the market economy of any country, since it is the main generator of quality jobs and investment oriented to economic development. In addition to fostering growth, it could play a much more active role in social well-being, since the potential it provides can be addressed with the appropriate strategy.
Undoubtedly, the private sector needs the formulation of industrial policies that improve the general business environment and favor development, that is, access to national and international markets, to information related to business, technical assistance services and financing.
The role of the State in the development of the business sector is essential, since it must establish the conditions under which the companies operate. These rules of the game must ensure the existence of competitive markets and offer an adequate legal and regulatory framework.
If the regulatory processes are simplified and made more transparent, they would facilitate the establishment of companies, fostering economic growth, favoring formality, increasing tax collection and reducing corruption. The private sector can and should play a much more active role in development and must participate, through innovation, in the production of goods and services that improve the quality of life of the population.
Through privatizations, the potential of the private sector would grow with the consequent improvement of competitiveness among established actors in the Cuban economy. This process entails a high degree of commitment to the effective transition of property relations towards an environment in which the role of human capital is most valued with the favorable impact on the level of income of the population.
The globalization of trade, finance, and distribution chains has
established a new level of interconnection and interdependence between countries
developed and developing. The fall of tariff and regulatory barriers in the international relations of trade, investment and finance of our country would allow a greater access to vital resources for the promotion of our economy and would contribute meaning to the role of Cuba in the concert of nations.
To contribute to the prosperity of the country, the private sector depends on the provision of quality public services, such as a strong infrastructure (roads, airports, railroads, telecommunications networks, etc.) that generates conditions for full development. Cuba lacks this base, so it is vital to direct public spending towards it.
To increase the level of productivity in the Cuban workforce, it is necessary to locate the relevance of university education in the productive processes of the new economic order. In this way, the private sector would obtain qualified human capital to optimize its capabilities.
All these phenomena are addressed in the first point of this work, whose primary function is to recapitulate the approaches of my two previous works. This time the focus is on maximizing the powers of the private sector according to the guidelines of the new call.
All the conversations around the problems of entrepreneurship in the world
they include the issue of financing as one of the most important obstacles to business development. In Cuba, the budget for the creation of new businesses by the population is scarce and there are times when making effective and optimized use of it is not an easy task. More than the lack of competition from entrepreneurs, this is due to the technical and financial obstacles that our economic system still suffers.
Regardless of whether a future State establishes a Rule of Law that articulates the legal and legislative possibilities to fully establish the private sector, weak access to financing could be presented as the next chimera.
Enhancing financial inclusion through innovation requires an effort to
articulation of public and private agendas in terms of objectives and priorities
developmental. For this, it is necessary to generate spaces and mechanisms that allow attracting and channeling the efforts of the private sector towards inclusive development objectives, through an adequate context and incentives. The second point of this paper addresses this issue in a very original way.
At the same time, the private sector can contribute to accelerate the increase in employment, income and opportunities, through investments oriented to research and development by disseminating better productive practices. This proactive behavior can be observed in developed economies. It is because a greater proportion of companies in these countries inject their capital in activities such as research and development, collaboration with external entities and constant training of their human resources. As a result of these investments, it is encouraged that the activities of the companies are concentrated in the extremes of what is known as the productive chain.
Regrettably, the processes associated with research and development in Cuba, in addition to being scarce, suffer from a sufficient degree of linkage with the productive processes of the national economy, since they do not make adequate use of the potential of human capital that is formed in the educational institutions. The third point of this paper focuses on this problem.
Finally, in the conclusions I address the issues presented through the work in a personal and subjective way.