• The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba. It includes analyses and observations of the author, Arch Ritter, as well as hyper-links, abstracts, summaries, and commentaries relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
    Commentary, critique and discussion on any of the postings is most welcome.
    This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' original blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement:
    "... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

CUBA SUGAR HARVEST PILES ON ECONOMIC WOES

Reuters , May 10, 2021 9:18PM EDT

Original Article: Cuba’s Sugar Harvest

By Marc Frank

HAVANA, May 10 (Reuters) – With Cuba’s sugar harvest poised to draw to a close as the coronavirus pandemic rages, production stands at little more than two-thirds of planned levels, an industry official said on Monday, indicating the smallest crop in more than a century.

In yet another blow to the ailing Cuban economy, Jose Carlos Santos Ferrer, first vice president of state sugar monopoly AZCUBA, told the state Cuban News Agency that as of end-April, production had reached 68% of the Communist-run country’s plan. With the planned target announced earlier this year as 1.2 million tonnes of raw sugar, that means a harvest of 816,000 tonnes – the lowest since 1908.

The harvest was also hit hard by a shortage of foreign exchange to purchase fuel, agricultural inputs and spare parts due to the COVID-19 pandemic and fierce U.S. sanctions. Mills were temporarily shuttered due to fuel and cane shortages, as well as COVID-19 outbreaks, Santos Ferrer said.

Cuba consumes between 600,000 and 700,000 tonnes of sugar a year domestically and has an agreement to sell China 400,000 tonnes annually. It was not clear if authorities planned to cut domestic consumption, exports to China or both.

Cuba’s sugar harvest begins in November and usually winds down by May, when yields plummet as the summer heat and rainy season set in. Even if the country manages to reach 900,000 tonnes of raw sugar, that would still mark the lowest since 1908.

Cuba’s output has averaged around 1.4 million tonnes of raw sugar over the last five years, compared with an industry high of 8 million tonnes in 1989.

While no longer a top export, and behind other foreign revenue earners such as medical services, tourism, remittances and nickel, sugar still brings Cuba hundreds of millions of dollars a year from exports, including derivatives. It’s also used to produce energy, alcohol and animal feed at home.

Like other industries, agriculture and cane cultivation face structural problems in the import-dependent command economy which the government is only just addressing.

Over the last six months it has adopted monetary and other market-oriented reforms, but these will take time to kick in.

Cuban economist Ricardo Torres said the measures established a minimum base to relaunch the sugar sector, but were not nearly enough.  “As the overall reform progresses, new opportunities will emerge for the sector, but it requires a fresh look to begin the recovery, possibly with outside advice,” he said.

Cuba’s economy shrank 11% last year and continued its decline through April, local economists said, as a COVID-19 surge gutted tourism and combined with shortages of even the most basic goods to hit retail sales and agriculture in general, as well as sugar.

“The results are not good and we are at the start of the rainy season which effectively ends the harvest,” a local sugar expert said, confirming the country would not reach a million tonnes for the first time in over a century and requesting anonymity as he was not authorised to talk with journalists.

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USAID IN CUBA: CODE NAMES AND COUNTER SURVEILLANCE

TRACEY EATON | MAY 10, 2021

Original Article: USAID in Cuba

For decades now, the U.S. government has carried out democracy projects aimed at undermining Cuba’s socialist government. One deal that has always intrigued me was the $15.5 million, three-year contract awarded to Creative Associates International in October 2008. The fact that Creative Associates ran the program from a secret base in Costa Rica added to the allure.
In 2014, the Associated Press scooped everyone with revelations that Creative Associates had set up a secret Cuban Twitter. USAID protested the story. Still, the AP report triggered a flurry of interest and an Office of Inspector General investigation soon followed.
But ZunZuneo was only the tip of the iceberg, making up $1.7 million of the $5.3 million in projects that Creative Associates funded. A review of 22 Creative Associates reports from 2008 to 2012 provides fresh insight into the NGO’s sprawling program and illustrates its dogged efforts to recruit young people and members of Cuba’s counterculture.
“Travelers” and “consultants” from at least 10 different countries in the Americas and Europe took part in the program. Projects and people were identified by code. USAID sent in supplies using via diplomatic mail service, coordinating closely with the embassy staff.
Download the Creative Associates documents here. Some of the details I found interesting are below:

Continue Reading:  USAID in Cuba

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New Publication, CUBAN INTERNATIONAL RELATIONS AT 60

Reflections on Global Connections

Edited by Mervyn J. Bain and Chris Walker – Contributions by Mervyn J. Bain; Jeffrey DeLaurentis; H. Michael Erisman; Liliana Fernández Mollinedo; Adrian Hearn; Rafael Hernández; John M. Kirk; Peter Kornbluh; William LeoGrande; Robert L. Muse; Isaac Saney; Paolo Spadoni; Josefina Vidal and Chris Walker

Cuban International Relations at 60 brings together the perspectives of leading experts and the personal accounts of two ambassadors to examine Cuba’s global engagement and foreign policy since January 1959 by focusing on the island’s key international relationships and issues. Thisbook’s first section focuseson Havana’s complex relationship with Washington and its second section concentrates on Cuba’s other key relationships with consideration also being given to Cuba’s external trade and investment sectors and the possibility of the island becoming a future petro-power. Throughout this study due attention is given to the role of history and Cuban nationalism in the formation of the island’s unique foreign policy. This book’s examination and reflection on Cuba as an actor on the international arena for the 60 years of the revolutionary period highlights the multifaceted and complex reasons for the island’s global engagement. It concludes that Cuba’s global presence since January 1959 has been remarkable for a Caribbean island, is unparalleled, and is likely to continue for the foreseeable future. Scholars of international relations, Latin American studies, and political science n will find this book particularly interesting.

Lexington Books

Pages: 306 • Trim: 6 x 9

978-1-7936-3018-6 • Hardback • May 2021 • $110.00 • (£85.00)

978-1-7936-3019-3 • eBook • May 2021 • $45.00 • (£35.00) (coming soon)

Table of Contents

Introduction: Reflections on Cuba’s Global Connections (1959-2019)

Mervyn J. Bain and Chris Walker.

Part I: Cuban – U.S. Relations

Chapter 1 The Process of Rapprochement Between Cuba and the United States: Lessons Learnt. Remarks at the “The Cuban Revolution at 60” conference. Dalhousie University, Halifax, October 31, 2019.  Josefina Vidal

Chapter 2 US-Cuban Relations: Personal Reflections. Remarks by Ambassador (ret.) Jeffrey DeLaurentis. Saturday, November 2, 2019  Jeffrey DeLaurentis

Chapter 3 Coercive Diplomacy or Constructive Engagement: Sixty Years of US Policy Toward Cuba.  William LeoGrande

Chapter 4 The President has the Constitutional Power to Terminate the Embargo.  Robert L. Muse

Chapter 5 [Re]Searching for the ‘Havana Syndrome’.  Peter Kornbluh

Chapter 6 From Eisenhower to Trump: A Historical Summary of the US-Cuba Conflict (1959-2020).  Liliana Fernández Mollinedo

Part II: Cuba on the Global Stage

Chapter 7 Cuba is Africa, Africa is Cuba.  Isaac Saney

Chapter 8 Cuba-Canada Relations: Challenges and Prospects.  John Kirk

Chapter 9 Cuba-China Relations and the Construction of Socialism.  Adrian H. Hearn and Rafael Hernández

Chapter 10 Cuba-European Union Relations. A Complex and Multifaceted Relationship.  Liliana Fernández Mollinedo and Mervyn J. Bain

Chapter 11 Havana and Moscow; Now, the Future and the Shadow of the Past.  Mervyn J. Bain

Chapter 12 Havana and Caracas: Counter-Hegemonic Cooperation and the Battle for Sovereignty. Chris Walker

Chapter 13 Cuba’s Struggling External Sector: Internal Challenges and Outside Factors.  Paolo Spadoni

Chapter 14 Cuba as a Petropower? Foreign Relations Implications. H. Michael Erisman

Conclusions: Reflections on Cuba’s Global Connections.  Mervyn J. Bain and Chris Walker

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CINCO ASPECTOS PARA ENTENDER LA DEVALUACIÓN DEL PESO CUBANO

By Pavel Vidal, Profesor de la Universidad Javeriana Cali y ex analista del Banco Central de Cuba

Por ahora los errores que se aprecian en el ordenamiento parecen ubicarse dentro del margen esperado, dado el tamaño de la devaluación y las características propias que la corrección de precios relativos tiene en Cuba.

April 26, 2021

Hyperlink to Original Article: Devaluación del Peso Cubano

La devaluación de la tasa de cambio oficial del peso cubano a partir del primero de enero de 2021 es la medida crucial de la reforma monetaria. Ello permite avanzar en la unificación cambiaria, facilita la salida del peso convertible (CUC) de circulación y genera un cambio de precios relativos que promueve la transparencia financiera y reorienta los incentivos económicos a favor de decisiones más eficientes en las familias, las empresas y el gobierno. Estos efectos se potencian con el aumento de los salarios, la rebaja de subsidios y las nuevas reformas estructurales que comienzan a ponerse en práctica.

…………….

Para continuar: Devaluación

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MEANWHILE: ANOTHER MAJOR “DERRUMBE” IN OLD HAVANA, THIS TIME ALONG THE MALECÓN

Original Spanish Language Article

14ymedio, Juan Diego Rodríguez, Havana, 22 April 2021

At least one man was seriously injured on Thursday when two buildings completely collapsed and part of a third also fell on Havana’s Malecón. The buildings were semi-dilapidated, fenced with metal, uninhabited, and at the time of the collapse they were being demolished by construction workers.

The two buildings and the fragment of a third that collapsed are located on what is officially called Maceo Avenue between Águila and Crespo streets, very close to the Prado de La Habana. According to a nearby resident, “the workers demolishing them were using a jackhammer when what was left of the buildings fell down.”

“At least one man was seriously injured, because he was passing by on the sidewalk and the metal fence gave way with the pieces that fell. Half of his body was buried under the rubble and other people also suffered minor injuries,” detailed the neighbor, who also added: “It was a danger even for the cars passing on the street.”

“There wasn’t any good signage telling people not to pass by,” a neighbor told this newspaper, noting that “not only were the buildings collapsing, but there were electrical cables on the sidewalk and every time I passed by I had to step off the sidewalk, but this a street with fast-moving traffic and every time you step off the sidewalk your life is at stake.”

“Everything around here is grim, the day will come when we will see the entire Malecon collapse,” laments another neighbor. “They don’t fix things here, they just paint them when an important visitor is coming, or tear them down to build hotels,” he complained. “This demolition work should not have been done without closing the block.”

“The east building has just collapsed right now, right here in front of me,” a passerby reported through a live broadcast on the social network Facebook, and who also recorded the moment when the injured man was taken from the place in a vehicle heading to a hospital. “It fell on a man,” he explained in the video.

The images show a group of people trying to rescue the injured man from under the fragments of the building. “The debris reached to the other side of the street,” explained the internet user in a transmission of slightly longer than a minute.

The collapsed building is located in the municipality of Centro Habana, one of the most populated in the capital and which for decades has been an area characterized by the high presence of tenements, with infrastructure problems and overcrowding. Many of the buildings are from the early twentieth century and have not received repairs for more than fifty years, not even painting on their facades.

In the vicinity of the Malecon, the buildings have suffered especially the effects of the salt air which, together with the lack of maintenance, have turned the housing stock in the area into one of the most damaged in the Cuban capital. The successive programs launched by the Government have not resolved the increasingly frequent collapses.

It has been three years since the Government acknowledged a deficit of almost one million homes on the island, a very serious situation that it aspired to alleviate in a period of ten years. However, the shortage of materials due to a persistent crisis exacerbates a problem that continues to leave millions of people in suspense, not knowing when they might see their roof coming down.

According to a report from the Cuban Observatory for Human Rights last October, almost half of the homes in the country need repair, and 11% of families live in places at risk of collapse.

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

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

Mauricio Vicent, La Habana 

EL PAÍS,  22 ABR 2021 – 19:04 EDT

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

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

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

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

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

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

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

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

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

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

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

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

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

Marc Frank

Financial Times, April 19, 2021

Original Article: Cuba Exits Castro Era

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Brigadier-General Luis Alberto Rodríguez López-Callejas

President Miguel Diaz-Canel

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EFFICIENCY AND FREER MARKETS FOR CUBA

By Michael Wiggin*

HAVANA TIMES, April 14, 2021

Original Article: Efficiency and Freer Markets for Cuba

There is much to admire in Cuba in its commitment to principles of universal education, health care and equality.  Yet, something is not working well enough and these commitments cannot be adequately supported.  What jumps out is the potential benefits of a self-reorganizing of society made possible by free markets.

This observation became apparent when studying participatory democracy.  It does not seem fair to write off Cuba as non-democratic when certain aspects of Cuban governance involve high levels of engagement of citizens in the elections of representatives at the municipal level and indirect elections at provincial and national levels. 

In describing the activities of elected officials, much of their time seems preoccupied with the central administration of bakeries not working well, deterioration of buildings, lack of local services, line-ups at grocery stores etc. Topics that would rarely, if ever, attract the attention of elected officials in free market societies. 

If a bakery provides poor service, someone establishes another and provides better service.  A lack of local services becomes a recognized need and an opportunity for someone to set up a business to serve that need. 

Local contractors compete based on affordability and quality of service.  There should be no need to wait for the next council meeting in several months with follow-up another six months later.

A freer marketplace allows for timely improvements and creation of new services with little or no effort by government and greater overall efficiency.

I respect that it is not as simple as that.  A bakery unable to get flour is not able to bake bread.  A grocery cannot provide vegetables if they are rotting in the farmers’ field because of transportation problems or fuel shortage.  However, even these difficulties will generate needs that enterprising individuals can address and improve. 

Gradually, the improved efficiency in providing services and products will lead to an improvement in the overall economy.  This is already very evident through the expanding activities of innovative cuenta propistas (self employed).

It is therefore important to look at free markets as an important aspect of how people behave not as ideology – not as capitalism.  Free markets are possible in conjunction with Cuban societal commitments to fairness and equality. 

Keynes observed that while excessive inequality is undesirable, a little inequality is a driver for improvement, a way for people to do a little better. 

Accordingly, the objective should be to limit excessive inequality.  Successful societies apply progressive, but not punitive, income taxes and inheritance or wealth taxes. 

A continued stress on a commitment by individuals to a well-functioning fair society could allow Cuba to benefit from the efficiency of free markets and, at the same time, better support Cuban principles and objectives.

Raul Castro did say that he would move forward, carefully, but without pause.  He also said the Cuba has to learn, even from capitalists.

Unfortunately, it is during times of change that people get dissatisfied as the desire for change outstrips the rate of change.  I think that now is such a time and Cuba should open up more rapidly to free market philosophies without compromising Cuban commitments and principles.

*A Havana Times guest writer from Ottawa, Canada

Photographer, in front of the Capitolio, 2014

Paladar, 2014

Mobile food vender, 2014
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CUBA’S ECONOMIC WOES MAY FUEL AMERICA’S NEXT MIGRANT CRISIS

April 16, 2021

Author: William M. LeoGrande, Professor of Government, American University School of Public Affairs and senior fellow at the Washington Office on Latin America, a human rights advocacy group.

Original Article: Cuba’s Economic Woes May Fuel America’s Next Migrant Crisis

Not all of the migrants hoping to claim asylum in the United States are fleeing Central America’s violence-torn “Northern Triangle” of Guatemala, Honduras and El Salvador, contrary to popular perception.

Of the 71,021 asylum-seekers waiting in Mexico for their applications to be processed in the U.S. as of late February, 16% were Cuban, according to federal immigration data.

That makes Cubans the third-largest group of migrants, just ahead of Salvadorans, and after Guatemalans and Hondurans.

Why Cubans flee

The Cubans at America’s doorstep are mostly economic refugees. But since Cubans no longer have preferential status over other immigrants – as they did until former President Barack Obama stopped automatically admitting Cubans who made it to the U.S. – claiming asylum is now virtually their only hope of winning entry. G

Cubans who can afford it fly to South America or hire smugglers to take them to Mexico in “fast boats” before trekking north to the U.S. border. Those who can’t afford to pay smugglers try to cross the Florida Straits on rafts or small boats called “balsas” – a dangerous 90-mile ocean passage.

So far this year, the U.S. Coast Guard has picked up 180 Cuban “balseros” at sea trying to reach the U.S. The number is modest – but it’s already more than three times the Coast Guard rescues of Cubans made last year. Cubans intercepted at sea are returned to Cuba under the terms of a 1995 migration agreement.

The current uptick recalls the gradual increase in rafters rescued at sea in the spring of 1994, numbers that rose exponentially that summer, culminating in the “balsero” migration crisis.

Triggered by the collapse of the Soviet Union – communist Cuba’s main international partner at the time – the 1994 exodus saw 35,000 Cubans arrive in the U.S. in two months.

It was the United States’ third Cuban migration crisis. In 1965, some 5,000 Cubans embarked from the port of Camarioca in small boats, landing in south Florida. In 1980, the Mariel boat crisis brought 125,000 Cuban migrants to the U.S. in the so-called “freedom flotilla.”

These migration waves came when the Cuban economy was in crisis and standards of living were falling. All three occurred when Cubans had few avenues for legal migration. With legal routes foreclosed, pressure to leave built over time as the economy deteriorated, finally exploding in a mass exodus of desperate people.

After studying U.S.-Cuban relations for four decades, I believe the conditions that led to these migration crises are building once again.

Economy in free fall

Hit by the dual shocks of renewed U.S. economic sanctions during the Trump administration and the COVID-19 pandemic, the Cuban economy shrank 11% in 2020.

Former President Donald Trump cut off two major sources of Cuba’s foreign exchange revenue: people-to-people educational travel from the U.S., worth roughly US$500 million annually, according to my analysis of data from the Cuban National Office of Statistics, and $3.5 billion annually in cash remittances.

The pandemic hammered Cuba’s tourist industry, which suffered a 75% decline – a loss of roughly $2.5 billion.

These external shocks hit an economy already weakened by the decline in cheap oil from crisis-stricken Venezuela due to falling production there, forcing Cuba to spend more of its scarce foreign exchange currency on fuel. Since Cuba imports most of its food, the island nation has experienced a food crisis.

The result is the worst economic downturn since the 1990s.

Pent-up Cuban demand to emigrate

The 1994 Cuban migration crisis ended when former President Bill Clinton signed an accord with Cuba providing for safe and legal migration. The U.S. committed to providing at least 20,000 immigrant visas to Cubans annually to avoid future crises by creating a release valve.

President Trump replaced President Obama’s policy of normalizing U.S.-Cuban relations with one of “maximum pressure” aimed at collapsing the Cuban regime.

He downsized the U.S. embassy in Havana in 2017, allegedly in response to injuries to U.S. personnel serving there. And he suspended the Cuban Family Reunification Parole Program, which provided upwards of 20,000 immigrant visas annually to Cubans with close relatives in the U.S.

These measures drastically reduced the number of immigrant visas given, closing the safety valve Clinton negotiated in 1994. In 2020, just over 3,000 Cubans immigrants were admitted to the U.S.

Today, some 100,000 Cubans who have applied for the reunification program are still waiting in limbo for the program to resume.

A policy problem

The migration crisis brewing in Cuba has been largely overlooked while the Biden administration focuses on managing the rush of Central American asylum-seekers and caring for unaccompanied minors at the U.S.-Mexico border.

White House Press Secretary Jen Psaki recently said that Cuba policy is currently under review, but that it’s “not a top priority.”

U.S. officials could head off the migration crisis brewing in Cuba by making the changes to U.S.-Cuba relations Biden promised during his 2020 presidential campaign.

Restaffing the U.S. embassy in Havana would make it possible to resume compliance with Clinton’s 1994 migration agreement to grant at least 20,000 immigrant visas annually. That would give Cubans a safe and legal way to come to the U.S. and discourage them from risking their lives on the open seas or with human traffickers.

Lifting Trump’s economic sanctions would curtail the need to emigrate by reducing Cuba’s economic hardship, in part by enabling Cuban Americans to send money directly to their families there.

And reversing Trump’s restrictions on travel to the island would help revitalize the private Cuban restaurants and bed and breakfasts that rely on U.S. visitors.

All these measures would put money directly into the hands of the Cuban people, giving them hope for a better future in Cuba.

Balseros arranging Departure, Playas e Este, 1994
Playas del Este, 1994. Did this one make it?
Launching the balsa (rAFT)
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CUBAN COMMUNISTS UNDER PRESSURE TO ACCELERATE ECONOMIC REFORMS

Reuters, April 15, 2021

Marc Frank

Original Article: Pressure to Accelerate Economic Reforms

Retiring Cuban Communist Party leader Raul Castro promised a decade ago he would transform the Soviet-style command economy into a more mixed and market-driven one “without haste and without pause.”

Now, with the Caribbean country in crisis and even the most basic goods in short supply, the party is under pressure to act faster as it convenes this weekend for its eighth congress since the 1959 Revolution.

The April 16-19 congress comes as Cubans battle worsening shortages of basic goods, including food and medicine. An economic crisis has been exacerbated by a tightening of decades-old U.S. sanctions and the coronavirus pandemic.

“I hope that the congress will take a deep look at our internal problems, not to reiterate promises but to quickly solve them,” said Julian Valdes, a government accountant in Havana.

Most experts say reform has been undermined by vested bureaucratic interests and ideologues within the party. They will be reading the tea leaves as new leaders emerge in the all powerful politburo at the summit.

The congress will mark the end of the Castro era as the 89-year-old Raul Castro – the brother of late revolutionary leader Fidel – resigns as party secretary, the most powerful position in Cuba.

President Miguel Diaz-Canel is widely expected to replace him. “If President Miguel Diaz-Canel is given the post of party secretary, it would strengthen his ability to take decisions and it might augur well for more expansive reforms,” said Carlos Saladrigas, president of the Cuba Study Group, composed of Cuban-American business people in favor of engagement with their homeland.

“If, however, someone else is appointed, especially from the ‘old guard’, it would possibly indicate… continuing economic stagnation,” he added.

A long-time European investor in Cuba agreed, saying the government needed to push ahead with reforms to improve competitiveness, including further devaluation of the peso currency, liberalization of agriculture, and greater incorporation of small- and medium-sized companies into the economy.

The pace of that would be dictated by personnel changes announced at the congress, he said, requesting anonymity.

Diaz-Canel, 60, said at a meeting last week on agriculture that “everything that stimulates production, eliminates red tape and benefits producers is favorable.”  That captures the essence of reforms adopted by the party at its sixth congress in 2011 and again five years ago at the seventh congress, but which have stalled amid resistance from some party members and ideological infighting.

The party has previously pledged to regulate and tax, not administer state-owned businesses; allow markets more sway over the central planning system and agriculture; do more to attract foreign investment; and support private initiative.

PEOPLE DO NOT EAT PLANS

John Kirk, a Cuba expert at Dalhousie University in Nova Scotia, said there was much more to be done to free up the private sector, agriculture and foreign investment.

“The Cuban government has taken only baby steps in all of these areas, and needs to show greater initiative,” he said.

Over the last nine months, following four years of stagnation and in 2020 an 11% contraction of the economy, the government has made more forceful changes.

It has granted more autonomy to state businesses to earn and spend hard currency and loosened regulations on small private ones. It has also unified its two currencies and devalued the remaining peso, cut utility and other subsidies, and decentralized the pricing and sale of some farm products.

“People do not eat plans,” Prime Minister Manuel Marrero said this month, expressing the new sense of urgency.

That will be the underlying theme of the economic debate at the congress, according to Cuban economist Omar Everleny.

Everleny said Cubans understood U.S. sanctions and the pandemic were partly to blame for the hardships they faced, but also were tired of excuses and foot-dragging by authorities.

“The people demand more concrete actions and results from the party,” he said, using agriculture as an example.  “It is not enough to make an effort: there must be results. Thousands of measures have been taken in agriculture, but the results are not yet on the shelves of the average Cuban,” he said.

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