Author Archives: Betancourt Roger

CONFERENCE PROCEEDINGS, ASCE 2014

Posted on February 2, 2015 by Arch Ritter

The papers presented at the 2014 Conference of the Association for the Study of the Cuban Economy are now available.

Cuba in Transition: Volume 24: Papers and Proceedings of the Twenty-Fourth Annual Meeting.

The papers listed below are hypewr-linked to directly to their respective file on the ASCE web site.

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New Site on the Cuban Economy: “ASCE BLOG”

Posted on January 6, 2014 by Arch Ritter

 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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Roger R. Betancourt, “Why Cuba Remained a Colony while Latin America Became Independent: Implications for the Current ‘Transition’”(December 2011)

Posted on March 13, 2012 by Arch Ritter

Roger R. Betancourt,  University of Maryland and Development Research Center

From Cuban Affairs Quarterly Electronic Journal; (Re-published here with the permission of the author)

The complete essay is available here: Betancourt Implications for the Current ‘Transition’

Abstract

From the 1790s to the 1820s most Latin American countries started struggles that led to independence while Cuba remained a colony long afterwards. We will show how unique economic conditions, a transformation in the nature of slavery and the economic and political incentives associated with the Spanish special relation together led to the delay of independence for Cuba. Ironically, we will show how present unique economic conditions, current social cleavages and economic and political incentives associated with the US special relation together raise the probability of a similar delay in a transition to a democratic market economy. Awareness of the existence of these factors may help prevent or at least shorten such delay.

 Introduction

Most Latin American countries became independent from Spain at the beginning of the 19th century. These events were made official through declarations of independence for areas similar but not identical to current geographical arrangements or for larger territories, comprising several current countries that later separated into the countries we know today. These declarations took place between 1804 (Haiti) and 1825 (Bolivia and Uruguay). Cuba, on the other hand, became independent officially in 1902.

In the first section of this essay I will highlight Cuba’s incentives to remain a colony. They arose as the confluence of three factors that affected Cuba differently from other Latin American countries between the 1790s and the 1820s. These factors were unique economic conditions associated with Cuba’s sugar exports, the transformation of slavery during this period associated with the Industrial Revolution, and the evolution of economic and political incentives granted by the Spanish Crown which is associated with the so-called special relation between Cuba and Spain. Subsequently, in Section 2, I will provide a succinct discussion of the immediate implications of remaining a colony after Cuba’s main window of opportunity for independence ends.

One of the ironies of the current situation in Cuba is that it represents a critical historical juncture, just like independence did about 200 years ago, and the factors affecting the evolution of the economy and the political system can also be thought of in terms of incentives, i.e., incentives to remain a nondemocratic ‘mixed’ market economy. These factors also fall into three distinct but related categories: unique economic conditions, social cleavages arising from previous history, and the special relation between Cuba and the United States. The third section of the paper discusses these factors in detail and their implications for the current situation.  While I don’t believe that history is necessarily destiny, one way of avoiding this outcome is to be aware of the lessons offered by historical processes.

Concluding Remarks

Summing up, Cuba is again at a critical historical juncture. In this one the current economic situation is forcing the introduction of significant reforms that improve civil liberties associated with economic activities without much change in political rights. Prospects of an oil bonanza materializing in the next few years, however, lessen the need for further economic reforms and increase the incentives to repress political rights.

Racial differences provide a persistent social cleavage accentuated by a more recent one between the Diaspora and the non-Diaspora. Ironically, blacks are likely to feature prominently in the leadership of a move toward a democratic market economy.  Unfortunately, incentives toward remaining a nondemocratic ‘mixed’ market economy suggest that this path toward ameliorating racial discrimination is unlikely to arise out of the current ‘transition’.  Meanwhile the antagonistic special relation with the US provides a convenient setting for evolving to a nondemocratic ‘mixed’ market economy. Just as it happened 200 years ago, the choices made at this critical juncture are likely to affect outcomes long afterwards. In the current juncture, however, one notable outcome of the joint operation of these three factors is delay in the enjoyment of the political rights and civil liberties associated with democracy by Cuban citizens.

Roger Betancourt

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