Tag Archives: Miguel Diaz-Canel

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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LA ECONOMÍA CUBANA Y EL SÍNDROME DE CONCHA

Por Juan Triana Cordoví

OnCuba News

Fuente: http://oncubanews.com/opinion/columnas/contrapesos/la-economia-cubana-y-el-sindrome-de-concha/

Plaf… o demasiado miedo a la vida es una película cubana de 1988 y podría decirse que es un metáfora anticipada y muy aproximada de nuestra realidad actual.

Concha es uno de los personajes principales de esa película cubana. Mujer divorciada y con un hijo mayor, por demás pelotero. Ella se debate entre la decisión de realizar un cambio drástico (comenzar una nueva vida mudándose con un chofer de taxi, hombre que la ama y al que ella ama) o seguir igual: encerrada en sí misma y en su pasado, soportando una situación interna difícil de sostener y enfrentada a agresiones externas (ataque con huevos) que la acosan sistemáticamente y sobre los cuales no tiene la posibilidad de influir.

Al final Concha muere de un infarto que le produce el sonido de una pelota de goma rebotando en una pared de su casa y que ella confunde con el sonido de otro huevo reventando en algún lugar de su hogar. La verdadera razón de su muerte, sin embargo, fue la indecisión y el miedo al cambio.

Cuba se debate en un problema parecido al de Concha. Es atacada por un enemigo externo que parece insaciable (Trump y los cubano-americanos de Marco Rubio y compañía, que ahora pretenden chantajear al mundo amenazando con poner a funcionar el título 3 de la Ley Helms- Burton); enfrenta una situación económica difícil y está abocada a cambios significativos tal cual anuncia el proyecto de nueva Constitución de la República. A la vez, padece de la permanencia de una testaruda resistencia a los cambios necesarios que de alguna manera ha conducido a idas y venidas en ese proceso de transformación tan necesario que exige nuestra realidad económica, política y social.

“El flamante restaurante Moscú. la calle P entre 23 y 21, ”

Esa resistencia ha generado costos muy grandes. Describo alguno de estos:

  • La tasa de crecimiento sigue siendo muy baja y está muy lejos de la tasa de crecimiento que necesitamos.
  • Las exportaciones de bienes siguen teniendo un comportamiento insuficiente y continúan concentradas en unos pocos bienes.
  • La dependencia de las importaciones se mantiene y no parece que tenga solución de corto plazo.
  • La presión fiscal no permite amplios márgenes de maniobra.
  • El empleo no crece y se ha precarizado.
  • El salario, a pesar del crecimiento del salario medio mensual, sigue siendo insuficiente.
  • El éxodo de personal calificado, especialmente jóvenes y mujeres que desangra a nuestra economía, se mantiene.
  • La tasa de inversión permanece muy baja respecto a las necesidades de crecimiento, prácticamente está a la mitad de esas necesidades y la ejecución de las inversiones sigue siendo insuficiente.
  • La deuda de corto plazo a proveedores y los dividendos no pagados a inversionistas extranjeros son una carga financiera importante, se convierten en incentivos negativos al crecimiento y generan incertidumbre a futuros inversionistas interesados en el país.
  • La empresa estatal socialista, responsable de al menos el 80% del PIB y mayoritaria como fuente de empleo, pilar de las transformaciones emprendidas hace unos años atrás, no alcanza a responder adecuadamente a nuestras necesidades de desarrollo y se ha anunciado será necesario repensar las OSDEs.
  • La inversión extranjera, declarada estratégica para el desarrollo del país no logra despegar y aun cuando ha mejorado su captación respecto a años atrás sigue siendo insuficiente y está lejos de nuestras necesidades reales.
  • Se mantienen brechas importantes –vertical y horizontal– en la infraestructura básica.
  • Existen brechas tecnológicas significativas en buena parte de nuestro sistema productivo.
  • El sector no estatal, cooperativas y propietarios privados en general, arrendadores de tierra y empleados en ese sector, aun espera por un marco legal más proactivo que le permita crecer cualitativamente.
  • Sectores decisivos, como la agricultura y la industria no terminan de encontrar una senda dinámica de crecimiento sostenido.

Esos son en buena parte los costos de esa resistencia. Todos ellos, o la inmensa mayoría, fueron objeto de análisis en la última sesión de la Asamblea Nacional.

Para Continuar: Triana, LA ECONOMÍA CUBANA Y EL SÍNDROME DE CONCHA 2019

Dr. Juan Triana

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LA ECONOMÍA CUBANA EN 2018: OTRO AÑO SIN COLAPSO Y SIN PROGRESO

Por Pavel Vidal Alejandro, Diciembre de 2018.

Este año el crecimiento económico nuevamente quedará por debajo del plan oficial. Desde el tercer trimestre el gobierno cubano ajustó la meta de 2 por ciento a 1 por ciento, después de obtenerse un crecimiento de 1,1 por ciento en el primer semestre. Se sabía que este iba a ser un año complicado para sectores claves como el turismo y la industria azucarera, y para el sector exportador en general. Se sabía que este año el entorno económico iba a ser desfavorable y que iba a ser difícil encontrar impulsos al crecimiento debido a las secuelas que dejó el huracán Irma en la agricultura, a los problemas por los que sigue atravesando Venezuela (a pesar del aumento en el precio del petróleo), y debido al efecto de las medidas de la Administración Trump sobre el arribo de visitantes. A ello se le une una situación financiera nacional que todavía no se recompone y que obliga a mantener contraídas las importaciones.

Los últimos datos de la Oficina Nacional de Estadísticas e Información (ONEI) confirman la complicada situación por la que atraviesa el comercio exterior cubano, evidenciando que los shocks internacionales (la crisis venezolana y las nuevas restricciones en la política de Estados Unidos) y los atrasos en las deudas comerciales, tienen una alta responsabilidad en lo que sucede con el PIB. Las exportaciones de bienes y servicios presentaron un crecimiento nulo en 2017 (medidas a precios contantes), lo que lleva a acumular cuatro años sin aumento real de los ingresos externos. Ello exige ajustar las importaciones y limita la disponibilidad de insumos para el sector productivo. Las importaciones reales cayeron un 1,6 por ciento en 2017, en 2016 también habían caído (-10,6 por ciento) y en 2014 (-1,5 por ciento).

Probablemente a finales de diciembre se anuncie un dato oficial de crecimiento del PIB algo mayor que cero, que otra vez contrastará con una realidad que se sigue pareciendo más a una recesión. Los enormes problemas para cumplir los compromisos financieros con proveedores e inversionistas, la escasez de productos básicos, y la dinámica de los precios de los bienes de consumo, cada vez coinciden menos con las estadísticas oficiales del PIB y del Índice de Precios al Consumidor.

El crecimiento económico cubano se mantiene en una media de 1,7 por ciento en los últimos cinco años, según unos registros oficiales (que probablemente esconden una ligera recesión). Pero, así y todo, es meritorio ver cómo las autoridades cubanas han logrado mantener a flote una parte de la actividad productiva mientras el principal socio comercial (Venezuela) ya ha perdido la mitad de su PIB. Con la dependencia que aún mantiene Cuba de Venezuela para la exportación de servicios profesionales (médicos, principalmente) y para la importación de petróleo, sigue pareciendo increíble el resultado.

Ciertamente, esta es una capacidad que han desarrollado las autoridades económicas después de tres décadas de funcionamiento bajo restricciones financieras casi constantes. Las estructuras económicas monopólicas y controladas centralmente, las cadenas de suministros administradas por el Estado, los mercados racionados, y las regulaciones financieras y cambiarias se activan al máximo bajo el mando político en épocas de crisis, y se ponen en función de distribuir y en tratar de repartir prioritariamente los escasos ingresos.

Se debe reconocer que es un sistema que ha mostrado ser efectivo para manejar las crisis y evitar el colapso económico, como también ha sido “efectivo” en limitar la iniciativa privada, la innovación y el despegue de la productividad. Es un sistema que tiene el récord de mantener al país con las menores tasas de inversión de América Latina. Y así lleva casi 30 años ya el aparato productivo cubano: no colapsa del todo, pero tampoco hay progreso económico.

Dos amortiguadores del shock venezolano

 En estos últimos años la economía cubana ha logrado, además, encontrar otras dos vías para amortiguar el shock venezolano. En primer lugar, el impulso que alcanzó desde 2015 el arribo de turistas. Un crecimiento promedio de 16 por ciento por tres años ayudó a obtener otras fuentes de ingresos externos (aunque no alcanzó para hacer crecer el total de las exportaciones), y dinamizó al sector privado y a la inversión extranjera directa.

Por eso ha sido tan preocupante que en 2018 el sector turístico se haya desacelerado. Las restricciones de viaje para los ciudadanos estadounidenses y la mala publicidad que generan los supuestos “ataques sónicos”, han tenido un efecto prolongado en el mercado turístico cubano. Desde 2015 hasta 2017, el arribo de visitantes desde Estados Unidos (incluyendo cubanoamericanos) había venido creciendo a una tasa promedio anual de 44 por ciento y había duplicado su participación en el total de visitantes a la Isla (en 2017 llegó a representar un 22 por ciento del total de la demanda). Sin embargo, en el primer semestre de 2018 los visitantes desde Estados Unidos acumulaban una caída del 24 por ciento en comparación con igual período de 2017.

Se puede estimar que, de no ser por la nueva política estadounidense, Cuba podía haber llegado a la cifra de los 5,7 millones de visitantes en 2018, bastante por arriba de los 4,9 a los que se debe llegar este año. Así, el empeoramiento de las relaciones con Estados Unidos, ha implicado recibir alrededor de 785,000 turistas menos en 2018, lo que tiene un costo para la economía cubana de alrededor de US$557 millones, por concepto de ingresos no recibidos (ver Cuba Standard Economic Trend Report, 2018 tercer trimestre). Este es un impacto incluso mayor que el estimado de US$300 millones que se dejarían de recibir por la cancelación del programa médico cubano en Brasil.

Afortunadamente, la tendencia de los últimos datos mensuales de arribo de visitantes internacionales evidencia una significativa recuperación en la demanda por el mercado turístico cubano. Gracias a esta tendencia positiva, ya en el tercer trimestre de 2018 la cantidad de visitantes fue un 5 por ciento mayor que los recibidos en igual período de 2017. Tal resiliencia de la demanda por el mercado cubano es un excelente dato para la economía de la Isla, dado que el turismo será clave para la dinámica de 2019.

En segundo lugar, ha funcionado también como amortiguador la política fiscal expansiva. En 2017 el gasto de gobierno fue el componente de la demanda agregada que más creció a precios constantes: un 2,2 por ciento. Desde 2015 viene aumentando el gasto del presupuesto del Estado y el déficit fiscal como proporción del PIB. Después de años de austeridad fiscal, el gobierno echó manos del gasto fiscal para amortiguar los efectos de la crisis venezolana.

Para reducir los efectos inflacionarios de esta política fiscal expansiva, el Ministerio de Finanzas y Precios ha venido estrenando en grande los bonos públicos. Es decir, ya no se imprime dinero nuevo para financiar el gasto fiscal que no tiene respaldo en ingresos, sino que lo financian los bancos comerciales estatales al comprar los bonos públicos.

Tal política fiscal anticíclica ha amortiguado la caída del PIB, pero lo preocupante es que ha generado un hueco fiscal por encima de 8,000 millones de pesos en 2017 (8,6 por ciento del PIB) y de cerca de 12,000 millones de pesos para 2018 (alrededor de un 12 por ciento del PIB). El déficit fiscal en pesos corrientes es el histórico más alto y, en relación al PIB, es una proporción que no se veía desde la crisis de inicios de los años 90. No cabe duda de que la expansión fiscal ayuda al crecimiento del PIB en el corto plazo, pero sobre una burbuja financiera que se está acumulando en la forma de bonos públicos en manos de los bancos comerciales estatales.

Los cambios irrelevantes en el margen

 Y no se puede obviar la pérdida de dinamismo en las reformas estructurales, lo cual mantiene estancado el potencial de crecimiento de la economía. Es decir, hay factores cíclicos y coyunturales, pero también siguen lastrando el potencial de crecimiento tanto la dualidad monetaria y las ineficiencias del sector empresarial estatal, como las restricciones sobre la agricultura y al sector privado, todo lo que impide acumular más capital físico y hacer un uso intensivo de la tecnología y el capital humano.

El presidente Díaz-Canel, por el momento, se mantiene en la senda de las transformaciones graduales que no tocan la columna vertebral del sistema centralizado y el monopolio de la empresa estatal. Ello coincide con las expectativas de un Presidente que no llega al poder presentando una agenda propia, sino que fue seleccionado por la generación de los “históricos” para darle continuidad al programa definido durante el período de Raúl Castro.

Una manera simple de ilustrar la manera en que se vienen aplicando las reformas es la siguiente. Si hay que cambiar diez cosas para que funcione eficientemente un sector productivo, un mercado o un mecanismo económico, el gobierno cubano va a cambiar solo dos, y estas dos nunca van a ser las más importantes. Con ello, mantienen la imagen de reforma, minimizan los conflictos y divisiones políticas al interior del gobierno y el Partido, pero gastan tiempo y energía en producir transformaciones que no tienen la posibilidad de ofrecer resultados significativos, dado que no se han cambiado las otras ocho cosas que impiden el funcionamiento eficien Lo acabamos de ver este año cuando se deciden realizar modificaciones a la Ley 118 de la Inversión Extranjera con vistas a acelerar la llegada de capital extranjero, y para ello se establece que, en las propuestas de inversión, hay dos documentos que ya no son necesarios presentar al Ministerio de Comercio Exterior (MINCEX), y que ya no hay necesidad de presentar un estudio completo de factibilidad de la inversión, sino un estudio más sencillo de pre-factibilidad.

Sin embargo, las modificaciones no tocan, por ejemplo, el sistema de contratación de la fuerza de trabajo a través de empresas empleadoras estatales que operan con objetivos rentistas y dañan la competitividad, ni van dirigidas a potenciar la inversión con capital de los cubanos residentes en el exterior.

También se evidencia en las recientes medidas para evitar la evasión fiscal del sector privado, en las cuales se considera la obligación de tener una cuenta bancaria por parte de los negocios de mayores ingresos, pero no se atacan las principales fuentes de informalidad y del uso del efectivo, tales como la ausencia de un mercado mayorista, la no autorización para importar insumos, el poco uso de medios de pagos electrónicos y que los negocios no cuentan con personalidad jurídica.

En la agricultura también vimos este año otro ejemplo de medidas en el margen que no van a producir resultados significativos. Se decide ampliar los tiempos del usufructo y las extensiones máximas de tierra asignadas a los privados, pero no se desmonta el sistema centralizado de Acopio estatal, y los campesinos siguen sin contar con un mercado donde obtener los bienes de capital, la tecnología y los insumos suficientes.

El año 2019 tendrá como elementos positivos la recuperación del turismo, la reanudación de entrega de licencias a los privados, el aumento de la inversión extranjera a partir de los proyectos ya aprobados, y las múltiples oportunidades que se abren para generar nuevos servicios a partir de la conexión 3G a los teléfonos celulares.

Una de las mayores ilógicas de la reforma cubana es que solo abrió el sector privado a actividades de bajo valor agregado, teniendo Cuba un capital humano de calidad. Tal vez la conexión 3G sea un punto de inflexión para que esto cambie, y el sector privado pueda aportar más al progreso económico desde el conocimiento y la innovación. Pero para ello se requiere que la política pública se salga del margen y cree un marco regulatorio adecuado, no para restringir, sino para promover la expansión de una de las áreas de la llamada economía naranja de mayor dinamismo a nivel internacional.

Dr.  Pavel Vidal

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DEMOCRATIZING CUBA? INTERVIEW WITH ARTURO LÓPEZ-LEVY

Published originally by NACLA (https://nacla.org). This is the last installment of a NACLA series on Cuba’s constitutional reform

Arturo López-Levy is the Bruce Gray Fellow and Visiting Assistant Professor of International Relations at Gustavus Adolphus College, Minnesota. He worked as a political analyst for the Cuban government until 1994. He is a co-author of Raúl Castro and the new Cuba: A Close-Up View of Change (McFarland, 2012.

Arturo López-Levy

During his time as president, Raúl Castro announced a series of reforms. [3] One of these was to overhaul Cuba’s 1976 constitution [4], which was drafted at the height of Cuban socialism and has long been out of sync with the country’s post-Soviet reality. In July, Cuba’s National Assembly unveiled a proposed version for the new constitution [5]. This draft will undergo a process of public debate throughout the fall and should be ratified in February 2019.

The constitutional reform has intensified debates on the island about rights, citizenship, and the new economy. This essay forms part of a running forum NACLA is hosting to offer a range of views on this crucial process at a critical moment in Cuban history.

In this essay, political scientist and international relations expert Arturo López-Levy explains how the constitutional reform reflects the goals and expectations of a new generation of the Cuban political elite.

 

Michelle Chase (MC): In broad strokes, what are the most relevant changes proposed in the new draft of the Constitution?

Arturo López-Levy (ALL): If people outside Cuba want to understand the current process of constitutional reform in Cuba, they should look at the relevant terms of the debate and balance of power within the island rather than impose prescriptive and sometimes utopian views about democracy from the outside.

The first thing I would caution is that we should pay attention to the framing of this debate. While many outside observers, dissidents, opposition, and exile intellectuals focus on substantive issues of liberal democracy (such as the right to organize political parties, freedom of association and expression, etc.), the framing of this debate within Cuba’s political structures is mostly focused on procedures and institutions (term limits, decentralization, separation of a new presidency of the republic, presidency of the Council of State, and premiership and legalizing new institutions and practices of the new economy.)

This is hardly a surprise. Facing the passing of the generation who made the Cuban revolution in 1959, the goal of the Cuban elite is improving the collective character of the leadership and the sustainability of the one-party system. There is a new generation of leaders rising in Cuba, but there is no evidence to suggest that they will dismantle the monopoly of the Cuban Communist Party (PCC), establish an independent judicial system, or willingly adopt a free press. This fact has made many observers of Cuba’s political reform skeptical about the prospects for democratization in Cuba. That is why they dismiss the relevance and implications of the debate that is taking place as non-consequential.  The problem with these analysts is that they are imposing their own priorities and values without observing the process on its own merits. In contrast, a good analysis should emphasize the magnitude of the institutional change being proposed, and how a change in these institutional procedures can produce substantive changes, even if unintentionally, in the long run.

From an institutional point of view, the proposed reforms to Cuba’s current constitution represent a fundamental political liberalization of the current system. The new Carta Magna represents explicit and implied changes of utmost importance in the economic realm and the organizational structure of the Cuban state.

In terms of explicit changes, the proposed amendments redefine the character and goals of the Cuban state. The proposed constitution drops the goal of “building a communist society” and ratifies the adoption of a new model of a mixed economy in which not only private property is legalized but also the role of the state sector in the Cuban economy changes. This goes farther than reforms introduced in 1992, which opened the possibility for some expansion of private property in the country but explicitly excluded some sectors of production from privatization. That list disappears in the new project. This change does not mean that the Cuban state now has a “neoliberal orientation,” as some have argued, but it does legally empower the government with discretion to decide what to privatize, how and when.

The draft constitution also lays out changes in the structure of the state that open the gates for a substantial future decentralization. The new constitution redefines the role and mode of election of the provincial governors and their relations with the municipalities. At the national level, the new text proposes the creation of a presidency, as the top official of the country, centralizing in that office many functions that Fidel Castro has said in the past that should be distributed in a council of notables and representatives of the social organizations under the tutelage of the communist party (the Council of State). Together with this new office of the presidency, the constitutional proposal includes the separation of functions and position of the president of the Council of State and prime minister. This is not a separation of power, as some uninformed observers suggest, but a clearer distribution of functions. The prime minister is subordinate to the president, who is also supposed to be the leader of the party, but the premier’s performance and legacy will be essentially assessed by his performance (better economy, welfare, etc.), not in ideological terms.

MC: How was this draft produced? Who exactly contributed to it and how do we see those interests in the draft?

ALL: The politburo of the Communist Party created a commission six years ago that worked on a blueprint of the most important proposals. Then, at the end of the legislative term in December 2017, the National Assembly created a commission of deputies that included many of the members of the first commission created by the party, plus some relevant scholars of law, history and other matters, and representation from official regional and mass organizations.  In terms of generations, the commission showed an interesting mix of old and new blood (in both political and demographic terms).

Most of the members of this commission are openly and inextricably tied to the orthodox party line of the PCC. The group was not composed of the country’s most prominent jurists, constitutional law scholars, experts, or intellectuals. They were competent loyalists who exercised their power as agenda setters in the dark, with no transparency.

This fact disavows any fiction of separation between the state and the party but it also confirms the relevance assigned by the leadership to the constitution making process and the anticipated changes for the political future of the country. This is a loyalist commission that is conscious of the need for renewal within the limits of the system and took seriously the challenge of legitimation and adaptation under the new conditions of the world and Cuban politics and economy.

The commission submitted its proposal to the National Assembly, which debated it and approved it for submission to the general public as a project for debate. Then a process of discussion throughout the whole country began, in every neighborhood or place of employment. In addition, for the first time and creating an interesting precedent, a website hosted by the ministry of foreign relations is collecting comments from emigres. This final project will supposedly be submitted to a referendum during the first half of 2019.

The process of debate serves many purposes beyond the pursuit of some domestic and external legitimation. One of the most important goals is the collection of information about the positions not only of the antagonists but also about those who are associates in different degree with the system. The discussion allows also some cooptation of civil society’s demands and elites opening space for them within the governing coalition. It also allows the historic generation of the revolution to test the persuasive capability and attraction of the different positions of those rising within their ranks.

MC: Why is the Constitution being revisited at this time? How is it related to Raúl Castro’s reforms, the new presidency of Miguel Díaz-Canel, etc.?

ALL: This proposal of constitutional reform is part and parcel of the gradualist and incrementalist approach to economic and political reform adopted by Raúl Castro. An important part of the new project has to do with the political conception about what type of state Cuba will be. The new Article 1 introduces the notion of a socialist “rule of law,” better interpreted as a socialist rule by law. Although this term has been mentioned several times since 1959, it has never been elevated to the rank of a constitutional principle. The idea—as presented by the most outspoken voice in the commission, the chief of the secretariat of the Council of Ministers Homero Acosta—emphasized constitutional obedience and observance over arbitrary power.

Does talking about a “rule of law” socialist state and the reintroduction of guarantees of important rights such as habeas corpus represent the adoption of a judiciary independent from the Communist Party? Obviously not, but that does not mean that when Cuban leaders speak about a “more democratic system” or a “democratic party of the Cuban nation” or rapprochement with patriotic emigres, they are just babbling demagoguery. On the contrary, this is an acknowledgment that, without the complement of political liberalization, the success of economic reform is at risk. Facing the ideological position presented by former dean of the law school of the University of Havana, Jose Toledo Santander who defended the proposition that the Communist party was above the National Assembly and the constitution is what the party- particularly its Political Bureau- say it is; Acosta proposed a different scheme in which the party lead the discussion of the constitutional reform today and then becomes the main guardian of its strict application in accordance with the will of the people who is the ultimate holder of Cuban sovereignty.

The new president Miguel Díaz-Canel and his team are conscious of the potential problems that a more open Cuba can bring. Let’s not forget that political liberalization, not to mention democratization, can be a destabilizing process for a system like Cuba’s. But Díaz-Canel and the new generation of leaders know that accelerating the reforms adopted under Raúl is their best chance. Many factors are pushing in this direction. The one-party state’s old pillars of legitimacy (personal charisma, the appeal of communist paradigms, the appeal of social equality) have declined. It is also clear that the current political structure is inadequate to cope with challenges associated with these reforms, such as the rise of inequality, the overlapping of race and class in the income gap, the increase of corruption and the divisions between urban and rural areas, tourist and non-tourist sectors of the economy, and sectors that benefit from remittances versus those that do not.

In general, these reforms show that president Díaz-Canel and his generational team are setting the political agenda of the country. Some of these leaders have been candid about the fact that the constitutional reforms are updating the legal framework of the country because politics and law have lagged behind the economic and social changes in the country. This was never a major concern of Fidel and Raúl Castro, or the generation of the so-called “historicos.” It confirms that the new generation of leaders is acting with the support of the old generation but is pressing their own issues forward.

MC: Is it fair to say that the new constitution is moving Cuba toward a more republican, or liberal, concept of citizenship?

ALL: Yes, in the margins. In the liberal sense, it proposes a rule by law, not a rule of law. This is better than what exists now but it is not based on an open and transparent competition of political views within the paradigm of the universal declaration of human rights. In the republican sense, the assessment is more complex. The new project creates a better separation of functions between president and prime minister and improves some mechanisms of horizontal accountability and decentralization. At the same time, by transferring to a president of the republic the previous functions of the council of state, the new constitution will strengthen the individual power of the top executive. This could open the door to bouts of Latin American caudillismo down the road.

However, liberal democracy or republicanism in the western style should not be the main criterion to measure the progress of Cuban political development. Cuba democratizes according to its own history and culture. The concept of political liberalization is better fitted to deal with the transformation taking place in Cuba because it emphasizes issues such as the expansion of choices and human rights as international standards. For instance, the expansion of rule by law provides the country with better institutional mechanisms (courts, police, prosecutors, etc.) to cope with an eventual democratization, regardless of the government’s intention to use it to strengthen one-party rule. In a worst-case scenario, non-liberal reformers will be doing the right thing for the wrong reason. The result could be positive.

MC: What implications do all these changes have for U.S. policy toward Cuba?

ALL: If the international community, particularly Latin America and the United States, want to have a realist policy of democracy promotion towards Cuba, it is essential for their policymakers to abandon false presumptions about short-term democratization in the liberal sense and educate themselves about the real and relevant framework, choices, and scenarios within which Cuba is discussing its constitutional reforms. In such a critical hour, the policies of the Trump administration are the model of what not to do. If they continue to adopt a narrow vision about democratization and rights, the role of most international actors, their positions and interactions will be counterproductive.

At a critical time of debate, which will shape how Cuban politics will unfold and whether there will be more opportunities for democratization in the future, the role of the United States is important mainly for what it shouldn’t do. Cubans will decide their own destiny within the context of a nationalist culture strengthened by the 1959 revolution. If Washington insists on treating the new government as mere continuation of the previous generations, trying to play favorites within Cuban politics and interfering in Cuba’s internal affairs, American policy will be very counterproductive to Cuba’s political development and even detrimental to America’s national long-term interest in a peaceful, stable, democratic, and market-oriented Cuba.

The Trump administration has chosen to reaffirm policies of hostility despite all the promising signs for marketization and political liberalization of more engagement during the last two years of the Obama administration. Washington should reconsider the way it engages with a changing Cuba. It should look at this process of constitutional reform with a flexible vision about the positions and motivations of all Cuban actors, including non-liberal reformers in the government. Rather than dismiss the relevance of the intergenerational transition of leadership, it should engage the new president Miguel Díaz-Canel with dialogue and dignity using this critical juncture for a new beginning and facilitating the deepening of the reforms, not repeating the hostility role so fruitful to the most conservative elements in the Cuban government ranks.

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