• Submitted by: manso
• Business and Economy
• 10 / 22 / 2010

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After years of financial micromanagement of state companies by ministries and the central bank, the government is providing more leeway to company managers as part of ongoing economic reforms, Communist Party daily Granma said in a recent article.

“The deeply rooted custom among many entrepreneurs consists in waiting for ‘what they give me’ and then ‘do what I can do’,” the official newspaper said in an article about Frioclima, a state company that makes air conditioning and refrigeration equipment. “Shaking these vices from the state is the only way to revitalize the industrial sector.”

Until recently, company managers were required to apply for permission even for small amounts of hard-currency spending; no state company was allowed to directly seek loans. Now, with government being short on hard currency, company executives are supposed to self-manage their budgets and generate revenues by seeking commercial loans, substituting imported supplies with domestic products, and boosting exports, said Edismar Saavedra, Deputy Minister of Steel and Mechanical Industries, according to Granma.

“Separating state and entrepreneurial functions is becoming key to the transformations, in an effort to increase efficiency and making the operations of numerous factories profitable,” the article said.

The story pointed out how Frioclima’s management was struggling to adapt to the new freedoms, while falling behind on production plans due to the lack of supplies. The company could solve many of its problems by sourcing domestically, the article suggests. While some components can only be found abroad, many simpler parts, such as screws, paint, aluminum profiles, and cables could be bought in Cuba, one manager admits in the article.
 
Source: www.cubastandard.com/2010/10/21/government-increasing-autonomy-of-state-...