At a special meeting of Cuba’s Council of Ministers in early May, key leaders addressed some of the biggest long-term threats to Cuba’s economic health.

Adel Yzquierdo Rodríguez, minister of economy and planning, named three factors that keep the economy from expanding: continued losses and waste in state-run entities, the lack of necessary leadership by government investors, and the inadequacy of contracts among entities and institutions.

Yzquierdo said Cuba’s new investment law now under review will define the role of foreign investment in the state, private and mixed sectors.

Rodrigo Malmierca, minister of foreign trade and investment, said that services especially doctors and technicians “continue to be the main source of hard currency for the country, and has great potential keep increasing.”

Gladys Bejerano, general comptroller and vice-president of the Council of State, discussed corruption under the euphemistic title of “detected irregularities,” focusing on how the violations of contracts by certain foreign companies have “affected the economy.”

She made a special presentation on one of Cuba’s most persistent corruption scams: the theft of fuel from refineries, storage facilities and gas stations, and the sale of that fuel to the private sector at a 60% discount off the official price.

Bejerano described some of the measures the government has put in place to stop this never-ending scam, including automated technologies, the use of GPS and, in particular, a program to sell fuels to the private sector but without raising transport fares. She urged her audience to look at the “true causes” of corruption that allow such serious scams to flourish in the first place.

But the real news was a report submitted by Salvador Pardo Cruz, Cuba’s new minister of industry. Since 1990, he said, some 2,000 factories and other entities have suffered serious deterioration, breakdown or outright paralysis due to lack of maintenance and obsolete or deficient equipment. As a result, he said, between 2001 and 2010 the island had to import more than $680 million worth of commodities and items that had previously been produced in Cuba.

Despite Pardo Cruz’s insistence that renovating these plants and seeking to prolong their life span is of utmost importance, a solution is virtually impossible.

That’s because most of the equipment and machinery he’s referring to was made in the former Soviet Union and his allies and purchased by Cuba through barter deals. Even then, the equipment was largely considered obsolete, based on outdated technology from the 1940s and 1950s. Those countries knew they were selling junk to Cuba whether it was weapons, transport equipment, metalworks or cement plants. Some of this machinery is so old that any talk of “recovery” is, in most cases, out of the question.

Furthermore, as Perfeccionamiento Empresarial was implemented, it became crystal-clear by the early 2000s that of the 3,700 industries and services in Cuba’s state sector, fewer than 1,000 would qualify as productive entities. Most of the rest were simply dragging on in a state of bankruptcy that had existed for 30 or 40 years, surviving only thanks to huge and non-productive subsidies.

These “white elephants” the focus of Pardo Cruz’s analysis are for the most part impossible to save, and today represent an insurmountable burden.

What will the government do, keep subsidizing them for another 50 years? Transfer them to cooperatives that might use them to produce something else in the form of cottage industries? Declare a firesale of some sort?

The most expedient solution is to follow the only example at hand, that of the sugar industry: close them. This isn’t entirely an IMF or “shock-therapy” recipe but a step-by-step dismantling operation, as was done with the obsolete sugar sector in 2002.

The closing down of non-productive entities is spelled out in black and white in the Party’s Lineamientos (guidelines). But will they do it? The report by Pardo Cruz, despite his urge for recovery, is a blunt reminder that the Cuban economy needs to face this old and costly challenge.