• 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.

New Site on the Cuban Economy: “ASCE BLOG”

 New Picture (10)

 

The Association for the Study of the Cuban Economy established a Blog  some months ago. It promises to be the locus of timely and serious economic analyses and commentaries on the Cuban economy.

The location of the Blog is  http://www.ascecuba.org/blog/

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The Table of Contents as of January 6 2013 was as follows. Each article is linked to the original location on the ASCE Blog.

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Cuba’s External Debt Problem: Daunting Yet Surmountable  by Luis R. Luis

The external debt of Cuba is not excessively large relative to GDP, though this is distorted by an overvalued currency and the reliance on non-cash services exports. Recent bilateral restructurings are easing the debt burden but are insufficient to lift creditworthiness and restore access to international financial markets. [More]

Controls, Subsidies and the Behavior of Cuba’s GDP Price Deflator by Ernesto Hernández-Catá

In this paper a model of overall price behavior for the Cuban economy is estimated. The model, despite limitations, explains reasonably well the path of the GDP deflator. Importantly, the model sheds light on the interaction between unit labor costs, consumption subsidies and the behavior of prices in the economy. [More]

A Triumph of Intelligence: Cuba Moves Towards Exchange Rate Unification by Ernesto Hernández-Catá

The movement towards a unified exchange rate is positive, though a gradualist approach presents some dangers, argues Ernesto Hernandez-Cata in this post. [More]

La Senda de Cuba para Aumentar la Productividad by Rolando Castaneda

Este artículo de Rolando Castañeda señala la necesidad de estimular la actividad privada propiamente dicha para alcanzar mayor productividad y empleo como han demostrado un gran número de economías en transición. [More]

Another Cuban Statistical Mystery by Ernesto Hernández-Catá

Ernesto Hernandez-Cata estimates the net value of Cuban donations abroad. [More]

La Estructura Institucional del Producto Interno Bruto en Cuba by Ernesto Hernández-Catá

Este trabajo presenta estimaciones de la estructura del PIB cubano para el gobierno, empresas del estado y el sector no estatal e ilustra la relativamente baja contribución del sector privado a la economía. [More]

Oscar Espinosa Chepe by ASCE

The members of ASCE are deeply saddened by the news of the passing after a long illness of Oscar Espinosa Chepe in Madrid on September 23.[More]

Convertible Pesos: How Strong is the Central Bank of Cuba? by Luis R. Luis

In this post Luis R. Luis analyzes implications of the lack of full dollar backing for the convertible Cuban peso (CUC), one of the two national currencies circulating in Cuba. [More]

Government Support to Enterprises in Cuba by Ernesto Hernández-Catá

This post looks at state support to Cuban enterprises and uncovers that net transfers are again rising. The reasons for this are not always clear but Ernesto Hernandez-Cata offers a plausible explanation. [More]

A Political Economy Approach to the Cuban Embargo by Roger Betancourt

Roger Betancourt analyzes the evolution of the Cuban embargo and shows that some parts have already been lifted. Verifiable human rights guarantees may provide a way to elicit political support in the US for action to change trade and financial elements of the embargo. [More]

Cinco mitos sobre el sistema cambiario cubano by Ernesto Hernández-Catá

Ernesto Hernández-Catá comenta sobre el sistema de cambios múltiples vigente en Cuba. [More]

La dualidad monetaria en Cuba: Comentario sobre el artículo de Roberto Orro by Joaquin P. Pujol

Joaquín P. Pujol comenta en esta nota sobre la dualidad monetaria en Cuba. [More]

Unificación monetaria en Cuba: ¿quimera o realidad? by Roberto Orro

En este artículo Roberto Orro describe el complejo sistema monetario y cambiario de Cuba y sugiere que la unificacion monetaria no está a la vista. [More]

Consumption v. Investment: Another Duality of the Cuban Economy by Roberto Orro

Roberto Orro argues in this article that the Cuban economy experienced two distinct periods where either investment or consumption prevailed. This behavior was influenced by external factors among them the assistance derived from the Soviet Union as contrasted to that coming presently from Venezuela. [More]

Gauging Cuba’s Economic Reforms by Luis R. Luis

In this post Luis R. Luis gauges the progress of Cuba’s recent economic reforms using Transition Indicators developed by the European Bank for Reconstruction and Development (EBRD). [More]

On the Economic Impact of Post-Soviet and Post-Venezuelan Assistance to Cuba by Ernesto Hernández-Catá

The end of Venezuelan aid to Cuba will have a sizable negative impact on the economy though very likely of lesser magnitude than the withdrawal of Soviet assistance in the 1990′s concludes Ernesto Hernandez-Cata in this article. [More]

The Significant Assistance of Venezuela to Cuba: How Long Will it Last? by Rolando Castaneda

Rolando H. Castaneda argues that the high levels of Venezuelan aid to Cuba are unsustainable and constitute a heavy burden for both countries even for Cuba in the medium-term as the assistance allows the postponement of essential economic reforms. [More]

Cuba: The Mass Privatization of Employment Started in 2011 by Ernesto Hernández-Catá

In this post Ernesto Hernandez-Cata analyzes Cuban labor market data, identifying large sectoral changes in employment that signal the beginning of large scale privatization of employment in the island. [More]

How Large is Venezuelan Assistance to Cuba? by Ernesto Hernández-Catá

In this article Ernesto Hernandez-Cata explores Cuban official statistics to show that Venezuelan subsidies rival or exceed those flowing from the former Soviet Union during the 1980s. This raises questions of sustainability and severe adjustment for both countries. [More]

Cuba Ill-Prepared for Venezuelan Shock  by Luis R. Luis

Cuba’s weak international accounts and liquidity and lack of access to financial markets place the country in a difficult position to withstand a potential cut in Venezuelan aid argues Luis R. Luis. The failure of reforms to boost farm output and merchandise exports make the economy highly dependent on Venezuelan aid and remittances from Cubans living abroad. [More]

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Cuban hopes dashed as new and used cars go on sale

 

By Marc Frank

HAVANA (Reuters) – Cubans awoke on Friday for the first time in half a century with the right to buy new and used vehicles from the state without special permission, but markups of 400 percent or more quickly dashed most people’s expectations.

At the state-run Peugeot dealership in Havana on Friday morning, where prices ranged from $91,000 for a 2013 model 206 to $262,000 for a 508, people walked away shaking their heads in disgust.

“I earn 600 Cuban pesos per month (approximately $30). That means in my whole life I can’t buy one of these. I am going to die before I can buy a new car,” Roberto Gonzales, a state driver, said, walking back to his 1950s Plymouth. The average monthly wage in Cuba, where four out of five of the 5 million-strong labor force work for the state, is $20.

A European diplomat quipped, “I am slightly flabbergasted. With these prices, the old-time U.S. cars will not disappear fast from the streets.”

Under a reform two years ago, Cubans can now buy and sell used cars from each other, but until Friday had to request authorization from the government to purchase a new vehicle or second-hand one, usually a rental car, from state retailers. Before September 2011, only automobiles that were in Cuba before the 1959 revolution could be freely bought and sold, which is why there are so many 1950s or older cars, most of them American-made, rumbling through Cuban streets.

Geely-CK

New Geely cars, Cuba’s #1 best seller

Along with Cuba’s famous rolling museum of vintage U.S. cars, there are also many Soviet-made cars, dating from the era when the Soviet Union was the island’s biggest ally and benefactor. Newer models are largely in government hands and were sold used before Friday at a relatively low price to select individuals, for example, Cuban diplomats, doctors and teachers who served abroad.

Across town from the Peugeot dealership, where more than a hundred used rent-a-cars went on sale for prices ranging as a rule from $25,000 on up, disgust turned to anger on Friday.  “These prices show a lack of respect for all Cubans. What is here are wrecks. I now have no hope of getting a car for my family,” artist Cesar Perez said, looking at a 2005 Renault on sale for the equivalent of $25,000 and available outside the country on the Internet for $3,000.

A teacher looked at the price list and yelled “Are there any bicycles?” as she stomped away without giving her name.

STATE MONOPOLY

The Cuban state maintains a monopoly on the retail sale of cars. There are 650,000 autos on the island, half of them owned by the government.

The decades-old ban on importing cars and need for state permission to purchase from the state has left nine out of 10 Cuban households without a car or other vehicle such as a motorcycle and dependent on the decrepit public transportation system.

The cost of new and used cars sold by Cubans to each other is similar to those that went on sale on Friday because of limited availability.

The government said all profits would go into a special fund to upgrade public transportation.

Diplomats, foreign businesses and select Cubans will still need government permission to import a new or used car without the huge markup.

The liberalizing of car sales was one of more than 300 reforms put forth by President Raul Castro, who took over for his ailing brother Fidel in 2008, and approved in 2011 at a congress of the Communist Party, Cuba’s only legal political party. The proposed changes put a greater emphasis on private initiative, which had been largely stifled under Cuba’s Soviet-style system, and less government control over the sale and purchase of personal property such as homes and cars.

“These prices will clearly be outside the purchasing capability of the vast majority of Cubans, even with the support from relatives abroad. In essence, they represent a luxury tax imposed by the government on the nouveau riches of Cuba,” John Kirk, one of Canada’s leading academic experts on Latin America and author of a number of books on Cuba, said by email.

There are now tens of thousands of small private businesses in Cuba, and thousands of farm, construction, transportation and other types of cooperatives, all of which in theory should benefit from the opening up of car sales.

Bert Hoffmann, a Cuba expert at the German Institute of Global and Area Studies in Hamburg said in an email that many businesses needed vehicles, but such high prices would make it difficult for most and cut into other business activity, stalling their overall development.

Cuba Apr 2012 072’57 Ford;  CuC 1.00  for having a photo taken

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Lack of Customers Affects New Cuban Micro-enterprises

Canadian Press | Dec 27, 2013

CuentaPropistaCuenta Propista, Calle Monte, 

HAVANA – The dented metal pizza trays are packed away, so too the old blender that never worked when it was needed. Gone is the sweet smell of rising dough that infused Julio Cesar Hidalgo’s Havana apartment when he and his girlfriend were in business for themselves, churning out cheesy pies for hungry costumers. Two years on the front lines of Cuba’s experiment with limited free market capitalism has left Hidalgo broke, out of work and facing a possible crushing fine. But the 33-year-old known for his wide smile and sunny disposition says the biggest loss is harder to define.

“I feel frustrated and let down,” Hidalgo said, slumped in a rocking chair one recent December afternoon, shrugging his shoulders as he described the pizzeria’s collapse. “The business didn’t turn out as I had hoped.”

The Associated Press recently checked in with nine small business owners whose fortunes it first reported on in 2011 as they set up shop amid the excitement of President Raul Castro’s surprising embrace of some free enterprise. Among them were restaurant and cafeteria owners, a seamstress and taekwondo instructor, a vendor of bootleg DVDs and a woman renting her rooms out to well-heeled tourists. Their fates tell a story of divided fortunes.

Of the six ventures that relied on revenue from cash-strapped islanders, four are now out of business, their owners in more dire financial straits than when they started. But the three enterprises that cater to well-heeled foreigners, and to the minority of well-paid Cubans who work for foreign businesses, are still going and in some cases thriving. While the sample size is small, the numbers point to a basic problem that economists who follow Cuba have noted from the start: There simply isn’t enough money to support a thriving private sector on an island where salaries average $20 a month.

“Clearly, there is a macroeconomic environment that does not favour the private sector or the expansion of demand that the private sector requires,” said Pavel Vidal, a former Cuban Central Bank economist.

Vidal has long called on Communist authorities to adopt a huge stimulus package or more aggressively seek capital from foreign investors. Now a professor at Colombia’s Javeriana University, he says one has only to look at the trends since 2011 to see the private sector economy is nearly tapped out. After a surge of enthusiasm, the number of islanders working for themselves has stalled for the past two years at about 444,000 — or 9 per cent of the workforce.

Even in developed countries where entrepreneurs have access to capital, loans and a wide pool of paying customers, startups are risky ventures. According to the U.S. Small Business Administration, about half of all new establishments in America close within five years, and two-thirds are gone within a decade. The failure rate of Cuban entrepreneurs followed by AP was 44 per cent in less than two years, and worse if one considers only those that relied primarily on Cuban customers.

“There’s not enough money circulating in the economy in the hands of everyday people,” said Ted Henken, a professor of Latin American studies at Baruch College in New York and author of an upcoming book on private enterprise in Cuba. “You’re all competing for the same customers, most of whom are poor and have very limited disposable income.”

Cuba Mar 2011 063Reparaciones, photo by Arch Ritter

Economists have criticized the Cuban government for a series of measures to crack down on what it sees as illegal activities — including banning private movie cinemas, taxing the import of hard-to-get products in travellers’ luggage, and banning the sale of imported clothing. But on Saturday, Castro came down firmly in favour of increased regulation, sternly warning entrepreneurs that “those pressuring us to move faster are moving us toward failure.”

Henken and Vidal said Cuba must find a way to raise state salaries, expand state-funded microcredits and create a functional wholesale market to service the new businesses. They also noted that for a relatively well-educated society like Cuba’s, there are remarkably few white collar jobs on the list of nearly 200 activities that have been legalized.

Still, not every entrepreneur is struggling. High-end bars and glamorous new restaurants have become common in Havana, with shiny state tour buses disgorging photo-snapping travellers to sample lobster tail and filet mignon at upward of $20 a plate. Private rooms and homes that rent to foreigners can go for $25-$100 a night, less than most tourist hotels. Cubans with the means, and the business sense, to tap into the gravy train can do very well.

Chef-owner Javier Acosta sank more than $30,000 into Parthenon, a private restaurant catering to tourists and diplomats. He struggled at first, telling the AP back in 2011 that there were nights when nobody came in and he and his four waiters just sat around. But the restaurant slowly gained a reputation, in part because Acosta makes a potent Cuban mojito and offers a special suckling pig that can feed up to five people for $50.

These days, Acosta is expanding. He recently added tables in a new room decked out with mosaic tiles and faux Greek pillars, and plans to build a roof deck. He even has started advertising, paying $300 a year to have his establishment included in a tourist magazine. “I haven’t yet managed to recover my initial investment and the other money we’ve put into the place,” the 40-year-old said. “But in two or three more years maybe I can.”

Even more humble operations can do well, as long as they have some access to foreign money. One woman who rents an apartment to foreigners for $25 a night in the upscale Vedado neighbourhood says her business provides a stable income that supports her and allows her to help her son and granddaughter.

Two women who sell $1.25 box lunches to Cubans and foreigners in a building in Old Havana with many international firms and consular offices have managed to stay afloat despite a sharp drop in customers following the departure of several companies, and what they say has been a steady rise in prices of key ingredients like black beans, rice, cooking oil and pork. “This has become difficult,” said Odalis Lozano, 48. “But we’re still here, because we can always make some money.”

For those without access to that foreign cash line, the results have been grim. Besides, the failed pizzeria, a DVD salesman, seamstress and street-side cafe owner who allowed the AP to tell their stories shut down after less than a year in business, citing high monthly taxes, a lack of customers and limited resources and business sense.

The only two operations that rely on everyday Cubans for revenue which remain in business are gymnasiums. One is run by Maria Regla Zaldivar, who in 2011 was giving taekwondo classes to children in Nuevo Vedado and dreamed of converting a ruined dry cleaning factory into a proper gymnasium. The factory remains a crumbling shell, but Zaldivar said her business continues. She declined to grant a formal interview, but said in a brief phone call that she had rented a small space near her apartment and continued to give classes.

The other success story belongs to Neysi Hernandez, the mother of Julio Cesar Hidalgo’s girlfriend. Hernandez opened a simple gymnasium for women in the courtyard and garage of her home in Havana’s La Lisa neighbourhood, charging the equivalent of $5 a month for membership. Two years later, she has 25 paying clients and ekes out a small profit.

Hernandez says her customers are loyal, despite the fact the gymnasium lacks basic amenities like a shower room, lockers and towels. Unable to afford imported equipment, Hernandez uses sand-filled plastic water bottles for weights. Her three exercise bicycles and mechanical treadmill are creaky and aging. “My gymnasium is modest, but they like it,” Hernandez said, adding she has dreams of one day installing a small massage room and sauna. “A little bit at a time.”

For the pizza man Hidalgo, however, the experience with private enterprise has been a bitter one. He says he lost between $800 and $1,000 on the pizzeria. He is appealing a $520 fine levied by tax authorities who accuse him of understating his profits, even though the business failed. He has had bouts with illness, and has been unemployed since the pizzeria closed in April. Hidalgo says he has not given up on the idea of opening a new business one day. But he is also setting his sights beyond Cuba’s shores.

“What I wanted was to work and make money so that I could live a normal life, have money to buy myself shoes, eat, and go out with my girlfriend,” Hidalgo said, punctuating each modest desire with a flip of his hand and a rueful smile. “I hope that kind of work materializes in my country, but if the opportunity presents itself to work somewhere else, I won’t turn it down.”

Recently, Hidalgo’s girlfriend, Gisselle de la Noval, 25, took out a license to operate a nail salon in the space once occupied by the pizzeria. The salon has been open a matter of weeks and it is too soon to know if it will do well. But she says she is content, charging about 40 cents for a manicure and slightly more for a pedicure. “I don’t miss the pizzeria, but I am sad it wasn’t a success,” she says with a shrug. “But I am young, so whatever. Now I’m dedicated to this.”

Cuba-taxiingBicytaxis, photo by Arch Ritter

 

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Clase de economía política para el Ministerio del Interior (MININT) en Cuba, por Juan Triana Cordovi,

http://www.youtube.com/watch?v=1KwHP88wXfE

Juan Triana Cordovi, profesor del Centro de Estudios de la Economía Cubana en la Universidad de La Habana, se dirige en una conferencia magistral a los principales jefes del Ministerio del Interior (MININT) para hablarles de las necesidades de cambios profundos en la economía y la política del país

 Desde un enfoque favorable al gobierno cubano, el profesor Triana destaca muchísimos de los errores actuales y no tan actuales en la administración del país. Habla y reflexiona sobre la necesidad de que todos los cubanos tengan internet rápido en sus domicilios.

Habla de forma clara, sencilla y didáctica. Independientemente de su parcialidad política, por primera vez circula en Cuba de forma no censurada un análisis autocrítico del gobierno planteando soluciones

New Picture (9)Juan Triana Cordovi

New Picture (7) Jefes del Ministerio del Interior

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Cuba to eliminate currency pegged to dollar

BY ANDREA RODRIGUEZ, HAVANA, 20 december 2013, ASSOCIATED PRESS 

Cuba will eliminate a currency pegged to the dollar as part of a move to end its unique double-currency system, which had become a symbol of economic inequality to many islanders, Cuba’s top economic official said Friday.

Tourists currently use a convertible peso roughly equal to a U.S. dollar while most Cubans are paid in ordinary pesos worth about four cents. Many goods are easier to find in government stores that exclusively accept convertible pesos, a mechanism designed to keep the flow of the special currency under government control. The dual system has created special privileges for Cubans who work in tourism, and resentment among those who don’t.

The government of President Raul Castro pledged in October to gradually unify the two currencies in order to prevent shocks like spikes in inflation. Many Cuban economists said the process would take years.

On Friday, Vice President Marino Murillo told parliament that the peso pegged to the dollar, known as the CUC, would eventually disappear, the first time the government has explicitly said that. He promised that savings in the convertible pesos would retain their value until the change took place. “People who have the convertible Cuban peso (CUC), whether in the banks or kept at home, will not lose any financial capacity when the dual monetary system is eliminated,” said Murillo. He did not say when the change would go into effect.

The double monetary system was established in 1994 amid an economic crisis sparked by the fall of the Soviet Union, which heavily subsidized Cuba for decades. It was designed to allow Cuba to receive hard currency needed for international trade from the outside world while insulating the rest of the communist economy from market influences.

In October, the official newspaper Granma said that the government’s first step would be to allow several businesses that currently accept only convertible pesos, or CUCs, to do business in ordinary Cuban pesos, or CUPs. The official exchange rate will remain in effect, Granma said, meaning the goods themselves will remain out of reach for Cubans without access to the foreigner exchange-driven economy, which includes millions of dollars a year in remittances from relatives in the United States and other countries.

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The Changing Slogans of Cuba’s Leadership

pedro_campos1December 17, 2013 |  “Down with Capital, Long Live Capital!” Pedro Campos HAVANA TIMES

Those in Cuba who once bet on the complete expropriation and nationalization of foreign capital today beseech foreign capital to come in their aid, offering investors every imaginable guarantee. The Cuban State economy is in crisis, but not as a result of the imperialist blockade or the collapse of the Soviet Union, as the defenders of “State socialism” often say. The main reasons for the crisis must be looked for in more than fifty years of nearly-absolute state control, in the extreme centralization of decisions regarding how and how much of the billions of rubles received as subsidies from the former Soviet Union and the billions of Cuban pesos and hard currency produced by the working class were spent over this period of time, in the all-encompassing intervention of the State in the economy through domestic and foreign trade monopolies. It is to be found, also, in the State’s almost complete control over the means of production, in the nationalization of international capital, the capital of Cuba’s high and petite bourgeoisie, of free, individual and family workers – recall the “revolutionary offensive” of 1968 – of cooperatives and worker associations. The low salaries of workers, the maintenance of wage labor for the State, the financial imbalances generated by high spending in gigantic State institutions – such as the Armed Forces, State Security, the Party’s political and grassroots apparatuses, propaganda networks entirely subordinated to the State / Party / government, the country’s unwieldy foreign service – and international campaigns aimed at securing support for the government are some of the other causes behind the crisis. All of this could be summed up as the catastrophic result of that series of aberrant, archaic and dogmatic conceptions that Stalinism developed under the banner of Marxism-Leninism. According to the Stalinist logic, a political and military elite is to determine and regulate a society’s laws, economy, way of life and just about everything else in the name of the communist Party, the revolution, socialism and the working class – so-called “real socialism”, whose only real characteristics have been the absence of democracy and the refusal to socialize political and economic power. I have insisted on this elsewhere: unless the economic, political and social failure of this false socialism is acknowledged, the mistakes made will never truly be rectified. Those who defend this unjust system and now unscrupulously try to “update” it mistakenly identify the Cuban revolution with the Cuban government/State/Party that has made and continues to make every absurd mistake, “validating” the claims of right-wingers worldwide regarding the “unviability of socialism” (perhaps the best help global capitalism could hope for). Today, Cuba’s State economy can no longer rely on massive subsidies from the Soviet Union, Venezuela is experiencing a serious economic crisis and cannot continue to provide the aid Chavez offered the island. Likewise, the governments of powerful allies such as Russia, China and Brazil only offer credits that must be repaid. The bureaucratic apparatus of Cuba’s government/Party/State has refused to consider the truly socialist option: it has refused to share the country’s economic power with the people, with Cubans at home and abroad, with the workers. It has refused to allow workers to participate in the administration, management and revenue-collection of State companies and to grant full freedom to the self-employed and cooperatives, instead subjecting these to regulations, experiments and all manner of toing-and-froing. Naturally, workers identify less and less with a State that only caters to the interests of an elitist, bureaucratic caste which continues to determine the country’s laws, investments, estates and the lives of people. Faced with this complex situation, torn apart by its own contradictions and flip-flopping, the Cuban government/State/Party has now decided to contract legal matrimony with international capital, in order to be able to continue exploiting Cuban workers with its aid. The ironies of history! The “revolutionary leadership”, thirsty for foreign capital, today assures us it will not nationalize foreign investments made at El Mariel, the immense commercial project dependent on the end of the US blockade / embargo. The same government that blamed international capital – and US capital in particular – of all the world’s evils, that once boasted of having nationalized (placed under State control, to be more accurate) all foreign properties, today swears blind that it will respect international capital and begs, beseeches its powerful northern neighbor to lift the restrictions that prevent US millionaires from showering Cuba with dollars. They are not concerned about the risk that big, transnational companies – particularly US companies – will take possession of the resources and wealth of the “Pearl of the Antilles”, the “Key to the Gulf”, the “World’s Cruise Ship”, offering foreign investors the sweat of Cuban laborers on a silver platter, in order to share with them the surplus value they can squeeze out of workers together. This is typical of the annexationist stance that Cuba’s new Right – which has taken power in “socialist” Cuba – cannot conceal. We are dealing with the same people whose slogan once was “down with Capital”, those who today yell: “long live Capital!” The traditional Cuban Right based in the United States does not conceal its intentions of restoring capitalism on the island. The new Right offers us a pig in a poke, painting itself a “socialist” red while acquiescing to Yankee capital, allegedly excluding the old, “imperialist” capitalists (no, the new ones are “anti-imperialists”), so that the nouveaux riches and bureau-bourgeoisie, allied to and financially dependent on international capital, can survive the inevitable collapse. This comes as no surprise. Many of us in Cuba’s democratic and socialist left have been saying for many years that the bureaucratic State has only two options: coming to an agreement with the Cuban workers and people or with foreign capital. The second alternative has been the one chosen in all places where “State socialism” was essayed, where the powerful, authoritarian elite re-converted back to capitalism and became a new type of bourgeoisie. We are not against foreign investment. The question is who these investments benefit and what type of economy they are to serve, whether they are aimed at overcoming the economic and financial problems of the bureau-bourgeoisie and Cuba’s new Right or at developing the mid-sized and small companies and cooperatives of a socialist economy. During a fund-raising campaign in Miami, President Barack Obama assured Cuban dissidents he would not negotiate with the Cuban government in what is left of his term in office, while speaking of the need to change the United States’ long-standing foreign policy towards Cuba. The Democrats are already scrambling to secure votes from the Cuban and Hispanic communities, in view of the fact that there is a good chance the Republicans will put forth a Cuban-born senator as presidential candidate in the coming elections. If that were to happen and the Republicans won… Many concerns, questions and disagreements must exist in the high echelons of Cuba’s leadership. What did the US president mean? If there are to be no negotiations, the blockade will not be lifted and American investments will not come. What will they do with the Mariel project, its three million containers and their debt to Brazil? What steps could be taken to ensure the inflow of US capital, without putting their political power at risk? If this US president doesn’t lift the blockade, is that possibility to be discarded by Cuba’s current leaders? If the Republicans were to win the coming elections and a man of Cuban origin were to take office, what would they do? Now, has anyone in Cuba’s distinguished government of generals asked the Cuban people what they want? With every new development, what becomes clearer and clearer is that Cuba needs to democratize society, allow all Cubans to freely express our thoughts and to peacefully and democratically fight for their realization, allow for freedom of expression and association, the free and democratic election of all public officials and full access to the Internet. This process of democratization would allow all Cubans of good will to take part in the building of a democratic future of peace, justice and harmony, with everyone and for everyone’s benefit, regardless of their political views, religion, skin color or sexual orientation. Let’s hope open debate and the interests of the people prevail over the petty interests of extremists. Socialism in defense of life.

 

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Cuban dissidents say police detained more than 150 on Human Rights Day

BY JUAN O. TAMAYO Miami Herald, Wednesday, 12.11.13

Cuban police carried out more than 150 detentions of dissidents Tuesday on International Human Rights Day and followed up Wednesday by carting off the founder of a group that was holding a rare human rights congress, according to activists in Havana.

Antonio Rodiles, founder of the group Estado de SATS, was taken away by police Wednesday around 11 a.m. as he watched a group of children write graffiti on the sidewalk in front of his home, activist Elizardo Sanchez Santa Cruz said.  Dissident blogger Regina Coyula, who was in Rodiles’ house participating in the First Congress for Human Rights, told reporters that Rodiles was detained when he intervened with police who were harassing his girlfriend for taking photos of the children.

Yohandry Fontana, a pro-government blogger widely believed to be a State Security official, tweeted Wednesday: “I confirm the detention of Antonio Rodiles for attacking and insulting children.”

Estado de SATS and two other independent groups sponsored the Congress, which started Tuesday on the anniversary of the U.N.’s Universal Declaration on Human Rights and was to end Wednesday night with a musical concert.

Sanchez Santa Cruz, head of the illegal but tolerated Cuban Commission for Human Rights and National Reconciliation, said he had information on more than 150 detentions on Tuesday and was still receiving new reports as of Wednesday evening. All but a handful had been released by Tuesday night after so-called “short-term arbitrary detentions for political motives,” usually designed to intimidate or harass dissidents and keep them from attending opposition gatherings. “That’s not counting the harassment and other acts of vandalism because there was a lot of violence by the forces of repression along the entire country,” Sanchez Santa Cruz said by phone from Havana.

Reports of more detentions were still arriving at his Havana office Wednesday because government security forces shut down the cellular and home phones of several hundred activists for much of Tuesday, he said.

The dissident group Ladies in White said its members alone suffered about 130 detentions as they tried to stage street protests — not tolerated by the government — in downtown Havana and the eastern city of Santiago de Cuba, the country’s second largest city. Others were detained as they tried to reach Rodiles’ home to participate in the two days of panel discussions, video programs and art shows, according to dissidents. Also detained were several members of the Cuban Patriotic Union, an opposition group most active in the eastern part of the island. UNPACU founder Jose Daniel Ferrer said more than 130 UNPACU and Ladies in White members were detained Tuesday in eastern Cuba alone amid a string of protest meetings, marches and distributions of anti-government leaflets and posters.

Several dissidents were injured when government-organized mobs and State Security agents threw rocks at them, Ferrer said. Mob members and police also made off with cameras, cell phones and cash taken from many of the opposition activists.

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A member of Ladies in White is detained by Cuban security before the start of a march marking International Human Rights Day in Havana, Dec. 10, 2013.

 

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Obama-Castro handshake – a Sign of Mandela-like Reconciliation?

The Obama-Castro Handshake: No High-five

The Economist, Americas View;  Dec 10th 2013, 15:54 by H.T. | MEXICO CITY

s1.reutersmedia.net

“ON BACKGROUND, I can confirm there was a handshake.” In such deliciously cloistered terms did aides in 2000 confirm that President Bill Clinton had shaken hands with Fidel Castro–the first time a sitting American president had ever done so with the Cuban leader. Compared with that, President Barack Obama’s quick but highly public handshake with Raúl Castro, the Cuban president (and Fidel’s brother), at Nelson Mandela’s memorial service in Johannesburg on December 10th looked like a sign of rapprochement between America and Cuba meant to be shouted from the rooftops.

Don’t read too much into it. Judging by the video footage, Mr Castro was the first in a line of leaders greeted by Mr Obama. It would frankly have been rude to rebuff him, not least at an occasion in which Mr Obama spoke movingly of Mr Mandela’s spirit of reconciliation. There were a few words exchanged, but they looked more polite than profound. Not a word, it seems, about Alan Gross, an American government subcontractor jailed in Cuba, who a few days ago appealed to Mr Obama to push for his release.

What’s more, next in line was Dilma Rousseff, the Brazilian president who has been publicly furious with the Obama administration over spying allegations. If he had given the cold shoulder to Mr Castro, she could legitimately have spurned his kiss on both cheeks.

Nor is it the first time Mr Obama has shaken hands with a Latin American antagonist. When he warmly greeted the late Venezuelan leader Hugo Chávez in 2009, it was reported as an attempt to usher in a new era of friendship between the two countries. Nothing of the sort happened. Nor, for that matter, did it after Mr Clinton’s handshake with Fidel.   Better, then, to look for real signs of a thaw. The half-a-century-old American embargo of Cuba still exists, and diplomatic ties have been severed since 1961.

However, Mr Obama’s government has shown some signs of flexibility. Cuban-Americans can travel and send money to Cuba more easily, and postal restrictions have been relaxed. Last month Mr Obama told a group of Cuban-Americans that the United States should “update its policies” towards the Caribbean island.

Then again, in his speech at Mr Mandela’s memorial, Mr Obama also took a swipe at repressive regimes, presumably including Cuba’s. “There are too many leaders who claim solidarity with Madiba’s struggle for freedom, but do not tolerate dissent from their own people,” he said.

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With Dilma Rousseff

FIDEL-CASTROAn Earier Handshake! No trace on the Web of the Clinton-Fidel Handshake.

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Exclusive: Russia signs deal to forgive $29 billion of Cuba’s Soviet-era debt – diplomats

By Marc Frank;  HAVANA Mon Dec 9, 2013 3:55pm EST

HAVANA (Reuters) – Russia and Cuba have quietly signed an agreement to write off 90 percent of Cuba’s $32 billion debt to the defunct Soviet Union, a deal that ends a 20-year squabble and opens the way for more investment and trade, Russian and European diplomats said.

The two sides announced an agreement to settle the debt dispute earlier this year and finalized the deal in Moscow in October. It would have Cuba pay $3.2 billion over 10 years in exchange for Russia forgiving the rest of a $32 billion debt – $20 billion plus service and interest, the diplomats said. It must still be approved by the Duma, Russia’s lower house of parliament.

800px-Embassy_of_Russia_in_Havana_-_Nick_De_MarcoRussian Embassy, Havana

Negotiations on the form in which Cuba will pay the remaining debt are ongoing, the diplomats said, as even $320 million per year represents a large sum for the cash-strapped country, which has labored under a U.S. economic embargo for decades.

Cuba’s total export earnings are around $18 billion, including tourism and medical and educational services.

Neither Cuba nor Russia has made any official comment on the debt agreement. Cuban officials were not immediately available for comment.

Cuba defaulted on its debt in the late 1980s but recently has been trying to restructure the old debts to improve its international credibility.

Russian Prime Minister Dmitry Medvedev, during a visit to Cuba in February, signed a general agreement to work out a formula and settle the old debt by next year. The decision rankled other countries grouped in the Paris Club of creditor nations because it broke ranks with the collective approach of the organization.

PARIS CLUB CONTACTS

The Paris Club is an informal group of creditor governments including Canada, France, Germany, Japan, Russia, the United Kingdom and the United States as well as a number of smaller European nations. The Paris Club reported that Cuba owed its members $35 billion at the close of 2012, now estimated at around $37 billion, which would leave the island owing $5 billion to $6 billion of non-Soviet debt to the club’s members.   The organization has a Cuba working group, which does not include the United States.

Russia pledged to work with Cuba towards reaching an agreement with the Paris Club as part of the October settlement, one Russian diplomat said. “The Paris Club should be grateful as it removes a huge amount of money from the table and makes an eventual agreement more likely,” he said.

While some Paris Club members clearly preferred a united front, one European diplomat said Russia’s help in settling Paris Club debt could prove important and that a reduced debt would indeed be more easily negotiable.

Since the Medvedev visit, the Paris Club has put out feelers to the Cubans and a few months ago two representatives traveled to the Caribbean island to meet with the central bank, the first such visit in over a decade. Unlike the International Monetary Fund and World Bank, from which Cuba is excluded under the longstanding U.S. trade embargo, the Paris Club does not issue multilateral loans.

Cuba releases very little information about its foreign debt. Last month the government reported its “active” foreign debt, accumulated after it declared a default in the late 1980s, as $13.6 billion in 2010. The government no longer reports its “passive” debt from before the default and estimated at around $8 billion. The Communist-run island has never included debt to the Soviet Union in its figures, claiming the amount was in overvalued convertible rubles and that the country sustained massive damage from broken contracts when its former benefactor collapsed.

Cuba has post-1980s default debt of hundreds of millions of dollars to Russia. “The final deal recognizes some of the Soviet debt, and that’s politically important for Russia. It also opens the way for more credit which is important for Cuba,” a Russian diplomat said, like others requesting anonymity.

SEARCH FOR CREDIBILITY

Three years ago Cuba restructured its active government and commercial debt with China, estimated at around $6 billion. Last year Cuba settled a dispute with Japanese commercial creditors dating back to the 1980s. Under the Japanese agreement, 80 percent of the 130 billion yen debt (about $1.4 billion) was forgiven, with the remainder to be paid over 20 years. Mexico recently forgave 70 percent of a $478 million debt Cuba accumulated in the late 1990s, in exchange for the remaining $146 million being paid over 10 years.

“The agreements with China, Japan, Mexico and Russia ease some outside financial restrictions on the Cuban economy and should facilitate trade ties with these countries,” said Pavel Vidal, a former Cuban Central Bank economist now teaching at Colombia’s Javeriana University. “The austerity measures adopted by the government in 2009, and these accords to lower the foreign debt, help stabilize the island’s finances at a very important moment when a significant monetary reform over three years (devaluation and elimination of the dual currency system) has begun,” he said.

Raul Castro, who replaced his ailing brother Fidel as president in 2008, has drastically reined in imports and cut state payrolls and subsidies while insisting the near-bankrupt government get its financial house in order.

In 2011, the Communist Party approved a five-year economic plan that called for efforts to “enhance Cuba’s credibility in its international economic relations by strictly observing all the commitments that have been entered into,” before and after the default. The plan also called for expediting the rescheduling of Cuba’s foreign debts and implementing “flexible restructuring strategies for debt repayment” as soon as it is practical.

(Editing by David Adams and Jim Loney)

Soviet Spy Ship, havana Harbour, 1971; Photo by Arch RitterSoviet Spy Ship, Havana Harbour, 1971; Photo by Arch Ritter

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In Cuba’s Press, Streets and Living Rooms, Glimmers of Openness to Criticism

  By VICTORIA BURNETT New York Times; Published: December 7, 2013; MEXICO CITY.

 It is a rare day in Cuba when the Communist Party’s triumphalist newspaper suggests that the government — just maybe — messed up. Or when the party’s chief ideologist renounces government secrecy. Or a salsa star, performing at an official concert, calls for the freedom to vote and to smoke marijuana. But such gestures of openness are becoming more common.

Glasnost it is not, say Cuban intellectuals and analysts. But glimpses of candor in the official news media and audacious criticism from people who, publicly at least, support the revolution suggest widening tolerance of a more frank, if circumscribed, discussion of the country’s problems. “There is more space for debate,” said Armando Chaguaceda, a Cuban political scientist and blogger who lives in Mexico. “People are more outspoken.”

For decades, Cuba’s garrulous citizens discussed politics sotto voce and barely referred to Fidel and Raúl Castro by name, even in their own living rooms. But in recent years, especially in Havana, Cubans have begun talking more openly about the economy, the political leadership and the restrictions they resent. As they taste new freedoms and, increasingly, discuss their problems online, they are pushing the boundary between what can and cannot be said. “What people can get away with has changed,” said Ted Henken, a professor at the City University of New York.

Much of this comes down to President Raúl Castro’s style, said Carlos Alberto Pérez, a self-described “revolutionary” blogger. Since Mr. Castro took over from his ailing brother in 2006, he has invited Cubans to give their opinions on the economy and called on the state-run news media to be more incisive. “People in Cuba want to debate, argue, listen and be listened to,” said Mr. Pérez, whose website covers issues ranging from the difficulty of getting a body cremated to public transport.

Overhauls allowing limited private-sector activity and more freedom to travel have loosened the state’s grip on Cubans’ lives and led them to question more openly a political system that has kept the same people in power for more than five decades.

In September, the Catholic Bishops’ Conference made a bold, if oblique, bid for a more democratic system, calling in a pastoral letter for an “updating” of the political model and saying Cuba should be a “plural” society.

Meanwhile, the Internet — despite being out of reach for most Cubans — has broken the state’s monopoly on information and allowed for a spectrum of opinion, bloggers and analysts say. Bloggers, including many who support the Communist system, have written about economic mismanagement, the timidity of changes, corruption, bureaucracy, the lack of Internet connectivity and the passivity of the state-run news media. Blogs and Facebook posts often spur streams of blunt online comment. “It’s revealing that people who are supposedly on the inside are making the same criticisms as people on the outside,” Professor Henken said.

There are still limits. While the government preaches frankness, it continues to crush opposition, and those who step over the fickle line between loyal criticism and dissent risk ostracism, loss of employment, harassment or jail. The Cuban Commission for Human Rights and National Reconciliation, an independent group that tracks treatment of activists, said there were 761 short-term arrests of dissidents in November, one of the highest figures in the past two years. And in October, five independent journalists were detained for several days, according to Reporters Without Borders. “It’s ambiguous,” said Mr. Chaguaceda, the political scientist. “It depends who you are, how you say things, where you say them.”

In the middle of a nationally televised concert in September, the jazz singer Robertico Carcassés surprised the nation by calling for the right to elect the president, the legalization of marijuana and freedom of information. Even more shocking was the authorities’ reaction: After barring Mr. Carcassés from performing in state-owned venues, meaning most of them, they backed down after Silvio Rodríguez, a famous revolutionary singer, stuck up for his colleague’s right to speak out.

The state-run media, which comprises virtually all press, television and radio in Cuba, has publicly embraced what it calls the “battle against secretiveness” and made efforts, however tepid, to shake up its coverage. In September, the state-run television news introduced a segment, “Cuba Dice,” or Cuba Says, in which Cubans on the street are interviewed about issues including alcoholism, housing problems and the high price of fruit and vegetables.

In October, Col. Rolando Alfonso Borges, chief of ideology for the Communist Party, told a summit meeting of the Cuban Journalists’ Union that the party rejected secrecy. Last month, Miguel Díaz Canel Bermúdez, first vice president of the Council of State, met with journalists in the provinces to urge them to be more polemical. In a highly unusual show of flexibility, Granma, the party’s official newspaper, wrote in November that public opinion seemed to be against a recent ban on private 3-D cinemas. Noting the “rich” online debate, the article said Cubans supported regulating and reopening the movie theaters and hinted that the decision might be reversed.

Indeed, blogs have won high-level readers. The reform-minded blog La Joven Cuba was blocked for several months last year after it published several critical articles. These days, however, “we bump into officials, and they tell us, ‘Oh, I was just reading your article,’ ” said Harold Cárdenas Lema, 28, one of the blog’s founders.

The Internet, coupled with greater traffic between the island and the Cuban diaspora, has smudged the divisions that have defined life in Cuba since Fidel Castro’s 1961 dictum, “Within the revolution, everything; against the revolution, nothing.”  

“Cuba is a country where for years there was nothing but extremes,” Mr. Cárdenas Lema said. “But we’ve managed to achieve a more nuanced reality.”

Some dismiss the changes as window-dressing or a tactic to co-opt internal dissent. Arturo López Levy, a former intelligence analyst with the Cuban government who lectures at the University of Denver, says the push for a more critical official news media is partly an attempt to control a debate that is already happening in social media and elsewhere.  “Faced with the challenge of a more open environment, the government would prefer to channel complaints and debates through its own mechanisms,” he said.

Mr. López Levy likened the task of pushing for change from within in Cuba to the punishment of Sisyphus, rolling a stone up a hill only to watch it roll to the bottom. “But sometimes,” he acknowledged, “the stone comes to rest in a different position.”

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