• 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."

BROOKINGS INSTITUTION, EVENT SUMMARY: TIME TO INVEST IN CUBA?

Anna Newby | June 5, 2015

A video of the event is available here.

 800px-11_Tribuna_antiimperialista_(3)

Cuba’s economic future is looking up if Havana undertakes additional reforms. Such was the overall—yet cautious—consensus at this week’s Brookings event titled “Rethinking Cuba: New opportunities for development,” hosted by the Brookings Institution’s Latin America Initiative. The conference brought together a high-level group of experts from Cuba, the United States and other countries to examine the prospects for Cuba’s economy in the context of the historic process of normalization launched on December 17, 2014.

Opening the event, Brookings Senior Fellow Ted Piccone called attention to the gradual but unprecedented progress taking place in Cuba today. Amid “dialogue and confidence-building” between Washington and Havana—including Cuba’s removal from the U.S. State Department’s list of states that sponsor terrorism, an essential step for the full normalization of diplomatic relations—public- and private-sector actors are entering uncharted waters. As the event’s many panelists went on to discuss, financing Cuba’s growth, fostering foreign investment, and engaging the island’s emerging private sector remain enigmas in many ways.

Offering the Obama administration’s perspective, Under Secretary of Commerce for International Trade Stefan Selig pointed to new commercial openings in Cuba, such as the operation of Airbnb in the country and the increasing availability of commercial flights. There is “no denying the speed of these developments,” Selig said, and there is “no denying the excitement.” But the process of normalizing relations, Selig emphasized, will be “evolutionary and deliberative.”

Juan Triana Cordoví of the University of Havana and Archibald Ritter of Carleton University underscored the cautious excitement about Cuba’s economic outlook. Recognizing that the Castro government is revising its fiscal and economic policies, surveys of foreign business leaders show expectations that the ease of doing business on the island will improve. Policy moves, in combination with big investments in infrastructure development, have prompted “an important transformation in the image of Cuba,” in Cordoví’s words. And as Ritter pointed out, despite Fidel Castro’s famous interest in making Cuba a “giant school for socialism,” it has actually become “a giant school for entrepreneurship,” with deficiencies in access to capital and information spurring remarkable creativity among Cubans.

On the issue of financing, Brookings Nonresident Fellow Richard Feinberg acknowledged that Cuba is still mired in a low investment, low growth trap—a disappointment, as all panelists agreed, given Cuba’s potential for growth. As Yaima Doimeadíos pointed out, the large Cuban diaspora has been and will continue to be an essential financer of new investments—particularly in tourism. But the fact that Cuba remains outside the Bretton Woods international financial institutions is a major obstacle, andHavana must decide when (not if) to join those institutions, according to Feinberg. Regardless, as Germán Ríos of the CAF Development Bank pointed out, it will take a while before normal financing will be available to Cuba, given financial restrictions on the island and shortcomings in the banking sector. In the short term, capacity-building projects, technical assistance, and efficiency gains will be key; in the longer term, public-private partnerships are a central goal. As Yaima Doimeadíos of the University of Havana pointed out, the reduction in the number of small-scale, state-managed enterprises amounts to an acknowledgement by the Cuban government that it is poorly-equipped for such tasks. One of the best ways for the Cuban economy to achieve productivity gains, she added, will be through efficiency gains—these are more likely to be discovered in the private sector.

Turning to the issue of self-employment—a relatively new sector on the island—speakers agreed that self-employed Cubans still face many constraints. The field remains strictly controlled, as Ted Henken of Baruch College noted, and hardly allows for much creativity: “self-employment in Cuba—in the official sense—isn’t really entrepreneurial, [rather] it’s medieval, survivalist.” Ownership of capital is unclear, as Rafael Betancourt of Havánada Consulting added, and the centralized approval process means long waits.

Nevertheless, Henken emphasized, there is an apparent directive from the top to make improvements, with Raúl Castro writing to his colleagues that “we all” need to work to end the stigmatization of private enterprise and self-employment in Cuba. He likely recognizes the major advantages to removing the country’s “auto-bloqueo” (self-imposed blockade, in Henken’s words) preventing the inflow of capital and knowledge, which the Obama administration has offered to help provide to Cuban entrepreneurs. Conveniently, self-employment fits within the socialist narrative of capital ownership by the workers.

Concluding the event, Piccone reiterated that in spite of the positive outlook for Cuba, changes on the island will be slow and incremental. Basic economic incentives still do not fully align with market-oriented structures, and technological hurdles to development—particularly internet access—remain high. Moreover, many of the most promising developments are at the microeconomic level and are not likely to have widespread effects. He added that U.S.-Cuba relations are only part of the story and that developments vis-à-vis China, Mexico, Venezuela, Brazil, and elsewhere could also prove consequential.

One audience member pointed out that the glaring weak link in Cuba’s economic picture is political, not economic, i.e., the government’s political will to modernize and integrate its economy. Cuban law technically prevents nationalization, requires compensation if a foreign asset is expropriated, and guarantees that profits can be repatriated. But foreign investors doubt the Castro government’s seriousness about enforcing those laws, given its history of hostility to foreign business.

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CUBA AFTER THE CASTROS: THE LIKELY SCENARIOS

JOSÉ AZEL, June 14, 2015 – The Wall Street Journal –

Original here:   http://www.wsj.com/articles/cuba-after-the-castros-the-likely-scenario-1434319520

RaulMiguelDiaz-CanelPresident Raul Castro and First Vice-President and Probable Successor  Miguel Díaz-Canel

 The 2008 succession from Fidel to Raúl Castro was efficient and effective. But the popular hallucination outside the island—in which Gen. Castro intervenes forcefully to end the communist era and inaugurates a democratic, market-oriented Cuba—is not going to be how the story ends.

Given Raúl’s age—84—there will be another succession in the near future. The critical question is not what economic reforms Raúl may introduce, but what follows him.

José Ramón Machado Ventura, second secretary of the Communist Party, is also 84 years old and Cuba watchers do not see him as the next leader. If Miguel Díaz-Canel, 55, the first vice president of Cuba, ascends to the presidency, he will most likely be a “civilian” figurehead for the generals to present to the international community.

Raúl was head of the armed forces for nearly 50 years and now, as head of the country, he has appointed his military officers and military family members to positions in government and industry. One possible scenario after he is gone would be a reversion to a military dictatorship such as Cuba under Batista, Brazil from 1964-85, or Egypt today. Yet another outcome, equally disquieting, is possible.

By some estimates, including the University of Miami’s Institute for Cuban and Cuban-American Studies, the Cuban Revolutionary Armed Forces controls over 70% of the economy. Enterprise Management Group (GAESA), the commercial holding company for the Cuban Defense Ministry, is involved in all key sectors of the economy. Through government-owned subsidies, the company is heavily involved in tourism, retail sales, mining, farming and energy, and joint ventures with foreign investors.

Raúl, as a matter of survival not ideology, has introduced some tentative economic reforms, while continuing to expand the metamorphosis of his officers into businessmen. Some might present this as a positive development, where warriors exchange their weapons for calculators. But what does it mean for the future of Cuba when the Raúl era comes to an end and military officers are in political and economic control?

In a system where enterprises are state-owned and managed, the military officers-turned-business executives will enjoy the privileges of an elite ruling class. Yet it will not take long for the military elite to realize that managing government-owned enterprises offers only limited benefits—owning the enterprises is a far more lucrative option.

Once the Castro brothers are no longer in the picture, the military oligarchy might decide to champion a far-reaching but phony reform—that is, a manipulated privatization of the industries under their managerial control. Not unlike the rigged privatizations in Russia in the 1990s, an illegitimate and corrupt privatization process would give birth to a new class of government-created oligarchs—instant capitalist millionaires, the new Cuban “captains of industry.”

The Cuban population might not view these ownership changes as particularly undesirable or nefarious, mistakenly viewing them as a positive transition toward free markets and prosperity. The international community would likely also acclaim the mutated generals as agents of change bringing market reforms to Cuba. In the United States, of course, the change in U.S.-Cuba policy introduced by President Obama would be declared a success.

Cuban Communism, to be sure, would come to an end, leaving in its wake generals, new captains of industry and assorted other nouveau riche in charge of country devoid of democratic culture. And like Russia after the collapse of the Soviet Union, Cuba’s economy would be riddled with monopolies and oligopolies whose owners would have the power to stifle any pro-competitive policies or international investors that might threaten their position.

It is often argued that the introduction of economic reforms, even without political reforms, will lead sequentially and inexorably to democracy. As in the case of China after Mao, this is not necessarily, or even probably, the case.

Without profound political reforms, putative economic changes conducted by Cuba’s military will only transfer wealth from the state to a ruling military and party elite. It will not lead to democracy or prosperity.

Mr. Azel is a senior scholar at the Institute for Cuban and Cuban-American Studies, University of Miami, and the author of “Mañana in Cuba” (AuthorHouse, 2010).

Fidel-and-raul-Castro- as múmias do CaribeFather Time:  Always At Work

 

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CUBA’S CHALLENGE: WHAT DID THE CUBAN REVOLUTION ACCOMPLISH AND WHERE CAN IT GO FROM HERE?

BY SAMUEL FARBER, June 10, 2015

Original Essay from “JACOBIN” Here:  Cuba’s Challenge

Samuel Farber was born and raised in Cuba. He is the author of Cuba Since the Revolution of 1959: A Critical Assessment.

When in the 1950s, along with many of my high school classmates, I became involved in the struggle against Cuban dictator Fulgencio Batista, one of our teachers remarked that we had no real reason to criticize the state of our country because so many other nations in the region — such as Bolivia and Haiti — were much worse off than us.

His description of Cuba’s comparative position was accurate, but incomplete. On the eve of the 1959 Revolution, Cuba had the fourth highest per capita income in Latin America, after Venezuela, Uruguay, and Argentina.

And although average per capita income is an insufficient, and sometimes misleading, indicator of general economic development, other indicators support his picture of the pre-revolutionary Cuban economy: in 1953, Cuba also ranked fourth in Latin America according to an average of twelve indexes covering such items as percentage of labor force employed in mining, manufacturing, and construction, percentage of literate persons, per capita electric power, newsprint, and caloric food consumption.

Yet, at that time the country’s economy was also suffering from stagnation and the pernicious effects of sugar monoculture, including substantial unemployment (partly caused by the short sugar cane season of three or four months). Most importantly, the national indexes of living standards hid dramatic differences between the urban (57 percent of the population in 1953) and rural areas (43 percent), especially between Havana (21 percent of Cuba’s total population) and the rest of the country. The Cuban countryside was plagued by malnutrition, widespread poverty, poor health, and lack of education.

For my teacher, it seems, the fact that other people were worse off made him more accepting of his own life circumstances. But he was the exception. To the extent that Cubans compared themselves with the people of other countries, they preferred to look up to the much higher standard of living of the United States rather than console themselves by looking down at the greater misery of their Latin American brethren.

As a 1956 report of the United States Bureau of Foreign Commerce put it: “the worker in Cuba . . . has wider horizons than most Latin American workers and expects more out of life in material amenities than many European workers . . . His goal is to reach a standard of living comparable with that of the American worker.”

This underlines the fundamental mistake of assuming instead of ascertaining that comparisons of economic performance have any meaning to the people who live in those economies. Taken to an extreme, this mistake leads to an “objectivist” analysis that stands outside history as it is actually lived by its actors and is likely, as in the case of my high school teacher, to result in a conservative commitment to the existing social order, as opposed to a questioning of, or opposition to, the existing social order and its ruling group.

For those who are affected by it, economic development has a meaning that goes beyond economic data and requires an understanding of popular aspirations and expectations, which are based in part on the existing material reality and in part on past history.

In terms of its material reality, the Cuba of the fifties was on the one hand characterized by uneven modernity, fairly advanced means of communication and transportation — especially the high circulation, by Latin American standards, of newspapers and magazines — and the rapid development of television and radio. On the other hand, there were abysmal living conditions in the Cuban countryside.

As far as its history, the Cuba of the 1950s was still living the effects of the frustrated revolution of 1933, a nationalist revolution against dictatorship with an important anti-imperialist component and the participation of an incipient labor movement, then under Communist leadership.

Although this revolution had achieved some significant reforms equivalent in the Cuban context to Franklin Roosevelt’s New Deal, it failed to achieve major structural changes in Cuban society, such as real national political and economic independence from US imperialism (beyond the abolition of the Platt Amendment in 1934) or any meaningful agrarian reform and diversification away from the one-crop sugar economy with all it implied in terms of economic instability, large-scale unemployment, and poverty.

These were the economic issues brandished by the Cuban opposition at that time to struggle for more or less radical reforms to the existing order, instead of pondering and celebrating Cuba’s comparative high rank among Latin American economies. Thus Eduardo Chibás, the leader of the reform Ortodoxo Party, of which Fidel Castro was a secondary leader, proposed in 1948 a series of modest reforms to improve the life of the Cuban rural population.

Five years later, after Batista’s coup against the constitutional government, Castro — in his “History Will Absolve Me” speech at his trial for his failed attack against one of Batista’s military installations — proposed a more radical series of measures, including giving property titles to peasants holding up to 165 acres of land, with compensation granted to landlords on the basis of the average income they would have received over a ten-year period. He also added new elements to his reform agenda, such as his radical plan for the employees of all large industrial, mercantile, or mining concerns, including sugar mills, to receive 30 percent of profits.

Fidel, 1956

Fidel and Rebels, 1956

After 1959

Immediately after the victory of January 1, 1959, in response to many Cubans’ pent-up expectations, Castro’s revolutionary government engaged in a vigorous policy of redistribution. There was an urban reform law to substantially reduce rents, a left-Keynesian policy of public works to combat unemployment, and a radical, albeit not a collectivist, agrarian reform law proclaimed in May 1959.

Then, in late 1960, in part in response to the hostility of US imperialism and in part based on the political inclinations of the revolutionary leaders, the large majority of both urban and rural property was nationalized by the Cuban state.

In April 1961, Castro declared Cuba to be “socialist,” and it became, in structural and institutional terms, a replica of the model in the Soviet Union and Eastern Europe. Although Cuba’s one-party state placed more emphasis on popular participation than its equivalents in the Eastern Bloc, its political control was before long just as absolute.

Like the supporters of the Cuban status quo before the revolution, the supporters of today’s Cuban system assert that it is economically superior to other countries, particularly in Latin America. In terms of GDP — which, as previously mentioned, is not by itself a reliable indicator of economic well-being, although the Cuban government relies on it in a modified form — Cuba has fared poorly in comparison with its neighbors.

Whereas in 1950 Cuba ranked tenth in per capita GDP among the forty-seven countries in Latin America and the Caribbean, almost sixty years later, in 2006, it ranked near the bottom of the list, only ahead of Haiti, Honduras, Nicaragua, Bolivia, El Salvador, and Paraguay. GDP has increased little since then with a 2 percent average rate of growth in the last five years.

The government’s supporters point to Cuba’s achievements in education and health (in particular, its low infant mortality) as conclusive evidence for its more progressive economic policies. And indeed Cuba has performed very well in the Human Development Index (HDI), which combines income, health, and education statistics.

But while this index does a good job of measuring critical aspects of well-being in the less developed capitalist countries, it does not adequately capture the shape of state-socialist economies such as Cuba. It does not quantify the hardships that people suffer in countries where the economic problems of underdevelopment intersect with those particular to Soviet-style societies.

Take income, for example. Unlike capitalist societies, in Cuba, access to many luxury or high-cost goods is often obtained by the ruling groups through extra-economic, in kind, political means, rather than through the expenditure of monetary income. Although this situation has become more complicated since Raúl Castro took office in 2006 and expanded private economic activity to cover approximately 25 percent of the labor force, obtaining high-end goods still depends to an important degree on political access.

One example is traveling abroad. For the majority of Cubans who don’t have sufficiently wealthy relatives overseas, it is political access to state-sponsored travel — for example, officially sanctioned attendance to political, economic, cultural, or academic conferences — rather than private income that remains the principal way to venture outside the island.

A similar situation exists in terms of Internet access. In Cuba — a country with one of the lowest levels of web availability in Latin America and the Caribbean — many people can connect to the Internet only at their workplace or school, but only for strictly work-related purposes. Otherwise, they run the serious risk of being reprimanded or even losing their ability to go online.

Privately, they can get on the Internet by paying rates unaffordable to average Cubans, and only at tourist hotels or at the centers sponsored by the state telephone monopoly. However, free access to the Internet is the norm for those who are well-situated in terms of political power or have connections to those who do.

Besides the issue of monetary income, the HDI ignores other factors that make living conditions in Cuba difficult. These include the irregular supply and quality of food, housing, toiletries, and birth control devices for women and men. The same applies to the poor state of roads, inter-urban bus and railway transport (premium transportation services exist but are costly and therefore out of the reach of most Cubans), and the delivery of basic necessities such as water, electricity, and garbage collection.

The HDI does not quantify the hardships of daily life associated with these inadequacies either — for example, the amount of time people have to spend going from place to place and standing in line to obtain a wide variety of goods. Economic indexes can also be deceptive insofar as they don’t take into account the maintenance and upkeep of systems that deliver key services.

Take water, for example. Viewed in one way, Cuba ranks well in that regard, with 95 percent of its population officially having access to drinking water. But serious water shortages are a normal condition of life in Cuba. This is partially due to seasonal droughts in certain regions, particularly in the eastern half of the island. But the most important cause of that shortage is the deteriorated infrastructure — broken pipes and numerous leaks — going back to well before the collapse of the Soviet bloc.

For these reasons, more than half of the water pumped by the country’s aqueducts is lost, especially in the Havana metropolitan area. This is much of the daily material reality Cubans face, and it shapes their aspirations and expectations.

Strong Thumbs, No Fingers

The Cuban government and its supporters claim that most of these economic problems are the result of the criminal economic blockade of the island imposed, for more than fifty years, by the United States and which remains mostly in force despite the resumption of diplomatic relations between the two countries.

There is no doubt that the embargo has been damaging, particularly in the early years of the revolution, as Cuba was forced to reorient most of its economic activity towards the Eastern Bloc. Repealing the 1996 Helms-Burton Act and ending the blockade would be a very welcome development for both principled and practical reasons. Such a move would also considerably increase economic activity in Cuba, most likely in the fields of tourism and, possibly, biotechnology and the production and export of certain types of agricultural commodities such as citrus.

However, the US blockade did not prevent Cuba from trading with industrialized capitalist countries in Asia and Europe, and particularly with Canada and Spain. The principal obstacle to Cuba’s economic relations with those non-US industrial capitalist countries was Cuba’s own lack of goods to sell and thus its lack of hard currency with which to pay for imports, whether capital or consumer goods. Nevertheless, Cuba received more than $6 billion in credits and loans from many of the industrialized capitalist countries until Cuba suspended the service of these debts several years before the collapse of the Soviet bloc.

More important than the damage caused by the US economic blockade is Cuba’s inadequate capital, as well as other problems typical of economically less developed countries — the export of commodities such as nickel and sugar amid unstable world prices — which in turn interact with the myriad economic shortcomings and contradictions of Soviet-style economies, including the failures of agriculture and the scarcity and poor quality of consumer goods.

In truth, Cuba’s achievements and failures resemble those of the Soviet Union, China, and Vietnam before these countries took the capitalist road, suggesting that systemic similarities are more significant than national idiosyncrasies and variations on the general Soviet model.

Konstantin Chernenko fidel castro cuba ussr Soviet Leonid BrezhnevFidel and Leonid

Cuba shares with the USSR what the political scientist Charles E. Lindblom called “strong thumbs, no fingers.” Having “strong thumbs” allows the government to mobilize large numbers of people to carry out homogeneous, routinized, and repetitive tasks that require little if any variation, initiative, or improvisation to adapt to specific conditions and unexpected circumstances at the local level — precisely the tasks that require subtle fingers rather than undiscriminating thumbs.

This explains how a Soviet-style government can organize a massive vaccination campaign, while at the same time its bureaucratic, centralized administration and lack of “nimble fingers” prevent it from acquiring the necessary precision for timely coordination of complicated production and distribution in all economic sectors — especially agriculture, among the least homogeneous and predictable areas of the economy.

Cuba’s deficiencies, particularly in the production of consumer goods, also stem to a large extent from its principal leaders’ ideological inclinations. While these leaders have clearly favored the production and delivery of certain collective goods like education and health care, they have tended to be indifferent if not hostile to goods normally consumed by individuals or families.

This is rooted in a deeply ascetic strain of some leftist traditions. The most prominent and consistently austere among the revolutionary leaders was Ernesto “Che” Guevara, who as minister of industry in the early days of the revolution shaped many aspects of the Cuban economy.

When serious shortages of consumer goods began to occur in Cuba in the early 1960s, Guevara spoke critically of the comforts that Cubans had surrounded themselves with in the cities, comforts which he attributed to the way of life to which imperialism had accustomed people, and not to a standard of living resulting from the relative economic development of the country and especially to the working class and popular struggles in the pre-revolutionary era.

Guevara argued that countries such as Cuba should invest completely in production for economic development, and that because Cuba was at war, the revolutionary government had to ensure peoples’ access to food, but that soap and similar goods were non-essential. It is clear however, that his hostility to consumer goods was by no means specific to a war economy.

As he put it in his private reflections shortly after he left the Cuban government in the mid-1960s, “in Cuba, a television set that does not work is a big problem but not in Vietnam where there is no television and they are building socialism.” He added that “the development of consciousness allows for the substitution of the secondary comforts which at a given moment had transformed themselves into part of the individual’s life, with the overall education of society allowing for the return to an earlier era that did not have this need.”

Later, after the failure of the grandiose plans for economic growth that Guevara and other revolutionary leaders articulated, these ascetic politics came to be shared by the entire Cuban government leadership. They were soon consecrated in the Cuban revolutionary ideology as hostility to the “consumer society” of the economically developed world, a view that was never part of the ideology of the pre-revolutionary Cuban left, Communist or otherwise.

It was therefore entirely fitting that during the Cuban economic cycles associated with the spirit and politics of Guevara, the emphasis was always on capital accumulation instead of increased consumption. This was the case, for example, with the Guevarist-type economic period of 1966–1970 (shortly after he left the Cuban government).

As the prominent Cuban economist Carmelo Mesa-Lago points out, at this time the national plan called for a sharp increase in national savings that was to be generated by a cut in consumption through the expansion of rationing, the export of products previously assigned for internal consumption, and the reduction of imports considered unnecessary.

Material incentives sharply decreased, and the population was exhorted to work harder, save more, and accept deprivation with revolutionary spirit. Accordingly, the share of state investment going to the sphere of production increased from 78.7% to 85.8% between 1965 and 1970. This was indeed a Cuban high point of what the Hungarian theorists Ferenc Fehér, Agnes Heller, and György Márkus have called the “dictatorship over needs.”

The Special Period

Until the collapse of the Soviet bloc, the Cuban government was able to deliver for the majority of its people an austere standard of living that, on the whole, guaranteed a minimum of economic security and the satisfaction of basic needs, in spite of serious deficiencies in areas such as housing and consumer goods.

Notwithstanding the serious problems and contradictions of a Soviet-style economy, this was made possible by the USSR’s massive economic subsidies, which helped the Cuban government finance a generous welfare state with an extensive education, health services, and social security system. These massive subsidies were the result of Cuba joining the Soviet state as its junior partner in an international alliance that did confront strategic obstacles in Latin America (because the USSR was reluctant to challenge the US in its own sphere of influence), but that ended up being much more viable and successful in Africa despite some tactical differences.

Although overall literacy was at 76.4% before the revolution, it was much lower in the countryside; the government has succeeded in almost entirely wiping out illiteracy. It has also expanded secondary and higher education, promoting a substantial degree of social mobility facilitated by the massive emigration from the island of its upper class and large segments of its middle classes.

The dramatic enlargement of the military also allowed for the rise into officialdom of many Cubans of humble origin. Black Cubans in particular benefited, with the elimination of the informal but substantial racial segregation that had existed in pre-revolutionary Cuba, especially in the area of employment.

Racism was by no means eliminated. The Cuban government, implicitly identifying racism only with its segregationist form, soon declared the problem solved, with policies of “affirmative action” not even considered, in a context where blacks were not allowed to organize independently to defend their interests.

In general, however, Cuba became a more egalitarian society, attaining in the mid-1980s a Gini coefficient of 0.24 (although this measure also suffers from the political access problems discussed above). It was this, along with the growth of a nationalist and anti-imperialist consciousness that ensured a large base of popular support for the government. At the same time, however, critical voices even inside the Castro administration were systematically suppressed, and political dissidents (as well as petty offenders — Cuba has one of the highest imprisonment rates for common crimes) were jailed in large numbers.

The collapse of the Soviet bloc provoked a massive economic crisis, reflected in the quick and sharp 35 percent GDP drop. Cubans went very hungry in the first half of the nineties, the worst years of the crisis, leading to serious nutritional deficiencies that provoked an outbreak of optical neuropathy in 1991 that affected more than fifty thousand people until it was partially controlled in 1993.

Services such as public transportation went into a tailspin, from which they have only partially recuperated. Inequality has grown significantly, particularly between those with and without access to the hard currency provided by remittances from abroad. Real wages in the public sector, which still accounts for at least 75 percent of the labor force, dropped precipitously, and as late as 2013 they had only reached 27 percent of 1989 levels.

The “Special Period” also had a noticeable impact on the health care system, reducing the gains achieved in the previous thirty years. There are shortages of medical supplies and of family doctors and specialists, who are often working abroad as a part of international programs.

Patients have to even bring their own bedding to the hospitals, and “gratuities” to medical personnel have become increasingly common. Teachers have fled the education field in search of higher wages in other sectors such as tourism; at one point the government even tried to replace those educators with television sets and quickly trained high school graduates, with predictably negative results.

The system of social security, which made great advances in the 1960s with universal coverage and the unification of the previously existing patchwork of pension and retirement plans, went into a sharp crisis as the peso-denominated pensions fell to a fraction of their previous purchasing power.

Most importantly, during the quarter century that has elapsed since the fall of the USSR, the support of the regime has fallen quite substantially, particularly among young people. This does not mean that they have begun to openly oppose the government. They are far more likely to look for individual ways to resolve these problems. They would rather leave the island than politically confront a government that despite having released most political prisoners and allowed for a significant degree of social liberalization (for example, in terms of religion and emigration) still maintains a one-party state and an apparatus of repression. (Although it typically employs close monitoring, harassment, and frequent short-term arrests of dissidents instead of the long prison terms that were the norm under Fidel Castro’s rule.)

The Critique from the Left

Supporters of the government, especially abroad, continue to defend the system as if nothing happened during the last twenty-five years, and keep pointing to poor countries such as Haiti — which were worse off than Cuba before the 1959 Revolution — as evidence of how better off Cuba is. But for the most part, the Cuban people are not comparing their standard of living to those of other less developed countries.

Older Cubans are much more likely to compare their current hardships with the greater security and predictability they experienced before the Special Period, and remember nostalgically the early 1980s when the opening of the farmers’ markets, after the mass exodus from the Port of Mariel in spring 1980, allowed Cubans to reach perhaps their highest living standards since the 1960s.

For many Cubans, and particularly for the disenchanted young who are keenly aware of contemporary cultural trends in fashion, music, and dance, the existence of a large Cuban-American community in South Florida has also become a major standard of comparison.

And the nascent critical left in Cuba — like the oppositionists of the 1940s and 1950s — does not celebrate, in the manner of the official Communist party press and foreign supporters, Cuba’s good performance in the HDI. Instead, it is trying to organize under extremely difficult conditions, on behalf of the political liberties necessary to defend the standard of living of the Cuban people and open up the possibility for a popular and democratically self-managed economy and polity.

sam-farberSamuel Farber

 

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MAKING SENSE OF TODAY’S CUBAN ECONOMY: PROMISES IN THE MAKING

Jose Gabilondo, The Huffington Post, 8 June 2015

Original Here: Making Sense of Today’s Cuban Economy

 The exact path remains uncertain, but Cuba’s economy is on the move. Bright-eyed capitalists have been thumping their tails since President Obama gave the nod last December to restoring diplomatic relations, but the island’s economic model was already in flux. In 2011, the Sixth Congress of the Communist Party outlined its own tropical perestroika in the Lineamientos, a forward-looking blend of goals, strategies, and values intended to adapt the island’s socialist project to the contemporary global order.

 As normalization looms, thought leaders like Brookings and the Bildner Center have been taking up economic questions about Cuba. For most of us, though, this topic remains a black box because the U.S. embargo — intendedly so — also blocks understanding the fascinating amalgam that is Cuba. A tiny loophole lets academics visit and study the island, so I have discussed its Central Bank, its quirky currencies, Cuban-American identity, recent reforms to its economy, and the impact of Cuban-Americans on U.S. policy towards the island.

 To promote wider understanding of this crucial moment in the Cuban economy, let me emphasize three important aspects: macroeconomic structure, microeconomic institutions and economic culture. This post looks at some of the island’s macroeconomic challenges, i.e., the big picture issues that frame the economy as a whole. The work of markets is done not at this level but, instead, mostly by microeconomic institutions like the price mechanism, more so in a capitalist than in a command economy. So later posts will take up that issue, as well as the question of culture since it is real people and not abstractions that bring an economy to life. I speak not in the neo-Plattist spirit of the Helms-Burton Act or with the unsetting hubris of ‘regime change’ advocates, but as a child of the island who wishes the very best for it and intends to make it my home one day.

 Rightsizing the state sector.

 Consistent with the liberalization mandates of the Lineamientos, Raul Castro has sustained a steady pace of incremental reforms to state structure, including laying off public workers and facilitating micro-entrepreneurship, but the state still doles out economic freedom by the thimbleful, be it to cuentapropistas or the Benetton store in Plaza Vieja.

 Front and center is the issue of whether and how the state will marketize the military-run conglomerates that control key sectors. More is needed to free up even the pinkie of the invisible hand, though I dread the horror of a Starbucks in the Parque Central.

 Unifying the Cuban peso.

A Cuban friend once quipped, “Cuba’s system is not socialism — it’s surrealism.” Nowhere is this more true than in its balkanized currency system. It has two official currencies — the “soft” national peso (CUP) and the “hard” currency pegged to foreign currencies (CUC) — neither of which trade off the island.

 And different exchange rates exist. Intra-governmental accounts use a fictional 1 CUP to 1 CUC ratio that leads to implicit subsidies and taxes and makes it hard to identify profit and loss centers. Elsewhere, legal and grey markets perform price discovery that result in a rate of 25 CUP to 1 CUC. In the end, the CUP will trump the CUC, but whether this will happen slowly or all at once remains to be seen.

 Clearing political risk.

 The U.S. has certified several thousand expropriation claims against the island and Cuba estimates the value of its claims against the U.S. for embargo losses to be over one trillion dollars. Until the two countries resolve these dueling claims, political uncertainty haunts the economy. Cuba has many bilateral investment treatments that give foreign investors the right to arbitrate investment disputes, but more expansive remedies against political risk might enhance investment.

 Creating infrastructure for financing the state.

 To make good on its substantial promise, the island would benefit from more multilateral, domestic, and foreign financing. Long overdue (what are we still waiting for?) is Cuba’s membership in the Bretton Woods institutions, e.g., the International Monetary Fund and the World Bank group. Their resources would help with currency reform and what is, in effect, the island’s voluntary structural adjustment program. Though foreign creditors seem to be increasing their willingness to lend, the island may want to mend fences with the Paris Club and its private creditors. Cuba’s financial system would benefit from an interbank funding mechanism and a local public debt market, but those pieces may have to wait.

 Boosting exports.

At present, Cuba imports much more than it exports, so increasing exports would give the island more foreign exchange and improve its terms of trade, something that is possible only after the embargo ends.

 Building a banking system.

 Havana may have some dual-currency ATMs, but it would behoove the island to have more robust banking networks that let Cubans and foreigners settle payments, save money, and borrow.

Building legal infrastructure.

Both the state and the non-state sectors in Cuba would benefit from a more developed legal system. Strictly speaking, this is neither a macro- nor micro- factor. It’s more of a meso-level issue of institutionality that bridges the two. No knee-jerk patriot, I do admire the way that U.S. legal system has built a federal judiciary with the independent power to block both executive overreaching and mob mentalities doing business as ‘democracy’. A robust tradition of judicial review could really help the long-term interest of the Cuban economy.

Because it is the land that neoliberalism and its spawn the Washington Consensus forgot, the island is a real-world laboratory for testing economic theory, especially efforts to modify capitalism and socialism by learning from recent history. Here I’ve sketched some macroeconomic issues only in a very impressionistic way. If you’re interested, consider attending the Association for the Study of the Cuban Economy’s annual conference in Miami. It’s a welcoming place where folks expound, challenge, and build out ways of thinking about these issues.

 

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SHOULD CUBA REMAIN A ONE-PARTY STATE?

By Samuel Farber

Original here: One-Party State?

HAVANA TIMES — In Cuba the one-party state is a very controversial question that few of the left-wing critics of the Cuban regime have been willing to address. What follows is an attempt to explore, from the left, some of the issues around this topic.

In the first place, the abolition of the Cuban one-party state is one thing, separate and apart from the political system that would replace it, whether without or with many political parties. In reality the Cuban Communist Party (PCC, its Spanish acronym) is not a party – which would imply the existence of other parties – but the organ that monopolizes the political, social and economic life of Cuban society. This monopoly – explicitly sanctioned by the Cuban Constitution – is based, among other authoritarian mechanisms, on the control of Cuban society through the so-called mass organizations that function as transmission belts for the decisions taken by the PCC. For example, the CTC, the official trade union central, is the transmission belt that allows the Cuban state to maintain its monopoly of the organization of Cuban workers. Many left critics of the Cuban regime will agree that workers (and all other Cubans) should have the right to organize themselves independently of the PCC to struggle for their own interests. Taking this notion to its logical conclusion would imply the abolition of the one-party state system, including its control of the mass organizations that function as the transmission belts for the Cuban Communist Party.

Cuba’s dominant system is going through a transformation – likely to accelerate after the historic leaders of the revolution pass away – towards the Sino-Vietnamese model of state capitalism under the direction of the PCC, which means that the need to abolish the one party state system with its transmission belts will remain in effect.

The function of political parties

The modern political parties came into being in the nineteenth century as suffrage expanded. As sections of the ruling class felt increasingly threatened, they organized themselves politically to defend their class interests, typically in conservative, liberal and, sometimes, Christian parties. There have been times when a ruling party represented one whole social class, as was the case of the Tory party in the U.K. in various historical periods. More frequently, however, different parties have represented different sectors of the ruling class. Liberals and conservatives not only represented material conflicts within the ruling classes, as for example the interests of the great landlords against those of the new industrial capitalists, but also ideological conflicts of pre-capitalist origin concerning the power and role of the Catholic Church in society.

Aside from representing different sectors of the ruling classes, these parties also incorporated intermediate sectors of society, such as independent professionals and small businesspeople, and tried to coopt popular expectations and struggles in a manner that would not threaten the fundamental interests of the powerful. In many occasions, the so called middle classes and strata also organized their own political parties especially in parliamentary systems with proportional representation (which historically propitiated the creation of numerous parties.) In Cuban political history, we have the case of the Ortodoxo Party founded by Eduardo Chibás, a party principally based on the middle classes but with a growing multi class support. But the fact that this party implicitly or explicitly accepted Cuban capitalism does not mean that it was an expression or had an organic relationship with the ruling classes.

That means that, historically speaking, the relationship between class and party has not been unequivocal: the ruling class has usually not been a monolith and has generally not been represented by a single party. This has also been certainly the case with the working class, the representation of which has been assumed by such diverse parties as social democrats, communists and social Christians. In the case of the classical social democracy that represented the working class through its close links with the unions, its growing conservative tendencies were not merely ideological but also represented the growth of a union bureaucracy, which based on the power that the unions had acquired, had the possibility of extracting sometimes significant concessions from the ruling classes. These concessions helped to demobilize the workers and solidified a bureaucracy more concerned with protecting its huge investments in the union infrastructure than in risking everything in pursuit of a revolutionary break (like in the Europe of the first postwar period) or in resisting imperialist war making (1914). This was the history of the very powerful and supposedly revolutionary Marxist German Social Democracy, whose bureaucratic-oligarchic model was portrayed by the Italian-German sociologist Roberto Michels in his classic Political Parties.

With respect to the Russian Bolshevik party: although Stalinists as well as Cold War apologists in the Western world held on to the myth that there was no difference between the Bolshevik and Stalinist parties, numerous historians (Stephen Cohen, Alexander Rabinowitch and William Rosenberg among others) have demonstrated that before undergoing the process of bureaucratic degeneration that began with the Civil War that took place from 1918 to 1920, this revolutionary party was in reality quite pluralist and democratic. Among many examples, I can cite the fact that although Bolshevik leaders such as Kamenev and Zinoviev opposed the October Revolution, they continued to be important party leaders after the revolution, and that although Bukharin publicly adopted and agitated for a political line radically opposed to Lenin’s regarding the peace of Brest-Litovsk in 1918, he remained as party leader for many years afterwards. Far from the “monolithic unity” defended by the Castro brothers, the Bolsheviks were characterized not only for the plurality of political positions, but also for a chronic tendency to factionalism that generally did not become an obstacle to “unity in action.”

It is for all these reasons that almost 80 years ago Leon Trotsky in The Revolution Betrayed harshly criticized the Stalinist theory about political parties and social classes that tried to justify the one-party state:

  congreso-machado-fidel-y-raul

 First Vice President Juan Machado Ventura, ex-President Fidel Castro and President Raul Castro at the last Communist Party Congress in April 2011: No end in sight for the CPP – for little while at least.

In reality classes are heterogeneous; they are torn by inner antagonisms, and arrive at the solution of common problems no otherwise than through an inner struggle of tendencies, groups, and parties. It is possible, with certain qualifications, to concede that “a party is part of a class.” But since a class has many “parts” – some look forward and some back – one and the same class may create several parties. For the same reason one party may rest upon parts of different classes. An example of only party corresponding to one class is not to be found on the whole course of political history – provided, of course, you do not take the police appearance for the reality.

With respect to the multi party systems of capitalist societies: there is no doubt that political democracy has seriously deteriorated throughout the world. Political parties are increasingly devoid of content and subject to the demands of the shallowest kinds of political marketing, a process that has been aggravated by the huge costs of political media campaigns, particularly in the U.S., which in turn has closed the access to the big media for nascent movements and candidates who oppose the existing system. Also, parliamentary bodies have been declining, and many of their powers have been taken over by the executive branches, which unscrupulously use the doctrine of state secrets to protect their newly assumed prerogatives. As a result, political apathy, ignorance, and abstention have become prominent features of capitalist democracy. While this is fatal to any notion of democracy built on the participation and control of an active and informed citizenry, is has certainly been convenient and highly functional to a capitalist system that structurally privileges private and corporate economic power at the expense of public regulation and democratic control from below.

After the One-Party State

But let’s suppose that Cuba’s one-party state will be abolished. Whether we want it or not, new parties will develop once repression and the legal and constitutional obstacles against independent party organizations have ceased to exist. Shall we demand then that those new parties are suppressed, or instead of that, shall we engage wholeheartedly in the propaganda and political and ideological agitation against the inevitable neoliberal and reactionary wave that generally has succeeded bureaucratic Communism throughout the world? Those are the circumstances, when we could struggle, for example, for a new Constitutional Convention to publicly debate the critical question of the kind of society that should replace bureaucratic Communism, debates that should include, of course, our arguments in favor of the construction of a socialism based on democracy and liberty. This debate would also be a strategy to prevent the immediate recourse to electoral campaigns and their marketing focused not on political programs but on individuals, many of who are going to be financed, among others, by the rich Cuban-Americans in Miami. To confront this plutocratic possibility, we could, for example, campaign for the exclusively public financing of all electoral activity, including free access to the mass media and distribution of public funds according to the popular backing for each political group.

But let us assume the optimal case – unfortunately very unlikely under the current circumstances – of a broad mass movement replacing the bureaucratic one-party system with a revolutionary and democratic socialism based on the fullest liberties and on worker, peasant and popular self-management. In that case, what would be the meaning of the unity that many Cubans have wished for? To the extent that there are common interests – material as well as ideological and political – we should aim for a unity based on joint political activities and negotiations to form alliances based on shared political interests and principles. But this need not be the “monolithic unity” propagated by Raul Castro and other revolutionary leaders, which has meant censorship and the suppression of different point of view even within the ranks of the revolutionary government. As Rosa Luxemburg put it, freedom is for those who think differently. It is mistaken and dangerous to assume that there will not be important conflict of interests as well as of points of view among the popular classes under a revolutionary and democratic socialism.

There is no reason to think that class conflict exhausts all possible social conflicts, including those based on strictly material questions. For example, one fundamental questions for any society, be it socialist or capitalist, is the rate of accumulation, or in other words, what part of economic production is to be immediately consumed and what part is to be saved to insure the reproduction of society and the improvement of the standard of living. In capitalism this is decided through the decisions of the ruling class within the framework of the market economy that favors and consolidates its power. Under socialism, this decision would affect every social group because it would determine the resources to be available resources for each work and community center. It is to be expected that differences over this question will develop between, for example, those who want to enjoy a better standard of living today and those who are more concerned with the standard of living of future generations. In that case, how would those differences and conflicts be organized into coherent and systematic alternatives so they are decided democratically? That would be the critical function of parties under socialism, educating and agitating in favor of alternative visions of the road that society can or should take.

It is well known that political parties, like many other types of organizations, have shown pronounced bureaucratic and oligarchic tendencies. But there are measures that can be adopted to compensate and fight those tendencies, such as combating the apathy and abstention among the rank and file through democratic debate and the continual practice of real power. An active, informed and involved membership in the affairs of their parties and society is the best guarantee against bureaucratization. There are also organizational measures that can reinforce that participation and control from below, such as mechanisms that assure its local and national democratic control of union and party functionaries, and the maximum transparency with respect to party policies and its internal functioning, aside from its right to remove any leader through party and union referenda. (There are people who have advocated a ban on reelection for union and party leaders. Although this proposal is worth discussing, I believe that it would be counterproductive and possibly undemocratic and in any case would not prevent manipulation on the part of the leaders that have been officially removed.)

I hope that this discussion on the one-party state continues. The topic is too important to ignore it; it is one of the kernels of the thoroughly undemocratic system ruling in Cuba.
—–

*Samuel Farber was born and raised in Cuba and immigrated to the United States before the 1959 Cuban Revolution. He has written many books and articles about Cuba including Cuba Since the Revolution of 1959. A Critical Assessment published by Haymarket Books in 2011

Cuba 1

The Party in Action in the National Assembly

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ECONOMISTAS CUBANOS Y DE EEUU DEBATEN EN WASHINGTON SOBRE EL LIBRE MERCADO

Original here: ECONOMISTAS CUBANOS Y DE EEUU DEBATEN

JAIRO MEJIA/EFE

WASHINGTON  3 de Junio de 2015

Conference Program: Rethinking Cuba, New opportunities for Development

12166748-cartoon-like-drawings-of-flags-showing-friendship-between-Cuba-and-USA-Stock-PhotoEl centro de estudios Brookings Institution acogió el martes en Washington un inédito encuentro de economistas cubanos y expertos estadounidenses para analizar los efectos del progresivo e histórico camino en la isla hacia el libre mercado, en paralelo a la normalización de relaciones con EEUU.

En una muestra más de los nuevos tiempos tras el anuncio de normalización de relaciones entre Cuba y Estados Unidos del pasado 17 de diciembre, profesores de la Universidad de la Habana presentaron ante los “cocineros de ideas” de Washington los pasos del castrismo hacia una economía menos regulada.

El subsecretario de Comercio Internacional, Stefan Selig, reconoció que desde la llegada de Raúl Castro al poder Cuba ha realizado reformas para abrir su economía, aunque persisten “profundos desafíos estructurales” para salir del anacronismo.

En su opinión, “Cuba ha estado anclada en el pasado”, algo que no ha permitido a la isla caribeña avanzar del mismo modo que lo hicieron economías que abrieron sus mercados como Chile, Colombia, México o Perú.

“El nuevo rumbo (en Cuba) significará poner el reloj de nuevo en marcha…No nos hacemos ilusiones, sabemos que tomará tiempo y que habrá obstáculos en el camino”, aseguró Selig.

El profesor de Economía de la Universidad de la Habana, Juan Triana, aseguró que, desde la llegada de Raúl Castro, Cuba ha abordado importante reformas, como atestigua el aumento del número de paladares (restaurantes) y alojamientos en el país, que han creado un semillero de pequeños empresarios.

Triana señaló que, desde que comenzó el año, la llegada de turistas norteamericanos ha experimentado un importante aumento, una señal de que las medidas para rebajar las barreras a desplazamientos y transacciones financieras con Cuba adoptadas recientemente por la Casa Blanca han tenido un efecto inmediato.

Pese a los avances en el camino hacia la normalización, que podrían culminar en breve con un anuncio sobre la apertura de embajadas, el levantamiento total del embargo estadounidense a la isla será “largo y tortuoso”, a juicio de Triana.

Por su parte, el economista Archibald Ritter, investigador de la universidad canadiense Carleton, dijo que Cuba debe crear una estrategia de manejo de la inversión extranjera que evite una “walmartización” (término derivado de la cadena de supermercados Walmart, que se refiere a grandes empresas que comen terreno a las pymes) de la economía que acabe con los pequeños empresarios.

Según Ritter, “Raúl Castro es cauteloso y pragmático” en lo que se refiere a las reformas necesarias para que la economía cubana pueda seguir el camino de crecimiento, al tiempo que se abre tras más de un siglo de enemistad con su vecino y primera economía mundial.

Richard Feinberg, investigador de la Universidad de California y experto en Cuba, recordó que el Gobierno castrista sigue manteniendo un férreo control de la economía a través de empresas estatales que no permiten un sector privado sostenible.

La profesora del Centro de Estudios Económicos de la Universidad de la Habana Saira Pons consideró que Cuba necesita dar más libertad a las empresas estatales y crear un marco de relación más acorde con la economía moderna. No obstante, Pons recordó que el gasto social es todavía algo prioritario en Cuba y difícil de recortar. El 20% del producto interior bruto (PIB) cubano se destina a financiar sanidad y educación gratuita.

Yaima Doimeadios, también procedente de la Universidad de la Habana, indicó que una sistema socialista no está dispuesto a rebajar los logros sociales obtenidos, y eso será definitorio en el futuro económico cubano.

Tras más de dos décadas sin el soporte financiero soviético, Cuba se ha visto obligada a dar tímidos pasos hacia una economía más liberalizada, pero la falta de productividad, lastrada por pobres infraestructuras y empresas ineficientes, ha impedido progresos.

“Los ganadores han sido, hasta ahora, los que han producido menos y han sido menos ineficientes”, según apuntó Doimeadios, quien dijo que con la mayor apertura y el posible fin del bloqueo estadounidense persistirán dudas sobre cómo equilibrar crecimiento, estabilidad fiscal y una nueva mentalidad en el país. EFE

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WASHINGTON REMOVES CUBA FROM US LIST OF TERRORISM SPONSORS

29 May 2015 – AP – ANDREA RODRIGUEZ AND MATTHEW LEE

Original here: http://hosted.ap.org/dynamic/stories/UNITED_STATES_CUBA?S

HAVANA (AP) — The Obama administration formally removed Cuba from the U.S. terrorism blacklist Friday, a decision hailed in Cuba as the healing of a decades-old wound and an important step toward normalizing relations between the Cold War foes.

Secretary of State John Kerry signed off on rescinding Cuba’s “state sponsor of terrorism” designation exactly 45 days after the Obama administration informed Congress of its intent to do so on April 14. Lawmakers had that amount of time to weigh in and try to block the move, but did not do so.

“The 45-day congressional pre-notification period has expired, and the secretary of state has made the final decision to rescind Cuba’s designation as a state sponsor of terrorism, effective today, May 29, 2015,” the State Department said in a statement.

“While the United States has significant concerns and disagreements with a wide range of Cuba’s policies and actions, these fall outside the criteria relevant to the rescission of a state sponsor of terrorism designation,” the statement said.

The step comes as officials from the two countries continue to hash out details for restoring full diplomatic relations, including opening embassies in Washington and Havana and returning ambassadors to the two countries for the first time since the U.S. severed diplomatic relations with the island in January 1961. The removal of Cuba from the terrorism list had been a key Cuban demand.

The Cold War-era designation was levied mainly for Cuba’s support of leftist guerrillas around the world and isolated the communist island from much of the world financial system because banks fear repercussions from doing business with designated countries. Even Cuba’s Interests Section in Washington lost its bank in the United States, forcing it to deal in cash until it found a new banker this month.

Banks continue to take a cautious tone about doing business with Cuba since U.S. laws still make the island off limits for U.S. businesses. Leaders of the Republicans-controlled House have shown zero interest in repealing the laws from the 1990s that codified the U.S. embargo on trade with Cuba.

“Taking Cuba off the terrorism list is one step toward normalization, but for doing business down there, we have a long way to go,” said Rob Rowe, vice president and associate chief council at the American Bankers Association.

In a blog post, the White House called the decision on the terrorism list another step toward improving relations with Cuba.

“For 55 years, we tried using isolation to bring about change in Cuba,” it said. “But by isolating Cuba from the United States, we isolated the United States from the Cuban people and, increasingly, the rest of the world.”

The terrorism list was a particularly charged issue for Cuba because of the U.S. history of supporting exile groups responsible for attacks on the island, including the 1976 bombing of a Cuban passenger flight from Barbados that killed 73 people aboard. The attack was linked to Cuban exiles with ties to U.S.-backed anti-Castro groups and both men accused of masterminding the crime took shelter in Florida, where one, Luis Posada Carriles, currently lives.

“I think this could be a positive act that adds to hope and understanding and can help the negotiations between Cuba and the United States,” said director Juan Carlos Cremata, who lost his father in the 1976 bombing.

“It’s a list we never should have been on,” said Ileana Alfonso, who also lost her father in the attack.

Top U.S. Republicans criticized the move, with House Speaker John Boehner of Ohio saying the Obama administration had “handed the Castro regime a significant political win in return for nothing.”

“The communist dictatorship has offered no assurances it will address its long record of repression and human rights at home,” Boehner said in a statement.

Former Florida Gov. Jeb Bush said the decision was a mistake and called it “further evidence that President Obama seems more interested in capitulating to our adversaries than in confronting them.”

House Minority Leader Nancy Pelosi, a California Democrat, praised the move, saying it is a “critical step forward in creating new opportunities for American businesses and entrepreneurs, and in strengthening family ties.”

U.S. and Cuban officials have said the two sides are close to resolving the final issues needed for restoring diplomatic relations, but the most recent round of talks ended May 22 with no announcement of an agreement.

White House press secretary Josh Earnest said Friday that “there continue to be issues that need to be worked out.” He said important progress had been made, but would not give a time frame for an announcement. “That’s obviously among the next milestones,” he said.

Washington and Havana are wrangling over U.S. demands that its diplomats be able to travel throughout Cuba and meet with dissidents without restrictions. The Cubans are wary of activity they see as destabilizing to their government.

Both the U.S. and Cuba say reopening embassies would be a first step in a larger process of normalizing relations. That effort would still have to tackle bigger questions such as the trade embargo as well as the future of the U.S. military base at Guantanamo Bay and Cuba’s democracy record.

RENOVATION AND REPAIR Cuba Mar 2014 002 United_States_Capitol_building_under_renovation_November_2014_photo_D_Ramey_Logan

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ANALYSIS: CUBA POLL — HANDLE WITH CARE

 Original Here: Kunzman on Cuba Poll

By Marcel Kunzmann

from Cuba Feute via The Cuba Standard

Bendixen-normalizationThe vast majority of Cubans welcome the current rapprochement with the United States and are optimistic about their future, according to a recent survey conducted in March on the island. On behalf of The Washington Post, Miami-based public opinion research firm Bendixen & Amandi International surveyed 1,200 Cubans on a wide variety of topics.

The survey produced a unique mosaic of opinions from the country. However, the results have to be looked at carefully.

Cuba – a difficult place for public opinion researchers

Opinion surveys are nothing new to most Cubans. The government has been using the methods of empirical social research for decades, to gather the mood of the population and identify specific problems to adapt their policies. For public researchers from other countries, however, Cuba is a tough environment. Government institutions are extremely suspicious of foreigners walking from door to door with questionnaires. In the case of Bendixen & Amandi, this made the hidden recruitment of Cuban interviewers obligatory.

“About three or four days into it, we got word that three of our interviewers had been detained,” said Fernand Amandi, who headed the Cuba poll. Still, the team managed to finish all interviews as scheduled between March 17-27. Although other public opinion institutes conduct Cuba polls on a more or less regularly base, the recent Bendixen poll stands out in the context of the diplomatic thaw between Cuba and the United States, and shines with its broad extent of aspects. Cuba pollsters from the exterior rarely manage to conduct 1,000 Interviews with such a wide variety of topics, so it is not surprising that international media gave broad coverage to the poll.

A closer look at the results is definitely useful.

Prevailing optimism and the desire for prosperity

First of all, it is striking that most Cubans draw a bright picture of their future. Seventy-two percent of respondents considered themselves optimistic about their own and their family’s future. Fifty-five percent assume that their wishes will become reality within the next five years. Asked about what they desire, 64% said they want to travel to another country, while 37% want to open their own business, followed closely by 34% who want to buy a car — multiple responses were possible here.

On the question, “In your opinion, what do the people of Cuba need the most at this time?”, 24% demand an open political system, while exactly as many want an improved quality of life. Far ahead in first place was, however, an improved economy, which 48% said Cubans need most. Only 19% claimed to be satisfied with their current economic system, which underlines the predominant perception of economic struggles.

The political system of Cuba — a bit of context

At least 39% of Cubans stated to be satisfied with their political system, while 34% said they weren’t satisfied at all with politics in their country. For 49% of those, the reason was a lack of freedom, while in second place 26% named the lack of economic development. Nineteen percent, however, stated the abstract slogan “We need change” as reason for their political discontent.

In a wider Latin American context, the political system of Cuba doesn’t perform as badly as these numbers suggest on first sight. According to recent Gallup polls, only 34% of Latin Americans trust their respective parliaments. In Peru, only 25% of the interviewees said they trust their government, while only 28% of Peruvians are satisfied with the state of democracy in their country. To give some other examples: In Colombia, 39% are satisfied with their democracy, in Argentina and Brazil 49%, and in Ecuador 56%.

Cubans rated their social system above-average, although the approval turned out slightly worse than in previous polls. Today, 68% of Cubans are satisfied with their healthcare system. This coincides with a 2007 Gallup poll, where 75% of Cubans said they trust their healthcare system — in contrast to 57% in the rest of Latin America. With 72% satisfaction, the Cuban education system was rated slightly better than healthcare. In 2007, Cuba already performed well with a 78% satisfaction in contrast to a 59% Latin American average. At that time, only a meager half of Latin Americans stated that education is accessible for all in their country, while 98% of Cubans affirmed this for their island.

Russia still more popular than the United States

Asked about their stance towards other countries, Bolivia, Ecuador and Venezuela were rated highly positive; more than 90% of respondents considered these countries a “friend of Cuba”. The United States ended up with 53%, far behind Russia (71%), although still ahead of North Korea (43%).

An overwhelming majority of Cubans (97%) share the opinion that diplomatic normalization with the United States is good for their country. Sixty-four percent expect economic changes, while 37% are expecting changes in the political sphere. Although 52% of respondents would like a multi-party system for Cuba, only 19% expect that this will be realized.

Not surprisingly, 96% of Cubans oppose the U.S. embargo against the island, but 83% would appreciate Raúl Castro visiting the United States. Their views of the United States also emphasize the economic priorities of many Cubans: Asked what they expect from the Cuba-U.S. thaw, 43% would like to have U.S. supermarkets, which places consumption on the first place in their wish list, followed closely by apartment buildings (41%), pharmacies (40%) and cars (35%). Meanwhile, most Cubans seem not to fear the side effects of a tourist boom, with 96% claiming that tourism would benefit their country.

Cubans favor Raúl Castro over his brother Fidel

Asked about the popularity of personalities, Pope Francis and Barack Obama seem to be the most popular international leaders in Cuba. Eighty percent of respondents had a positive opinion of them. Naturally, this wasn’t the case when it comes to their own head of government: Only 47% of Cubans have a positive opinion about Raúl Castro, giving him the same approval rating that Obama currently holds among Americans. However, Raúl is slightly more popular than his brother Fidel, who received a 44% approval rating. In a Latin American perspective, Raúl Castro actually enjoys the same approval rating as Rafael Correa in Ecuador (45.5%), but is far more popular than his close Venezuelan ally Nicolás Maduro who currently has to deal with a lowly 25%. Maduro is faring much better among Cubans, enjoying a solid 62% approval.

It’s also interesting to put a closer look at the demographic composition of these results. While in the group of 18-49 year olds 75% view their future optimistic, only 68% of those 50 years and older share this attitude. Even more striking is the obvious racial gap. Seventy-seven percent of the self-described white population are optimistic of their future, in contrast to only 57% of Afro Cubans. Nevertheless, support for the political and economic system of the island is above average within the black population.

Approval of the single-party system in Cuba is highly age dependent: While 59% of 18-49 year olds wish to have a choice of parties, only 37% of those 50 and older, and 27% of Cubans older than 65 do so. On the other hand, only 27% of 18-34 year olds hold a positive attitude towards the ruling Communist Party, while 44% of the 50-64 year olds do.

The same is true for the popularity of Raúl Castro, although the age gap is much smaller here. Only 43% of the 18-34 year olds have a positive opinion of their president, while Castro is enjoying the support of the majority (55%) of Cubans older than 65 years. The situation is similar for Fidel Castro, who enjoys the highest backing in the group of 50-64 year olds (51%), while only 40% of white Cubans but 51% of Afro Cubans have a positive opinion about their ex-president.

Also, there is a noticeable regional spread: While Raúl Castro enjoys his highest approval (57%) in central Cuban provinces, Fidel Castro is quite more popular in western Cuba and Havana, where 58% do have a positive opinion of the historic leader of the Revolution. Obviously, their origin doesn’t play a role, since both Castros were raised in eastern Cuba, where their popularity is lowest.

How representative is the composition of the poll?

Speaking about demographics, some methodical weaknesses of the poll are obvious. Asked by Cuba heute, the Washington Post stated that “researchers did compare the demographic makeup of respondents to the overall population on sex, region and race, and found they were very close to government estimates”, but “the sample was somewhat younger than the overall population.” Although one can approve this statement when looking at the final results, there is some evidence for a lack of representation when it comes to the social composition of the group of respondents.

It stands out that 57% of respondents claimed to have access to their own landline phone in their home. Official figures show that there are only 29 phone lines per 100 inhabitants (including cell phones) in Cuba. After speaking with the pollsters of Bendixen & Amadi, the Washington Post found a plausible explanation for this phenomenon, telling Cuba heute that the interviewers themselves already noticed this bias: “Like you, they were surprised by the result on phone usage, and sought an explanation from their field team in Cuba. They reported that many respondents did not comprehend this question as it was intended, and seemed to interpret having access to a phone at home as having access to a phone in their community (i.e. in a neighbor’s home). Some interviewers observed homes having no visible telephone but nonetheless reporting that they did.”

It gets more complicated when you take a look at the employment of the respondents. The pollsters of B&A surveyed as many state as private-sector employees in Cuba; every third person was apparently working for the private sector, according to the results. This definitely is not a representative composition in a country where only 22% of all employees (including farmworkers) work in the private sector. This sums up to only 12% of the adult Cuban population, the target group of the survey. This possibly points to an urban bias within the set of respondents, where an obviously disproportional number of private-sector employees was included. Other polls, like the annual Cuba Survey of the International Republican Institute (IRI), did a much better job when it comes to the selection of a representative group of participants. The Washington Post has yet to answer a question about that subject.

Opinion polls in Cuba always have to overcome many obstacles. On the one hand, the country lacks the appropriate infrastructure to conduct modern randomized telephone surveys. On the other hand, the old-style survey process itself seems to be even more difficult in Cuba than in other places. Especially with controversial political topics (e.g. the question of the one-party system), more than 20% of respondents declined to make a statement. In addition to that, it is perfectly conceivable that many supporters of the Revolution do not participate at all in foreign surveys, as a matter of principle. Even for major polling institutes seem to fail in the selection of a representative group of participants. Last but not least, some questions suffer from a huge range of different interpretations, as the example of the telephone landlines shows.

Despite their methodical weaknesses, the Bendixen & Amandi survey gives us a first insight into the thinking of some Cubans. Despite the usual margin of error of 5% and a not fully representative audience, one can at least on the clearly unequivocal questions draw some conclusions about the attitude of the overall population. Even so, this survey represents a snapshot. Especially on controversial issues a high grade of uncertainty remains, which is why the results should always be treated with caution.

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Cuba heute is a German-language blog about political and economic trends in Cuba with emphasis on the ongoing reform process. The author is studying politics and history at the University of Jena (Germany) and plans to spend a semester in Havana this winter

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FRENCH GROUP TRUMPETS CUBAN DRUGS INNOVATION

Financial Times, May 26, 2015

Andrew Ward, Pharmaceuticals Correspondent

Original here: Cuban Drugs Innovation

Cuba has the potential to become a force in the life science industry as its economy gradually reopens to the world, according to Abivax, a French company that has licensed a hepatitis B treatment from Cuban researchers.

Abivax is planning an initial public offering in Paris to finance clinical trials of the ABX203 therapeutic vaccine developed by the Center for Genetic Engineering and Biotech in Havana.

Hartmut Ehrlich, Abivax chief executive, said that Cuba had world-class medical science ready to be tapped as the country re-engages with the US and the broader global economy.

He highlighted the 500 products developed by 40 pharmaceuticals companies during past decades when Cuba’s isolation made it difficult to access some foreign drugs.

“They have a strong public health system and a strong science base because [Fidel] Castro decided in the 80s that in order to fulfil the medical needs of the population they needed to develop their own medicines,” said Mr Ehrlich.

Abivax was among the French companies that accompanied President François Hollande on a visit to Cuba this month — highlighting growing international interest in the commercial opportunities created by Cuba’s economic reforms. The Paris company owns the rights to ABX203 in 80 countries across Europe, Asia and Africa and will share revenues with its Cuban partners should the treatment reach market. Late-stage trials of the vaccine started in February.

Cuban products are still barred from the US, the world’s biggest pharmaceuticals market, by a trade embargo but the chances of this being lifted appear to be rising as talks continue about resuming diplomatic relations severed since the cold war.

Mr Ehrlich said that Abivax would be interested in US rights to ABX203 should the market open. European companies hope they will have a head start in Cuba over US rivals held back by the embargo.

“It takes time to build trust with our partners in Cuba and we believe we have achieved that trust,” said Mr Ehrlich. “We have found the Cubans to be very collaborative. For us it has been a real pleasure to work with them.”

ABX203 is a first-in-class immunotherapy that aims to provide longer-lasting suppression of the virus than existing treatments — and potentially a cure. An estimated 350m people worldwide have the chronic form of hepatitis B, which kills more than 1m people every year.

Analysts say that both ABX203 and a separate HIV treatment being developed by Abivax in France have lots of potential if trials prove successful. Mr Ehrlich said that the company was open to a partnership with a larger pharmaceuticals group to help reach market. He would not say how much money would be raised in the IPO, announced last week, but Abivax was on course to burn €20m of cash this year and €30m next year.  fbb5f4388c59ee22ea6925023b66b419PPG: Cuba’s Wonder Heart Drug, (also Cuba’s Viagra)

CUBA-INSTITUTO DE INGENIERIA GENETICA-CARTERInstitute of Genetic Engineering and Biotechnology, Havana

 

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WILL A (REPUBLICAN-DOMINATED) US CONGRESS’S OMNIBUS BILL FORCE PRESIDENT OBAMA TO CHOOSE BETWEEN REVERSING HIS CUBA POLICY AND SHUTTING DOWN THE FEDERAL GOVERNMENT?

From the “Cuba Central Team”, May 22, 2014

Original article here: US CONGRESS’S OMNIBUS BIDGET BILL AND CUBA POLICY

 Step-by-step, legislation is working its way through Congress to curtail much of the progress President Obama is making in U.S.-Cuba relations by cutting the funds needed by federal agencies to implement his new policies.

 Today, we ask: Will those who benefit most from the new policies that encourage travel and trade with Cuba do nothing but stand on the sidelines in the expectation that President Obama will veto the bills that reverse them?

 In 2011, after President Obama reinstated the rules allowing Cuban Americans to visit their relatives on the island and permitting all Americans to send remittances to Cubans, hardliners used the budget process to prevent the policies from being implemented.

 Back then, the White House issued a policy statement promising to veto the legislation unless the budget riders on Cuba were removed. The President’s supporters, who comprised the majority in the Senate, kept the provisions out of the big budget bills that finally emerged from paralysis and delays on Capitol Hill. Legislation reversing the modest but hopeful travel and remittance reforms never reached the President’s desk.

As a result, hundreds of thousands of journeys between the United States and Cuba have taken place every year reuniting families, while increasing numbers of Cubans receiving the economic support they needed to run their own businesses and lead more independent lives.

This is a different time. On December 17th, the President changed the whole intent of U.S. policy and the architecture of U.S.-Cuba relations.

For the first time in six decades, the U.S. government is encouraging citizen diplomacy, greater travel and trade, the telecommunications, travel, and other industries, to build relationships and stronger ties with Cuban counterparts — putting our country on the side of Cubans succeeding, rather than rooting for the Cuban government and system to fail.

That is why Jet Blue and other airlines are expanding charter services and planning commercial routes, why ferry companies are planning to set sail for Havana, why Airbnb and Netflix are hoping to build real businesses in the Cuban market, why Governors like Andrew Cuomo are trying to position companies in their states to succeed.

It is why Americans across the country, and Cuban Americans in the communities where they live, are so deeply committed to a policy that puts the Cold War behind us and puts our country on the right side of history.

Unless the Congress pulls the plug with the budget riders they’ve put into play. The House Appropriations Committee has already voted to ground new commercial or charter flights that come into being after March 15, 2015 in the transportation department budget bill.  Jet Blue and Tampa International Airport — that means you.

A similar set of restrictions in the same measure would stop the new ferries from ever leaving port, despite one estimate that says every ship put into service would provide as much as $340 million back into Florida’s economy.   Fort Lauderdale, Tampa, Orlando, Miami? Don’t spend it yet.

 Then, there’s the Commerce Department bill shutting down U.S. exports to Cuba. Telecommunications firms? Others? Better dial 9-11.

 Even worse, as USA Today reports, there are budget restrictions yet to be voted on: restoring the limits on travel and restricting the use of American dollars on the island — take that MasterCard and American Express.

Where are the adults? Not in the House. Speaker John Boehner, as the Washington Post reported this morning is giving the greenlight to hardliners who are “interested in stopping this progression toward normal relations with Cuba.”

Certainly not in the Senate, where hardliners won’t allow an Ambassador to be confirmed to represent our country and its interests in the new embassy in Havana, should they allow it the funds to open at all.

Here’s the bottom line. Whether Congress follows the regular order and starts enacting bills to finance Cabinet departments separately — or it wraps them all together in one giant package — sooner or later all these restrictions are going to land with a thump and a thud on President Obama’s Oval Office desk.

Congress may even force him to choose between closing down his Cuba policy and shutting down the federal government.

 We think the President will warm up his veto pen and choose to save a policy that is good for our country, good for Cubans, and a cornerstone of his foreign policy legacy.

And so we ask again, as we did at the outset: will those who stand to benefit most from his decisions make him face that choice alone?

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