• This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement that was brought to my attention by Andrew Johnston of Ottawa: ".. ... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

    The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba.

Ricardo Torres: “Cuba Needs to Be Bold and Creative”

Patricia Grogg’s interview with Ricardo Torres.  The original article, from IPS, the Inter Press Service news agency,  is located here:  “Cuba Needs to Be Bold and Creative”

HAVANA, Oct 11 2012 (IPS) – Cuba has been steeped in a profound economic crisis over the last 20 years, and no short-term solution to the accumulated problems can be expected, says Cuban professor and researcher Ricardo Torres.

Whoever expects overnight success from the “Economic and Social Policy Guidelines” of the country’s ruling Communist Party, the document that serves as a virtual road map for the reformsthat are being implemented by President Raúl Castro, “knows nothing about the social sciences, and is sending the wrong message,” Torres says in this interview with IPS.

Prof. Ricardo Torres, Centro de Estudios sobre la Economia Cubana

Q: Is the pace of reform slow solely due to a government decision, or is it also because of other internal and external factors?

A: I do not totally agree with the opinion that the pace of change is slow. It depends on how you look at the process.

If we understand that everything stemming from the Party “Guidelines” is a process of social change, then we have to remember that the guidelines are less than two years old, which is not a long time in these cases.

If we are judging from the standpoint of the needs and aspirations of the great majority of Cubans, I would even say of the government, then yes, it might be slow. There are elements of the internal process that are delaying the changes enormously, and the first of these is inexperience in dealing with unprecedented changes.

Q: What internal factors are hindering these changes?

A: This is something that has been referred to many times, but it doesn’t hurt to mention it again. People’s minds are the hardest thing to change, and if they have done something a certain way for 50 years, it is not easy for them to agree to do it differently in a short amount of time. In fact, in some cases, that learning process will be impossible.

There is also the question of interests. The changes are affecting certain groups and segments of the population, which, therefore, are going to oppose them, using whatever resources they have within their reach to prevent or at least hinder their progress. It is a natural reaction by people to protect themselves against whatever may affect them.

Q: Is the external context also a factor? How?

A: From an international standpoint, there are many aspects that are holding back change in Cuba. The first is U.S. foreign policy, which is not helping the Cuban people, because it is based on the false assumption that the only good and positive thing for this country is regime change as they (the U.S. authorities) understand it.

That is an assumption that is valid for Washington but not for the lives of the Cuban people. This country needs to change everything that should change, but it will do so to serve its own interest and to benefit society, not because a foreign government thinks it is important for us to do this or that.

The way that U.S. policy is currently designed, it does nothing to favour this process of transformations that the island is going through, and it is creating resistance among certain groups in the government and in the population. Moreover, it is hindering economic and social development, because it puts Cuba at a disadvantage for competing in the international market.

A: I’m an economist, not a politician, and what I can say responsibly is that the U.S. blockade is having an adverse effect on Cuba’s economy and society, which is impossible to ignore.

Every year, it is costing the Cuban people money and quality of life.

What we cannot say is that all of Cuba’s problems are because of the U.S. blockade. And the blockade is not responsible for all of the bad decisions that we have made in the last 50 years in certain areas.

Q: The situation is difficult for the Cuban population. Many say they are pessimistic, and don’t see the light at the end of the tunnel. How can a consensus be maintained under these types of circumstances?

A: I see a way out, and this is a very personal opinion. For us, the key is to be bold and creative. It could be the case that we see ourselves locked into a vicious circle that requires an unexpected, radical decision, which may seem to break the consensus. If it is in the country’s long-term interest, it will have to be done and explained.

I am thinking about our relationship with the United States, our attitude toward private enterprise, effective and real decentralisation of decision-making, and the way that national or international economic relations are sometimes coordinated or governed in general. All of this requires a major change in mentality.

Q: Do you think that Cuba has the conditions needed for development?

A: Yes, of course, for growing and developing. What is needed is strategy, a vision for the future, and a break with many dogmas that are ever-present in most cases.

Q: Would you say political will exists for that?

A: Yes, I think it does, and there is also the legitimate aspiration of the entire Cuban people. Proof of that political will is that we are seeing a new, more pragmatic vision today, one that is more in keeping with reality and more flexible in decision-making and that takes the island’s real conditions more into account.

In addition, academia is playing a more important role in decision-making. I think this is a felicitous initiative of this process of change. Of course, we are not always satisfied with the level of participation that we have, and we want more.

Given that we devote ourselves full-time to investigating certain issues that are important to Cuba, we want that knowledge to be used, because in the end, our interest as economists — as I see it, the majority of us — is for our country to progress and for all of its inhabitants to have more comfortable, fuller lives.

Posted in Blog | Tagged , | 1 Comment

Foreign executives arrested in Cuba in 2011 await charges

The original Reuters article is here:  Foreign executives arrested in Cuba in 2011 await charges

By Marc Frank; (Editing by Jeff Franks and Jackie Frank)

HAVANA | Tue Oct 9, 2012 2:59pm EDT

HAVANA (Reuters) – Executives of three foreign businesses shut in 2011 ostensibly for corrupt practices have been held by Cuban authorities for a year or more and still have not been charged with a crime, sources with knowledge of the cases said this week.

Their ongoing legal limbo has put a behind-the-scenes strain on Cuba’s relations with their home countries – Canada and Britain – where the legal process protects suspects from lengthy incarceration without charges, western diplomats told Reuters.

Police closed the Havana offices of the British investment and trading firm Coral Capital Group Ltd last October and arrested chief executive Amado Fakhre, a Lebanese-born British citizen.

A month earlier authorities shut down one of the most important Western trading companies in Cuba, Canada-based Tokmakjian Group, after doing the same in July 2011 to another Canadian trading firm, Tri-Star Caribbean.

Cuban authorities say the cases, which are part of a larger crackdown on corruption on the communist island, are being handled within the letter of Cuban law.

The local legal process does call for defendants to be informed of why they were arrested and sets out time limits for charges to be filed, but they can be waved indefinitely in “exceptional circumstances.”

Cy Tokmakjian, head of the Tokmakjian Group, and Sarkis Yacoubian, head of Tri-Star, were arrested and confined to comfortable safe houses when their businesses were closed, but earlier this year both were transferred to La Condesa, a prison for foreigners just outside Havana.

Cy Tokmakjian

Coral Capital’s Fakhre was recently transferred to a military hospital when he fell ill after months in prison.

His company’s chief operating officer, British citizen Stephen Purvis, was arrested in April and is in the Villa Marista prison run by state security, sources said.

A number of other foreigners and Cubans who worked for the companies remain free, but cannot leave the island because they are considered witnesses in the cases.

STILL UNDER INVESTIGATION

Asked at a Havana penal conference last week when charges might be filed against the businessmen, Cuban Attorney General Dario Delgado told Reuters the investigation had not concluded because of the complicated nature of the alleged crimes.

“The cases are in the investigative stage and still have not been presented to the court, but I can guarantee they are proceeding according to Cuban law,” he said.

“There isn’t the slightest reason for concern. These cases, which involve economic crimes, are very complicated. They do not involve, for example, traffic violations or a murder,” he said.

Cuban Comptroller General Gladys Bejerano told reporters at the same conference that the length of investigations depended on the behavior of those involved.

“When there is fraud, tricks and violations … false documents, false accounting … there is no transparency and the process becomes more complicated because a case must be documented with evidence before going to trial,” she said.

Western diplomats acknowledged that the cases were being handled within Cuban law, but said there was no due process by western standards.

Cuba’s judicial system has been widely criticized because all branches are controlled by the state and inevitably this leads to tension when foreign nationals are arrested.

“It is not just that they haven’t been charged. They can be questioned without a lawyer present and that lawyer would work for the state anyhow,” one diplomat said.

Under Cuban law a defendant must be represented by a Cuban public defender, though other lawyers can consult on the case, they said.

“There is regular, monthly counselor access and some contact with Cuban defense lawyers, but we certainly would like to see the process proceed more quickly and transparently,” another diplomat said.

Soon after taking over for his ailing brother Fidel in 2008, President Raul Castro established the comptroller general’s office with a seat on the ruling Council of State, even as Cuba began implementing market-oriented economic reforms.

The measure marked the start of the campaign to weed out corruption and reflected concern over graft that followed similar reforms in other communist countries, foreign and local experts said.

Since then, high-level corruption has been uncovered in one sector of the economy after another, from the cigar, nickel, and communications industries, to food processing and civil aviation.

Posted in Blog | Tagged , | 1 Comment

Cubans Watching Venezuelan and U.S. Elections; Their Own, Not So Much

By Yoani Sanchez, from the Huffington Post, October 4, 2012.

The original article is here:  Cubans Watching Venezuelan and U.S. Elections; Their Own, Not So Much

Raul and Hugo

What does the voice of Henrique Capriles sound like? A neighbor asked me a few days ago. I didn’t know whether to tell him it was high-pitched or deep, soft or forceful, because the Cuban media is careful not to air it. Instead, we only have the opportunity to hear the agitated shouts of Hugo Chavez, the verbal attacks he throws at his young opponent.

A few days before the Venezuelan elections, our official press has closed ranks around the current occupant of the Miraflores Palace in Caracas. The television commentators assure us that there will be a landslide victory for the Socialist Party and celebrate in advance. But that’s just in front of the cameras; behind the cameras is nervousness, not certainty.

Raul Castro’s government has too much invested in the Venezuelan elections on October 7. Much more than with the dismemberment of the USSR and the conversion of the Eastern European countries. On that occasion, the loss of the Soviet subsidies and the political allies of the socialist bloc submerged the country into a profound material and diplomatic crisis. But within the country the control exercised by Fidel Catro’s regime had the strength — and stubbornness — to withstand the blow.

Today, more than two decades after the fall of the Berlin Wall, little remains of the fervor, the stubborn will, with which we faced what Fidel Castro called The Special Period, a crises presented to us as a necessary sacrifice, a test of ideological fortitude.

There are so many similarities and yet profound differences. The loss of the economic underpinnings from the Kremlin forced Fidel Castro to allow self-employment, the renting of houses, the development of farmers markets, foreign investment, and opening of the Island to international tourism and dollarization.

However, it was precisely the rise to power of Hugo Chavez in 1999 that was the key element to the walking back of these reforms. With a powerful and nearby partner lavishly giving us oil, why continue to deepen the process of relaxations that resulted in a loss of power.

Raul Castro, years later, would retake the path of economic openings that his brother had retracted. This time he would be supported by the Venezuelan subsidy, which has enabled him to implement the few changes slowly in a lukewarm fashion. Perhaps there was a moment when he believed that offering farmers the ability to lease land in usufruct, or expanding licenses for self-employment, would allow Cuba to take its first steps towards economic independence.

Or maybe he always knew that this type of dependency, once established, ends up becoming a chronic situation. More than a circumstance, the need for external subsidy is the core of the Castro regime, the direct result of its inability to successfully manage the national economy.

If, on Sunday, Venezuelans reelect Hugo Chavez as president, Raul’s regime will get some breathing room. But the great polarization in Simon Bolivar’s fatherland will make it more difficult to publicly sustain the maintenance of Cuba. It will no longer be the same.

On top of that, the obvious physical collapse or the expected death of Fidel Castro is an open secret throughout the whole country. His last brief and delirious “Reflections” column was published in the newspaper on June 19. Some say they are only waiting for the end of the Venezuelan elections to put an announcement date on his obituary.

The government in Havana is approaching complicated months. Venezuela’s will be the first in a cycle of three elections that will influence, to a greater or lesser extent, our national life. The presidential election in the United States follows immediately in the list of electoral processes that lie ahead. Mitt Romney has promised a heavy hand with the Cuban authorities, but Barack Obama can also be very caustic to the Cuban system if he deepens his policy of family, academic and cultural approaches.

The first five-year term of Raul Castro will end in February 2013. Few are betting that he’s thinking of retiring to make way for a younger figure. These elections, the third that await us in the coming months, are also the last in importance and in generating expectations. The process of nominating People’s Power delegates and installing them in the National Assembly has already begun, and this body will approve the nominations to the Council of State.

If the Venezuelan results will decide whether we are granted billions in subsidies, and our relationship with our powerful neighbor to the north is in play in those elections, the Cuban elections smell strongly of a play whose script is already written. We don’t even need surveys or voter polls. There is no possibility of a surprise.

Enrique Capriles

 

Posted in Blog | Tagged , , , | Leave a comment

Fidel’s “Revolutionary Collective Surveillance” Neighborhood Spies Create Social Violence and Hatred

By Yoani Sanchez, Huffington Post, 09/28/2012

Originals article here: Fidel’s “Revolutionary Collective Surveillancw

The stew was cooked on firewood collected by some neighbors, the flags hung in the middle of the block and the shouts of Viva! went on past midnight. A ritual repeated with more or less enthusiasm every September 27 throughout the Island. The eve of the 52nd anniversary of the founding of the Committees for the Defense of the Revolution (CDR), the official media celebrate on its commemoration, a song intended to energize those who are a part of the organization with the most members in the entire country, and to dust off the old anecdotes of glory and power.

But beyond these formalities, which are repeated identically each year, we can perceive that the influence of the CDR in Cuban life is in a downward spiral. Gone are the days when we were all “CeDeRistas” and the acronym — with the figure of a man brandishing a machete — still shone brightly on the facades of some houses.

Amid the ongoing decline of its prominence, it’s worth asking if the committees have been a more of source of transmission of power to the citizenry, than a representation of us to the government. The facts leave little room for doubt. Since they were created in 1960, they have had an eminently ideological base, marked by informers. Fidel himself said it during the speech in which he announced their creation:

We are going to implement, against imperialist campaigns of aggression, a Revolutionary system of collective surveillance where everybody will know who lives on their block and what relations they have with the tyranny; and what they devote themselves to; who they meet with; what activities they are involved in.

These words from the Maximum Leader are now difficult to find reproduced in full on national websites and newspapers. In part because, despite the unconditional support for the Commander in Chief, the current editors of these spaces know very well that such language is totally out of sync with the 21st century.

That is, what seemed like an exalted Revolutionary speech delivered from the balcony of the Presidential Palace, in the light of today has all the hallmarks of partisan despotism, of the grossest authoritarianism. Big Brother announcing his plan. If those words excited exaltation at the beginning of the sixties… they now provoke in many a mixture of terror, disgust and embarrassment for the man who spoke them.

The “sweeter” side of the CDR is the one that’s always related in official reports, talk about a popular force dedicated to collecting raw material, helping in the vaccination of infants, promoting blood donations, and guarding neighborhoods against crime. Put like that it appears to be an apolitical neighborhood group ready to solve community problems.

Believe me, behind this facade of representation and solidarity is hidden a mechanism of surveillance and control. And I’m not speaking from the distance of my armchair or from the lack of knowledge of a tourist who spends two weeks in Havana.

I was one of those millions of Cuban children who stockpiled empty jars or cartons, cut the grass and handed out anti-mosquito products in the CDRs all over the country. I was also vaccinated against polio and even tasted some plate of stew or other during the fiestas of this organization.

In short, I grew up as a child of the CDR, although when I reached adulthood I refused to become a militant among its ranks. I lived all this and I don’t regret it, because now I can conscientiously say from the inside that all those beautiful moments are dwarfed by the abuse, the injustices, the accusations and control that these so-called committees have visited on me and millions of other Cubans.

I speak of the many young people who were not able to attend university in the years of the greatest ideological extremism because of a bad reference from the president of their CDR. It was enough during a reference check from a school or workplace for some CDRista to say that an individual was “not sufficiently combative” for them to not be accepted for a better job or a university slot.

It was precisely these neighborhood organizations who most forcefully organized the repudiation rallies carried out in 1980 against those Cubans who decided to emigrate through the port of Mariel in what came to be known on the other shore as the Mariel Boatlift. And today they are also the principal cauldron of the repressive acts against the Ladies in White and other dissidents.

They have never worked as a unifying or conciliatory force in society, but rather as a fundamental ingredient in the exacerbation of ideological polarization, social violence, and the creation of hatred.

I remember a young man who lived in my neighborhood of Cayo Hueso, who had long hair and listened to rock music. The president of the CDR made his life so difficult, accused him of so many atrocities simply for the fact of wanting to appear as who he was, that he finally ended up in prison for “pre-criminal dangerousness.” Today this intransigent — this one-time “Frikie” from my block — lives with his daughter in Connecticut, after having his life and reputation dragged through the mud like so many others.

I also know of several big traders in the black market who assumed some post in the committees to use as a cover for their illegal activities. So many who took on the role of “head of surveillance” and were simultaneously the biggest resellers of tobacco, gas, and food in the whole area.

With few exceptions, I did not know ethically commendable people who led a CDR. Rather they attracted those with the lowest human passions: envy before those who prospered a little more; resentment of someone who managed to create a harmonious family; grudges against those who received remittances from family abroad; dislike for everyone who honestly spoke their minds.

This deceitfulness, this absence of values and this accumulation of grievances, have been been one of the fundamental causes for the CDRs’ fall into disgrace.

Because people are tired of hiding their bags so the informing neighbor can’t see it from their balcony. People are tired of the worn out sign in front of their house with the figure with the threatening machete. People are tired of paying a membership fee to an organization that when you need it takes the side of the boss, the State, the Party.

People are tired of 52 anniversaries, one after another, like a stale and nightmarish deja vu. People are tired. And the way to express this exhaustion is with the lowest attendance at CDR meetings, failing to go on night watch to “patrol” the blocks, even avoiding tasting the stew — ever more bland — on the night of September 27.

If doubts remain about why people get tired, we have the words of Fidel Castro himself on that day in 1960, when he revealed from the first moment the objective of his grim creature: “We are going to establish a system of collective surveillance. We are going to establish a system of Revolutionary collective surveillance!”

 

Posted in Blog | Tagged , , , | Leave a comment

Joaquin P. Pujol: “Where is Cuba Going?”

Joaquin Pujol has writter up his analysis based on his presentation at the August 2012 conference of the Association for the Study of the Cuban Econ omy. It is entitled  Where is Cuba Going? What economic policies have been adopted and what are the results thus far?

An abbreviated version of the Conclusions of the essay are presented below. The Complete essay is located here: “Where is Cuba Going”

Conclusions

Raul Castro has attempted to address the considerable popular discontent over living conditions on the island by opening up somewhat the economy—but only to a very modest degree, given his fear that broad-based economic reforms could be destabilizing. Yet, if no improvements are achieved, Cubans could demand political change, which Raúl has absolutely no intention of making. Rather, he will attempt to deal with the most pressing issues, such as food production, as well as housing and other economic and socioeconomic matters.

There has been little liberalization of the economy, with only a small opening to private employment and limited reform in the agriculture sector under Raúl Castro, the 10-year renewable lease on agricultural land being the most important. The dual Cuban peso/Convertible peso currency regime is a large impediment to economic reform, and development and economic policymaking remains ad hoc. There are other major disincentives to enterprise: price controls are still in effect, micro-businesses are tightly controlled, with little access to credit and highly taxed. The result is low product diversity, a large underground economy, widespread inefficiency, a low scale of production, wasted resources, contempt for law, corruption, and lack of innovation.

The policies implemented so far are quite timid and unlikely to achieve the desired results. Much deeper structural reforms are required to allow the private sector to contribute to the growth of the economy so as to allow the State to concentrate on its role of providing an appropriate legal and regulatory framework for the activities to flourish instead of trying to micro manage every thing.

The recent reforms in agriculture have many limitations, and are unlikely to significantly change the deteriorated situation that is evident in that sector. Overall food production in most items is still significantly below targets and shortages have been reported in most basic agricultural products. Cuba is producing less food than it did five years ago despite the efforts to increase agriculture production. The “land reform” has not produced many results in spite of a significant increase in usufruct farmers. All too many must still sell via state marketing agencies, few have access to the bank credit recently promised (Cuban banks are really transfer agencies; they have no experience in making true loans), and access to fertilizer, seed, etc. is still via inefficient state enterprises.

A number of problems have arisen as a result of the cutback in government expenditures. There have been shortages of imported inputs that have affected agricultural production and contributed to the stagnation of industrial output. The manufacturing crisis continues: production in 2008 was at 52 per cent of the 1989 level, according to official statistics, and has remained flat since then.

There has been a significant deterioration in education and health services, and a number of sicknesses long gone from Cuba have returned (such as dengue fever, conjunctivitis, influenza and even cholera). Moreover, the postponement of a large number of investment projects has resulted in a further neglect of maintenance and repairs of existing facilities. The elimination of government cafeterias and the reduction of subsidies through the rationing card mechanism have shifted the demand for food to the private market, while the decline in production has contributed to a 20 percent increase in prices of agricultural and meat products to consumers. Meanwhile, the morale of the public sector employees has plummeted and there has been a significant increase in thefts and corruption in the State enterprises and public offices.

A recent government report said there were 5 million people employed in 2011, similar to 2009, while unemployment rose from 86,000 to 164,000. Of those working, 391,500 were self-employed in 2011, when the government loosened regulations on small businesses, compared with 147,400 in 2009. More than 170,000 individuals have also taken advantage of a land lease program begun in 2008, the government recently reported. There was some significant progress reported in trimming the bureaucracy as the number of “directors” fell from 380,000 in 2009 to 249,000 in 2011.

But the shift from state to non-state employment is aimed in part at improving state wages and in this regard the plan has failed to achieve much progress to date. Cuba’s leaders have insisted that the country’s abysmally low state salaries can’t rise unless economic output increases. The average state worker is paid about $20 a month, and has to supplement that income by working odd jobs on the side, often in the informal sector. The average monthly wage increased from 429 pesos in 2009 to 455 in 20l1, the equivalent of just over a dollar based on the official exchange rate of 25 to 1, not nearly enough to stimulate productivity. Meanwhile, the government reported food prices alone increased 20 percent in 2011.

There are important limitations on the activities of self-employment. In addition to the very limited number of authorized activities, there is not a wholesale market where these individuals can obtain the necessary input to carry on their activities and thus in most cases they have to turn to the informal grey or black market for their supplies or try to get them from abroad thru “mules” that bring them into the country. While at the beginning the government was permitting such activities it has recently imposed a set of high tariffs on the importation of such goods. The government also has imposed high taxes on these activities, including on the hiring of additional laborers and does not recognize the costs that may be involved. The licensing process and the authorization to carry on with the activities are subject to arbitrary bureaucratic decisions and the risk of corruptive practices by government officials. The prevailing monetary duality and the various exchange rates that are not the product of a market mechanism create difficulties for transactions and distort the profitability of the activities. New start-up businesses in Cuba still can’t import supplies or equipment directly from abroad. They continue to face elaborate bureaucratic obstacles to the most trivial operational needs, like banking services and advertising. Investment capital from foreign partners can only come in secret.

A priority two years ago was the plan to shed 2 million workers from public payrolls over the course of five years. One hundred eighty-three private trades were approved by the Cuban Communist Party to absorb downsized workers. However, the limitations of private-sector work, inflexible laws, high taxes, the continuation of a dual currency system (pesos and CUCs), and poor conditions to acquire inputs have thwarted these efforts.

Surveys now show that well about 80 percent of the increased “self-employed” were previously unemployed (ie, illegally working) or retirees. About a quarter of the prior registered have turned in their licenses.  The costs and harassment were so great they were reluctant to continue. This meant the “non-state” sector could not absorb the fired public workers, the first year of dismissals (let alone the six months planned) only led to a reduction of 137,000.

While there has been some liberalization in agriculture and the labor market and there has been some dismantling of the centralized decision making model, the Cuban economic model is still very close to the one used in the former Soviet Union. Non-State enterprises are limited to agriculture, a small foreign investment sector and a very limited number of self-employment activities. The State authorities retain the power to dictate the majority of the prices in the economy, as well as an excessive number of regulations of both domestic and international trade. The control over the financial flows and the rate of exchange restrict heavily any entrepreneurial initiative and the legal framework is not clearly defined. The State is still dictating the allocation of resources leaving very little room for individual initiative and the working of appropriate incentives to bring about an improvement in productivity.

Despite the efforts to improve the performance of the public sector and to give a greater role to private activity overall domestic economic activity and the well-being of the population continues to decline, there continues to be a decapitalization of the industrial park and it is unlikely that this will improve in the absence of foreign investment.

While some of the policy changes are in the right direction, the reforms so far are too timid, there are too many limitations.  Much of the disconnect between the reforms and the results stems from the timidity of the reforms  The central challenge facing Cuba is that its policy framework remains an impediment to productivity and growth. Pressure from both external vulnerabilities and increasingly, aging costs and emigration, are adding to this fundamental challenge.

Overall, there has been disappointment that more significant economic reforms have not materialized under Raúl Castro. Reforms such as currency unification, free access to information technology and free foreign travel in support of Cuba’s knowledge economy, or a true rationalization of the public sector, seem a long way off.

Despite the liberalization measures, illegal Cuban migration, after years of decline, is up again and unless there is a significant improvement in the standards of living Cubans will continue to leave the country by whatever means become available.

Joaquin Pujol

 

Posted in Blog | Tagged | 1 Comment

US-Cuba Relations Make Little Progress

By Marc Frank in Havana; Financial Times; September 25, 2012

Original Article here:  US-Cuba Relations Make Little Progress

             US Interest Section, Havana, with black flags blocking view   of billboard messages emitted at the top of the building

When Barack Obama won the US presidency in 2008, many believed he would make significant progress in Cuban relations, so resolving one of the last conflicts of the cold war.

But four years later, US-Cuba relations remain stuck in much the same time warp, and whether Mr Obama or his Republican challenger Mitt Romney becomes the next US president, few expect a significant breakthrough – although the region’s changing ideological landscape could prompt the beginnings of a shift.

Mr Obama lifted all restrictions on Cuban American visits soon after taking office, and in December 2010 reversed a Bush Administration ban that led to a surge in so-called people-to-people visits, which are for educational purposes rather than tourism. But he has also stepped up financial sanctions under anti-terrorism laws, and this year issued tough new travel guidelines.

“The US position on Cuba continues to undercut our strategic position in the region and a breakthrough would greatly enhance Obama’s foreign policy legacy through solving a problem far simpler than many other global issues,” said Julia Sweig, a senior fellow on Latin America at the Washington-based Council on Foreign Relations.

“There is no question that Obama’s first term disappointed many when it comes to Cuba, but I think it premature to assume this status quo under a second term,” she added.

Mr Romney, if he wins, is, meanwhile, expected to tighten travel and adopt a more aggressive public stance towards Havana, encouraged by powerful Cuban-American legislators in the key electoral state of Florida.

The two countries’ latest, seemingly intractable, conflict is over the fates of jailed US contractor Alan Gross and five Cuban intelligence agents. Mr Gross was arrested in 2009 for participating in a US project to set up an internet platform covertly in Cuba. He is currently serving a 15-year sentence.

The Cuban agents were imprisoned in the US 14 years ago for infiltrating exile organisations and military installations in Florida. Following Mr Gross’ arrest, immigration and mail service talks restarted under Mr Obama were again suspended, and US diplomats say there will be no progress until Mr Gross is released.

Another factor limiting improved US-Cuban relations is the conservative tide that washed over Washington after the 2010 Congressional elections and that brought Florida Republican senator Marco Rubio to office and saw another hard-line Cuban American, congresswoman Ileana Ros-Lehtinen, appointed head of the House Foreign Relations Committee. Both lawmakers oppose contact with Cuba and are particularly incensed by people-to-people exchanges.

“This is nothing more than tourism . . . a source of millions of dollars in the hands of the Castro government that they use to oppress the Cuban people,” Mr Rubio charged during congressional hearings last year.

As many as 400,000 Americans visited Cuba in 2011, with as many as 70,000 of them not of Cuban heritage. They may have boosted the government, but were also important clients for the hundreds of small businesses that have opened in Cuba – part of Havana’s broad, if hesitant, market-oriented reforms.

Mr Rubio, according to his office, then blocked the administration’s nominee for undersecretary of state for Latin American affairs, Roberta Jacobson, until it agreed in March to roll back the travel programme. Tougher new regulations quickly followed.

“Under the new guidelines, applications often run to more than 100 pages, compared with just a few when the people-to-people programme began, and they are usually sent back for not meeting vague criteria,” said Bob Guild, vice-president of Marazul Charters, the oldest US company taking people to Cuba.

Although pro-embargo forces are expected to remain a strong influence in Congress even if Mr Obama wins, some advocates of a new Cuba policy hope he will use executive privilege to get round them.

One factor that could change the state of play is if Cuba is taken off the list of state sponsors of terrorism – as the US State Department did with North Korea in 2008 and Libya in 2006 – for helping broker peace talks between the Colombian government and the country’s Marxist Farc rebels. If the Farc lay down their weapons that could help lead to Mr Gross’ release, opening the way for further advances.

 

Posted in Blog | Tagged | Leave a comment

The Havana Genius Bar, Cuba’s Underground Economy: Going Strong and High-Tech!

By Elien Blue Becque; Bloomberg Businessweek; September 13, 2012

Original Essay Here: The Havana Genius Bar

When my iPhone slipped from the back of the tank and into the toilet, I snatched it out immediately. Though at first all seemed fine, it soon switched off and remained unresponsive.

“It’s toast,” was the verdict from Grant, an Apple (AAPL) store Genius. “We don’t deem it really, like, worth it to replace the inner components of the shell of a broken phone. I’ll throw that guy away and get you a brand new one.” Grant said I’d have to buy a new phone for $649 (or a refurbished one for $150). I was about to leave on a trip to Cuba, where my phone wasn’t going to work anyway. So I thanked him and left.

On my second day in Havana I pass a small electronics store in the once-upscale Vedado neighborhood and stop in. Fishing the useless slab from my bag, I ask, “Is there anyone who might know how to fix this?” The woman at the counter heads to the back and returns with a thin slip of paper bearing an address in the Miramar neighborhood.

A kid wearing white-framed Ray-Bans nods when I knock on the green plywood door at the destination. His name is Andy, and he’s confident he can fix my problem. Removing the tiny screws that hold the glass cover in place, he begins a rapid disassembly. I have to admit Andy seems less impressed with my fancy phone than I might have expected. “How often do you fix an iPhone?” I ask. “Daily,” he replies.

“In the last two or three years I’ve noticed [iPhones] popping up,” says Philip Peters, a Cuba expert at the Lexington Institute. Raúl Castro’s reforms have jolted the mobile market. “In 2008, when he lifted the prohibition on Cubans’ having cell phones in their own name, that led to an explosion in the number of subscribers.” Like many products in Cuba, iPhones are often brought in by tourists or citizens allowed to travel abroad.

Andy extracts the motherboard with a dental pick, puts it in a green tank, adds alcohol from a Fanta bottle, and presses power. The contraption shakes vigorously. Abelito, his partner, says they learned most of what they know via an illegal Web connection. After 20 minutes of careful prodding and scrubbing, Andy has miraculously resuscitated my phone, but the battery holds little charge. I try to pay. He refuses. “We usually only accept payment when we’ve fixed the problem.” “But you did!” I argue. He won’t be swayed.

A day later, at Hotel Saratoga in Old Havana, I notice the porter swiping at his iPhone 3. I tell him about my battery, and he points to a thin, carefully dressed young man hanging around the bar. Ten minutes later, Roberto and I are making our way down a muddy street behind the impressive, decaying Capitol Building modeled exactly after the rather better-kept one in Washington.

We stop in front of a dark entryway. Roberto asks me to wait and bounds up a set of concrete stairs. Minutes later he returns with a new iPhone battery in its black plastic wrapper. As payment, he accepts an 8-gigabyte flash drive I’ve been carrying. Flash drives are valuable here, where Internet use is restricted and monitored. Roberto, an architecture student, explains that while “tuition here is free, you have to buy lesson books, paper, pens, your food, your transportation.” All that costs money.

Just as their fathers learned to fix obsolete Detroit cars, Andy and Roberto have learned to make a living with Palo Alto technology to which they have no official access. The healthy cell-phone repair market here is the latest example of Cuban ingenuity that locals call sobreviviendo. It’s small-scale capitalism working around a 50-year embargo and an anemic, centrally planned economy.

Two months later my phone works perfectly. The next time an Apple Genius tells you there’s no hope, consider it an excuse to visit Havana.

 

Posted in Blog | Tagged , , , , | Leave a comment

Espacio Laical: “Por un consenso para la democracia”

A document entitled Towards a Concensus for Democracy” has just been published by Espacio Laical, a project of the Centro Cultural Padre Félix Varela of the Archdiocese  of Havana. The editor is Lenier Gonzalez.

The complete document is available here: Espacio Laical, Por un consenso para la democracia

Table of Contents

 - Cuba está viva. 6
– En torno a la democracia en Cuba. Por Roberto Veiga González 8
– ¿Es rentable ser libres? Por Julio César Guanche 14
– Hacia una democracia de los consensos. Por Roberto Veiga González 21
– Por un consenso para la democracia. Por Julio César Guanche 27
– Compartir la búsqueda de nuestro destino. Por Roberto
Veiga González 32
– Cuba hoy: compatibilidad entre cambios reales y el panorama constitucional. Por Monseñor Carlos Manuel de Céspedes 36
– Dossier sobre los desafíos constitucionales de la República de Cuba. Por Jorge I.  Domínguez, Julio A. Fernández Estrada, Dmitri Prieto Samsónov y Roberto Veiga González 47
– Fuerza por la unión, no unión por la fuerza. Por Mario Castillo 69
– Apuntes para una reforma del Poder Popular en Cuba. Por Roberto Veiga González 73
– Sobre la democracia y los partidos políticos: contribución a un debate impostergable. Por Armando Chaguaceda 80
– Dossier sobre la necesaria reforma al Partido Comunista de Cuba. Por Víctor Fowler, Orlando Márquez, Ovidio D’Angelo, Alexis Pestano, Arial Dacal y Lenier González 84

Lenier González

Posted in Blog | Tagged , , , , | Leave a comment

The Economist: “Cuba, Indecision time: Never rapid, Raúl Castro’s reforms seem to be stalling”

From The Economist: September 14, 2012.

The original article in The Economist is here: “Cuba, Indecision time: Never rapid, Raúl Castro’s reforms seem to be stalling”

Sep 14th 2012,

WHEN Raúl Castro, Cuba’s president, gave his latest big speech, to a meeting of the National Assembly in July, he repeated his stock response to those who urge him to move faster with reforms to his country’s stagnant state-run economy. Change, he said, would progress “without haste, but without pause”. But many on the island are questioning whether the reforms—officially called “updating”—have indeed paused.

The changes Raúl has instigated since taking over from his ailing brother, Fidel Castro, in 2006 are significant. Many restrictions on private business, some of which had been in place since the 1960s, have been lifted. Cubans can now buy and sell houses and cars, and employ people. Over 200,000 of them have become self-employed since October 2010. Farmers can lease idle land from the state. Private eateries are now free to serve what they like to as many diners as they like, leading to hundreds of new restaurant openings. Havana’s wealthier residents are rediscovering a long-forgotten pleasure: trying out a new place to eat.

But there are plenty of catches. Cubans can only buy second-hand cars; no new-car dealerships have been allowed. The rules on house purchases are proving so complicated that many people are still doing what they have always done: swap homes and pay each other under the table. Perhaps the biggest stumbling block is that private wholesale markets, long-promised, have yet to be authorised. So restaurants and other businesses have to buy their supplies at retail prices from supermarkets or, more often, the black market. The 181 permitted categories of self-employment include trades, such as plumbing, but still exclude professions. The state remains the sole importer of food. Agricultural output remains below its level of 2007. Flagship projects involving foreign investment, such as several much-touted golf resorts, have been quietly put on hold.

In addition, there have been some seeming U-turns on the road towards a freer economy. A particularly unpopular measure, imposed on September 3rd, dramatically raised the duty payable on excess baggage (above a limit of 30kg per person). This tax used to be paid in the local Cuban peso. Now it must be paid in the “convertible” peso, which is worth 24 times more. So the cost of bringing in goods such as televisions and music systems has soared from a few dollars, to hundreds of dollars.

The government said the change was to reduce queues and increase efficiency. Certainly, since President Barack Obama in 2009 removed almost all restrictions on visits to the island by Cuban-Americans, Havana airport has struggled to cope with the half-a-dozen daily flights that now arrive from the United States. Baggage carousels creak under the weight of everything Cuba lacks: flat-pack furniture, children’s toys, LCD televisions, computer games and the like. Many of the imports are brought in by professional “mules”, usually Cuban-Americans who travel back and forth from Florida several times a week. It is—or was—a profitable business.

The rise in duty will hurt private businesses, whose owners had been assured by state media that, unlike under Fidel Castro’s watch, they are a welcome part of Cuba’s new economy. Many depend on imports. “Nothing is available in Cuba, so what are we supposed to do?” complains Walter, who obtained a licence to be a “car electrician” last year, and runs a flourishing business installing imported music systems in cars. He says he will try to find a way round the increased duties, but if he fails, he will hand back his licence.

“Everything seems on hold,” says a Havana-based European businessman. One theory behind the impasse is that Raúl Castro, who is 81, lacks the energy to overcome resistance to change within the ruling Communist Party. The ghostly presence of Fidel Castro remains an obstacle to reform. And Fidel’s health is again the subject of distracting speculation. His previously verbose “Reflections” on current affairs published in state media fell away to a few, somewhat tangential, sentences before petering out completely in June. He has not been seen in public since March.

Raúl Castro’s crackdown on corruption is another dampener. Malpractice and fraud have been discovered in every industry examined by investigators. Dozens of Cubans and several foreigners have been jailed. The latest probe, in which the president’s son, Alejandro Castro, played a role, concerned a project to expand a nickel-processing plant, a joint-venture with Canada’s Sherritt International. After a brief trial, 12 officials, including three deputy ministers, were jailed last month. In their defence, the officials said that all their talks with foreign partners were held openly. As evidence, Sherritt provided contracts, some signed by Fidel Castro.

One of the defendants, Antonio Orizón de Los Reyes, who served as a deputy minister of industry for 19 years, gave an impassioned speech to the court arguing that he was a scapegoat, and that it was inconceivable that his superiors did not know the details of all deals. His speech was met with impromptu applause. He was sentenced to eight years in jail. “In this atmosphere, everyone is lying low,” says the foreign businessman. “No one is making decisions.” But raising hopes of change only to dash them may prove a dangerous business for the regime.

 

Posted in Blog | Tagged , | Leave a comment

Camila Piñeiro Harnecker May 2012, “Non-state enterprises in Cuba : current situation and prospects”

Below is a Power Point Presentation on  “Non-state enterprises in Cuba current situation and prospects” by Camila Piñeiro Harneck erof the Centro de Estudios sobre la Economia Cubana, Universidad de la Habana. It was presented at the Seminar on Prospects for Cuba’s Economyat the Bildner Center, City University of New York, on May 21, 2012.

.

The complete original Presentation is located here: “Non-State Enterprises in Cuba”, Camila Piniero Harnecker, 2011 .

.

 

Posted in Blog | Tagged , , , | Leave a comment