Tag Archives: Fidel Castro

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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Poor Fidel: Repudiated by his Own Brother and Reduced to Playing “Chicken Little’”

 

Fidel Castro and Iranian President Mahmoud Ahmadinejad,
Holding Hands, January 12, 2012:

By Arch Ritter

I almost feel sorry for Fidel – but not quite.

His own brother Raul, the National Assembly, and the last Party Congress have repudiated the various economic programs, policies and institutional structures that he implanted in Cuba for almost half a century. The Communist Party Conference on January 28 will implicitly reiterate what the Congress has already approved. Raul Castro’s economic reform agenda is steadily, inexorably and permanently reversing Fidel’s economic heritage – though not his political institutions.

If Fidel Castro understands what is going on, he can’t be too happy that a major part of his life’s work is being cancelled. On the other hand, he likely is pleased that the political system that he imposed on Cuba remains pretty much intact. There is virtually no sign that political reform may be forthcoming.

Fidel Rejected; Critics Vindicated

For almost half a century, Fidel constructed dysfunctional institutions and pursued counterproductive economic policies. (See Fidel’s Phenomenal Economic Fiascoes: the Top Ten) Worse still, he implanted and maintained an authoritarian regime that denies authentic participatory democracy and fundamental human rights to Cuban citizens. One result has been poverty for most Cubans by any international standard, though obscured by creative statistics.  Moreover, two million Cubans have left Cuba and many have made fine contributions to their new countries.

While Fidel’s economic visions, strategies and policies are being continuously repudiated by the current economic reform process, many of his critics have been vindicated. In the past, Fidel responded to criticism by incarcerating the critics (e.g. Oscar Chepe.) Others were demoted, fired, shunned, ostracized and pushed into exile. But the ongoing reform process is an official Cuban certification  that many of the critics were on the right track while Fidel was taking Cuba down a blind alley. Silencing criticism and commentary damaged economic policy and the Cuban economy, because errors could not be “nipped in the bud” or reversed quickly.

If only Fidel had taken and understood an “Economics 100” explanation of how markets operate and can serve as a mechanism for the social control of economic activity, Cuba’s economic experience surely would have been much better.

“Henny Penny” the Blogger

At this time, fortunately for Cuba, Fidel seems to have been pushed aside into a role where the real economic damage he can do is minimized. His principal activity now is to write “op-eds” or “Blog entries” or as he calls them, “Reflections”. (See Reflections of Fidel Castro) Fidel seems to be trying to reinvent himself as a seer or clairvoyant pronouncing sagely on the future of the human species and the significance of the events of the day. Though excluded from domestic governance and policy making, his ego perhaps may be assuaged by having his “Reflecciones” widely distributed through all the media which are still monopolized by the Communist Party. Following 50 years precedence, no-one else has access to the media in order to contradict or criticize his assertions or to make alternate arguments and analyses.

Fidel has made himself a prophet of doom – or perhaps an re-incarnation of “Chicken Little” or “Henny Penny”, running to tell the world “The sky is falling! The sky is falling!” Why is the world headed for disaster and the human race bound for extinction? Well, financial crisis, nuclear war, global warming, NATO, the G20 and now, Fidel’s latest concern, “fracking” (or hydraulic fracturing for natural gas and oil.) Who is responsible for all of this? Why of course the United States.

Fidel also comments on issues of the day such as the high quality of Hugo Chavez speeches and the perversions practiced especially by the United States but also the G20. While his commentaries have been “over the top” for a long time, they now seem to be increasingly incomprehensible. His latest Reflection for example (See The Best President for the United States) argues that a robot would do a better job than Obama as President. It includes the following sentence:

“I imagined Obama, very articulate with words, for whom, in his desperate attempt to be reelected, the dreams of [Martin] Luther King are more light years away than the closest inhabitable planet.”

This is not a mistranslation. At least Fidel could be provided with better editors. Otherwise, it will seem to readers that he may be losing out to Father Time rather quickly.

See also: Fidel’s Phenomenal Economic Fiascoes: the Top Ten

Cuba’s Achievements under the Presidency of Fidel Castro: The Top Ten

Fidel’s No-Good Very Bad Day

The “FIDEL” Models Never Worked; Soviet and Venezuelan Subsidization Did

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“Reflections” … on Vaclav Havel, Kim Jong Il, Fidel Castro and Raul Castro

By Arch Ritter

On December 18 and 19 2011, the world witnessed the passing of Vaclav Havel of Czechoslovakia and Kim Jong Il of North Korea.


Vaclav Havel

Kim Jong Il

Vaclav Havel will be remembered as the courageous dissident who stood up against a monolithic totalitarian regime, backed by the armed forces of the Soviet Union which had suppressed the “Prague Spring” of 1968, as well as uprisings in East Germany and Poland. Havel’s audacity in the face of overwhelming odds is an inspiration to all of us. But let us remember also Lech Walesa as well as the innumerable citizens who early on led the uprisings in most of the Eastern European states. Despite numerous incarcerations and suppressions, Havel persisted, providing ethical insight and guidance to the Czechoslovak democracy movement. In Havel’s words, from Living in Truth (1986):

It is, however, becoming evident—and I think that is an experience of an essential and universal importance—that a single, seemingly powerless person who dares to cry out the word of truth and to stand behind it with all his person and all his life, ready to pay a high price, has, surprisingly, greater power, though formally disfranchised, than do thousands of anonymous voters. …..…. It is becoming evident that politics by no means need remain the affair of professionals and that one simple electrician with his heart in the right place, honoring something that transcends him and free of fear, can influence the history of his nation.

How will Kim Jong Il be remembered?

Unfortunately Fidel Castro and his government threw their lot in with the totalitarian dictators of this world such as Kim Il Sung and his just-departed son Kim Jong Il, Gustaf Husak, Wojciech Jaruzelski etc. Even in 2008, Fidel was pronouncing his admiration for the Kims and their despicable, dysfunctional, dynastic despotism. (See Fidel Castro’s Reflections of Fidel Castro about Korea, from Cuba News Agency, August 22 and 24 2008.)

Who can forget and forgive Fidel Castro’s justification of and support for the Soviet invasion of Czechoslovakia in August 1968 – that took four tightly packed pages of Granma (August 24, 1968)?

Who in Cuba today rules with similar institutions to and in the style of Gustáv Husák, (Czechoslovakia), Leonid Brezhnev (USSR), Erich Honecker (East Germany), Wojciech Jaruzelski (Poland), Janis Kadar (Hungary),  Nicolae Ceausescu (Rumania) or Todor Zhivkov (Bulgaria) ?

Who in Cuba today wields the moral authority and insight of Vaclav Havel?

Perhaps Raul Castro is or should be thinking of the significance and legacies of Vaclav Havel and Kim Jong Il. Could Raul redeem himself at this late date and generate a legacy that will not be reviled in future? He could conceivably, if he were to phase out the old political regime and phase in a pluralistic democratic political system that fully respected political and civil liberties and labor rights as these are articulated in the various United Nations Declarations and Covenants. Perhaps there is still time. But the chances of this occurring are possibly 1 in 1,000. We most likely await the beginnings of an inevitable resolution that will be provided soon by Mother Nature and Father Time.

Granma, 24 de agosto de 1968, Front page

Yet Another Medal, this one from Kim Il Sung

With Jarulzelski

Holding hands with Quaddafi

 

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Fidel Castro: The Cowardice of Autocracy

By Arch Ritter

Note: This commentary is more political than economic in character. It is an attempt to get some ideas “off my chest”.
.

Fidel Castro’s attack on the Moncada Barracks in Santiago in 1953 and his subsequent crossing of the Florida Straits in the Granma to attack the Batista regime with a small armed force certainly appear courageous – though some observers question the personal courage of Castro during these events. But once in power, he quickly moved to suppress all opposition and alternate visions of Cuba’s future in order to minimize or eliminate any risk of rejection, criticism, or challenge to his power and his view of the world. Such a “stacking of the deck” in his own favor and the denial of freedom of expression and assembly to all who disagreed with him does look cowardly.

The Courage Phase: Fidel Castro (far Right) and followers arrested after the attack on the Moncada Barracks,  8/1/53

But what is cowardice and what is courage? In searching the literature via Google and Google Scholar, little analysis turned up for me, with the exception of an old essay by Joe K. Adams entitled “The Neglected Psychology of Cowardice” [Journal of Humanistic Psychology, 1965, 5; 57-69]. Adams begins his analysis with a lament that little had been written prior to 1965 on this topic. The Adams essay is the only reasonable and relevant analysis that I was able to locate, though there may be – and I hope that there would be – a substantial literature that I have not found.

Adams defines courage and cowardice in terms of the consequences that a person expects will follow from a particular course of action. The consequences may be physical, moral or intellectual and Adams (p. 58) defines them as follows:

  1. “Physical courage-cowardice: the relative willingness to risk or undergo anticipated physical pain or injury;
  2. Moral courage-cowardice: the relative willingness to risk or undergo undesired social consequences such as disapproval, contempt, loss of status or power, ostracism…
  3. Intellectual courage-cowardice: the relative willingness to risk or undergo a serious disturbance of one’s cognitive structure.”

On the courage side, one willingly confronts anticipated injury or risk while on the cowardice side, one minimizes expected injury and risk.  How does one minimize risks of personal pain, injury, disapproval, loss of status or power, or “disturbance of cognitive structure”? In Adams words (p. 59)

“….. by rendering harmless those who might bring about (these negative consequences …. ) by destroying them, censoring them, controlling them, or changing them. Destruction, censorship, control or change must itself be brought about with a minimum of risk i.e. in such a way that one’s opponents are unable to fight back. In addition to the possession of a complex and mystifying ideology, methods which are especially useful are secrecy, intrigue, deception, labeling, anonymity, entrapment, monopoly and getting others to do whatever open or fair fighting is necessary.”

This indeed sounds a lot like the Regime of Fidel Castro. However, Adams was not discussing Cuba or Eastern Europe. His case studies focused on the Catholic Church, the Inquisition, John Calvin’s Geneva, and political and academic ideologues (especially psychologists) circa the 1960s.

Why then did Fidel Castro shift from early courage pre-1959 to later cowardice when he found it desirable to deny people’s basic political and civil rights as these are interpreted by the United Nations Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights,  and the International Labour Organization Declaration on Fundamental Principles and Rights at Work? I am not in a position to give a good answer to this question, being neither a psychologist nor a connoisseur of Fidel Castro’s biography. However, perhaps Lord Acton’s maxim is relevant: “Power Corrupts and Absolute Power Corrupts Absolutely.”  Once tasting the fruits of power, Fidel became launched on a spiral, requiring more and more control of people’s lives, more and more adulation and influence. No amount of publicity and adulation ever seemed to be enough towards the end of his reign. The marches along the Malecon with him at the head became frequent and the political rallies occurred every weekend – non-stop mass mobilization to demonstrate loyalty and support for the Commandante.

Where does one see physical, moral and intellectual courage in Cuba at this time? Clearly it is with the dissidents, the Damas en Blanco, the independent journalists and economists, the Bloggers, and the labor or human rights activists who stand up to the autocratic regime – though with still small voice – at great personal risk.

Will President Raul Castro break from the political system established set by his older brother and demonstrate authentic intellectual courage?  If Raul really wanted to establish an independent legacy and an honorable place in the history books, he would return to authentic representative democracy will full practice of political pluralism and independent expression and assembly. Unfortunately such a courageous move though desirable is also improbable.

NOTE: For additional articles on various aspects of Fidel Castro’s presidency, see:

Cuba’s Achievements under the Presidency of Fidel Castro: The Top Ten

Fidel’s Phenomenal Economic Fiascoes: the Top Ten

Fidel’s No-Good Very Bad Day

The “FIDEL” Models Never Worked; Soviet and Venezuelan Subsidization Did

Fidel Castro, circa 2010 or 2011

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Yoani Sanchez on Cuba’s Current Predicament: “ Country for Old Men”

BY YOANI SÁNCHEZ

This essay was originally published in Foreign Policy, October 12, 2011. It can be found here:  “ Country for Old Men” or here: http://www.foreignpolicy.com/articles/2011/10/11/country_for_old_men

At the end of his July 31, 2006, broadcast, the visibly nervous anchor on Cuban Television News announced that there would be a proclamation from Fidel Castro. This was hardly uncommon, and many Cubans no doubt turned off their TVs in anticipation of yet another diatribe from thecomandante en jefe accusing the United States of committing some fresh evil against the island. But those of us who stayed tuned that evening saw, instead, a red-faced Carlos Valenciaga, Fidel’s personal secretary, appear before the cameras and read, voice trembling, from a document as remarkable as it was brief. In a few short sentences, the invincible guerrilla of old confessed that he was very ill and doled out government responsibilities to his nearest associates. Most notably, his brother Raúl was charged with assuming Fidel’s duties as first secretary of the Communist Party’s Central Committee, commander in chief of the Revolutionary Armed Forces, and president of the Council of State. The dynastic succession had begun.

It was a miracle that the old telephone exchanges, with their 1930s-vintage equipment, didn’t collapse that night as callers rushed to share the news, in a code that was secret to no one: “He kicked the bucket.” “El Caballo” — the Horse — “is gone.” “The One is terminal.” I picked up the receiver and called my mother, who was born in 1957, on the eve of Castro’s revolution; neither of us had known any other president. “He’s not here anymore, Mom,” I said, almost whispering. “He’s not here anymore.” On the other end of the line she began to cry.

It was the little things that changed at first. Rum sales increased. The streets of central Havana were oddly empty. In the absence of the prolific orator who was fond of cutting into TV shows to address his public, homemakers were surprised to see their Brazilian soap operas air at their scheduled times. Public events began to dwindle, among them the so-called “anti-imperialism” rallies held regularly throughout the country to rail against the northern enemy. But the fundamental change happened within people, within the three generations of Cubans who had known only a single prime minister, a single first secretary of the Communist Party, a single commander in chief. With the sudden prospect of abandonment by the papá estado — “daddy state” — that Fidel had built, Cubans faced a kind of orphanhood, though one that brought more hope than pain.

Five years later, we have entered a new phase in our relationship with our government, one that is less personal but still deeply worshipful of a man some people now call the “patient in chief.” Fidel lives on, and Raúl — whose power, as everyone knows, comes from his genes rather than his political gifts — has ruled since his ultimate accession in February 2008 without even the formality of the ballot box, prompting a dark joke often told in the streets of Havana: This is not a bloody dictatorship, but a dictatorship by blood. Pepito, the mischievous boy who stars in our popular jokes, calls Raúl “Castro Version 1.5” because he is no longer No. 2, but still isn’t allowed to be the One. When the comandante — now barely a shadow of his former self — appeared at the final session of the Communist Party’s sixth congress this April, he grabbed his brother’s arm and raised it, to a standing ovation. The gesture was intended to consecrate the transfer of power, but to many of us the two old men seemed to be joining hands in search of mutual support, not in celebration of victory.

Raúl’s much-discussed reforms followed the supposed handover of power, but in reality, they have been less steps forward than attempts to redress the legal absurdities of the past. One of these was the lifting of the tourist apartheid that prevented Cubans from enjoying their own country’s hotel facilities. For years, to connect to the Internet, I had to disguise myself as a foreigner and mumble a few brief sentences in English or German to buy a web-access card in the lobby of some hotel. The sale of computers was finally authorized in March 2008, though by that time many younger Cubans had assembled their own computers with pieces bought on the black market. The prohibition on Cubans having cell-phone contracts was also repealed, ending the sad spectacle of people begging foreigners to help them establish accounts for prepaid phones. Restrictions on agriculture were loosened, allowing farmers to lease government land on 10-year terms. The liberalization brought to light the sad fact that the state had allowed much of the country’s land (70 percent of it was in state hands) to become overgrown with invasive weeds.

While officially still socialist, the government has also pushed for an expansion of so-called self-employment, masked with the euphemism of “nonstate forms of production.” It is, in reality, a private sector emerging in fits and starts. In less than a year, the number of self-employed grew from 148,000 to 330,000, and there is now a flowering of textile production, food kiosks, and the sale of CDs and DVDs. But heavy taxes, the lack of a wholesale market, and the inability to import raw materials independent of the state act as a brake on the inventiveness of these entrepreneurs, as does memory: The late 1990s, when the return to centralization and nationalization swept away the private endeavors that had surged in the Cuban economy after the fall of the Berlin Wall, were not so long ago.

So for now, the effects of the highly publicized reforms are barely noticeable on our plates or in our pockets. The country continues to import 80 percent of what we consume, at a cost of more than $1.5 billion. In the hard-currency stores, the cans of corn say “Made in the USA”; the sugar provided through the ration book travels from Brazil; and in the Varadero tourist hotels, a good part of the fruit comes from the Dominican Republic, while the flowers and coffee travel from Colombia. In 2010, 38,165 Cubans left the island for good. My impatient friends declare they are not going to stay “to turn off the light in El Morro” — the lighthouse at the entrance to Havana Bay — “after everyone else leaves.”

The new president understands all too well that transformations that are too deep could cause him to lose control. Cubans jokingly compare their political system to one of the dilapidated houses in Old Havana: The hurricanes don’t bring it down and the rains don’t bring it down, but one day someone tries to change the lock on the front door and the whole edifice collapses. And so the government’s most practiced ploy is the purchase of time with proclamations of supposed reforms that, once implemented, fail to achieve the promised effects.

But this can only continue for so long. Before the end of December, Raúl Castro will have to fulfill his promise to legalize home sales, which have been illegal since 1959, a move that will inevitably result in the redistribution of people in cities according to their purchasing power. One of the most enduring bastions of revolutionary imagery — working-class Cubans living in the palatial homes of the bygone elite — could collapse with the establishment of such marked economic differences between neighborhoods.

And yet the old Cuba persists in subtle, sinister forms. Raúl works more quietly than Fidel, and from the shadows. He has increased the number of political police and equipped them with advanced technology to monitor the lives of his critics, myself among them. I learned long ago that the best way to fool the “security” is to make public everything I think, to hide nothing, and in so doing perhaps I can reduce the national resources spent on undercover agents, the pricey gas for the cars in which they move, and the long shifts searching the Internet for our divergent opinions. Still, we hear of brief detentions that include heavy doses of physical and verbal violence while leaving no legal trail. Cuba’s major cities are now filled with surveillance cameras that capture both those who smuggle cigars and those of us who carry only our rebellious thoughts.

But over the last five years the government has undeniably and irreversibly lost control of the dissemination of information. Hidden in water tanks and behind sheets hanging on clotheslines, illegal satellite dishes bring people the news that is banned or censored in the national media. The emergence of bloggers who are critical of the system, the maturation of independent journalism, and the rise of autonomous spaces for the arts have all eroded the state’s monopoly on power.

Fidel, meanwhile, has faded away. He appears rarely and only in photos, always dressed in the tracksuit of an aging mafioso, and we begin to forget the fatigues-clad fighting man who intruded on nearly every minute of our existence for half a century. Just a year ago, my 8-year-old niece was watching television and, seeing the desiccated face of the old commander in chief, shouted to her father, “Daddy, who is this gentleman?”

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Cuba: A Half-Century of Monetary Pathology and Citizen’s Freedom of Movement

By Arch Ritter

UNIVERSAL DECLARATION OF HUMAN RIGHTS

Article 13. (1) Everyone has the right to freedom of movement and residence within the borders of each state.  (2) Everyone has the right to leave any country, including his own, and to return to his country.
Article 30. Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.

In December 2009, I made a formal invitation to two Cuban citizens to visit Canada, following the official “Procedure for Inviting a Cuban National to Visit Canada” as laid out by the Cuba’s Ministry of Foreign Affairs (MINREX). I paid the required Consular Fee of $CDN 256.00 for each invitation. The two Cuban citizens invited were Yoani Sanchez and Miriam Celaya. I thought naively and foolishly that while Yoani Sanchez had been denied the right to leave Cuba a number of times before December 2009 when she had been invited by official institutions, perhaps a personal invitation would be successful. I of course was wrong. The Exit Permits of course were refused. The Consulate of Cuba in Ottawa of course refused to return the $512.00.

Yoani Sanchez

Miriam Celaya

The lack of freedom of movement of Cuban citizens is well known. The case of Yoani Sanchez is a cause célèbre and also a public relations disaster for the Government of Cuba. A number of analysts have written eloquently on the practice of the Cuban Government to dishonor its commitment to Article 13 of the United Nations Universal Declaration of Human Rights cited above. (See Ana Julia Faya: Nosotros tampoco viajamos libremente a Cuba, “Los permisos de entrada y salida del país son una violación de los derechos de los cubanos” and Haroldo Dilla Alfonso, “The (Non) Right of Cubans to Travel, Havana Times, February 01, 2011”

Sergio Diaz-Briquets has presented a comprehensive and comparative analysis of the Consular Fees charged by the Governmemt of Cuba for the acquisition of a passport, its renewal while abroad, and various other consular services (ASCE Conference 2010). He concluded that the Consular Fees are simply abusive. (See  S. Diaz-Briquets, Government-Controlled Travel Costs to Cuba and Costs of Related Consular Services: Analysis and International Comparisons )

However, the most egregious violation of the freedom of movement of Cuban citizens lies less in the exorbitant consular fees that are routinely charged to Cubans abroad for consular services and the Exit Permit controls over Cuban citizens and more in 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 into a foreign currency. On the other hand, anyone on official government business or activities sanctioned by the Government could get access to foreign exchange. This meant that for the average citizen travel was highly restricted unless one could find a foreign sponsor to pay the bills.

With the dual monetary system coming into play in the early 1990s, the economic powerlessness of most Cuban citizens was further intensified. With the collapse of the value of the “old peso” (Moneda Nacional) vis-a-vis the US dollar (and then the convertible peso 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. Cuba’s monetary system impoverishes Cuban citizens in terms of the international transferability of their earnings from work.

In order to travel abroad, Cuban citizens now have three options. First, they can work for some branch of the government, mixed or state enterprises or organizations such as Universities for which travel abroad on official business can occur. Second, they can marry a foreigner for convenience or in sincerity – Spaniards and Ecuadoreans have been predominant recently – who then provides hard currency funding for travel abroad. Or third, they can now convert their Moneda Nacional earnings into Convertible pesos at the ratio of 26 to 1 and then acquire foreign currency through various channels with the convertible pesos. For most citizens, travel abroad is essentially blocked by the monetary and exchange rate systems.

The central planning system and the generalized controls on the economy adopted in 1960-61 meant that inconvertibility would have happened in any case. However, inconvertibility occurred under the watch of Che Guevara, who at the time was President of the National Bank and Minister of Finance as well as Minister of Industries (which included Basic Industry, Light Industry, Mining, Petroleum, and the sugar mills. Guevera was the indisputable “czar” of the Cuban economy.

Monetary inconvertibility and the accompanying loss of freedom of movement is one of Che Guevara’s gifts to the Cuban people. This has been compounded by the monetary and exchange rate policies of the Fidel and Raul Castro Presidencies after about 1990, which generated the dual system and which have so far been unable to come to grips with it and establish a unified and convertible currency.

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Arturo Lopez-Levy: “Change In Post-Fidel Cuba: Political Liberalization, Economic Reform and Lessons for U.S. Policy”

Arturo Lopez-Levy

Here is the Hyperlink: Arturo Lopez Levy,Change In Post-Fidel Cuba: Political Liberalization, Economic Reform and Lessons for U.S. Policy” New America Foundation, May 2011,

Executive Summary:

This report explores the historic reform process currently underway in Cuba. It looks first at the political context in which the VI Cuban Communist Party Congress took place, including the Cuban government’s decision to release a significant number of political prisoners as part of a new dialogue with the Cuban Catholic Church. It then analyzes Cuba’s nascent processes of economic reform and political liberalization. To conclude, it discusses the challenges and opportunities these processes pose for U.S policy toward Cuba.

In his essay “Change in Post-Fidel Cuba”, Arturo Lopez-Levy, (a lecturer and PhD Candidate at the Josef Korbel School of International Studies at the University of Denver and also a graduate of the Carleton University-University of Havana Masters Program in Economics!) presents a wide ranging survey and careful analysis of economic and political changes in Cuba since Raul replaced Fidel in 2006, organizing his analysis around the pivotal Sixth Party Congress of April 2011.  Lopez-Levy tries hard to be even-handed and objective in his analysis. He succeeds well, though virtually no-one anywhere on any of the various political spectrums relevant to Cuba will be pleased with all of his assessments. His knowledge of Cuba at this juncture of its history is deep. He is particularly well qualified for undertaking such an analysis not only on the basis of his knowledge of Cuba and also given his academic work. His examination of Cuba’s political situation, the reform process, and US-Cuba relations is worth serious attention.

On the whole, Lopez-Levy is optimistic that the economic reform process, still in its initial phases, will be pragmatic, deep-cutting and irreversible but possibly excessively gradualistic.  He sketches the various elements of policy change that are slated for implementation and that will lead to a more decentralized and marketized economic framework that should help unleash and harmonize the economic creativity of Cuban citizens.

He is also optimistic that meaningful political liberalization will occur and indeed characterizes the regime under President Raul Castro as “Post-Totalitarian” – following some works of Juan Linz and Alfred Stepan (Problems of Democratic Transition and Consolidation, Baltimore: John

Hopkins University Press, 1996.) In Lopez-Levy’s words (p. 13), “Totalitarian practices have softened.” This obviously indicates that the author judges that practices indeed were totalitarian under Fidel and that they continue, though now somewhat “lighter”. (Political prisoners were released and independent critics have not been imprisoned.)

Lopez-Levy seems ready to be quite critical of Fidel but tends to give Raul the benefit of the doubt in a number of cases.  His euphemistic characterization of Fidel’s dictatorial rule is in fact damning if also humorous.

“By virtue of his historical leadership, Fidel Castro, in and of himself, embodied the minimum number of votes needed to establish a “winning coalition” in Cuban politics.”

But Lopez-Levy seems to want to find good things to say about Raul. For example,

“As Raul Castro hinted in his inaugural speech to the VI Party Congress2, this reform process will occur in tandem with political liberalization and the emergence of a Cuba more open toward the outside world.”

He also rather generously explains Raul’s selection of Jose Ramon Machado Ventura as First  Vice-President, and Second Secretary of the PCC as follows:

The decision to promote Machado (one year older than Raul)  to the second in command, first in the government, and now in  the Party, can be explained by two factors: 1) the triumph of the alliance of military leaders and provincial party czars as the dominant force in Cuban elite politics (versus government bureaucrats and Fidel’s appointed ideologues), and Raul Castro’s conviction that Fidel’s policy of promotion of young cadres “by helicopter”, not in a step by step Leninist fashion was a mistake.

The author’s own position on the political monopoly of the Communist Party of Cuba, sanctified by Article Five of the Cuban Constitution, does not seem clear. Lopez-Levy does speak supportively of political liberalization and refers to Fidel’s monopoly of the votes. But nowhere that I can see does he raise the over-arching central political issue and confront what he labels Raul’s “softer totalitarianism.”

The New America Foundation’s U.S.-Cuba Policy Initiative, directed by Anya Landau French, seeks to take advantage of recent developments to redirect U.S.-Cuba policy towards a more sensible, mutually beneficial relationship. Learn more at http://cuba.newamerica.net

 

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Hosni Mubarak, February 11, 2011: The “Writing on the Wall”

Marcos Perez Jimenez (Venezuela)            1958         √

Fulgencio Batista (Cuba)                               1959         √

Francisco Franco (Spain)                              1959           √

Anastasio Somoza (Nicaragua)                    1979          √

Idi Amin Dada (Uganda)                               1979          √

Jean-Bedel Bokassa (Central Af. Rep.)       1979          √

Augusto Pinochet (Chile)                               1989         √

“Baby Doc” Duvalier (Haiti)                          1989         √

Alfredo Stroessner (Paraguay)                     1989          √

The Junta (Argentina)                                    1983         √

Joao Figuieirado (Brazil)                                1985         √

President Leonid Brezhnev (USSR )            1989         √

Erich Honecker (East Germany)                   1989         √

Wojciech Witold Jaruzelski (Poland)             1989          √

Gustav Hudek (Czechoslovakia)                     1989          √

Janis Kadar (Hungary)                                     1988          √

Nicolae Ceausescu (Rumania)                         1989          √

Todor Zhivkov (Bulgaria )                              1989          √

Adil Carcani (Albania)                                     1989           √

Mobutu Sese Seko IZaire / Congo)               1997            √

Charles Taylor (Liberia)                                 2003           √

Fidel Castro (Cuba)                                         2006       Retired

Zine El Abidine Ben Ali (Tunisia)                  2011            √

Hosni Mubarak (Egypt)                                  2011            √

Bashir al-Assad (Syria)                                   20__

Ali Abdullah Saleh (Yemen)                           2011             √

Muammar Al-Gaddafi (Libya)                       2011              √

Raul Castro (Cuba)                                        20__

With Wojciech Jaruzelski

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Cuba’s 12 to 20 Chair Reform: Can the Small Enterprise Sector Save the Cuban Economy?

 

The quasi-private restaurants in the Barrio Chino have enjoyed a cultural exemption from the controls placed on normal “paladars” or restaurants. They have faced no 12 chair size limitation. They emerged some time ago as dynamic, large, diverse and efficient restaurants – indeed, the best in Havana. They are a living example of what many sectors of the Cuban economy could become if the tight restrictions and toxic tax levels were all made more reasonable. This is not yet happening. (Photo by Arch Ritter  2008)
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By Arch Ritter

In October 2010, Raul Castro’s Government increased the size limitation on private restaurants from 12 to 20 chairs. This was part of a broader reform package designed to shrink the state sector ultimately by about 1 million workers or 20% of the labour force and to re-absorb them into an expanding small enterprise sector. The 20 chair rule however is symbolic of the positive but timid character of the reforms undertaken so far.

This is an amazing and ironic reversal of fortune for Cuba’s private sector. Small enterprises were almost eliminated in the 1960s, were liberalized from 1993 to 1995 and then were stigmatized and contained by onerous regulations and taxation. Now they are supposed to save the economy, generating jobs, higher productivity and higher living standards than was possible under the old system. 9Raul apparently has even more faith in the small enterprise sector than I do!)

Fidel Castro’s 50-year attempt to construct his own variety of “socialism” is being repudiated and abandoned by his own brother and by the Cuban Government. This is an obvious humiliation for Fidel, even though the genuflections in the media and official documents –  including even the “Linamientos” – continue.

Firing one million state sector workers looks risky and brutal. Hoping that they will somehow be absorbed in the small enterprise sector looks like wishful thinking. In other contexts this approach would be labeled “neo-liberal”! Will the laid-off workers have the abilities and aptitudes necessary to start their own businesses?

But the biggest question is whether the small enterprise sector can create 500,000 jobs by March 30 and ultimately one million new jobs. As of  November 28, half way through period when the lay-offs are to occur, only 45,000 new self-employment licenses had been issued, with 43% going to retirees rather than those in the labor force. This process is off to a slow start but perhaps it will accelerate.

The regulatory and tax regimes under which small enterprise operated from 1995 to 2010 were designed to contain its growth, to keep enterprises tiny, and to limit the incomes of the self-employed. Now the tax and regulatory framework has been liberalized somewhat:

  • Licensing has been broadened.
  • Rental of facilities from citizens or the state is easier.
  • Sales to state entities are now possible.
  • Use of banking facilities and bank credit will be possible.
  • Permitted activities have been increased.
  • Some regulations have been eased.
  • Punishments for infractions have been eased. Virtually all of the old ‘infracciones’ continue to punished by the same fines as before. But the seizure of equipment and  the retraction of licenses have been dropped.
  • Imported inputs will become accessible for small enterprise at wholesale prices.

But tight limits on self-employment remain.

  • Professional activities are prohibited.
  • Intermediaries are prohibited and each producer is supposed to be the seller of his or her output.
  • Petty restrictions such as the 20 chair rule continue.
  • Tight limits continue on the hiring of employees.
  • Advertising remains prohibited.

The tax regime has been slightly relaxed but is still problematic. Small enterprises face five taxes: a sales tax (10%), a tax on hiring employees, social security taxes, a public services usage tax, and an income tax (that rises to 50% of income above 50,000 “old” pesos or about $2,000.00 per year.) For the calculation of the income tax, deductible costs of production from total revenues are limited to 10% for simpler enterprises up to 40% for larger enterprises. This means that for a restaurant with actual costs of production of 80% of total income, the tax on actual net revenue exceeds 100%.  The tax on hiring an employee is 37.5% of the average monthly wage for Cuba.

For very small-scale activities, an up-front monthly licensing fee that constitutes a simplified tax payment is required.

This revised regime is an improvement over the previous system. It may induce some enterprises to come up from underground and may promote the establishment of some new enterprises. But, on the other hand:

  • The high effective tax rates will kill off many potential enterprises and promote continued non-compliance.
  • The 37.5% employment tax will limit hiring.
  • The numerous controls and limitations on small enterprise will continue to “stunt” them so that they remain inefficient, wasting human and material resources.

It is therefore unlikely that small enterprise will expand enough to absorb one million redundant workers. By stunting the small enterprises, the possibilities of raising productivity, real incomes and ultimately living standards will also be limited

What happens then? Perhaps the “Fidelistas” could proclaim victory and halt or reverse the reform process. This is unlikely because the old “Fidel” model is discredited by events and by Raul himself. Moreover, Raul’s appointees now dominate the Council of Ministers. His military colleagues hold many key posts in the economy.

More likely, Raul’s Government will conclude that job creation should precede the lay-offs, not vice versa and that their expectations regarding job creation in the small-enterprise sector were overly optimistic. They might then slow down the lay-offs and in time liberalize the tax and regulatory framework.

Raul Castro is finally emerging from 60 years in his elder brother’s shadow. Perhaps he is thinking of his own historical legacy. “History” will never “absolve” Fidel, but it might absolve Raul if he sets Cuba on a course towards a workable economic system – not to mention human rights and meaningful pluralistic democracy.

Since its liberalization in 1993, the production of arts and crafts, largely for the tourist market, has expanded immensely and the quality and diversity of the products has improved greatly. It is now  a major source of foreign exchange for Cuba, though statistics on this do not seem to exist. This sector  provides another living example of the improvements that could be made in the small enterprise sector generally if it was liberalized appropriately. Above, a photo of the crafts market near the Cathedral on Avenida del Puerto, by Arch Ritter, 2008.

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Partido Comunista de Cuba, “Proyecto de Lineamientos de la Politica Economica y Social”: Viable Strategic Economic Re-Orientation and / or Wish List ?

I. “Structural Adjustment” on a Major Scale

On Tuesday, November 9, a major document appeared for sale in Cuba entitled “Proyecto de Lineamientos de La Political Economica y Social” or “Draft Guide for Economic and Social Policy.”  The purpose of the “Guide’ presumably is to spark and to shape public discussion and education on the economic matters that will be the focus of the long-postponed Sixth Congress of the Cuban Communist Party to take place in April, 2011. It also provides the essentials of the new approach that will likely be adopted at the Sixth Congress.

It can be found in its entirety, courtesy of the Blog Caf Fuerte. (http://cafefuerte.com/

, here: Projecto de Lineamientos de la Politica Economica y Social,

The “Guide” is a broad-reaching and comprehensive document that puts forward 291 propositions for the improvement of the functioning of the Cuban economy. It signals a break in the four years of near inaction that the Cuban economy endured since Raul Castro took over as acting and then actual President – and the ten years of paralysis from about 1995 to 2006 under President Fidel.  It amounts to a major process of “structural adjustment” of the sort that was begun in 1992-1994, but was then stalled when the Cuban economy appeared to rebound after 1994.  The document is also a contradiction and maybe a “slap-in-the-face” for Fidel Castro, as it indeed indicates that the Fidelista-style Cuban model – his life’s work – is not working. (See “Fidel’s No-Good Very Bad Day” and The “FIDEL” Models Never Worked; Soviet and Venezuelan Subsidization Did.)

II. General Character of the Proposals

The Table of Contents provides a quick idea of the scope of the document:

Introduction

Contours of Economic and Social Policy

I           Economic Management Model

II          Macroeconomic Policies

III        External Economic Policies

IV        Investment Policy

V         Science, Technology and Innovation Policy

VI        Social Policy

VII       Agroindustrial Policy

VIII     Industrial and Energy Policy ix

IX        Tourism Policy

X           Transport Policy

XI         Construction, Housing, and Hydraulic Resource Policy

xii        Commercial Policy.

The Introduction summarizes the basic objectives required to overcome the principal problems of the economy. These include putting into productive use the unused lands constituting almost 50% of total, raising agricultural yields, developing new mechanisms to reverse the process of industrial and infrastructural de-capitalization, eliminating excess and redundant employment, raising labor productivity, recovery of export capacity in traditional exports, undertake studies in order to eliminate monetary dualism, and provide improved capacities for more decentralized regional development.

The “Contour” section then states that “…only socialism is capable of overcoming the difficulties and preserving the conquests of the Revolution, and the implementation of the economic model prioritizes planification and not the market”. However, the next paragraph states “…socialism is equality of rights and equality of opportunity for all citizens, not egalitarianism.” The latter sounds less like “socialism” and more like “social democrat” if not the common approach of most Western countries. The latter quotation makes the former somewhat hard to interpret if not meaningless.

The document then goes on to list the 291 propositions under the 12 different headings. A few of the more interesting propositions are summarized below:

  • Wholesale markets for supplying state, cooperative and self-employment enterprises will be established. (9)
  • State enterprises will decide themselves how to allocate their investment funds, and normally will not receive budgetary support for this. (13)
  • Insolvent enterprises will face liquidation. (16)
  • Workers incomes in state enterprises will be linked to enterprise performance (# 19)
  • Monetary and exchange rate unification will be “advanced” (54)
  • The taxation system will be advanced in terms of progressivity and coverage, and will be based on generality and equity of its structure. (56 and 57)
  • The centralized character of the determination of the planned level and structure of prices will be maintained. (62)
  • Recover the place of work as the fundamental means of contributing to the development of society and the satisfaction of personal and family needs. (130)
  • Modify the structure of employment, reducing inflated staffing and increasing employment in the non-state sector (158-159)
  • Eliminate the ration book as a means of distributing products. (162)
  • Improve agriculture so that Cuba is no longer a net importer of food, prioritizing import substituting activities, reviving citrus fruit production, augmenting sugar production. (166, 174, 179, 194.)
  • Promote export-oriented industry (197)
  • Develop a range of new industries such as tires, construction materials and metallurgy (213, 215, 216)
  • Restructuring of domestic retailing and wholesaling. (283-291)

III. Preliminary Evaluation

This document will receive a great deal of attention inside and outside Cuba. It provides fodder – along with the recent legislation on self-employment – for analysts and observers of Cuba, who have had little of hard substance on which to base their analyses of Cuban policy under the “Raulista” Presidency for some time.

In some senses, this document is remarkable. It sets out an ambitious reform program for much of the Cuban economy. It may indeed constitute a “Wish List” of all the types of policy improvements and changes that would be nice to have. The question is “can and will they be implemented?”

This document also is a major risk for the Raul Castro Administration. It provides a check-list of tasks that will be difficult to achieve. If future implementation and economic performance is far below the expectations that are now being raised to high levels, there could well be a serious fall-out for the Government and the Party.

The document is also broad and ambitious but does not set any clear priorities and does not propose a sequence of actions. Everything can’t be done at once. How should the policy changes be phased or sequenced?

Some observers are skeptical and perhaps cynical regarding the “Guide” – for good historical reasons. In her Blog Entry entitled The Art of Speaking Without Speaking (http://www.desdecuba.com/generationy/?p=2088) Yoani Sanchez states:

When you grow up decoding each line that appears in the newspapers, you manage to find, among the rhetoric, the nugget of information that motivates, the hidden shreds of the news. We Cubans have become detectives of the unexpressed, experts in discarding the chatter and discovering — deep down — what is really driving things. The Draft Guidelines for the Communist Party’s VI Congress is a good exercise to sharpen our senses, a model example to evaluate the practice of speaking without speaking, which is what state discourse is here.

The Guide undoubtedly could be seen as an economic rescue program designed to rescue also the Communist party of Cuba, which faces steady de-legitimation as the economy deteriorates – even as the official GDP statistics appear to rise steadily.

What is missing from the “Guide”? Here is a first brief listing. Further analysis will be incorporated here later.

1.      Nothing is said regarding labor rights. A vital part of the reform approach if labor is to be used effectively would be freedom of association, collective bargaining and the right to strike. In the absence of these, pressures and insights from the grass roots to improve economic policy and its effectiveness are suppressed.

2.      Nothing is said regarding freedom of expression and the right to criticize the policies and institutions openly, honestly and continuously. The absence of this right leads to economic inefficiency and corruption as argued elsewhere. ( Freedom of Expression, Economic Self-Correction and Self-Renewal)

3.      No further elaboration of how the self-employment or micro-enterprise sector is presented, suggesting that the recent reforms are the end of the journey not a first step.

4.      The dedication to centralized determination of prices is problematic. If maintained strictly, it would make the decentralized decision-making allotted to enterprises for investment, the hiring of resource inputs, etc. meaningless, and the problems of trying to run the economy from a few office towers in Havana would continue.

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