Tag Archives: Miguel Diaz-Canel

CUBA AFRONTA EL RETO DE REFORMAR LA REVOLUCIÓN SIN NEGAR SU ESPÍRITU

Una nueva generación de dirigentes se encuentra frente al dilema de cómo reestructurar la economía para hacer el socialismo sostenible en la isla5

Mauricio Vicent, La Habana 

EL PAÍS,  22 ABR 2021 – 19:04 EDT

Continuidad política y reformas económicas de calado, y más lo segundo que lo primero, he ahí donde se juega el futuro de la Cuba tras el VIII Congreso del Partido Comunista, que tuvo lugar el pasado fin de semana en La Habana. El encuentro unificó todo el poder político en el presidente cubano, Miguel Díaz-Canel, y en una nueva generación de líderes nacidos después del triunfo revolucionario. Su principal desafío será realizar una apertura económica e introducir transformaciones profundas, que necesariamente deben ampliar el marco del mercado y de la iniciativa privada, avanzando hacia un modelo mixto, para tratar de hacer sostenible el sistema heredado, sin negar su espíritu..

Es la primera vez que se alinean el Gobierno y las estructuras de la cúpula del partido, hasta ahora encabezado por la vieja guardia, en la figura de un civil que no luchó en la Sierra Maestra, Diaz-Canel, que ya ejercía la presidencia desde 2018. Hasta este jueves el Partido Comunista de Cuba (PCC) rendía cuentas a Raúl Castro y a los históricos, que ahora abandonan todos los cargos.

Sabido es que el modelo de partido único no va a cambiar, pero mantenerse en el inmovilismo y en las reformas rácanas sería el mejor modo de que la economía se vaya a pique, lo que equivale a decir todo el sistema, dado que la crisis y la situación por la que atraviesa la isla es de extrema gravedad. Los problemas estructurales acumulados y la ineficiencia de la empresa estatal, agravados por la epidemia y el recrudecimiento del embargo norteamericano, no se resuelven con parches, se admite en las altas instancias, y también que las reformas introducidas hasta ahora claramente han sido insuficientes para garantizar un mejor nivel de vida a los cubanos, principal reto de los nuevos dirigentes, que no cuentan con la legitimidad “histórica” sino que la valoración que se haga de ellos dependerán de lo que logren.

“El PCC necesita ampliar las zonas de legitimidad de su mandato con un desempeño económico que lo justifique o se le va a complicar la gobernabilidad”, opina el académico cubanoamericano Arturo López-Levy, señalando que “a mediano plazo, la economía es el primer renglón para medir sus capacidades”. Hay bastante consenso en este punto, y también en otro asunto que menciona López-Levy: “Se necesita orientar prioridades y recursos hacia la seguridad alimentaria, pues sin comida no hay país, por muchos hoteles que se construyan o reparen. Díaz-Canel ha enfatizado el discurso de la continuidad para asegurar la confiabilidad de los que lo han elegido, pero para resolver las demandas y quejas de una Cuba globalizada y signada por una crisis estructural, va a tener que prometer y hacer grandes cambios, tanto sustantivos como en la forma de gobernar”.

¿Qué lectura puede hacerse del VIII Congreso? ¿Defraudó las expectativas de los que esperaban una apuesta decidida por la apertura? ¿O era lo que podía esperarse de un cónclave cargado de simbolismo en el que lo que se escenificaba era la despedida de Raúl y la generación histórica? Hay diversas opiniones. En su informe central, Raúl Castro criticó el “egoísmo” de los que demandan el ejercicio privado de algunas profesiones y reclaman la importación comercial privada para establecer un sistema no estatal de comercio, advirtiendo que hay “límites” que no se pueden rebasar porque implicarían la destrucción del socialismo. La mención cayó como un jarro de agua fría en los sectores que defienden la apertura y en muchos emprendedores, aunque pasados los días, y tras el primer discurso de Díaz-Canel, algunos de los analistas consultados se inclinan a pensar que “la reforma va” y que cada vez será más profunda. Hasta donde se llegará, sea por propia voluntad o por necesidad, es la gran incógnita.

“El VIII Congreso del PCC no ha traído grandes sorpresas, pero tampoco ha significado un retroceso en lo que al sector privado se refiere”, asegura Oniel Díaz Castellanos, fundador de Auge, empresa consultora que brinda asesoramiento a decenas de emprendedores privados. Admite que “ciertas palabras en el Informe Central alarmaron a varios colegas”, entre los que se incluye, pero dice que “una mirada serena” a las intervenciones de Díaz-Canel así como a las resoluciones emanadas de la cita, confirman que “hay una combinación de voluntad política para abrir más espacios económicos, a la vez que se establecen límites que no se deberían pasar según la lógica del PCC”. Su conclusión: “en ninguno de los Congresos anteriores se ha hablado y escrito tanto” sobre el sector no estatal, de las pymes y la iniciativa privada, de lo que deduce que “no hay marcha atrás” en la reforma.

Es de la misma opinión el economista Omar Everleny, que apunta que “el Congreso tiene varias lecturas: podría parecer que no hay cambios ya que se critica a personas que quieren obtener más ingresos y se precisa que Raúl estará presente en la toma de las decisiones fundamentales; pero por otro lado, se ha apelado a hacer ingentes esfuerzos por salir de la crisis económica, de implementar en el corto plazo medidas para potenciar el trabajo, la necesidad de descentralizar decisiones, de utilizar las formas no estatales, de implementar las pequeñas empresas….”. El camino, cree, no es inmovilista sino “reformista, pues si no será complejo producir los resultados económicos que espera la nación”.

En la composición del nuevo Buró Político, destaca Everleny la entrada de dos figuras “con un corte empresarial”: Manuel Marrero, que hoy es primer ministro, “pero que fue presidente de la corporación turística Gaviota”, y Luis Alberto López-Callejas, que al frente de GAESA (el grupo empresarial del ejército) “controla el mayor por ciento de los negocios en divisas cubanos sean tiendas, hoteles, marinas, aviación, y la zona Especial de Mariel, y no es un político al estilo de los que se conocen, sino un hombre de negocios clásico”.

Rafael Hernández, director de la revista Temas y miembro del PCC, consideró fuera de la realidad a los que pensaron que el Congreso iba a “rifar” el sector estatal y que “ahora sí era el turno de la privatización”. “Naturalmente, esos augurios no tenían sustento”, opinó, aclarando que ninguna “las resoluciones aprobadas desandan lo avanzado durante el año y pico de pandemia respecto a la legitimidad y consolidación del sector privado”. “La Resolución sobre la Conceptualización del modelo reitera ‘reconocer y diversificar las diferentes formas de propiedad y gestión adecuadamente interrelacionadas”, asegura.

Diversos economistas han puesto énfasis en que tan relevante como el Congreso fue lo sucedido justo antes de su inauguración, cuando Díaz-Canel presidió un inédito encuentro con emprendedores privados y representantes de la empresa estatal, en el que se habló del necesario impulso a las pymes y el papel creciente que ocupará el sector no estatal. En otra reunión con el sector agrícola, en la que resulto cesado el ministro del ramo, se aprobaron un conjunto de medidas para incentivar a los productores privados y reactivar esta esfera de la economía, vital en estos momentos de crisis, y allí el presidente advirtió de que no había “tiempo para pensar en el largo plazo”.

Sobre los “límites” en la apertura al sector privado de los que habló Raúl Castro —pero que no especificó—, López-Levy considera que no es la cuestión más relevante. “Los límites y las líneas rojas irán moviéndose con la vida. Las reformas traerán más presión de otras reformas, y otro tipo de cambios llegarán por carambola”. Los más escépticos indican que otros intentos de reforma se frustraron en el pasado, cierto, aunque hoy la situación es distinta, el tiempo y el ritmo son ahora vitales, pues la crisis es gravísima y las urgencias son cada vez mayores. Habrá que ver los próximos movimientos de los encargados por los ‘históricos’ en asegurar la “continuidad” y hacer sostenible el socialismo cubano.

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CUBA EMPHASISES CONTINUITY AS IT EXITS THE CASTRO ERA | FINANCIAL TIMES

The Castro era in Cuba came to a carefully choreographed end on Monday, as President Miguel Díaz-Canel was elected head of the ruling Communist party, replacing the retiring leader, 89-year-old.

Marc Frank

Financial Times, April 19, 2021

Original Article: Cuba Exits Castro Era

The Castro era in Cuba came to a carefully choreographed end on Monday, as President Miguel Díaz-Canel was elected head of the ruling Communist party, replacing the retiring leader, 89-year-old Raúl Castro.

The reshuffle in the top ranks also saw the departure from the politburo of the final survivors of the 1959 revolution that brought brothers Fidel and Raúl Castro to power. For those hoping for a significant shift in policy, however, there was little to cheer about.

The changes came at a four-day party congress held largely behind closed doors under the banner of “Unity and Continuity”. During the proceedings, many dissidents found their phone and internet service was cut, and they were not allowed to leave their homes, making it all but impossible to comment.

Among those promoted to the politburo was Brigadier-General Luis Alberto Rodríguez López-Callejas, once married to Raúl’s daughter Deborah and head of the armed forces’ civilian holding company, GAISA, which controls important swaths of the economy such as tourism and the retail trade. Rodríguez López-Callejas is close to Díaz-Canel, who has referred to him as his economic adviser, according to two European diplomats. He is also a competent businessman, according to three foreign counterparts who have worked with him.

“He comes by early in the morning once a week to check on everything and tour the place,” said one manager at the Mariel Special Development Zone just outside Havana, requesting anonymity. He is already under sanctions imposed by the Trump administration.

The appointment of the head of the military’s civilian companies will anger hardline Cuban exiles in the US and is unlikely to please the Biden administration, which has already signalled that it does not plan any overtures towards Havana in the near term.

As part of its tightening of restrictions on Cuba, the Trump administration placed sanctions on nearly all military-run companies on the island from hotels to financial services. The Biden administration has given no indication that it plans to lift these.

Monday’s appointment consolidates the power of Díaz-Canel, who has risen steadily through the ranks of Cuba’s bureaucracy with a reputation as a capable but cautious leader focused on economic reform. His Twitter account is peppered with the hashtag #SomosContinuidad (We are continuity).

Raúl Castro said upon stepping down at the weekend that “as long as I live, I will be ready with my feet in the stirrups to defend the motherland, the revolution and socialism with more force than ever”, a remark taken to indicate his continued involvement. Díaz-Canel confirmed this on Monday, saying his mentor “will be consulted about strategic decisions”.

Raúl Castro has been effectively running the country since his ailing brother Fidel handed power to him in 2006. Fidel Castro died in 2016.

One of the new leadership’s first orders of business will be to conduct a nationwide discussion of Raúl Castro’s last central committee report, in which he doubled down on existing foreign policy, the need for a single-party system and cautious market reforms to avoid “a restoration of capitalism and dependence on the United States”.

Nevertheless, many analysts believe the crisis that has led to widespread food shortages and long queues in shops for basic necessities will push forward economic reforms, particularly now that younger generations hold almost all positions.   “A new cohort of leaders will have a much freer hand to implement policies permitting a gradual turn to a more market-driven economy,” said Brian Latell, a former CIA Cuba analyst who followed the Castros for decades.

For example, Raúl Castro in the report castigated party members for their reticence to fully support the integration of small- and medium-sized private business into the national economy, while simultaneously drawing a red line over the extent of changes.

He said allowing private businesses to engage in foreign trade without going through the state was unacceptable.  “There are limits that we cannot exceed because the consequences . . . would lead to . . . the very destruction of socialism and therefore of national sovereignty and independence.”

Similar words were uttered before just about every reform undertaken over the past decade, signalling that serious resistance remains in the ranks.

The party congress spent a great deal of its time on the need to improve cadres and strengthen ideological work as the internet smashes its information monopoly at a time of crisis and destabilising monetary reforms. Opposition to the system was characterised as part of a US plot.

Bert Hoffmann, a Latin America expert at the German Institute of Global and Area Studies, said Cuba’s old guard might remain influential behind the scenes, particularly in the military. He added: “To weather the current crisis, further economic policy change will be imperative for Cuba.”

Brigadier-General Luis Alberto Rodríguez López-Callejas

President Miguel Diaz-Canel

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New Publication: CUBA EMPRESARIAL: EMPRENDEDORES ANTE UNA CAMBIANTE POLÍTICA PÚBLICA

March 12, 2021 by Arch Ritter

I have just received a copy of our new volume,

CUBA  EMPRESARIAL. EMPRENDEDORES ANTE UNA CAMBIANTE POLÍTICA PÚBLICA, by Ted Henken and Archibald Ritter, 2020, Editorial Hypermedia Del Libro of Spain.  This is an up-dated Spanish-language version of the book ENTREPRENEURIAL CUBA: THE CHANGING POLICY LANDSCAPE, by Archibald Ritter and Ted Henken.

The publication details of the volume are as follows:

  • Paperback : 536 pages
  • ISBN-10 : 1948517612
  • ISBN-13 : 978-1948517614
  • Dimensions : 6 x 1.34 x 9 inches
  • Item Weight : 1.96 pounds
  • Publisher : Editorial Hypermedia Inc
  • Publication Date: November 19, 2020
  • Language: : Spanish
  • Paperback, $21.90

Nuestro nuevo libro sobre el sector empresarial de Cuba, “Entre el dicho y el hecho va un buen trecho” a la venta AHORA a un precio accesible: US $21.90. It can be ordered from Amazon here: Cuba empresarial: Emprendedores ante una cambiante política pública (Spanish Edition): Henken, Ted A, Ritter, Archibald R. M.: 9781948517614: Amazon.com: Books

Some Brief Reviews:

Carmelo Mesa-Lago. Hasta ahora, este libro es el más completo y profundo sobre la iniciativa privada en Cuba.

Cardiff Garcia. Este libro aporta una lúcida explicación a la particular interacción entre el incipiente sector privado en Cuba y los sectores gubernamentales dominantes. 

Sergio Díaz-Briquets. Cuba empresarial es una lectura obligada para los interesados en la situación actual del país. Su publicación es oportuna no sólo por lo que revela sobre la situación económica, social y política, sino también por sus percepciones sobre la evolución futura de Cuba.

 

Richard Feinberg.Los autores reconocen la importancia de las reformas de Raúl Castro, aunque las consideran insuficientes para sacar a la economía cubana de su estancamiento. 

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New Publication: CUBA EMPRESARIAL: EMPRENDEDORES ANTE UNA CAMBIANTE POLÍTICA PÚBLICA

An up-dated Spanish-language version of the book ENTREPRENEURIAL CUBA: THE CHANGING POLICY LANDSCAPE, by Ted Henken and Archibald Ritter has been published on November 19, 2020 by Editorial Hypermedia Del Libro of Spain .

The publication details of the volume, entitled CUBA EMPRESARIAL: EMPRENDEDORES ANTE UNA CAMBIANTE POLÍTICA PÚBLICA,  are as follows:

  • Paperback : 536 pages
  • ISBN-10 : 1948517612
  • ISBN-13 : 978-1948517614
  • Dimensions : 6 x 1.34 x 9 inches
  • Item Weight : 1.96 pounds
  • Publisher : Editorial Hypermedia Inc
  • Publication Date: November 19, 2020
  • Language: : Spanish

Paperback, $21.90

Nuestro nuevo libro sobre el sector empresarial de Cuba, “Entre el dicho y el hecho va un buen trecho” a la venta AHORA a un precio accesible: US $21.90;

Cuba empresarial: Emprendedores ante una cambiante política pública (Spanish Edition): Henken, Ted A, Ritter, Archibald R. M.: 9781948517614: Amazon.com: Books

Carmelo Mesa-Lago
Hasta ahora, este libro es el más completo y profundo sobre la iniciativa privada en Cuba.

Cardiff Garcia

Este libro aporta una lúcida explicación a la particular interacción entre el incipiente sector privado en Cuba y los sectores gubernamentales dominantes. 

Sergio Díaz-Briquets

Cuba empresarial es una lectura obligada para los interesados en la situación actual del país. Su publicación es oportuna no sólo por lo que revela sobre la situación económica, social y política, sino también por sus percepciones sobre la evolución futura de Cuba. 

 
Richard Feinberg

Los autores reconocen la importancia de las reformas de Raúl Castro, aunque las consideran insuficientes para sacar a la economía cubana de su estancamiento. 

 

 

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CUBA URGES CALM AS OVERHAUL OF MONETARY SYSTEM LOOMS

Reuters, October 12, 2020

By Marc Frank

HAVANA (Reuters) – Cuba’s economy minister on Monday urged calm as the government prepares to unify its dual currency system and multiple exchange rates in hopes of improving economic performance.

The Caribbean island nation is undergoing a crisis caused by an onslaught of new U.S. sanctions on top of a decades-old embargo, the pandemic and its inefficient Soviet-style command economy.

Alejandro Gil, speaking during a prime-time broadcast on state-run television, said the country could not overcome the crisis without unification which he said included wage, pension and other measures to protect the population.

“It is a profound transformation that the economy needs that will impact companies and practically everyone,” Gil said.  “It is for the good of the economy and good of our people because it creates favorable economic conditions that will reverberate through more production, services and jobs,” he added.

The monetary reform, expected before the end of the year, will eliminate the convertible peso while leaving a devalued peso, officially exchanged since the 1959 Revolution at one peso to the dollar.  The soon to be removed convertible peso is also officially set at one to 10 pesos to the dollar for state companies and 24 pesos sell and 25 pesos buy with the population.

The government has stated numerous times that residents will be given ample time to exchange convertible pesos at the current rate once it is taken out of circulation and banks will automatically do the same with convertible peso accounts.  President Miguel Diaz-Canel said last week the country would end up with a single currency and exchange rate with the dollar but did not say what that rate might be or the date devaluation would happen.

Foreign and domestic economists forecast the move will cause triple digit inflation and bankruptcies while at the same time stimulating domestic economic efficiency and exports over imports.

The state controls the lion’s share of the economy and sets most wages and prices. Neither domestic currency is tradable outside Cuba.

“There will be no shock therapy here, the vulnerable will be protected. At the same time, it will favor motivation to work and the need to work to live,” Gil said.

Diaz-Canel announced in July that market-oriented reforms approved by the Communist party a decade ago and never implemented, including monetary measures, would be quickly put in place in response to the crisis. He said last week that monetary reform had now been approved by the all-powerful politburo.

Cuba, dependent on food, fuel and other imports has been caught short of cash as sanctions hit its foreign exchange revenues and the pandemic demolishes tourism and undermines remittances, creating food, medicine and other shortages.  Last year, the government began opening better stocked foreign exchange stores for people with access to dollars or a basket of other international currencies from remittances and other sources. However, all transactions must be electronic, for example through debit cards.

Foreign and local economists forecast economic activity will decline at least 8% this year, with trade down by around a third.

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REFORMS IN CUBA: WILL THE THIRD TIME BE THE CHARM? LAS REFORMAS EN CUBA: ¿A LA TERCERA VA LA VENCIDA?

 Cuba Study Group, October 7, 2020
Aldo Alvarez

On July 16th, 2020, Cuban authorities announced a New Economic Strategy planned for the next few years, initiating a new period of reforms promoted by the Cuban government. Taking this into consideration, it is worthwhile to establish a general guide explaining the reform periods that have occurred—including the counter-reforms that preceded them—during the last 30 years in our nation, beginning with the Cuban crisis post-1991. Understanding these reform processes can serve as a tool to better explain where, presumably, the country is headed.

A partir de los anuncios realizados por las autoridades cubanas el pasado 16 de julio de 2020 sobre la Nueva Estrategia Económica prevista para los próximos años, se inicia un nuevo período de reformas en Cuba promovido por el Gobierno cubano. En este sentido, consideramos que es relevante establecer una guía general de los períodos de reformas – precedidos de períodos de contrarreformas – que se han sucedido durante los últimos 30 años en nuestra nación – a partir de la crisis cubana Post-1991. El entendimiento de dicho proceso de reformas por parte de la ciudadanía bien puede servir como herramienta para entender de mejor manera hacia donde, presuntamente, se dirige el país.

Aldo Alvarez is an attorney and Young Professional member of the Cuba Study Group. He lives in Havana, Cuba. Aldo Alvarez es un abogado y miembro «Joven Profesional» del Cuba Study Group. Vive en La Habana, Cuba.

 

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CUBA ON EDGE AS GOVERNMENT READIES LANDMARK CURRENCY DEVALUATION

Government is forced to act as it faces a dire shortage of dollars and collapse of tourism


Marc Frank
in Havana. Financial Times, September 30, 2020.

Original Article: Landmark Currency Devaluation

Cuba is stepping up plans to devalue the peso for the first time since the 1959 revolution, as a dire shortage of tradable currency sparks the gravest crisis in the communist-ruled island since the fall of the Soviet Union.

Two Cubans and a foreign businessman, all with knowledge of government plans, said the move to devalue the peso had been approved at the highest level. They said the devastating effect of the coronavirus pandemic on tourism, a fall in foreign earnings from the export of doctors and tougher US sanctions had created the worst cash crunch since the early 1990s, forcing the government to move forward with monetary and other reforms. The sources said preparations for the devaluation were well under way at state-run companies and they expected the measure before the end of the year. They asked not to be identified owing to the sensitivity of the subject.

The government declined to comment. Scarcity of basic goods and long queues at shops have been a feature of life in Cuba since the Trump administration pushed for tighter sanctions against the country in 2019. The shortages have been exacerbated by the pandemic because Cuba imports about 60 per cent of its food, fuel and inputs for sectors such as pharmaceuticals and agriculture.

The Cuban government has yet to provide any economic data this year but the UN Economic Commission for Latin America and the Caribbean predicts the economy will contract 8 per cent after a sluggish performance over the past four years. Most other foreign analysts say trade is down by at least a third. People queue to exchange money at a bank in Havana.

Cuba operates two currencies: the peso and the convertible peso. The government claims both are of equal value to the US dollar, but neither currency has any tradable value abroad and imported goods, when available, are priced with huge mark-ups when they are purchased in the domestic currencies. The Cuban public can buy the convertible peso for 24 pesos and sell it for 25 pesos, although the government sets different domestic exchange rates between the two currencies in some sectors, ranging from one peso to 10 pesos. For example, in the special economic zone at Mariel near Havana, one convertible peso is exchangeable for 10 pesos.

According to the sources and recent government statements, the peso will be devalued significantly from its current level on paper of one per dollar and the convertible peso will be eliminated. Economists have long argued that Cuba’s currency system is so unwieldy that it stymies the country’s exports, encourages imports and makes it difficult to analyse corporate profits. Cuba’s government has said it will respect the peso’s current rate for an unspecified period to allow people to exchange convertible pesos into pesos. It will convert bank accounts priced in convertible pesos. As monetary reform becomes a reality Cubans face a shortage of hard currency and will once again be allowed to make purchases in US dollars, though only with a bank card. This was last permitted in 2004.

It is legal in Cuba to own US dollars and other internationally tradable currencies, but until recently they were not deemed legal tender even when paying by card. There is a large black market in US dollars beyond the government’s reach in which the American currency has this year appreciated by more than 30 per cent when valued in the local currencies. According to the government there are now more than 120 official outlets which price goods in dollars, selling everything from food and hygiene products to domestic appliances, hardware and car parts, and the government plans to open more.

Many Cubans queue for hours outside dollar shops to obtain the products they sell. To do so, Cubans first need to open an account in which they can deposit cash or wire transfers in dollars or other hard currencies; they can then use a debit card to pay for goods in dollars. There are already more than a million dollar-denominated cards in circulation, according to local reports.

“Now, on top of everything else, I have to also worry about the value of my money and how to buy dollars on the informal market for the card because the state has none to exchange at the moment,” said Jenifer Torres in Havana, who said she had a good job but was supporting dependent parents at home.

Bert Hoffmann, a Latin America expert at the German Institute of Global and Area Studies, said: “Instead of monetary unification — for many years the government promise — Cuba is moving into an economy with two different monetary circuits.” These were “the dollarised debit card shops and the normal domestic economy, in which the Cuban peso will be under strong inflationary pressures”.

The Cuban economy is largely owned and run by the state, which sets exchange rates and many prices. As the cost of inputs increases due to the currency devaluation, state-run companies are likely to increase their prices — fuelling inflation. Alejandro Gil, economy and planning minister, said in July that the crisis was “exceptional” and announced the government would move towards market-orientated reforms and loosening of the Soviet-style central planning system.

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President Diaz-Canel

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Cuba: Getting Serious about Reform?

Cuba: Getting Serious about Reform?

By Ricardo Torres*

AULA Blog, August 17, 2020; Original Article: https://aulablog.net/

Cuban President, Miguel Díaz-Canel Bermúdez/ Cubadebate/

The economic reform proposals that the Cuban government announced on July 16 sound promising, but they feel very similar to past efforts, and authorities have yet to demonstrate commitment to implement them in a manner that matches today’s serious global and national conditions. The measures come at a time that Cuba is experiencing its worst economic crisis in 30 years. According to the Economic Commission for Latin America and the Caribbean (CEPAL), the country’s imports fell 41 percent in the first five months of 2020 – more than any other country in the region except Venezuela. The commission predicts the island’s gross domestic product will decline 8 percent this year – a conservative estimate in view of its dependence on tourism, remittances (almost all from the United States), and distant trading partners.

  • The announced measures are too general to permit a detailed analysis of their potential impact, but a substantial number of them represent a more flexible interpretation of policies agreed upon during the Seventh Party Congress in 2016. They feature a 180-degree shift of focus on the private sector and cooperatives, which just two years ago the government was taking steps to severely limit. The greater use of the U.S. dollar – an inevitable consequence of the severe balance-of-payments crisis – is also noteworthy.

The political and economic moment calls for measures that are bold enough to change expectations – reduced because of past non-performance – and produce real results. After years of false starts, the government’s willingness to make the reforms a reality remains in question. The biggest doubts deal with how far the authorities will go toward restructuring state enterprises – an unavoidable step for any true transformation. The government faces five immediate challenges to managing the current crisis and ensuring a positive impact from the package of reforms.

  • Convincing domestic and foreign public opinion that this time reform is for real and will be sufficient and permanent. Decisions over the past four years have been erratic, undermining the conceptualización that then-President Raúl Castro announced in 2016 as an “updating” of “the theoretical bases and essential characteristics of the economic and social model.”
  • Creating and consolidating new, agile, and effective mechanisms for decision-making. The country lacks a system for guaranteeing that the best ideas for transformation reach the highest levels of government, are examined, and are adopted in a timely fashion. Ensuring that bureaucrats do not distort the policies is also essential.
  • Avoiding the hidden traps of some measures that have already been tried, which will remind Cubans of the worst moments of the Special Period in the 1990s. The dollarization scheme implemented back then, for example, was complicated by rule changes the government made midstream. Authorities also rejected the necessary restructuring of the enterprise system and public sector. Cuba survived – collapse was avoided – but emerged without a sustainable economic model. Genuine development was not achievable.
  • Achieving a critical mass of changes that become self-reinforcing and overcome trenchant ideological resistance and create enough momentum to refloat the economy. In the 1990s, Cuba benefited from a world economy that was growing – radically different from today. The current situation requires much greater internal efforts.
  • Adding social justice as a priority in the reform package. Although a central talking point in official discourse, it is either totally missing from the new strategy or implemented in ways that are not relevant to the new social structure of the island. Cuba needs a debate about modern social policies to address its multidimensional inequalities.

So far, the big winners in this new scenario are the private sector and cooperatives as well as people who have access to U.S. dollars. But the entrepreneurs face obstacles, such as the requirement that they use government-controlled enterprises in all foreign trade. The idea that the state intends to create its own micro, small, and medium enterprises also detracts from the reform message.

  • Expanded dollarization will further segment the productive sectors, but this time it probably will allow producers to purchase capital goods – an essential step in any process of stimulating production over the long term. The potential impact will be greater if combined with the promised, but often delayed, move toward a sustainable monetary and exchange scheme. The big question remains, however, if the government is serious about making it happen this time.

August 17, 2020

*Ricardo Torres is a Professor at the Centro de Estudios de la Economía Cubana at the University of Havana and a former CLALS Research Fellow.

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WHO WILL BE CUBA’S PRIME MINISTER? A GENERAL AND FORMER CASTRO SON-IN-LAW STANDS OUT

BY NORA GÁMEZ TORRES, Miami Herald

NOVEMBER 04, 2019 04:19 PM, UPDATED NOVEMBER 05, 2019 08:55 AM

Original Article: WHO WILL BE CUBA’S PRIME MINISTER?

Whether in New York, Mexico, or Russia, a face has become familiar in the most recent international trips Cuban leader Miguel Díaz-Canel has made: that of General Luis Alberto Rodríguez López-Calleja.

Image result for General Luis Alberto Rodríguez López-Calleja.

General Luis Alberto Rodríguez Lopez-Calleja, head of the Grupo de Administración Empresarial S.A. (GAESA)

Introduced as “an economic adviser,” the enigmatic military figure was third in line to greet Russian President Vladimir Putin at a meeting last week, just behind the vice president of the Council of Ministers, Ricardo Cabrisas, who renegotiated the debt to Russia, and foreign minister Bruno Rodríguez.

López-Calleja also sat close to Díaz-Canel in a meeting with Mexican president Andrés Manuel López Obrador in mid-October this year and accompanied him to his debut at the United Nations in September 2018.

Although the official Cuban media has been ambivalent, showing López-Calleja in photos but without publicly naming him as part of the official delegations, his growing international profile suggests that Raúl Castro’s former son-in-law could be among the favorites to fill the newly created position of prime minister.

While leaving much in place, the Cuban Constitution approved in February established a division at the top of the government and the appointment of a prime minister. Accordingly, Díaz-Canel changed his title from President of the Council of State and Ministers to President of the Republic at the beginning of October. The Cuban leader has three months to propose a prime minister, who will be in charge of the day-to-day running of the country.

“The election or designation of the prime minister is a decision in which the executive committee of the Political Bureau of the [Cuban Communist Party], the nerve center of the Cuban one-party system, will have the lead,” said Arturo López-Levy, assistant professor of international relations and comparative politics at Holy Names University in Oakland. Key figures of the generation of historical leaders, such as the first and second secretary of the Party, Raúl Castro and José Ramón Machado Ventura, as well as Castro’s successor in the presidency, Díaz-Canel, must approve the candidate, the analyst said.

López-Levy is López-Calleja’s cousin but declined to comment on their family relationship.

Although the president of the republic, Díaz-Canel, remains as head of state and “supreme” chief of the armed forces as established in the new Constitution, the prime minister will have great power as head of government and chief decision-maker in the administration of the country.

The new prime minister must manage the economic situation of the country, “particularly in the areas of food and energy security,” have the support of the Party and the Armed Forces high command, as well as knowledge of international affairs, especially relations with the U.S., Russia, and China, López-Levy said.

López-Calleja, a Castro relative with proven experience in administration and leadership over the military, as well as contact with business people and foreign leaders, stands out as the ideal candidate for the position.

He is the true czar of the Cuban economy, being at the head of the Grupo de Administración Empresarial S.A. (GAESA), a conglomerate of military companies estimated to control at least half of the Cuban economy. GAESA manages critical areas such as the remittance business, most of the tourism industry, the Special Development Zone in the Port of Mariel as well as the main stores and supermarkets, gas stations, import and export companies, shipping and construction companies, warehouses and an airline.

In emails obtained by the Miami Herald, managers at Odebrecht — the Brazilian construction company involved in a corruption scheme throughout Latin America that was in charge of the modernization of the Port of Mariel in Cuba — wrote that, though López-Calleja divorced one of Raúl Castro’s daughters, Deborah, he had the ear of the Cuban leader and exercised “strong leadership in the decisions made by the Cuban government. All our businesses in Cuba passed through their hands.”

GAESA is currently under U.S. sanctions. Some analysts suggest that the fact that the Trump administration did not include López-Calleja among Castro’s relatives hit with recent visa sanctions might indicate that the U.S. believes the general could play a key role during a transition on the island.

But internal movements in Cuba are difficult to predict, and López-Calleja is not the only one with prospects of becoming prime minister.

Foreign Minister Rodríguez has increased his international profile in recent years, capitalizing on his frequent harsh criticism of the U.S. government while negotiating a new diplomatic agreement with the European Union. He also served in the military and has spent years cultivating relations in the Party as a member of its Central Committee, to the point that he is seen as someone who represents the most conservative voice of the Party in the foreign ministry.

While Rodríguez and Tapia are currently members of parliament, López-Calleja must become a deputy in order to be nominated as prime minister, a requirement written in the new Constitution. Since the last parliamentary elections in March 2018, the Assembly has dropped 22 deputies and admitted 16 new ones who were not elected, through a mechanism that is not public.

The Party could also choose one of its own, for example, economist Jorge Luis Tapia, appointed a vice president of the Council of Ministers in September, after a decade leading the Party, first in the province of Ciego de Ávila and then in Camagüey.

Rodríguez, however, lacks experience in administration, and Tapia lacks international contacts.

Castro and the military could also keep López-Calleja as an influential figure who acts behind the scenes, especially for his valuable contacts with international business people.

“While he is a logical candidate given his success at managing GAESA, his business expertise may be more valuable there than as prime minister,” said William LeoGrande, a professor of government at American University and a specialist in U.S. relations with Cuba.

But the advance age of Castro, 88, and Machado, 89, leads López-Levy to think that whoever occupies the prime minister position will have real power during an imminent transition.

“In the transitions of post-revolutionary regimes, the titles acquire real power,” he said. In those circumstances, “people prefer to formalize their position.”

Arturo López-(Cajella)-Levy

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CUBA’S NEW CONSTITUTION EXPLAINED

By Geoff Thale and Teresa Garcia Castro

Washington Office on Latin America, (WOLA), February 26, 2019

Original Article: Cuba’s New Constitution

On February 24, Cubans went to the polls to vote on the ratification of a new constitution, one that makes significant changes to the country’s political, social, and economic order. This was the first time in 43 years that the Cuban people had the opportunity to express either support or opposition to a proposal that fundamentally restructures aspects of the Cuban economy and political system.

 Cuba’s President Miguel Diaz-Canel, left, Cuban First Vice President Salvador Valdes Mesa, center and Cuban Vice President Ramiro Valdez, right.

According to the Cuban electoral commission, voter turnout reached 84 percent (slightly higher than in Cuba’s last election cycle in April 2018), with 87 percent of the votes in favor. The size of the vote suggests that, whatever misgivings or frustrations Cubans had with the new Constitutional proposal, they saw it as a step in the right direction.

The new Cuban Constitution retains language that proclaims the Communist Party’s guiding role in Cuban society and socialism as being irreversible. At the same time, the document includes several major changes to Cuba’s traditional economic and political model.Additionally, the drafting process that yielded the final text that was approved in the February 24 referendum involved a citizen consultation process that was relatively inclusive and even resulted in changes to the final document, an important indication that the Cuban government’s gradual process of reform is continuing.   

Overall, there was real and relatively open debate leading up to the referendum on the Cuban Constitution.

Cuba’s current constitution was drafted and approved by referendum in 1976. Since then, the government’s vision for the country’s economy has changed significantly, especially in the past decade.  Reform guidelines announced in 2011, alongside a Communist Party document approved in 2016, make clear that Cuba is moving toward a mixed economy that includes both a private sector and state-run sector, a more significant role for foreign investment, and where the central planning role, though not eliminated, is diminished. A small private sector has already emerged in Cuba, and grown substantially in the last few years.

Overall, the past decade has seen Cuba’s Communist Party shift (at least in principle) toward a less heavy-handed approach to exercising influence over both Cuban society and the economy. In addition, expanded internet access has helped spread access to information and enabled greater and more open political debate.

In the face of these ongoing changes, the government launched a process to revise and update the 1976 Cuban Constitution. Some people had hoped that the final text would incorporate more radical changes in the Cuban model, and were disappointed. Indeed, some rumored changes did not appear in the final version that was voted on, while other proposed reforms appear to have been postponed to later debates about implementing legislation in the National Assembly.

Still, Cuba’s new constitution includes some noteworthy overhauls.The document does the following:

  • Recognizes private property and promotes foreign investment as fundamental to the development of the economy.
  • Limits the term of the president—who is selected by the National Assembly, as in parliamentary systems—to two consecutive five-year terms, and requires that the president be under sixty when s/he is elected. (This is a dramatic change from the era in which aging revolutionaries monopolized key government positions, and were repeatedly approved in their positions.)
  • Restores the pre-1976 position of Prime Minister, an official selected by the president who leads government ministries on a day-to-day basis.
  • Forbids discrimination based on sexual orientation.
  • Guarantees women’s sexual and reproductive rights and protects women from gender violence.
  • Establishes the presumption of innocence in criminal proceedings and the right to habeas corpus.
  • Strengthens the authority of local governments.
  • Allows holding dual citizenship.

These changes, and others, will have to be implemented through legislation and regulation. That process is likely to be both gradual and complicated. However, the changes in the new Cuban Constitution are undeniably significant, both reflecting and advancing the process of economic reform, strengthening citizen protections, and making the political process more transparent. While not as transformative as some had hoped, they should not be dismissed as meaningless or cosmetic.

 

THE CONSTITUTIONAL PROCESS

The process by which the new constitution and referendum came about is also noteworthy, given the degree of citizen participation involved and the government’s response to some of the feedback it received.

Constitutional reform had been under discussion since 2013, but it wasn’t until June 2018 that a drafting commission (made up of senior government and Communist Party officials, the heads of several Cuban National Assembly committees, and academic and technical advisors) began to work on this issue seriously. The government, the National Assembly, and the Communist Party all engaged in ongoing internal debates about the draft constitution, reflecting a larger national conversation among political elites about the pace and depth of political and economic reform in Cuba

Despite Cuba’s image as a state that has suppressed religious freedom, prevented organized political campaigns, and been unwilling to listen to citizens’ views, the government responded.

The first draft of the constitution was approved by the National Assembly in July 2018. For a subsequent three-month period, Cubans were invited to suggest changes to the proposed draft. According to official numbers, more than 8 million people participated in nearly 112,000 debates in workplaces, schools, and community centers, and suggested a large number of proposed modifications to the constitution draft.

This participatory process was also significant in that, for the first time, Cuban expats were allowed to submit proposed changes to the constitution draft. However, other than diplomats, Cubans abroad were not allowed to vote in the referendum unless they returned to the island to cast their ballots.

Overall, the consultation process constituted a significant exercise in citizen participation. While officials were not required to make changes based on citizen feedback, there were some cases in which they did.

The most well-known example of this was the same-sex marriage provision: a draft of the constitution originally included language that defined marriage as a consensual union between two people, without specifying genders. This attracted significant pushback from evangelical churches and some sectors of the Cuban Catholic Church, who organized a campaign to get the provision withdrawn. Many Cubans supported this campaign and made their objections known by disseminating posters, stickers, and t-shirts, threatening to vote “no” in a constitutional referendum. Around 179,000 people signed a petition, backed by evangelical churches, calling on the government to withdraw the provision.

The new constitution and the constitutional drafting process mark important steps forward in the economy, the political system, and the decision-making process in Cuba…

Despite Cuba’s image as a state that has suppressed religious freedom, prevented organized political campaigns, and been unwilling to listen to citizens’ views, the government responded. The commission in charge of processing citizen feedback eventually withdrew the proposed language. The just-approved constitution now contains no language on marriage; the issue will likely be revisited in a debate over the Cuban Family Code sometimes in the next two years.

Meanwhile, the government launched a campaign to encourage “yes” votes with posters, advertising, and the use of social media. On the other hand, opposition forces also painted “no” signs, printed up T-shirts, and staged Twitter protests. While there were reports that some proponents of the “no” vote were harassed, overall, there was real and relatively open debate leading up to the referendum on the Cuban Constitution.

 

WHAT HAPPENS NEXT

Overall, the new constitution and the constitutional drafting process mark important steps forward in the economy, the political system, and the decision-making process in Cuba, and should be understood as signs of change in the thinking of the political leadership and in the population as a whole.

Indeed, the referendum comes at a complicated moment for Cuba. Economic growth has stalled in the past year, and is projected to be no more than1.5 percent in 2019. Austerity measures initiated in 2016 will continue this year, including cuts in energy and fuel to state companies and reduced imports of consumer goods. The government will struggle to maintain its investment in the social safety net, including free healthcare, education and other services

Meanwhile, the Trump administration is threatening additional economic sanctions on the island, which could make foreign investment riskier. These sanctions will damage Cuba’s already fragile economy, and hurt everyday Cubans. In addition, they are likely to discourage the process of economic reforms and will have a negative impact on the growing private sector. A more constructive approach, and one that would encourage rather than discourage internal reform, would be to return to normalizing U.S.-Cuban relations. Ultimately, recognizing that important if gradual changes are underway in Cuba—as the new constitution illustrates— is in the interests of both the Cuban people and the United States.

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