Tag Archives: Special Period

Cuban Demography and Development: the “Conception Seasonality Puzzle”, the “Dissipating Demographic Dividend” and Emigration.

By Arch Ritter

Cuba’s Oficina Nacional de Estadisticas (O.N.E.) recently published the 2010 Edition of the Anuario Demográfico de Cuba 2009, available on line here: http://www.one.cu/anuariodemografico2009.htm. A wide-ranging listing of the web publications on demography and population is located at this address: Oficina Nacional de Estadisticas, LA POBLACION CUBANA . Comprehensive statistical information for Cuba is available quickly, comprehensively. ONE’s coverage and presentation of demographic statistics has been improving steadily in terms of quality and timeliness. (In contrast, basic information on the economy such as unemployment, the consumer price index, and GDP is opaque, minimalist, and not clearly defined.)

Numerous useful and interesting insights into Cuba’s development, past and prospective, are apparent in the ONE data – and other demographic sources. A few are mentioned here.

1. Cuba’s Seasonal Conception Puzzle

An interesting phenomenon. of which I have been unaware. is the seasonal character of the numbers of births in Cuba – and of course the causal seasonality of conception rates. As Chart 1 illustrates, births peak from August to December but decline sharply during the months of February to June. This means that Cuba’s amorous months of high conception levels are from about December to April.

One can venture a number of guesses as to why this might be the case. For example, perhaps the cooler weather of Cuba’s winter months is more conducive to activities related to conception. Or maybe there is greater optimism and dynamism during the more prosperous times of the tourist high season. If anyone has clearer insights into this phenomenon, please let me know!

Chart 1 also shows increasing numbers of births from 2007 to 2009.

2. From Baby Boom to Baby Bust and Beyond?

From 1960 to 1970 Cuba experienced a major “baby boom” with fertility rates rising to around 4.5 children per woman on average Chart 2. This may reflect the improvement in living conditions for many families, improved medical facilities and perhaps greater optimism about the future, leading women and families to choose to have more children during the first decade of the Revolution.  As is well known, however, the fertility rate began a long descent to levels a good deal below the minimum necessary for long-term population stability which is considered to be around 2.2 children per woman.  This baby “bust” commenced in 1970 and has continued to 2009, bottoming out at 1.39 children per woman in 2006 but rising somewhat to 1.70 in 2009. Cuba’s demographic experience is similar to that of numerous higher income countries such as Spain, with a fertility rate of 1.6 in 2005-2010: Italy, 1.4 ; Portugal, 1.4; Russia, 1.5; Canada, 1.6 and Germany 1.3.)

The causes of the declining fertility rates in Cuba undoubtedly included similar factors to the experience of other countries: higher female labor force participation rates (so that the income sacrifice for additional children was higher), better pension systems (so that one’s children were no longer necessary for income-support during old age), reduced opportunities for employing children as income earning assets due to urbanization and increased schooling, different career aspirations for women, easy availability of contraception including abortion etc.

The impact of the changing fertility rates can then be observed in the 2010 population pyramid (Chart 3.) The 1960-1975 “Baby Boomers” reached age 40 to 50 during the 2000s leading to the large cohorts in the 2010 pyramid. But since 1970, the declining fertility rate has led to ever-narrowing cohorts of younger age groups. Even the demographic “echo” of the 1960-1970 cohort was muted.

Chart 3  Cuba’s Population Pyramid, 2010

The consequences for Cuba of an aging population also are similar to those for other countries, though some other high income countries, large scale immigration changes the picture. The main consequences are:

  • The Old Age Dependency rate increased by almost 40% over the 1990-2010 period. Child Dependency rates declined by about 30% in the same period, reflecting the declining fertility rate.  (Table 1.).
  • The aging population will cause the Total Dependency Ratio (the sum of Child and Old Age Dependency as a proportion of the total population) to increase in future, burdening the economically active population for the support of pensioners and their health care.
  • The “aging population” in time will become a “dying population.” The population, previously increasing or stable, will decline sharply when the “baby boom” cohorts hit age 65 or so in 10 to 15 years. This could be modified by compensating changes in fertility or international migration, but not in life expectancy which is unlikely to rise much further in future..
  • The “Total Dependency Ratio” has been particularly low during the years when Child Dependency declined but the large “Baby Boom” age cohorts were still of working age. It is now at 42.2% (Table 1). Consequently the economically active population between age 20 and 60 as a proportion of the total population has been large.This so-called “demographic dividend” or “demographic window of opportunity” normally provides a stimulus to growth and development as in China. However, in Cuba’s case, it is passing quickly and so far has been partly wasted as it has been underemployed in low productivity activities.

Emigration

The Anuario Demográfico de Cuba 2009 also provides comprehensive information on internal migration and some general figures for external migration. Emigration numbers are illustrated in Figure 4. The “Special Period” since 1994 has been characterized by a steady hemorrhage of emigration. While ONE does not present information on the sociological character of the emigrants, casual observation suggests that they are well educated, entrepreneurial and perhaps disproportionately in the early adult 18 to 35 age grouping.

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The New Analysis of Cuba’s Monetary Situation by Pavel Vidal Alejandro: “Cuban Monetary and Financial Jigsaw Puzzle”

An insightful new analysis of Cuba’s monetary, exchange rate, banking and balance of payments imbroglio by Pavel Vidal Alehjandro has just been published by the Real Instituto Elcano, Madrid. A bruef extract is included below.

The full document is available here: The Cuban Monetary and Financial Jigsaw Puzzle

Theme: The 2008-09 balance of payments crisis and a succession of errors in economic policies have resulted in new monetary and financial complications in the Cuban economy, to be added to the costs and distortions of currency duality.

Summary: The Cuban economy currently operates with two local currencies –the Cuban peso and the convertible peso, both with convertibility problems and multiple and overvalued exchange rates– and has been subject to a banking crisis since 2009. It is a veritable monetary and financial jigsaw puzzle. In order to do away with the dual currency and overcome financial imbalances, monetary policy must devalue the two domestic currencies. Cuba’s banks are facing a systemic liquidity crisis with no lender of last resort to help them out of it. The country cannot access a last-resort loan from the IMF, the World Bank or the IDB since it is not a member of these institutions. The government has been applying a tough adjustment policy which has led to the reduction in the fiscal deficit and to a surplus in the balance of payments, which has served to pay off debt and gradually unfreeze bank accounts, although the matter is far from being fully settled

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Jump-Starting the Introduction of Conventional Western Economics in Cuba

By Arch Ritter

I.   Initiation of the Joint Havana-Carleton Universities Economics MA  

As the Cuban economy was sinking into the nadir of its depression following the ending of the “Special Relationship” with the former Soviet Union, the Faculty of Economics at the University of Havana decided that the time was right to introduce conventional economics into University curricula and into Cuba generally. With the collapse of the Soviet Union and the transition to mixed economies throughout Eastern Europe and the Soviet Union, the Soviet version of the discipline of Economics virtually disappeared. Cuban economists were left orphaned with a discipline that had become extinct. They generally were unfamiliar with the near-universal language of economics and found it difficult to communicate in the discipline with their colleagues in Latin America and the rest of the world.

This move to introduce conventional economics was spear-headed by Dra. Lourdes Tabares, who was the Chair of the Economics Department at the University of Havana at the time. It had broad though far from unanimous support within the University.

A meeting was arranged in early December 1993 in Havana to discuss alternative approaches to accelerating the process of developing instruction in conventional economics. Financed by the International Development Research Centre (IDRC), and coordinated by Dr. Gary McMahon, this meeting brought together a number of academics and officials from Chile and Argentina and me from Canada, with University of Havana counterparts.

A decision was reached at that meeting to organize a joint MA program in Economics mainly for young faculty members from Cuban Universities to be given in Cuba at the University of Havana. An agreement was subsequently reached between the President of Carleton University, Dr. Robin Farquhar and the Rector of the University of Havana. Juan Vela, to provide the Carleton program adapted to the circumstances of Cuba.

The program was conceived in December 1993 and was up and running six months later in Havana.

The Economics MA was financed for the first two years by the IDRC and was supported by Gary McMahon and Pierre Beemans. Following that, the Canadian International Development Agency (CIDA) financed another three years of the MA Program. The program received crucial support from the United Nations Economic Commission for Latin America (UN ECLAC), which lent its good name as a co-sponsor of the program and provided about 40% of the faculty at its own expense. Particularly vital was the support of Francisco Leon and the Secretary General Gert Rosenthal of UN ECLAC. The Canadian Embassy in Havana, notably through Ambassador Mark Entwistle and Nobina Robinson, were instrumental in the extension of the program. CIDA was so pleased with the first two IDRC-financed years that it decided to extend the Economics MA for an additional three years.

It also agreed to expand collaboration between Carleton University and the University of Havana for five years and to five other units at the two Universities: Biology, Business, Linguistics, Women’s Studies and Public Administration. Professors were recruited from a number of Latin American countries as well as Canada. Among the contributing professors were

  • Canada: Keith Acheson, Zhiqi Chen, Donald McFetridge, Gary McMahon, Carl McMillan, Soo Bin Park, Simon Power, Arch Ritter, Nicholas Rowe, Larry Willmore (also with the United Nations), and Frances Woolley.
  • UN ECLAC: Ricardo Ffrench-Davis, Michael Mortimer, Bernardo Kosakoff Juan Carlos Lerda, Luis Felipe Jimenez, , Jorge Katz, , Joe Ramos, Daniel Titelman.
  • Argentina: Jose Maria Fanelli. Mario Damill, Guillermo Rozenwurcel
  • Bolivia: Juan Antonio Morales
  • Brazil: Ricardo Paez de Barras
  • Peru: Alberto Pasco-Font

Senior Cuban professors worked with the visiting Canadian and Latin American professors and took over some of the classes. Among the Cuban professors were Felix Marero, Elena Hernandez, Lourdes Tabares, Nelida Gancedo, Vilma Hidalgo, Manuel Miranda, Frank Hidalgo, Ela de Quezada, Raul Sandoval, Celia Fernandez, Ermida Gonzalez and, and Marta Madero.  

 

II. Impacts of the Program

The objective of the five years of the MA Economics Program was to support the introduction of conventional economics into the curriculum of Cuba’s universities. From this perspective, I think that it could be considered to have been reasonably successful. At the University of Havana for example, a program in conventional economics was initiated quickly and is in operation. Similarly the University of Oriente soon established a conventional economics program, under the leadership of the MA graduate Ulisses Pacheco who became Dean of the Faculty. These programs have been producing some impressive graduates and new academics for over a decade.

A substantial number of the MA graduates went on to earn Doctoral degrees in Economics both inside Cuba, notably in a program with the University of Barcelona and outside Cuba at Carleton University, Ottawa Canada. However, significant numbers of the graduates have emigrated and built their lives elsewhere. This is undoubtedly a loss for Cuba, as all were just at the early stages of their productive professional and family lives. (Remittances are small compensation for this loss.) 

Of the 76 graduates of the program, 16 now are employed in Cuban Universities, 22 have other employment in Cuba, most in government, 7 were citizens of other countries and have returned to their own countries, and 31 have left Cuba. The visiting professors were particularly happy with the level of qualification and the strong commitment and motivation of the Cuban students. It was a positive and pleasant experience for all the professors involved. There were of course some minor frictions in the implementation of the program but surprisingly few and most were resolved quickly and satisfactorily. 

One such issue was a conflict with the Ministry of Cooperation and Foreign Investment, MINVEC. The problem was that the University of Havana had entered into an agreement with Carleton and IDRC but had not gone through MINVEC. It was some five months after the beginning of the program in July 1994 that MINVEC finally gave its approval.

Another issue that had to be dealt with has been described by Luis Casaco in a his Blog entitled “historias mínimas – short tales, palabras, amigos y un poco de música”,  and can be seen at the following address: when carleton university knocked my door at  http://kaskouy.blogspot.com/2008/03/when-carleton-university-knocked-door.html.

 

III. Where are They Now: Graduates of the Havana-Carleton Economics MA, 1995-1999

As of October 15, 2010 This listing is based on information mainly from around 2002. Much has happened since then, and undoubtedly there are many inaccuracies. Please forward any corrections that you may be aware of regarding locations and employment or contact information. Please send any corrections or new information to Arch_Ritter@Carleton.Ca

1994-1995 COHORT

  • Raul Ávila Rodríguez, Ottawa Canadá
  • Regino Boti Llanes, Londres, RU
  • Idania Coello Caballero, La Habana, Cuba
  • Ledya Fernández Lleal, Facultad de Economía, Universidad de La Habana, Cuba
  • Luis René Fernández Tabío, Instituto de Investigaciones (CESEU), La Habana, Cuba
  • Nélida Lamelas Castellano. University of Santiago de Compostela, Santiago, España
  • María Rosa Moreno Fernández, PNUD, La Habana, Cuba
  • Ulises Pacheco Feria, Decano, Facultad de Economía, Universidad de Oriente, Santiago de Cuba
  • Carmen Quintela F., (Facultad de Economía, Universidad de La Habana,) Cuba, Deceased
  • María C. Sabourin Jovel, Miami USA 
  • Mario Sánchez Egozcue, Centro de Estudios sobre la Economía Cubana, La Habana, Cuba
  • Juana Sánchez Mesa, PNUD, La Habana, Cuba
  • José Somoza Cabrera, Dpto. del Medio Ambiente, Universidad de La Habana, La Habana, Cuba
  • Magda Valera Cepero, Miami, Estados Unidos
  • Ignacio Vera Paneque, Naciones Unidas, Nueva York

Class of 1995-1996

  • Fausto Arias Araluce, “Interholdings” Spain
  • Even Chi Pardo (ciudadano panameño) Universidad de Panamá, Panamá
  • Pablo Crespo Brito, Barcelona, España
  • Bernardo Cutié Rizo, Miami, Estados Unidos
  • Gelvis de Armas O., Facultad, ISRI, La Habana, Cuba
  • Pierre Fils Aimee, (ciudadano haitiano) Toronto, Canadá
  • Idania Gancedo Gaspar, Facultad de Economía, Universidad de La Habana, Cuba
  • Eduardo Hernández Roque, Banco Central de Cuba, La Habana, Cuba
  • Nelson Lim Chang, Departamento de Economía, Universidad de Oriente, Santiago de Cuba
  • Boris Moreno Capote, Iglesia Católica, San Antonio de los banos, Cuba
  • Olga Pérez Soto, Facultad de Economía, Universidad de La Habana, Cuba
  • Amarylis Rodríguez R., Ferris Management Ltd., La Habana, Cuba
  • Maria Sanabria Pis, Banco Central de Cuba, La Habana, Cuba
  • Javier Tella Reyes, USA
  • Jorge A. Uriarte Landa, Gobierno de Canadá, Ottawa, Canadá

Class of 1996-1997

  • Alex Gay Cabrera, ¿Alemania?
  • Yuri Gracia Morales, Integral S. A., La Habana, Cuba
  • Arturo López Callejas, Universidad de Denver, Estados Unidos
  • Ricardo Mansilla Corona, Center for interdisciplinary Research in Sciences and the Humanities of the National University of Mexico (UNAM) Ciudad de Mexico. Web site :  http://www.ceiich.unam.mx/0/13PerCur.php?tblPersonalAcademico_id=12  
  • René Mujica López, España
  • Mahe Parodi Heydrich, Mississauga, Canadá
  • Karel Regalado Alonso, Tembec, Temiskiming, Canadá
  • Judith Rodríguez Marcial, FinTur (empresa financiera) La Habana, Cuba
  • Luciano Rondón Hernández, Montreal, Canada
  • Ana Julia Yanes Faya, Gobierno de Canadá, Ottawa, Canadá

Class of 1997-1998

  • Alexis Aguilera Borges, Cuzco, Peru  
  • Raysa Alcalá Martínez, Investigadora, Oficina Nacional de Administración Tributaria (ONAT), La Habana, Cuba
  • Alberto Baly Gil, ¿Cuba?
  • Luis Casaco, Montevideo, Uruguay
  • Vladimir Díaz, Empresa Seguridad y Protección, La Habana, Cuba
  • Yaimí Farías Dominguez, Miami, Estados Unidos
  • Tania García, Facultad de Economía, Universidad de Oriente, Santiago de Cuba
  • Abel Izquierdo Falcón, Profesor, Universidad Central de Las Villas, Cuba
  • Ernesto Landa Falcón, Gobierno de Cuba, La Habana, Cuba
  • Adrián López Denis, Profesor, Universidad Princeton, Princeton, Estados Unidos
  • Osmel Martínez Trujillo, Toronto, Canadá
  • Cristian Meneses Torres (ciudadano chileno), ¿Chile?
  • Hector Molina, Facultad de Economía, Universidad Central de Las Villas, Cuba
  • Antonio Ruiz Cruz, Facultad de Economía, Universidad de Las Villas, Santa Clara
  • Esteban Salido Gamboa, Miami, United States
  • Víctor Sombart, Faculty de Economía, Universidad de Oriente, Santiago de Cuba
  • Thanh Huong Tran (“Alina”), (ciudadano vietnamita) Viet Nam
  • Eileen Tur, Toronto, Canadá

Class of 1998-1999

  • Maritza Álvares Herrera, Miami, Estados Unidos
  • Hamma Bachra Ahmed, (ciudadano saharaui), Sahara Occidental
  • Maria Boiko, (ciudadana ucraniana) Ucrania
  • Vilma Cervantes R., La Habana, Cuba
  • Marco Díaz Díaz, La Habana, Cuba, (deceased)
  • Kim Frederick, (ciudadano granadino) Grenada
  • Antonio Galis-Menéndez, Estados Unidos Radamés Gonzáles, Santiago de Chile
  • Tatiana González, Ministerio de Comercio Exterior, La Habana, Cuba
  • Luis Gutiérrez Urdaneta, La Habana, Cuba
  • Zoe Medina Valdés, Facultad de Economía, Universidad de La Habana, Cuba
  • Yenniel Mendoza, Instituto Nacional de Investigaciones Económicas, La Habana, Cuba
  • Mavis Morales, Rusia
  • Ana M. Pérez de la Cruz, Panamá
  • Heidi Portuondo C., Barcelona, España Eduardo Ramos D., n.a. Cuba
  • Lester Rodríguez, Business Analyst, Finantix (Italian financial software house),
  • Padua Italy Paul Valdes-Miranda, Market Research Analyst, Ciudad Mexico, Mexico
  • Katty Yeja López, Bahamas

At the Inauguration of the Program, Ambassador’s Residence,September 1994 Gary McMahon, Ambassador Mark Entwisle, Francisco Leon, and Lourdes Tabares

Nicholas Rowe, teaching a Macroeconomics class, October 1994

 

Class of 1996-1997 From left to Right: Nicki; Nicki’s son Junior, (Canadian, not known), Elizabeth Rohr (Carleton University), Rene Mujica, Victor Sombert,  Luciano Rondon,  Ana Julia Yanes Faya, Mahe Parodi, Karel Regalado, E. V. Diaz, Judith Rodriguez, Yuri Gracia,  

Class of 1997-1998   From left to right, Back:  Osmel Martinez, Yaimi Farias Dominguez, Raysa Alcala, Ernesto Landa, Belkis, Alberto Baly, Alina, Paul Valdes-Miranda, Tran Thang Huong, Esteban Salido, Eileen Tur, Alexis Aguilera and Arch Ritter. In front: Ricardo Mansilla, Adrian Denis with Luis Casaco’s son Mauri and Luis Casaco, Guabano, February 1998

Class of 1998-1999 Front row. left to right: M. Bachra-Ahmed, Maritza Alvarez,  Maria Boiko, Kim Frederick, Tatiana Gonzalez, Marcos Diaz Diaz Back row:  Radamez Gonzalez, Vilma Cervantes, Zoe Medina, Katty Yeja, Mavis Morales, Eduardo Ramos, Heidi Portuondo, Ana Margarita Perez. Luis Gutierrez, Paul Valdes-Miranda

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Review: Cuban Currency: The Dollar and Special Period Fiction, by Esther Whitfield.

Cuban Currency: The Dollar and Special Period Fiction. By Esther Whitfield. Minneapolis: University of Minnesota Press, 2008. Pp. 217. $22.50 paper. ISBN: 9780816650378


Esther Whitfield

I must confess that when I first noticed the volume Cuban Currency: the Dollar and Special Period Fiction, I thought it was an analysis of Cuba’s monetary system, not having read the title carefully. To my trepidation, Esther Whitfield focuses instead on literature, but in the context of Cuba’s dual-currency pathology. Her survey of recent fiction has turned out to be a delight, even for an economist with little direct knowledge of Cuban literature.

Whitfield’s central argument is that the “Special Period” in Cuba generated a boom in cultural exports, including literature, due to a number of factors including the opening of Cuba’s economy and society, the subsequent expansion of international tourism and the popularity of all things Cuban, as well as the decriminalization of the use of the dollar in 1992, its adoption as a legal currency, and its quick ascent to supremacy over the “old peso.” Special Period literature then became market-driven—like many other activities in Cuba—with authors’ incomes dependent on foreign sales and hard-currency contracts, rather than on Cuba’s literary bureaucracy, membership in the writers’ union and the domestic market.

The dominance of the foreign market was further strengthened by the shrinkage of the domestic peso market for books because of declining incomes. This new foreign-market orientation was formalized by legislation in 1993 that permitted authors to negotiate their own contracts with foreign publishing houses and to repatriate their royalties under a relatively generous tax regime. Like other Cuban citizens, authors responded quickly to these new incentives.

In very simple terms, a key message of the book is that money talks and literary types listen. Or in “Special Period” Cuba, literary types chase dollars – like most other Cubans in this era, dollars having had greater purchasing power than “old pesos” in Moneda Nacional.

Special Period fiction is set in a “real Cuba” of interest to foreigners, namely in the Cuba of a behavior-warping dual-currency system, urban decay, dysfunctional Soviet-style economy, and political gerontocracy, together with a vibrant Afro-Latin culture and time-immemorial tropical eroticism. Ironically, the international boom in Cuban fiction during the sunset of the Revolution was a sequel to the literary boom of the 1960s, which was set in the confidence and vigor of the youthful Revolution.

Whitfield begins with an analysis of the circumstances of the Special Period that pushed authors into this external orientation. She then focuses on the works of Zoé Valdés, especially her award-winning I Gave You All I Had (1966), published in exile in Paris, which allows Whitfield to trace the central role played by a U.S. one dollar bill and its symbolic relevance for the culture of the Special Period. Short stories are the subject of the next chapter, with particular attention to the work of Ronáldo Menéndez. His story, entitled “Money,” is also set in the world of the doble moneda and doble moral, but criticizes the reliance on foreign markets and worries about the jineterización (or prostitution) of the writer-publisher relationship and possible debasement of “true” Cuban literature. Whitfield goes on to examine the work of Pedro Juan Gutiérrez, notably the five books of his Ciclo Centro Habana. Gutiérrez writes for a foreign readership, but also critiques it, placing the reader in the position of voyeur into the “lives of sexual disorder, moral depravity and economic despair” of Havana (98). In her final chapter Whitfield meditates on artists’ depictions of Cuba’s urban decay and on critical analyses of such depictions.

Whitfield has produced a fine analysis of how economic circumstances generated new problems and new possibilities for Cuban authors, who have risen to the challenge and produced a literature of broad international appeal. Whitfield’s writing is engaging, her knowledge seems profound, and her subject is enchanting. However, I am not a competent critic of Cuban literature or literary criticism, and cannot tender a confident evaluation of its value for scholars in these fields. Her book, linking socio-politico-economic circumstances of the Special Period to Cuban literature, will nevertheless interest a broad range of social scientists, as well as the more literary-minded.

Is the international market for Cuban fiction as transitory as one might expect or hope that the Special Period itself may be? Perhaps. It may be that when Cuba escapes the Special Period – now 20 years running – and becomes a “normal country” with a normal monetary system, the special interest in its literary portrayal may diminish. However, the difficulties of economic and political reform are likely to continue for some time, and are likely to take various twists and turns that will hold our interest for some time to come.

I hope that Cuba’s fiction writers are there to illuminate the process for a world readership.

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

“The Cuban model doesn’t even work for us anymore” stated former President Fidel Castro, when asked if Cuba’s economic system was still worth exporting to other nations, by Jeffrey Goldberg, of  The Atlantic magazine during an interview in Havana. (JIM WYSS ,  AND LUISA YANEZ, Miami Herald, September 9, 2010), broken.html.

Was this a throw-away line? A rare moment of candor and  self-criticism? Or a mis-translation? Or is the implication that Raul can’t make things work anymore. but he, Fidel, could if he were back in charge?

In fact, the “Cuban Model” was a series of “FIDEL” MODELs. None of them ever worked effectively. They were all characterized by a dictatorial, overpowering and personal control by Fidel himself. From 1959 to 2006, the central feature of Cuba’s economic existence was Fidel’s micro-management of the economy. This was observed and analyzed in 1962 by the French agronomist Rene Dumont who lamented Fidel’s itinerant and ill-informed decision-making on every issue or problem that came to his attention. We saw it in January 2006, shortly before he left office, with “La Revolucion Energetica” in which again he micro-managed the issue.

The abolition of private enterprise in 1961, 1963 and 1968 (with the “Revolutionary Offensive”) has been a continuous disaster, suppressing and wasting the energies and entrepreneurial capabilities of the Cuban people. The 1961-1963 “Instant Industrialization” strategy was a disaster, quickly aborted. Likewise, the 1964-1970 “10 Million Ton Sugar Harvest” plus “New Man” plus Hyper-Centralization were all fiascos that also were aborted in 1970.

The Cuban economic expanded steadily from 1970 to 1985. Unfortunately this success was ephemeral, based as it was on Soviet support as well as a convertible currency debt build-up that led Cuba ultimately to declare a moratorium on debt servicing in 1986.

Cuba’s “Golden Age” of economic prosperity from 1970 to 1986 or so was one of Soviet economic Orthodoxy under-girded by massive Soviet subsidization.  This subsidization of the Cuban economy occurred mainly through the pricing of merchandise trade products. The USSR paid a ruble price for its sugar imports from Cuban that was a multiple of the prevailing world price at official exchange rates for many years. At the same time, Cuba paid a price that was below the prevailing market price for its petroleum imports from the USSR. The accompanying chart, derived from the work of William Leogrande, and J. M. Thomas illustrates the magnitudes of the assistance. My own quantitative estimates placed the value of this subsidization at around 23% to over 36% of National Income in the 1980 to 1987 period. (See the Table at the bottom of this note for the detail of the calculations.)

When economic stagnation set in 1985, Fidel designed the “Rectification Process” which was supposed to correct previous errors, re-centralize and de-marketize the economy and reignite economic expansion. This also failed.

Then with the termination of Soviet subsidies came the economic melt-down and the “Special Period in Time of Peace”. The latter in fact is not “special” but instead is the real world. In the “Special Period” the expansion of 2004 to 2008 is in large part due to the special relationship with Venezuela and the subsidization that this has produced. President Chávez supports Cuba through low-cost oil exports to Cuba, export and investment credits, and generous foreign exchange payments for Cuban exports of medical services.

In summary, the various development models and approaches that have dominated in Cuba have been Fidel’s personal models. Fidel Castro is correct in stating that they don’t work anymore. However, they have never worked.

Source:

Ritter, Archibald R. M. “The Cuban Economy inb the 1990s: External Challenges and Policy Imperatives.” Journal of Interamerican Studies and World Affairs, 32:3; Fall, 1990.

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Review of Amelia Weinreb’s Cuba in the Shadow of Change: Daily Life in the Twilight of the Revolution

Cuba in the Shadow of Change: Daily Life in the Twilight of the Revolution. By Amelia Rosenberg Weinreb. Gainesville: University Press of Florida, 2009. Pp. 272. $69.95 cloth. ISBN: 9780813033693.

An excellent book has appeared recently on Cuba by Amelia Rosenberg Weinreb (Professor of Anthropology, University of Texas at Austin.)

In Cuba in the Shadow of Change: Daily Life in the Twilight of the Revolution Weinreb explores and analyzes the lives, behavior, and views of “ordinary Cubans” or the culture of the silent majority or “shadow public.” These Cubans are familiar to those who have come to know Cuba during the Special Period and probably constitute a large majority of the population. These “unsatisfied citizen-consumers,” as Weinreb calls them (2 and 168.), strive to survive with some access to basic “modern” goods, above and beyond what the ration book provides in an amount insufficient for life maintenance since 1990. These modern goods perhaps include some luxuries, but they also include basics such as women’s hygiene products that are available only in the “dollar stores” or tiendas de recaudación de divisas (stores for the collection of foreign exchange).

This “silent majority” has remained under-analyzed by scholars, perhaps—as Weinreb suggests—because they do not seem to merit special attention relative to indigenous peoples, the poor, or labor unions, or perhaps because they do not fit the orientations of “New Social Movement” and “Structuralist Marxist” approaches. Weinreb’s sociological-anthropological analysis of Cuba’s silent majority therefore fills a major vacuum in works on Cuba over the last 20 years, focusing as it does on the character, aspirations and behavior of a group that has been almost ignored even though it probably constitutes a majority of the population of Cuba.

Weinreb’s ethnographic participant observation succeeds in producing an analysis from about as deep within Cuban realities as it is possible for an outsider to get. Her success can be attributed in part to her research assistants and neighborhood ambassadors, namely her three young children, Maya, Max, and Boaz, who helped to establish rapport, friendship, and shared parenting bonds with Cubans who empathized and wanted to help a young mother. This “family fieldwork” provides a unique window into Cuban society and the lives of Cubans.

Weinreb’s focus is a “shadow public,” somewhat analogous to the shadow economy, as the following explains:

[U]nsatisfied citizen-consumers . . . share interests, characteristics, a social imagery and practice, but their political silence, underground economic activity, and secret identity as prospective migrants casts a shadow over them. They are therefore a shadow public, an un-coalesced but powerful group that engages in resistance to state domination but without a public sphere, and only in ways that will allow them to remain invisible while maintaining or improving their families’ economic welfare. (168)

The roots of the shadow economy of course predate the Revolution. Indeed they go back to the colonial period and its unofficial economy of smuggling and contraband that predominated for a number of centuries when the Spanish crown attempted to enforce a bilateral trading monopoly on its Spanish colonies – plus heavy economic restrictions and con trolls from Spain.  Colonial disregard for Spanish officialdom was encapsulated in the expression “Obedezco pero no cumplo (I obey but do not comply). This saying has a modern ring to it in the Cuban context.  Cuba’s underground economy has deep historical roots.

However, the expansion and pervasiveness of today’s shadow economy were generated by the character of central planning itself, and by the circumstances of the Special Period, as analyzed in chapter 1. Indeed, the rationing system, installed in 1962 allocated the same bundle of products to every citizen regardless of their tastes or preferences. It was normal that people would exchange or selling the products provided by the rationing system that they did not want for things they did want. Thus everyone became a micro-capitalist exchanging, buying and selling various products. Furthermore, because the planning system was always imperfect, enterprise managers had to improvise solutions “outside the plan” to their supply problems, by buying or selling inputs or outputs in a quasi-market” – also part of the shadow economy. Indeed managers the success of enterprise managers and their reward depended on how well they could improvise in this unofficial – and indeed technically illegal – market environment. The problems of the “Special Period” also required citizens to find additional sources of income above and beyond the state sector wage that would purchase the food requirements for about 10 or 14 days of each month.

Chapters 2 and 3 examine how citizens strive to maintain private space and personal control within the context of the state’s domination of personal life and economic activity. Chapters 4-6 explore a range of survival strategies. Chapter 4 focuses on the concepts and practices encapsulated by the terms resolver, luchar, conseguir, and inventar, each with unique connotations in the context of the Special Period. The significance of material things—and the lack thereof—are investigated in chapter 5. Chapter 6 treats the importance of access to foreign exchange or “convertible pesos.”

Weinreb here presents a Cuban class system that puts the “red bourgeoisie” at the top, followed by artists with privileged access to travel and foreign exchange earnings, “dollar dogs” or cuenta propistas (own-account workers) with access to tourist expenditures or remittances from relatives or friends abroad, “unsatisfied citizen consumers,” and finally, at the bottom, the “peso poor” who lack access to foreign exchange and additional earnings.

The final chapters examine the broad-based phenomenon of feeling trapped and the dream of escape via emigration. Chapter 8 explores “off-stage” expressions of dissatisfaction, criticism, and resistance, which remain purposely hidden, unorganized, and outside public space. This state of affairs may be changing, however, with the Damas en Blanco and bloggers courageously breaking into the public arena, spearheaded by Yoani Sánchez. Finally, chapter 9 draws together the strands of Weinreb’s analysis and explores the relevance of the concepts of shadow public and unsatisfied citizen-consumer in the broader context of Latin America.

Weinreb succeeds admirably in describing and analyzing Cuba’s silent majority, those “ordinary outlaws” who are decent, hard-working, entrepreneurial, and ethical, yet must defend themselves and their survival through a myriad of economic illegalities within the framework of a dysfunctional economic system. These people live within the doble moral, effectively cowed into acquiescence by a political system whose main escape valve is criticism, innocuous at first, but then increasingly bitter,  followed by emigration. The shadow public perhaps constitutes a potential “shadow opposition,” but seems to be easily contained and controlled by the governments of the Castro brothers.

One might conclude from Weinreb’s work that this population—currently disengaged and thinking incessantly about emigration—is ripe for public reengagement and that in time there may occur a surprisingly rapid mobilization for change.

Weinreb’s analysis raises some additional questions.

  • Under what circumstances might a shadow opposition become organized, finding a strong voice to become a real opposition?
  • Will the new citizen-journalists of Cuba’s blogging community—plus critics such as Vladimiro Roca, Oscar Espinosa Chepe, Marta Beatriz Roque, Elizardo Sánchez, the Damas en Blanco, and some Catholic organizations—be able to break the control of the Communist Party and the current leadership?
  • Will normalization of relations with the United States and the ending of the “external threat”—a siege mentality long used as a pretext for denying basic political liberties—further erode control of the Party and create new political alignments within Cuba?

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Pavel Vidal Alejandro, “Cuban Economic Policy under the Raul Castro Government”

An excellent  study on Cuban economic policy has recently been published by Pavel Vidal Alejandro of the Centro de Estudios sobre la Economia Cubana, University of Havana.  “Cuban Economic Policy under the Raul Castro Government” is published through the Institute of Developing Economies of the Japan External Trade Organization. Attached is the Hyperlink:

http://www.ide.go.jp/Japanese/Publish/Download/Report/2009/pdf/2009_408_ch2.pdf

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Has Cuba’s Catastrophic Decline in Real Wage Levels Been Reversed?

The level of “real” or “inflation-adjusted wage levels collapsed catastrophically in the economic melt-down of 1989-1993. Has this been reversed during the alleged economic recovery from 1994 to 2010?

The chart below indicates that real wage levels may have increased steadily after 1994, but they are still a small fraction of their pre-melt-down level. This Chart is based on calculations presented by Pavel Vidal Alejandro, an analyst in Cuba’s primary economic research institute, the Centro de Estudios sobre la Economia Cubana (CEEC), also reproduced below.

According to this data, Cuba’s real wage collapsed from high of around 190 pesos (Moneda Nacional) to 20 pesos by 1993, recovering only slowly to 2008. For those who observed this collapse in the early 1990s, these figures are indeed credible.  How Cuban citizens reliant upon peso incomes survived through this catastrophic decline constitutes several million stories of endurance and innovation – or the practices encapsulated by the “Special Period” terms “resolver”, “luchar”, “conseguir” and “inventar”.

Chart 1: Cuba: Real Inflation-Adjusted Wages, 1989-2009
(Pesos, Moneda Nacional)

Source: Pavel Vidal Alejandro, “Politica Monetaria y Doble Moneda”,
in Omar Everleny Perez et. al., Miradas a la Economia Cubana,
La Habana: Editorial Caminos, 2009, p.35

The 1989-1993 economic contraction – approaching 40% of GDP – resulted from the termination of the subsidization from the former Soviet Union camouflaged in the form of credits never to be repaid, the above market prices paid for Cuban exports, the below-market prices for Cuban imports with that country.  In terms of official statistics on aggregate per capita economic growth rates, it would appear that the Cuban economy has fully recovered and surpassed the 1989 level by about 20% in GDP per capita terms as indicated in Chart 2.

Source: the author on the basis of statistics from the Oficina Nacional de Estadisticas, Anuario Estadistico de Cuba, various issues and UN ECLAC, Preliminary Overview of theEconomies of Latin America and the Caribbean, various issues

“Where’s the economic recovery? We don’t see it.”

But this raises the question: How could the economy recover so fully while real wages are still only at about 22 to 25 % of the 1989 level? This is indeed a puzzle. Citizens of Cuba have observed the contradiction for some years, as suggested by the saying mentioned above.

One possibility is that the GDP statistics are dubious. Indeed the Cuban government adopted a new approach to measuring GDP relabeling it as “Sustainable Social” GDP, measuring the value of services not at the cost of their provision but at an estimated evaluation of their worth internationally.  This revised GDP measure increased Cuba’s GDP per capita and increased the ostensible growth rate as the service sector expanded.
A second partial explanation for the immense gap between overall economic performance levels and wage levels is that substantial portions of the goods and services produced in the economy are pilfered and distributed through the ubiquitous underground economy so that revenues seem seldom to permit higher wage and salary payments but actually more is produced but leaks out of official circuits.

There are undoubtedly other factors explaining this situation as well.

“Resolver”, “luchar”, “conseguir” and “inventar”

How have Cuban citizens managed to survive with real incomes still around 22 – 25% of their 1980s levels. In fact, many Cubans have been able to generate incomes higher than the official wages and salaries. The additional sources of income include:

  • “Income in kind” ranging from lunches for workers, food supplements for seniors;
  • “Income in kind” and special access to transportation and housing for well-placed government officials (e.g. use of official vehicles for private purposes);
  • Illegal but tolerated salary supplements for employees of joint foreign-state enterprises and embassies;
  • Remittances from abroad;
  • Legal self-employment incomes;
  • Home produced goods and services for exchange or sale with friends and neighbours;
  • Informal (un-registered or underground) economy activities;
  • Pilferage from the state sector for resale or personal use.

If citizens can tap such other income sources, as many or most do, then they can survive reasonably well. However, there are some that have no access to any of these additional sources of income – or perhaps only simple survival activities such as selling cigarettes or Granma in the street. Which groups of citizens fall into this category? Perhaps the following:

  • Some pensioners;
  • Workers in the state sector outside the major cities;
  • Some agricultural workers

However, given that the rationed monthly food allowance is meager and on balance covers around 10 to 14 days of food requirements, while the rest of food requirements and basically everything else must be purchased from the dollar stores – where products bear a 140% sales tax – or the farmers markets or self-employment sector or the underground economy , these individuals obviously are in dire straits.

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