Author Archives: Ritter Arch

“Political Science”: When Will Cuban Universities Join the World?

By Arch Ritter

 In 1993, the Faculty of Economics at the University of Havana decided that it had to incorporate mainstream economics into its curriculum because “Soviet” or “central planning” style economics had virtually disappeared following the break-up of the Soviet Union and the Soviet Bloc. After some discussions with the International Development Research Center (IDRC) in Ottawa, a Masters in Economics Program commenced operation at the University of Havana principally for young Cuban professors of Economics plus others. The program was financed by IDRC and then the Canadian International Development Agency and had the support of the United Nations Economic Commission for Latin America and the Caribbean. It included Canadian and Latin American Professors with senior Cuban professors acting as counterparts.

The program ran from 1994 to 2000, and helped to “jump-start” the introduction of conventional economics into Cuban Universities. It contributed to the changing climate of opinion that has resulted in the new approach to economic policy adopted by President Raul Castro.  I am happy to say that it was my Economics Department here at Carleton University that offered its MA in collaboration with the University of Havana. A description of this Master’s Program in Economics offered at the University of Havana from 1994 to 2000 can be found here.

In contrast, the teaching of Political Science – or “Government” to use the Harvard label – in Cuban Universities appears to be virtually non-existent or else locked in a Soviet-era time-warp at this time. As far as I can determine from perusing the web sites of Cuban Universities, little has changed in this regard since about 1990.

During the 1960’s and early 1970’s, the University of Havana’s School of Political Sciences  (Escuela de Ciencias Políticas) was active at the Faculty of Humanities (Facultad de Humanidades)  This School was created in 1961 after the triumph of the Revolution as part of the University Reform (Reforma Universitaria). But during the decade of 1970 to 1980 the School was closed. Some of its activities were then assumed by the recently created “Ñico López” Party School (Escuela del Partido “Ñico López”), affiliated with the Cuban Communist Party, outside the University campus and with no relation to the University. The main purpose of the “Ñico López  Party School was and still is the formation of Party cadres.

Universidad de la Habana

One outstanding research center affiliated with the Communist Party namely the Centro de Estudios sobre sobre América (CEA) apparently got out of control and was effectively terminated. (See Haroldo Dilla’s commentary on the death of CEA in Cubaencuentro¿Qué pasó con el Centro de Estudios sobre América?)

In 2013, one searches in vain for Departments of “Political Science” in Cuba. There are or have been University and Party Centers for the study of international relations such as the Instituto Superior de Relaciones Internacionales ((ISRI) and the  Centro de Estudios Hemisféricos y Sobre Estados Unidos(CEHSEU, formerly CESEU). But there seems to be a total absence of what one might identify as Political Science or “Government” in any part of the Universities. The closest the University of Havana seems to come to political science appears to be in the Filosofía Marxista Leninista program of the faculty of Ciencias Sociales y Humanísticas. This program seems to be totally removed from an objective analysis of how political systems actually operate in Cuba or anywhere else.  Not surprisingly, this program has a clear ideological orientation, as suggested by the first suggested type of employment for its graduates cited below, (though I suspect that the graduates would be increasingly unemployable with the exception of a handful of future professors teaching the same stuff):

El filósofo tiene además una actuación especial en el trabajo político e ideológico, en tanto puede mostrar cauces metodológicos: holísticos, dialécticos, heurísticos, hermenéuticos, etc., desde perspectivas epistemológicas amplias, dialécticas y transformadoras, que permiten para acceder con profundidad a los dominios de la ciencia, al arte y a la vida cotidiana. Igualmente su actuación contribuye a develar nuevos horizontes epistemológicos, axiológicos y comunicativos, en la medida que, con sentido cultural, dialéctico, complejo y sistémico somete a crítica los momentos débiles de la racionalidad moderna y muestra la esencia de los nuevos paradigmas contemporáneos desde un enfoque marxista creador. En fin, su modo de actuación leninista creadora.”

Where are courses on Cuba’s actual political system, comparative politics, political theory, political philosophy, local politics and political sociology, not to mention the innumerable more specialized topics that one commonly finds in the course program of a Political Science department? (See Harvard’s extensive offerings here.)  

Universidad de Oriente, Santiago de Cuba

In the mid-1990s two Cuban professors, Miriam Gras and Gloria Leon of the University of Havana attempted to set up a network of researchers in Comparative Politics. For their efforts – and also for speaking out on political issues – they were fired from the University.

There are of course talented and widely recognized intellectuals both within and outside the universities who analyze US-Cuban relations and some aspects of international relations. But it is difficult to identify professors from Cuba’s universities who are courageous enough to “push the envelope” and to analyze Cuba’s political system seriously, directly and openly, or to adopt mainstream or conventional political science approaches in their work. The serious analyses of Cuba’s own political system and its functioning are the work mainly of off-shore analysts, either recent émigrés such as Haroldo Dilla Alfonso, Cuban-Americans such as Jorge Dominguez and Marifeli Perez-Stable and many others, or non-Cubans such as Vegard Bye of Norway – also among many others. To find critical analysis of Cuban politics within Cuba, one has to go to independent publications such as Espacio Laical linked to the Catholic Church in Havana and a couple of blogs such as SinEvasion, by Miriam Celaya.

Why is such political analysis essentially off-limits in Cuban universities? You can guess the answer.

One consequence of the absence of the discipline of Political Science in Cuba is that we have only a vague idea of how Cuba’s government actually functions. Who within the Politbureau and Central Committee of the party actually makes decisions? To what extent and how do pressures from the mass organizations actually affect decision-making, or is the flow of influence always from top to bottom rather than the reverse? What role do the large conglomerate enterprises that straddle the internationalized dollar economy and the peso economy play in the process of policy-formulation? Is the National Assembly simply an empty shell that unanimously passes prodigious amounts of legislation in exceedingly short periods of time – as appears to be the case?  One is left with a feeling that the real political system is one of black boxes within black boxes linked in various ways by invisible wires and tubes.

One hopes that Cuba’s universities soon will establish formal Departments of Political Science and that the academic staff will undertake real scientific analysis of Cuba’s political system.  

University of Havana, Faculty of Law in the background

University of Havana circa 1955

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Cuba-Russia Debt Write-Off and Aircraft Leasing: Win-Lose or Win-Win?

By Arch Ritter

Great!  Canadian tourists will once again fly on Tupelov and Ilyushin aircraft on their low-cost snow-bird visits to Cuba – just like in the 1970s to 1990s. I remember one partially half-empty flight in the early 90s when the stewards requested in mid-flight that half the passengers move to the back part of the plane to balance the load, somewhat like I often do in my 14-foot boat.

Cuba looks like the big winner in the debt-write-off and aircraft leasing agreement with Russia reached yesterday, February 21, 2013. But Russia gets a small reprieve for its civilian aircraft sector.

Over and above the massive hidden subsidization provided to Cuba back in the golden age of Soviet-Cuban relations, (amounting to 15 – 30 % of Cuba’s quasi-GDP depending on the year in the 1980s), Cuba also built up a debt to the Soviet Union that amounted to around $28 billion as on 1989.  It looked as if this debt would never be repaid and that Russia had given up all hope of repayment.

The debt write-off deal lets Cuba off the hook, at least in part. Cuba can now claim that it is a responsible economic partner and participant in the international economic system. This should facilitate access to new foreign credit and thus be of some benefit. Cubana also acquires Russian aircraft, presumably at a reasonable price relative to those of the leasers of European, Brazilian and Canadian aircraft, even if of unproven quality and competitiveness. This all looks good for Cuba.

What does Russia get out of the deal? A market for its aircraft. While its military aircraft industry appears to be highly competitive internationally, the civilian aircraft sector has almost disappeared in the face of Boeing, European Airbus, Embraer of Brazil and Bombardier of Canada – and with Chinese aircraft starting to make an appearance. This deal provides a market – albeit a small one– for Russia’s civilian aircraft. Perhaps the Cuban market provides a loss-leader for Russian civilian aircraft into international markets.

At the same time, Russia probably loses nothing in writing off Cuba’s debt as it probably never would have been paid in any case.

Cubana’s New Aircraft, the Ilyushin 94-400 and Tupelov 204SM

The above chart, based on the work of Leogrande and Thomas illustrates the magnitudes of Soviet assistance to Cuba including trade credits.

 

William Leogrande, and J. M. Thomas illustrates the magnitudes of the assistance. My own quantitative estimates placed the value of this subsidization at around 23% to over 36% of National Income in the 1980 to 1987 period.

 

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Raul on a Roll; Anti-Reformers in Retreat!

 

President Raul Castro, January 2013

By Arch Ritter

Migratory reform. New cooperatives legislation. Tax reform. Conversion of pseudo-cooperative “UBPCs” to more authentic cooperatives. Liberalized markets for housing and cars. Liberalized regulations and taxation for small enterprise. And perhaps more to come as some of the “Lineamients” recommendations get implemented.

President Raul is seems to be trying to escape from Fidel’s shadow and create his own legacy as he proceeds to reverse some of the most foolish of his brother’s policies. Indeed future history will not view Raul as his big brother’s sidekick and will evaluate him more positively.

Every successive Raulista  policy reform is a further condemnation of Fidel’s near-half century of personal rule in Cuba. No doubt Raul’s government would build a nice mausoleum for Fidel were he to die before Raul and Cuba’s media and speeches by Party members pour unanimous adulation on Fidel. But Fidel’s approach to the economy – not the polity – is being condemned by his own brother and by the Communist Party itself with every new reform measure.

Is anyone defending Fidel’s economic record?  One looks in vain for any critical analysis from the Fidelista conservative “left” in the press, the universities, or even in the world of the pro-government bloggers.  (Please let me know if I have missed this.)

Where are the defenders of Fidel’s approach to economic management?  They have fallen silent because Fidel, his economic team and his policy approach have been discredited.  Moreover, in Cuba’s one party system, Raul has all the means necessary to maintain unanimity and have the whole party and mass organization system move along with him. Interestingly enough, as far as I can determine, even the foreign Fidelista  “friends”, opportunists, sympathizers, and sycophants remain largely unanimous in abandoning Fidel’s economic approach and backing Raul’s reforms.

In contrast, those Cubans that want further and faster reforms are vocal and active – though their voices are muffled by the political controls over all the media, by the tight limits on the internet and by the monopolistic political system. However, the voices of independent analysts do get through via some academic and other publications and some blogs.

Will the reforms slow down? Will Cuban citizens be assuaged with the reforms that have now been introduced?  Will Cuban citizens continue to accept Fidel’s political system after having rejected much of his economic system?

Probably not.

Cubans must be asking themselves why they put up with so many of the economic stupidities of the Fidel regime for over 50 years. (Think of the nationalization of almost everything in the 1960s, the shutting down of almost all small enterprise, the 10 million tons, the “New Man,” the abolition of cost accounting – and accountants – in the 1960s, the shutting down of half the sugar sector in 2002.) They must also be asking themselves if the political system installed by Fidel is just as noxious and dysfunctional as the economic system.

Cuban citizens will not be assuaged. The economic reform movement will continue under and after Raul. Heightening popular expectations for reform will spread increasingly into political areas.

If only the United States would drop the embargo and remove the pretext of the regime for maintaining the one-party monopoly status quo, thereby permitting an acceleration of the democratizing process.

Fidel with President Kirschner of Argentina, January 2013

 

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The Economic Implications for Cuba of Relaxing Restrictions on the Freedom of Movement

By Arch Ritter, October 16, 2012

Cuba’s relaxation of its much-loathed travel regulations, to come into effect on January 14 2013,  is welcome news as it will improve the freedom of movement for Cuban citizens considerrably– one hopes .  It is certainly to be welcomed warmly.

The new policy abolishes the requirement to have a foreigner make an invitation and pay $224.00 (CDN in 2009) for an exit visa (non-refundable even if the permit is refused.) It also permits Cubans to remain outside the country for 24 months, extendable, rather than the current 11 months, without having their property in Cuba confiscated.

There are a number of unknowns in the new policy however.

  • Restrictions or controls apparently will remain on professionals . How broad these are is not clear.
  • Will the restrictions still apply to independent professionals such as pro-democracy critics such as Oscar Chepe or Yoani Sanchez?  Will they still require exit permits?  Will they then be free to return to Cuba?

Dimas Castellanos, Miriam Celaya, Reinaldo Escobar and Yoani Sanchez; Will Cuba’s Pro-Democracy Bloggers now be able to exit Cuba freely and – one hopes – to return freely as well?

 TheEconomic Consequences of the New Travel Regulatoions

 Increased Emigration?

Easier exit and 24 months – extendable – absence may lead to more emigration and the  loss of “human capital.”  Already annual net emigration is high, reaching 38,165 in 2010 (ONE 2011 Table 3.21). Those who emígrate are disproportionately better education and entrepreneurial and ready to face the challenges of starting over in a new country. Such population loss is especially onerous in view of Cuba’s declining population and the prospect of accelerated decline as an aging population becomes a dying population .

Or Decreased Emigration?

Greater freedom to exit and re-enter Cuba may in fact reduce emigration as Cubans in Cuba are able to leave more freely.

Perhaps increased numbers of Cubans will remain in Cuba if they are free to visit abroad for lengthy periods ot time and also to return.

For some Cubns such as musicians oir major league Cuban baseball players in the United States and Canada,  spending part of the year in the US but returning for some months to Cuba each year would be an ideal situation. Would some such professionals ultimately  return to live in Cuba part-time?

Declining or Increasing Revenues for the Government?

The Cuban Government will lose the revenues from the very high exit permit fees. (These were an extortionarte $ US 224.00 for each person in 2009 when I tried to invite two  Cubans, Miriam Celaya and Yoani Sanchex to visit Canada in a prívate capacity. The payments were non-refundable.)

But will increased foreign travel lead to higher government tariff revenues from the increased volumes of products imported by air passengers?

 Increased Remittance Payments from Migrants?

Will more Cubans leave Cuba to work abroad but support their families at home in Cuba and revisiting often? The result would then be increased inflows of hard currency to Cuba.

In summary, the economic implications of the relaxation of the travel restrictions are ambiguous and not yet clear – as is the detail of the legislation itself at this time.

However, the government perhaps is to be congratulated for renouncing some easy forms of hard currency income from the elimination of the exit permit fee and facing the risk of increased emigration.  Over time, the crass monetary aspects of the improvement in peoples’ freedom of movement should be more positive in terms of government revenues and National economic gains.

 Currency Inconvertibility and Monetary Dualism as Limits on Freedom of Movement

The most serious violation of the freedom of movement of Cuban citizens results from Cuba’s monetary and exchange rate system.  Cuba’s currency has been inconvertible for 50 years and the dual monetary and exchange rate system has prevailed for the last 20 years. Currency inconvertibility means that citizens can not routinely change their earnings for foreign currencies in order to travel freely. Instead, from 1961 to 1992 they have had to get permission from the Government to exchange their earnings in Moneda Nacional pesos into a foreign currency. This meant that for the average citizen travel was highly restricted unless one could find a foreign sponsor to pay the bills.

The economic powerlessness of most Cuban citizens was further intensified when the dual monetary system came into play in the early 1990s,. With the collapse of the value of the “old peso” (Moneda Nacional) vis-a-vis the US dollar (and then the convertible peso or “CUC”) the purchasing power of earnings in the official economy also collapsed.

At the exchange rate for Moneda Nacional to the US dollar at around 26 to 1, the average monthly income is somewhere around US$ 20.00. It is not easy to travel outside – or inside – Cuba independently with this level of income!

In sum, Cuba’s exchange rate and monetary systems impoverish Cuban citizens in terms of the international transferability of their earnings from work.

Only when Cuba establishes a normal exchange rate and monetary system will greater freedom of movement become a realistic possibility for the average Cuban citizen.

 

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Cuba’s Economic Problems and Prospects in a Changing Geo-Economic Environment

By Arch Ritter

Below is a Power Point Presentation made at the “Seminar on Prospects for Cuba’s Economy” at the Bildner Center, City University of New York, on May 21, 2012.

The full presentation can be found here: CUNY Bildner Presention, Arch Ritter on Cuba’s Economic Problems and Prospects….”, May 21 2012

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My Skepticism Runs High, but Maybe I am Wrong! Some Articles on the Moringa Oleifera.

By Arch Ritter

Fidel’s latest enthusiasm for the Moringa and the Mulberry arouses my disbelief, mainly because we have been through this movie too many times already. [See the previous blog entry: Still More “Good Advice” from Fidel!] The following articles from the Cuban press do not assuage my skepticism, the first four and the sixth having been written after Fidel’s great insights, making me think that Cuban journalistic sycophancy lives.

Could I be wrong? Sure. But the Moringa has been around for a while and has not turned out to be quite the miracle crop Fidel makes it out to be anywhere else. This makes me think that Fidel’s enthusiasms may have gotten out of hand one more time.

Here are some articles on the Moringa from the Cuban press for anyone that may be interested, courtesy of Ana Julia Faya:

1. Periodico Adelante, de Camaguey, junio 26, 2012, “Plantadas en Camaguey más de 200 hectáreas de Moringa”, http://www.adelante.cu/index.php/noticias/de-camagueey/1702-plantadas-en-camagueey-mas-de-200-hectareas-de-moringa-oleifera.html

And Cubadebate: http://www.cubadebate.cu/noticias/2012/06/26/sembradas-en-camaguey-mas-de-200-hectareas-de-moringa-oleifera/

2. Radio Maboas, de Amancio, junio 21 de 2012. “Agricultores amancieros apuestan por los beneficios de la Moringa Oleifera”, http://www.radiomaboas.cu/index.php/las-tunas/7-noticias/amancio/1387-los-agricultores-amancieros-apuestan-por-los-beneficios-de-la-moringa-oleifera

3. Periódico Escambray, Sancti Spiritus, 21 de junio de 2012, “La moringa: reseña de un árbol maravilloso,http://www.escambray.cu/2012/la-moringa-resena-de-un-arbol-maravilloso/

4. Periódico Victoria de Isla de Pinos, 20 de junio de 2012, “De la Moringa, todo“,  http://www.periodicovictoria.cu/index.php/isla-de-la-juventud/medio-ambiente/de-la-moringa-todo

5. Periódico Trabajadores, mayo 3 de 2012 (before Fidel Castro’s note on the moringa) “Sin temor a la sequía”http://www.trabajadores.cu/news/20120503/259364-sin-temor-la-sequia

6. Granma, 26 de junio de 2012: “La Moringa'”  http://www.granma.cubaweb.cu/2012/06/26/nacional/artic03.html

Here is Wikipedia’s discussion of the Moringa: Moringa oleifera, from Wikipedia, the free encyclopedia. The Wikipedia article emphasizes the possible role of the Moringa for purposes of Malnutrition relief. One hopes hat this is not the property of the Moringa that Fidel is expecting will be useful in the Cuban context. Here is a Wikipedia quotation:

Moringa trees have been used to combat malnutrition, especially among infants and nursing mothers. Four NGOs in particular have advocated moringa as “natural nutrition for the tropics.” One author stated that “the nutritional properties of Moringa are now so well known that there seems to be little doubt of the substantial health benefit to be realized by consumption of Moringa leaf powder in situations where starvation is imminent.”  Moringa is especially promising as a food source in the tropics because the tree is in full leaf at the end of the dry season when other foods are typically scarce

As for the other wonder-plant, the Mulberry, the most famous Mulberry was the portable  artificial harbor constructed on the Normandy beaches for the WWII D-Day liberation of Europe, as pictured below.

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Still More “Good Advice” from Fidel!

By Arch Ritter

Fidel visits a collective farm. The manager of the farm says: “Fidel, all our chickens are dying and we don’t know what to do.”

Fidel replies: “The chickens are suffering from a salt deficiency. Feed them more salt.”

The workers on the  farm then feed the chickens more salt. A year later, Fidel happens to visit the chicken collective again. The manager says “Fidel, almost all our chickens have died. What should we do?”

Fidel pulls on his beard, thinks hard, and says sagaciously: “Your chickens are suffering from a deficiency of pepper. Feed them some pepper.”

The chickens are then fed pepper. The following year, Fidel again passes through the farm. The manager says: “Fidel, all our chickens have died. We are lost.”

Fidel says: “What a pity. And I still have so many more good ideas.”

[This story came to me originally with a Rabbi in the place of Fidel.]

Cuba’s economic history is in part a history of his “Good Ideas”, imposed on Cuba, with the support and adulation of acolytes, devotees and yes-men and with the suppression of criticism. Think of Instant Industrialization (1961-1963), the “Revolutionary Offensive (1968), the 10 million tons sugar harvest goal, the “New Man”, the Havana Green Belt project and shutting down half the sugar mills (2002).

Fidel now has yet another “Good Idea” reproduced below in his new reader-friendly format, namely a haiku-length quasi-twitter statement. Perhaps he learned from Yoani Sanchez that “brevity is the soul of wit” and also beats three-hour verbosity.

Reflections of Fidel
Nutrition and healthful employment
(Taken from CubaDebate)

“THE conditions have been created for the country to begin massively producing Moringa Oleífera and mulberry, which are sustainable resources [for the production of] meat, eggs, milk and silk fiber which can be woven by artisans, providing well-remunerated employment as an added benefit, regardless of age or gender.”

Fidel Castro Ruz
June 17, 2012
2:55 p.m. •

(See Reflections  of Fidel)

This looks like déjà vu all over again with Fidel proposing a new massive scheme. Thankfully the former President is totally out of the economic picture. If he were still the Big Boss in charge of the central planning system, we could expect some billions would be invested in another untested hare-brained scheme. I still remember Fidel’s adulatory descriptions of “Black Velvet,” the Canadian breeding bull, which was supposed to revolutionize Cuba’s milk cow herds and lead to unlimited supplies of milk, butter etc. Now the new agricultural miracle is Moringa Oleífera and mulberry!

In contrast, President Raul, the pragmatist, might order a study for some four years before deciding whether or not to run a pilot project. Or, more likely now, perhaps an independent farmer might give it a try and if it works, others will adopt it and then in time still others– which is how innovation occurs in a decentralized market economy.

Moringa Oleífera

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Presentations from the Bildner Center, (CUNY) “COLLOQUIUM ON THE CUBAN ECONOMY” May 2012,

On May 12, The Bildner Center at City University of New York, under the leadership of Mauricio Font organized a one-day conference analyzing the recent experience of the Cuban economy in its process of transformation.  All of the Power Point presentations from the  “COLLOQUIUM ON THE CUBAN ECONOMY” have been posted on the  Center’s Web Site. The presentations of the Cuban participants, all from the Center for the Study of the Cuban Economy, namely Omar Everleny, Pavel Vidal, Camila Piñeiro, and Armando Nova, are especially valuable and informative as they provide up-to-date and inside analyses of major issue areas. Mauricio, Mario González-Corzo, and the team are certainly to be congratulated for organizing this event

All of the presentations can be be accessed at the Bildner Web Site via the hyperlinks listed below in the form of the program of the conference.

Session #1: Cuban Updates on Actualización

1. Cuentapropismo y ajuste estructural
Omar Everleny, University of Havana

2. Microfinanzas en Cuba
Pavel Vidal, University of Havana

3. Non-state Enterprises in Cuba: Current Situation and Prospects
Camila Piñeiro, University of Havana

4. Impacto de los Lineamientos de la Política Económico y Social en la producción nacional de alimento
Armando Nova, University of Havana

Moderator: Mauricio Font, Bildner Center for Western Hemisphere Studies

Session # 2: Strategic Initiatives: Agriculture

1. Measuring Cuba’s Agricultural Transformations: Preliminary Findings
Mario González-Corzo, Lehman College, CUNY

2. U.S. Food and Agricultural Exports to Cuba – Uncertain Times Ahead
Bill Messina, University of Florida

Moderator: Emily Morris, Economist Intelligence Unit in London

Session # 3: Revamping Socialism: Perspectives and Prospects

1. Actualización in Perspective
Mauricio Font, Bildner Center for Western Hemisphere Studies

2. Cuban Restructuring: Economic Risks
Emily Morris, Economist Intelligence Unit in London

3. Prospects in a Changing Geo-Economic Environment Archibald Ritter, Carleton University, Canada

ROUNDTABLE: Implications and Future Agenda


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Cuba in the 2012 Yale University “Environmental Performance Index Rankings.”

By Arch Ritter

In the recently published Yale University 2012 Environmental Performance Index, Cuba’s ranking is surprisingly strong. Its position in the world is # 50 which looks pretty reasonable in comparative international perspective, though the Yale study classifies Cuba as a “Modest Performer”. (The ranking for Canada is #37 and that for the United States is # 49.) In the Latin American context, Cuba is tied for 8th place with Argentina. Other Latin countries rank higher: Costa Rica at #5; Colombia #24; Brazil #30; Ecuador #31; Nicaragua #35; Panama #39; and Uruguay, # 46.

On a second related index, namely the Trend EPI, or the trend rank based on performance over the last decade, Cuba ranks #101 in the world and #12 in the Latin American and Caribbean region.

The Yale Index now seems to be “the gold standard” in such environmental performance indices. Comprehensive information on the Yale index is available on their web site: Yale University 2012 “Environmental Performance Index Rankings”. The detail of the final results and background studies for the 2012 Report are all available here:  File Downloads.

A pictorial summary of the methodology and indices used to construct the composite index are presented in Chart I below, and Cuba’s performance in the various component indices is pictured in Chart 2.Chart 1

Chart 2:

According to the Yale study, and illustrated in Chart 2, Cuba performed well in the following areas:

  • Environmental impacts on health and the environmental burden of disease;
  • Forest cover and planting (reflecting the conversion of sugar lands to plantation);
  • Protected Areas;
  • Agricultural subsidies.

Cuba’s performance was considered weaker in

  • Air quality;
  • The ecosystem effects of water resources;
  • Fisheries;

Cuba was judged to be more or less “OK” on water resources for human consumption and CO2 emissions.

A second study produced as Appendix 5 of the Republic of Cuba – European Union Country Cuba’s Strategy paper and national indicative programme, 2011-2013, Appendix 5  provides  additional information on Cuba’s environmental performance that is more worrying. Among the environmental performance measures and commentaries that it includes are the following:

  • “Of the flora in Cuba about 48% is in danger, of which around 22% in serious risk. Of the fauna these figures are 30% in danger of which 14% in critical risk.”
  • There is an almost complete lack of infrastructure to manage water pollution. “Of the 2,160 main contaminant sources recognized by UNEP, 1,273 or 59 percent, release their pollution into the Cuban environment without any treatment whatsoever. Another 433, or roughly 20 percent, receive limited but inadequate treatment before being discharged.”
  • “Some 17 or 18 percent of urban sewage receives treatment before discharge into Cuban waterways.”
  • According to UNEP, approximately “341,716 tons per year of organic material are discharged into Cuban waters, equivalent to the pollution generated by a population of over 22.3 million people (almost twice the actual population).”
  •  “….it has been estimated that annually 863.4 billion gallons of contaminated water finds its way into Cuba’s rivers, much of it industrial.”
  • “Salt-affected soil covers 14 percent of the national territory, or approximately 1 million hectares. The cost of recovering these salt-affected soils has been estimated at $1.43 billion. This is one of the main contributors to soil erosion which according to the Cuban government, affects 60 percent of Cuba’s territory, which has given rise to serious concerns about desertification, or extreme topsoil loss.”
  • “Waste is collected efficiently in most parts of the country but dumped in uncontrolled dumpsite for the mayor part. The existing landfills for Havana are full and new two landfills will be constructed, making use of state-of the art technology (ground water protection, leakage and leaching control).”

In addition, as visitors to Havana can attest, air pollution is a serious concern though it seems to have improved somewhat since some of the older Soviet era trucks, buses and the “Camellos” have been taken off the streets. The smoke from the old electricity generation plant and the refineries in Havana also has a major effect when the wind is in the wrong direction. The waste waters of Havana are sent by sewage pipe – clearly visible from the eastern part of the Malecon – one kilometer off-shore where they are swept into the Florida Straits – thankfully missing the beach areas or east Havana, Varadero, Cayo Coco, Guardalavaca etc.

All in all, like virtually all other countries, Cuba has no grounds for environmental complacency.

Smoke from Havana’s Thermal Elecctricity Plant, from the Edificio Fochsa,  Photo by Arch Ritter

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Cuba’s Debt Situation: Official Secrecy and Financial “Jineterismo”

By Arch Ritter

Does Cuba have an “external debt problem”? Is servicing the debt, that is, paying the interest and amortization, a serious burden for the balance of payments?

Unfortunately, Cuba does not provide sufficient information to analyze this issue clearly. One searches in vain in the documentation of the Oficina Nacional de Estadisticas (ONE) and the web site of the Banco Central de Cuba (BCC) for useful and up-to-date information on debt magnitudes or the cost of servicing the debt. Why is it that all the countries in Africa – excepting Somalia and South Sudan – and all the countries of Latin America can provide up-to-date information on their debts but Cuba can not? [For Africa see the African Economic Outlook, 2012, Table 12    and for Latin America, Naciones Unidas, CEPAL, CEPAL, Naciones Unidas, Balance Preliminarde las Economias de America Latina y el Caribe. 2012]

One can only conclude that Cuba’s debt issue is a matter of “official secrecy”. Presumably it is not due to incompetence in the Central Bank or the Statistical Agency.

Surprisingly, the present lack of timely and detailed information on the external debt is in sharp contrast with the situation under the government of President Fidel Castro in the 1980s. In this period, the BCC published detailed information on the external debt which permitted independent external analysis (See for example A. Ritter, “El problema de la deuda de Cuba en monedas convertibles”; “Cuba’s convertible currency debt problem”, – Revista de la CEPAL; CEPAL Review, 1988, not available in electronic format.)

The most recent number for Cuba’s external “gross debt” provided by the ONE for 2008 was 11.6 billion pesos in Moneda Nacional. This constituted 19.1% of Cuba’s GDP for that year (ONE AEC Table 8.2). These numbers are undoubtedly higher now in 2012 after the 2008-2009 recession.

The total external debt ostensibly amounted to 92.7% of Cuba’s exports of both goods and services in 2008. This does not seem unduly onerous. However, Cuba’s service exports, paid for primarily by the Government of Venezuela in exchange for medical and other services are vulnerable to change if Hugo Chavez were to leave the scene or lose the forthcoming presidential election. These service exports are unsustainable in the long run in any case as countries develop their own medical services.

As a percentage of merchandise exports, Cuba’s gross debt comes in at 325%, a magnitude that is more onerous. Unfortunately lack of relevant information prevents a determination of debt service as a percentage of exports of goods and services or of merchandise exports alone.

But how meaningful are these gross debt figures?

Cuba’s external debt is in foreign currency. Cuba’s domestic GDP is measured in Moneda nacional. What is the reasonable exchange rate for translating Moneda Nacional into a common foreign currency such as the US Dollar? The appropriate exchange rate would not be the official 1.00 CuP = $US 1.00. Nor would the appropriate rate be  24.00 CuC = $US 1.00, which was the exchange rate of the CuP (in Moneda Nacional) to the CuC (or the Convertible Peso.) If it were the latter, then the hard currency debt of 11.6 billion would be 458% of Cuba’s GDP, an amount that would be horrendous. Likely the true weight of the external debt is somewhere the 19.1% of GDP and the astronomical 458% of GDP, but we have little idea exactly where.

Cuba underwent a debt crisis in the late 1980s when it faced a total hard currency debt of $US 5.5 billion. It resolved the problem by first arranging a series of reschedulings. When these did not solve the problem, Cuba suspended negotiations on July 1, 1986, and entered a debt moratorium paying neither interest nor amortization.

According to a report by the Republic of Cuba-European Union entitled Country Strategy Paper and National Indicative Programme for the period 2011-2013. 24 March, 2010, “Annex VIII: Debt Sustainability Analysis.” Cuba’s creditors, excluding the former Soviet Union, were owed a total of $31.7 billion in 2008. The total volume of debt outstanding now in 2012 is undoubtedly higher than the 2008 figure. Some 20 billion of this was “inactive” or no longer honored by Cuba, but we do not know which debts were no longer active.

Under President Fidel Castro and perhaps Raul Castro as well, Cuba has played an interesting and remunerative game, making economic friends with a succession of suitors, obtaining trade, official and bank credits from its partners, and then reneging on the debt. The most dramatic example was of course the former Soviet Union which extended credits amounting to around 20 billion transferable rubles, or some $US(1988) 28 billion. This debt plus other debts with the countries of the Soviet Bloc is not acknowledged by Cuba will never be repaid.

More recently, Venezuela, China and Iran have been the favored economic partners with Cuba extending credit to promote their exports. Will they also be “stood up”, “let down” or “dumped” by Cuba when the credits run out?

Certainly when Chavez leaves the scene and when Venezuela decides to end its special relationship with Cuba, Cuba will likely declare a moratorium. Are there additional suitors who are willing to enter a special economic relationship with Cuba and provide new credit lines? I can no longer see a waiting list of suitors. However, there may well some ready to succumb to the charms of Cuba, its diplomats and its trade negotiators. Perhaps Brazil is next in line!

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