Caribbean & Central America - February 2017 (ISSN 1741-4458)

President Raúl Castro’s efforts to boost public sector efficiency and accountability appear to be making only slow progress, if latest reports from the comptroller general’s office are anything to go by.

As part of his reform efforts, in 2009 President Castro created a new comptroller general’s office. From the outset, this has been overseen by Gladys Bejerano, dubbed ‘La Dama de Hierro’ (the Iron Lady), who clearly has the president’s confidence. Bejerano now sits on the ruling Communist Party’s central committee and is also vice president of the State Council.

Bejerano’s line is that Cuba cannot – and will not – tolerate corruption and inefficiency. To this end, the comptroller general’s office oversees an audit of decentralised public sector entities in Cuba’s 15 provinces every year. Results of the latest process (officially, the XI Comprobación Nacional al Control Interno) are now filtering through, and for yet another year they appear less than satisfactory.

Between October and December last, for instance, the comptroller general for the province of Havana, Miriam Marbán González, oversaw an audit of decentralised entities in the area, along with some of the relatively new non-agricultural cooperatives in the capital (mostly set up by former state workers). In February, she reported that 67 completed audits had revealed significant losses, due to a lack of control and accountability, poor transparency and, by all accounts, quite serious inefficiencies. She put the losses at COP90m in the national currency (approx. US$3.4m) and CUC51m in convertible pesos, for a total of roughly US$54m. This, she dryly intoned, evidenced “failure to comply with the Lineamientos” – Castro’s so-called guidelines, first unveiled in 2008-2009, for the ‘updating’ of economic and social policies.

Moreover, Marbán González also reported that in over a dozen cases, the audit process could not be completed, owing to missing documentation (and even the total lack thereof in some cases). She noted “insufficiencies and indiscipline”, along with poor planning and management, which meant that economic plans were “not being fulfilled”.

Reports from other parts of the country, including Cienfuegos, Matanzas, Pinar del Río, Villa Clara and Holguín were no better. Luis Ángel Lastre, chief comptroller for the province of Santiago de Cuba, reported that of 32 entities audited there, 63% had “favourable results” but the rest, while meeting their social objectives, were found to be in difficulties, owing again to a failure to apply and implement guidelines for internal control.

These incidents underline the difficulties involved in expecting current and former state workers brought up in large, rigid institutions – where decision-making was tightly controlled from the top – to adapt to ‘life on the outside’, as it were. Speaking in Santiago de Cuba after Ángel Lastre provided his report, Gladys Bejerano urged Cuban officials to go beyond complaints to deal with the root causes of the problems, citing a need for better training and professionalization. “If there is not organisation, discipline and control, it is impossible to achieve the prosperous and sustainable development that we are targeting” she noted.

In similar vein, at the 60^th ordinary general assembly of the Organization of Higher Audit Institutions of Central America and the Caribbean (OCCEFS), held in El Salvador in July 2016, Bejerano stressed that audit programs are essential for more efficient management and noted that they also can be used to promote transparency and prevent corruption. She highlighted Cuba’s interest in international best practices.

Inefficiency (or incompetency) is not the sole problem it appears. Bejerano regularly warns that a lack of control can lead to criminality. Referencing the recently-deceased Cuban leader, Fidel Castro, in her address in Santiago, the comptroller general noted that one of Fidel’s mantras was that the Revolution must not allow itself to fall into lies and self-deception, which can lead to “serious problems”.

Cuba ranked 60^th out of 176 countries in Transparency International’s 2016 Corruption Perceptions Index (CPI), with a stable score of 47 (where 0 is highly corrupt and 100, very clean). In the Americas region, it ranked 11^th of 33 countries, above the likes of Brazil, Panama, Colombia, Argentina, Peru and Mexico, among others. In other words, it is perceived to be one of the less corrupt countries in the region. While, in part, this may be a function of the Communist government’s ironclad grip on all aspects of life on the island, it may also reflect the fact that there is a lot less information available to the likes of Transparency International. While Cuba has tended to deal very harshly with senior officials caught up in corruption (to some controversy), policing petty corruption at lower levels of government is more difficult. In giving her annual report in July 2016, Bejerano told the national assembly that her office had estimated losses of COP132m (US$5m) to theft of resources alone in 2015, with increasingly more inputs (most of which are imported by the State) being ‘diverted’ for sale to the island’s lucrative black market. The worst offenders, she reported, were the agriculture ministry (MINAG), the external trade ministry (MINCIN) and the Havana provincial administration. The most affected resources included IT equipment, fuel, construction materials, tyres and spare parts.

• Audit results

Bejerano will give a full account of the 2016 audit results to the national assembly in July. For the cash-strapped central government, the US$50m+ in estimated losses in Havana province, most likely an underestimate, and presumably replicated across the country (if not to the same degree as in Havana), is no small amount at a time when the fiscal deficit could be heading for an eye-watering 12% of GDP this year (for details of Cuba’s latest budget position, see Latin American Economy & Business – February 2017).