• 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."

IS CUBA’S VISION OF MARKET SOCIALISM SUSTAINABLE?

Posted on August 8, 2018 by Arch Ritter

William M. LeoGrande

Tuesday, July 31, 2018

Just three months after Miguel Diaz-Canel took over the presidency of Cuba from Raul Castro, his government has unveiled a new Council of Ministers—essentially, Cuba’s Cabinet—along with the draft of a new constitution and sweeping new regulations on the island’s emergent private sector. While the changes announced represent continuity with the basic reform program Raul Castro laid out during his tenure, they are nevertheless significant milestones along the road to a more market-oriented socialist system.

The discussion and approval of the draft constitution was the main event of last week’s National Assembly meeting. The revised charter will now be circulated for public debate, revised, reconsidered by the National Assembly, and then submitted to voters in a referendum early next year. The avowed reason for revamping the constitution is to align it with the economic reforms spelled out in 2011 and 2016 that constitute the blueprint for Cuba’s transition to market socialism. Cuba’s 1976 constitution, adopted at the height of its adherence to a Soviet model of central planning, reflected “historical circumstances, and social and economic conditions, which have changed with the passing of time,” as Raul Castro explained two years ago. …

Continue Reading: Is Cubas Vision of Market Socialism Sustainable_

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GACETA OFICIAL NO. 35 EXTRAORDINARIA, DE 10 DE JULIO DE 2018:

Posted on July 17, 2018 by Arch Ritter

New Regulations for Cuba’s Non-Agricultural Private Enterprises as of July 10, 2018

Complete Document available here:

Gaceta-Oficial-Extraordinaria, 10 de Juliode 2018, _CYMFIL20180710_0001

 

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CUBA MOVES BACKWARDS: NEW REGULATIONS LIKELY TO IMPEDE PRIVATE SECTOR GROWTH.

Posted on July 17, 2018 by Arch Ritter

Brookings, Friday, July 13, 2018

Richard E. Feinberg, Nonresident Senior Fellow – Foreign Policy, Latin America Initiative and Claudia Padrón Cueto, Reporter – El Toque (Havana, Cuba)

In a leap backwards, the Cuban government has published a massive compendium of tough new regulations governing the island’s struggling private enterprises. The new regulations—the first major policy pronouncement during the administration of President Miguel Díaz-Canel—appear more focused on controlling and restricting the emerging private sector than on stimulating investment and job creation, more concerned with capping wealth accumulation than in poverty alleviation.

Many small businesses that cater to foreign visitors are already suffering from Trump-era restrictions and travel warnings that have decimated the U.S. tourist trade in Havana. But the new regulations are more a product of domestic Cuban politics than foreign pressures.

On a positive note, the Cuban government promises to renew the granting of licenses for many categories of private businesses by year-end, repealing the extended suspension announced last summer. But the new regulations greatly empower government rule-makers and intrusive inspectors, casting a gray cloud over the island’s business climate. Many existing businesses are likely to retrench if not close altogether.

The private sector grew dramatically in recent years, to include nearly 600,000 owners and employees by official figures, with many more enterprising Cubans working informally; in contrast, the state sector stagnated and further decapitalized. Indeed, many thriving private businesses began to compete successfully against state entities, notably in restaurants, bars and night clubs, guest houses, construction, and transportation. The healthy wages paid by profitable private firms often eclipsed the meager salaries paid to disgruntled government officials and factory workers.

The extensive, highly detailed regulations, which go into effect in December, read like “the revenge of the jealous bureaucrat.” Drawing on a multitude of ministries and operating at all levels—national, provincial, and municipal—interagency committees will now be empowered to authorize, inspect, and regularly report upon private businesses under their jurisdictions. The regulations are replete with astoundingly specific performance requirements and innumerable legal breaches that seem crafted to allow government officials wide discrimination to impose heavy fines (or extort bribes), suspend licenses, and even seize properties.

To cite but a few such regulations: Private restaurants and guest houses must cook food at a minimum of 70 degrees Celsius for the time required for each food; day care centers must allocate at least two square meters per child, have no more than six children per attendant, and be outfitted with pristine bathroom facilities described in exquisite detail (private schools and academies are strictly prohibited); and private taxi drivers must document that they are purchasing fuel at government gas stations, rather than buying on the black market. Further, local officials can deny new licenses based on “previous analyses,” even if the proposed business plan meets all the other specifications, and can fix prices “when conditions warrant.”

The regulations could help shield state enterprises from unwanted private competition. The very ministries that stand to lose market shares are in charge of approving licenses in their sector. For example, the ministry of tourism has the lead in judging licenses for private guest houses. Appeals are possible, but to administrative authorities, not to judicial courts.

Government agencies are also seeking to reassert control over the island’s vibrant artistic communities. The regulations prohibit artists from contracting directly with private restaurants and bars; rather they must be represented by public-sector entities that charge commissions up to 24 percent of revenues. Moreover, performers must not use “sexist, vulgar or obscene language,” which if enforced could imply the banning of popular hip-hop and reggaeton songs and videos.

Perhaps most telling are the restrictive rules squarely aimed at inhibiting private capital accumulation. In a sharp turn from past practice, Cubans will now only be allowed one license for one business, effectively outlawing franchising and diversification. Capacity at restaurants and bars is capped at 50 guests. Most biting, the new regulations establish an upward-sloping wage scale (whereby wages rise as more workers are hired); hiring more than 20 workers becomes prohibitively expensive (six times the average wage). Unlike in the past, employers will now have to pay taxes on the first five workers hired as well.

Many private businesses must also record their transactions (revenues and expenditures) in an account at a government financial institution and keep three months of prospective taxes on deposit. Intended to reduce under-reporting of income, this measure will significantly raise the effective rates of taxation. Investors must also explain their sources of funds. In a country where political authority is unchecked, these financial impositions alone will discourage many potential entrepreneurs.

The Cuban authorities have repeatedly asserted their interest in attracting foreign investment, to compensate for weak domestic savings. However, foreign investors are likely to view these new regulations, even though they apply to domestically-owned firms, as indicative of an official wariness if not hostility toward private enterprise in general. Risk-averse foreign investors will also note that the Cuban government is quite capable of precipitously altering the rules of the game.

The new regulations are the first major policy initiative promulgated during the administration of President Miguel Díaz-Canel. Many of the resolutions were approved by the Council of State under Raúl Castro, prior to Díaz-Canel’s inauguration in April, but nevertheless were issued during his young tenure. Not a good sign for those hoping that Díaz-Canel, 58 years old and ostensibly representing a younger generation, might quickly place his own imprimatur over the extensive state apparatus.

The new regulations make one thing abundantly clear: The Cuban government, state-owned enterprises and the ruling Cuban Communist Party do not want to risk major competition to their own interests—economic, commercial, and political—from a potentially capital-rich, diversified emerging private sector. Apparently, perceived interests in security and stability have overruled Cuba’s own declared economic development goals.

 

 

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CUBA IMPOSES MORE TAXES AND CONTROLS ON PRIVATE SECTOR AND INCREASES CENSORSHIP ON THE ARTS

Posted on July 12, 2018 by Arch Ritter

BY NORA GÁMEZ TORRES

Miami Herald, July 10, 2018 07:01 PM

The Cuban government announced that it will start issuing licenses to open new businesses — frozen since August 2017 — but established greater controls through measures intended to prevent tax evasion, limit wealth and give state institutions direct control over the ‘self-employment’ sector

Original Article: TAXES, CONTROLS, CENSORSHIP

The Cuban government issued new measures on Monday to limit the accumulation of wealth by Cubans who own private businesses on the island. The provisions stipulate that Cubans may own only one private enterprise, and impose higher taxes and restrictions on a spectrum of self-employment endeavors, including the arts.

The government announced that it will start issuing licenses to open new businesses — frozen since last August — but established greater controls through a package of measures intended to prevent tax evasion, limit wealth and give state institutions direct control over the so-called cuentapropismo or self-employment sector.

The measures will not be immediately implemented. There is a 150-day waiting period to “effectively implement” the new regulations, the official Granma newspaper reported.

Cubans who run private restaurants known as paladares, for example, will not be able to rent a room in their home to tourists since no citizen can have more than one license for self-employment.

“There are workers who have a cafeteria and at the same time have a manicure or car wash license. … That is not possible. In practice, he is an owner who has many businesses, and that is not the essence and the spirit of the TCP [self-employment], which consists of workers exercising their daily activities,” Marta Elena Feitó Cabrera, vice minister for labor and social security, told the official Cubadebate site.

About 9,000 people, half in Havana, are affected by the measure, said the official.

In addition, all private sector workers must open an account in a state bank to carry out all their business operations. And the boteros, those who work as private taxi drivers, must present receipts to justify all their deductible expenses. Other measures curb the hiring of workers in the private sector, which currently employs 591,456 people, or 13 percent of the country’s workforce.

The government also stated it would eliminate the tax exemption for businesses that have up to five employees and would instead impose a sliding scale that increases with each worker hired. It also ordered an increase in the required minimum monthly taxes of businesses in various categories.

Government officials quoted by Granma said that the measures will increase tax collection and reduce fraud. But economists have warned that more taxes on hiring employees could dramatically hamper the development of the private sector at a critical moment. A monetary reform — which could bankrupt nearly half of the state companies, potentially leaving thousands unemployed — is expected to happen soon.
The new measures also maintain a halt on new licenses for things such as “seller vendor of soap” and “wholesaler of agricultural products,” among others.

One significant provision states that those who rent their homes to tourists and nationals may also rent to Cuban or foreign companies but “only for the purpose of lodging.” That would presumably prevent renters from subletting units.

The “rearrangement” of self-employment, as the new measures were framed in the official media, reduces licenses by lumping together various elements of one industry while limiting another. For example, while there would be only one license for all beauty services, permits for “gastronomic service in restaurants, gastronomic service in a cafeteria, and bar service and recreation” were separated — meaning that one can own a restaurant but not also a bar.

To increase controls, each authorized activity will be under the supervision of a state ministry, in addition to the municipal and provincial government entities, which can intervene to set prices. The level of control reaches such extremes that the Official Gazette published a table with classifications on the quality of public restrooms and the leasing rates that would have to be paid by “public bathroom attendants,” one of the authorized self-employment categories. Some public bathrooms are leased by the state to individuals who then are responsible for upkeep and make their money by charging users a fee.

The regulations are the first significant measures announced by the government since Miguel Díaz-Canel was selected as the island’s new president in April. But the proposed regulations had been in the making for months by different government agencies, according to a draft of the measures previously obtained by el Nuevo Herald. The announcement comes just as the Cuban economy is struggling to counter the losses brought by the crisis in Venezuela — its closest ally — and the deterioration of relations with the United States.

The new measures could also have a significant impact on the cultural sector. The decree may be used by the Ministry of Culture to increase control over artists and musicians and impose more censorship in the country.

Decree 349 of 2018 establishes fines and forfeitures, as well as the possible loss of the self-employment license, to those who hire musicians to perform concerts in private bars and clubs as well as in state-owned venues without the authorization of the Ministry of Culture or the state agencies that provide legal representation to artists and musicians.

Many artists in urban genres such as reggaeton and hip-hop, who have been critical of the Cuban government, do not hold state permits to perform in public. However, many usually perform in private businesses or in other venues.

Painters or artists who sell their works without state authorization also could be penalized.

The measures impose sanctions on private businesses or venues that show “audiovisuals” — underground reggaeton videos or independent films, for example — that contain violence, pornography, “use of patriotic symbols that contravene current legislation,” sexist or vulgar language and “discrimination based on skin color, gender, sexual orientation, disability and any other injury to human dignity.”

The government will also sanction state entities or private businesses that disseminate music or allow performances “in which violence is generated with sexist, vulgar, discriminatory and obscene language.”

Even books are the target of new censorship: Private persons, businesses and state enterprises may not sell books that have “contents that are harmful to ethical and cultural values.”

Some CuentaPropistas:

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CUBA, SÍ, VENEZUELA, NO? A DOUBLE STANDARD IN FOREIGN POLICY

Posted on June 27, 2018 by Arch Ritter

BOTH LATIN AMERICAN STATES REPRESS THEIR CITIZENS AND HAVE LITTLE REGARD FOR HUMAN RIGHTS, SO WHY HAVE THEY RECEIVED SUCH DIFFERENT TREATMENT FROM CANADA AND OTHERS? 

BY:  YVON GRENIER, JUNE 21, 2018

 Original Article: Cuba, Sí, Venezuela, No?

For years the Trudeau government has been exceptionally forceful in its condemnation of Nicolas Maduro’s budding dictatorship in Venezuela.

Canada imposed sanctions last September on key figures in the Maduro regime “to send a clear message that their anti-democratic behaviour has consequences.” In advance of April’s Summit of the Americas, Canada supported the announcement by host country Peru that Maduro would not be welcome to attend. In Foreign Affairs Minister Chrystia Freeland’s words: “Maduro’s participation at a hemispheric leaders’ summit would have been farcical.”

Freeland then characterized Maduro’s re-election on May 20 as “illegitimate and anti-democratic,” with Canada announcing further sanctions on key figures in the Maduro regime on May 30. The Organization of American States also passed a June 5 resolution that calls for an extraordinary assembly to vote on suspending Venezuela from the 34-member organization. Furthermore, Canada will not seek to replace its ambassador in Caracas, which amounts to suspending normal diplomatic relations. And most recently, in a speech at a Foreign Policy event June 13 in Washington, Freeland made a point of mentioning the country, saying that “some democracies have gone in the other direction and slipped into authoritarianism, notably and tragically Venezuela.”

The three main parties in Ottawa are strangely in lockstep to denounce the “erosion of democracy” in that once prosperous and democratic nation. But the Trudeau government is particularly combative. This is a strong contrast to our policy toward the only country in the region that is arguably a worse offender of democratic rights: Cuba. For if “Canada will not stand by silently as the Government of Venezuela robs its people of their fundamental democratic rights,” its policy toward Cuba has studiously been to stand by silently as the Castro brothers and now President Miguel Díaz-Canel robs the Cuban people of their fundamental democratic rights.

Comparing the state of democracy and human rights

The kind of elections held on May 20 in Venezuela, while clearly unfree and unfair, would represent a positive step toward pluralism in the one-party system of communist Cuba. For one, Maduro banned his main opponents from running, but he did allow two marginal opponents to campaign and compete for the presidency. Neither the Castro brothers nor Díaz-Canel ever had to run against anybody. For decades they were appointed unanimously by a rubber-stamp legislature completely controlled by the only party allowed in the country. Arbitrary detentions, total control of all branches of government by the executive, and violation of democratic rights are systematic and written into law on the island.

While Maduro is accused of violating the constitution of the Bolivarian Republic of Venezuela, his Cubans counterparts do not need to disregard their 1976 constitution to trample democratic rights; its template is the USSR’s constitution of 1936 (imposed there under the leadership of Joseph Stalin). Cubans visiting Venezuela are pleasantly surprised at how relatively free the media and Internet access are compared to the reality at home. Monitoring organizations such as The Economist Intelligence Unit, Reporters without Borders and Freedom House rank Cuba lower than Venezuela in their indexes of democracy, press freedom, and civil and political rights.

True, violent repression in Cuba is not as overt as it has been recently in the patria of Bolivar, where up to 160 civilians were killed by government forces during the massive street protests of last summer. Arguably, this is because Cuba is a more stable dictatorship, one that has already exported most of its opposition overseas. Short-term arbitrary arrests of human rights activists, independent journalists and dissonant artists appear sufficient to curb public criticism. Incidentally, the number of such arrests “have increased dramatically in recent years” according to Human Rights Watch. The dissident Cuban Commission for Human Rights and National Reconciliation reports 5,155 such detentions in 2017. As Venezuela becomes more totalitarian, and more of its aggrieved citizens rush to the exit, it will conceivably experience lower levels of violence and unrest. To recall: in the wake of the 1959 revolution, violent clashes with the “counter-revolutionary” opposition lingered on until mid-1965 in Cuba — Fidel Castro had become a master of counter-insurgency.

According to some observers, the humanitarian situation may be worse in Venezuela, primarily because of rapidly deteriorating access to food and medicine. But then again, it is hard to measure and compare. The Cuban government does not produce statistics on poverty on the island. We know most Cubans are very poor, especially if they don’t have access to remittances regularly sent by their family in exile, a source of income not (yet) available to most Venezuelans.

In other words, while the situation may be worse in some respects in Venezuela, the difference in criticism from outside those countries can be in no way because of Cuba’s superior “democratic behaviour.”

A Cuban fascination versus a newer crisis

And yet, under Trudeau, Canada’s relations with communist Cuba have returned to their former glory. Seasoned advocate of ever-closer Canada-Cuba relations, professor John Kirk, recently waxed eloquent at a conference in Barcelona about a newly found “warm embrace” between the two countries, with increased investments, cultural ties, and exchange of high-ranking government ministers in both directions. The Canadian government, according to its approach presented online, is about “unlocking opportunities” and trade, not about sanctions and denunciations of undemocratic practices.

Contrast Freeland’s comments on Maduro to Trudeau famously saying, in his statement on the death of Fidel, “on behalf of all Canadians,” that “Mr. Castro’s supporters and detractors recognized his tremendous dedication and love for the Cuban people.”

When CBC News senior parliamentary reporter Catherine Cullen asked Trudeau whether he believes Castro was a dictator, Trudeau tepidly replied: “Yes.” Yet he sends very mixed messages and seems to prefer overlooking the darker side of the Cuban regime.

One can think of several plausible explanations for this discrepancy, starting with the Trudeau family and its strange fascination with Fidel. Comparisons with US President Donald Trump’s man crush for Vladimir Putin come to mind. One cannot help but wonder if Freeland’s silence on Cuba (it would be a shoe-in addition to her Putin-Maduro axis of evil) is a concession made to the boss.

Other explanations, inter alia: Venezuela is (still) an OAS member, unlike Cuba, though if memory serves, Canada and other principled guardians of the OAS Democratic Charter are invariably sanguine about welcoming Cuba back to the hemispheric fold. Perhaps hostility toward communist Cuba is now perceived as an outmoded residue of the Cold War. Venezuela is a post-Cold War failing state, driven to the ground by a clumsy heir of Hugo Chávez, with no Bay of Pigs or even embargo (the US purchases most of Venezuela’s oil) as convenient excuses.

The most credible justification for such double standards is that Venezuela is in the midst of a crisis, with lots of moving parts, rather than being fully constituted (or ossified) like Cuba, where it is too late for pressures to work. The island fully “slipped into authoritarianism” — just as Freeland described Venezuela recently — in 1952 and then into totalitarianism in the 1960s. Former US President Barack Obama’s rationale for opening up to Cuba was ostensibly that the US tried to topple the regime for longer than he lived, and repeatedly failed. Venezuela is still in flux, increasingly isolated in the region and the world, and consequently, amenable to change under international pressure. Maybe.

Cuba’s impact on Venezuela

Be that as it may, Canada would be well advised to consider the responsibility of Cuban leaders in the current crisis in Venezuela. Cuban infiltration of Venezuelan state institutions is complete, as Cuban “advisers” can be found in virtually every single office, ministry or barrack of the Venezuelan state. Meanwhile, millions of Venezuelan oil dollars (even foreign oil bought by Venezuela and gifted to Cuba) flow into Cuba’s coffers. Venezuela had been an obsession of Fidel’s since the early 1960s and turning the country into a Cuban ally was his greatest foreign policy accomplishment. His smaller and poorer country astonishingly managed to infiltrate what is after all a larger and richer country. When Chávez declared in 2007 that Cuba and Venezuela were a “single nation” with a “one single government,” he was not kidding.

So, in other words, Canada is excoriating Venezuela for trying to emulate a country Canada is proud to have sunny relations with. To be provocative: would the Canadian government like Maduro more if he, like Cuban leaders, banned competitive elections altogether and closed the borders?

Leaving aside the complementary but separate discussion on what policy is best for Canada, one can at least say this: if Canada continues to pick its human rights policies à la carte, raging against violations in one country and glossing over possibly worse ones next door, the world may notice and take neither Canada’s principled position nor its not-so-principled position seriously. And if global consistency is too much to ask (after all, Canada seems to get along fine with China, Saudi Arabia, etc.), at least some regional evenness or just an explanation would be most welcome.

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CUBA TO UPDATE SOVIET-ERA CONSTITUTION, ADAPTING TO REFORMS

Posted on May 31, 2018 by Arch Ritter

By ANDREA RODRIGUEZ,

 ASSOCIATED PRESS, HAVANA, May 28, 2018

 Original Article: CONSTITUTIONAL UPDATE

 When Cuba adopted its current constitution, the sugar-based economy was being bolstered by aid from the Soviet Union, citizens were forbidden to run private businesses or sell homes and gays kept their sexual identity a tightly guarded secret.

Now a rewrite is on the way as the country’s communist leaders try to adapt to the post-Soviet world in which hundreds of thousands of Cubans work for themselves, American remittances and tourism keep the economy afloat and the daughter of Communist Party chief Raul Castro is campaigning for gay rights.

The country’s parliament is scheduled on Saturday to name the commission to draft a new constitution, consulting with the citizenry and eventually bringing it to a referendum.

Officials have made clear that the constitution will maintain a Communist Party-led system in which freedom of speech, the press and other rights are limited by “the purposes of socialist society.” But Castro and other leaders apparently hope to end the contradictions between the new, more open economy and a legal system that calls for tight state control over all aspects of the economy and society.

The current ban on dual citizenship collides with the government’s effort to reach out to exiles. The definition of marriage as between a man and a woman runs up against Cuba’s growing gay rights movement. Many small businesses employ workers even though the constitution now forbids “obtaining income that comes from exploiting the work of others.”

The current constitution allows worker cooperatives, but only in the farm sector, and officials have allowed other types of cooperative but placed sharp limits on their growth and operations, keeping them as a marginal economic player.

The government, too, is likely to see changes. Castro, who turned over the presidency last month to Miguel Diaz-Canel, has proposed limiting presidents to two five-year terms and imposing an age limit — a dramatic shift following a nearly 60-year run of leadership by Castro and his late brother Fidel, who both ruled into their 80s.

“Cuba needs to change its constitution because our society has been radically transformed in recent years,” said political scientist Lenier Gonzalez, one of the directors of Cuba Possible, a think-tank aimed at promoting reform with the limits laid out by Cuban law and its single-party system. He noted the society has become more international, forms of property ownership have diversified and new social movements have emerged that now exist on the margins of the law.

He also said the revamp could help build the legitimacy of Diaz-Canel, 58, and other members of the new guard who are finally replacing the men enshrined as national heroes of the 1959 revolution led by Fidel Castro.

The Communist Party newspaper Granma has reported that the new constitution could boost the role of the country’s parliament, which now usually meets for two days a year to listen to speeches and approve official proposals. It said the congress might be professionalized and its membership trimmed. The 605 deputies now receive no pay other than what they get from their other jobs.

Parliamentarian Mariela Castro, the daughter of Raul and director of the Center of Sexual Education, has said the reform will expand gay rights, partly by tackling the current wording of the constitution that limits marriage to a man and woman.

The current constitution was adopted four decades ago at a time when Cuba was a potential Cold War flashpoint and a pillar of the Soviet Bloc. The document proclaims Cuba’s adherence to Marxist-Leninist socialism and to solidarity with countries of the Third World, particularly Latin America. The Communist Party is described as the “superior guiding force” of Cuba’s society and it says the economic system is “based on socialist property of the entire people over the fundamental means of production and on the suppression of the exploitation of man by man.”

“It is a historic constitution, the only one that remains in our hemisphere” from the time of Soviet-style socialism, said Julio Antonio Fernandez Estrada, a law professor at the University of Havana. “It’s more than 40 years old … It continues speaking of things that now do not exist in the world, such as the formation of the citizen for communism.”

He said the economic reforms promoted by Castro, which sought to allow the limited introduction of private enterprise within the communist system, “have been carried out, if not against, then in large part in spite of the constititution.”

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CUBA’S NEW LEADER PRAISES MADURO IN ‘SOLIDARITY’ VISIT TO VENEZUELA

Posted on May 31, 2018 by Arch Ritter

REUTERS, WORLD NEWS, MAY 30, 2018

Deisy Buitrago, Andreina Aponte

Original Article: President Miguel Diaz-Canel Praises Maduro

CARACAS (Reuters) – Cuba’s President Miguel Diaz-Canel flew to Caracas on Wednesday for his first foreign trip as head of state, a show of solidarity for Venezuela President Nicolas Maduro, whose controversial re-election this month has drawn condemnation in the West.

“I pledge to you that no matter how big the challenges, you can count on Cuba today and forever,” Diaz-Canel said after meeting Maduro in the Miraflores presidential palace. “Venezuela now needs our solidarity,” he earlier told Venezuela’s Constituent Assembly, a pro-government legislative super-body.

Venezuela’s President Nicolas Maduro speaks next to Cuba’s President Miguel Diaz-Canel during their meeting at the Miraflores Palace in Caracas, Venezuela May 30, 2018. REUTERS/Marco Bello

The United States, the European Union and major Latin American countries have condemned Maduro’s May 20 re-election, saying it did not meet democratic standards.

Two of his rivals were barred from standing and the election board is run by loyalists. The U.S. government imposed new sanctions on the crisis-stricken oil exporter.

But China and Russia have warned against meddling in the Socialist-run country, and fellow leftist governments in the region from Cuba to Bolivia have offered their support.

“Your words express the best of the Cuban people and we are forever grateful for the support you have given us,” said Delcy Rodriguez, a senior Maduro ally who heads the Assembly, which critics say has undermined the opposition-controlled legislature, the National Assembly.

Maduro was the first foreign leader to meet with Diaz-Canel last month after he succeeded Raul Castro to become president of the Communist-run island.

Venezuela, which holds the world’s largest oil reserves, exchanges crude for Cuban medical and other technical services, though deliveries have dropped in recent years during an economic implosion in the country of 30 million people.

“We felt (Maduro’s) victory as our own,” Diaz-Canel said. “Venezuela has supported Cuba in many ways throughout its history. We have a debt of gratitude.”

Venezuelan opposition politicians say bilateral relations with Cuba are deeply unfavorable.  “Maduro did not sell the country, he handed it over. NATIONAL SHAME!” tweeted opposition lawmaker Juan Guaido, posting a picture of Diaz-Canel wearing a sash with the yellow blue and red Venezuelan colors on Wednesday.

Diaz-Canel flew to Venezuela with his wife Liz Cuesta as first lady, in a break with custom during the nearly 60 years’ rule by the Castro brothers Fidel and Raul who generally traveled without their spouses.

Diaz-Canel’s visit came as Cuban authorities faced the chaos of flooding in the wake of Subtropical Storm Alberto that has killed already four people and prompted the evacuation of tens of thousands.

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¿QUÉ DIJERON LAS ÚLTIMAS ELECCIONES SOBRE LOS MIEMBROS DEL BURÓ POLÍTICO DEL PCC?

Posted on May 25, 2018 by Arch Ritter

Por: Jorge I. Domínguez. |  2018-04-30

¿Cómo les fue a los miembros del Buró Político (BP) del Partido Comunista de Cuba (PCC) en la elección para la Asamblea Nacional del Poder Popular, que fue celebrada el 11 de marzo de 2018? Fue un resultado que les amerita un perfeccionamiento. Todos los miembros del BP ingresan a la Asamblea, ya que la ley garantiza que el número de candidatos sea igual al número de escaños parlamentarios y, por tanto, todos los que aparecen en la boleta electoral son elegidos.

La ley electoral, sin embargo, ofrece una ventanilla para sopesar la popularidad relativa de los candidatos. La ley agrupa los candidatos en distritos y, por tanto, permite cuatro tipos de comportamiento electoral:

a) el voto unido por todos los candidatos,

b) el voto en blanco,

c) el voto nulo, c) o el voto selectivo; este último implica votar por el candidato A, pero no por el candidato B.

La preferencia oficial ha sido por el voto unido; la boleta electoral facilita la votación por el voto unido al ubicar privilegiadamente un círculo para tal votación. Por tanto, los otros tres comportamientos electorales implican una cierta inconformidad con estos procedimientos electorales, ya sea general (voto en blanco, o nulo) o con relación a algún candidato en particular (voto selectivo). Sumemos los tres tipos de votos que constituyen el voto inconforme, que difiere de la preferencia oficial por el voto unido: blanco + nulo + selectivo. En marzo de 2018, el voto inconforme sumó 1 millón 779 mil 178 personas, un 24 por ciento del electorado que acudió a las urnas, la mayor proporción en la historia de estas elecciones.

Examinemos la votación proporcional de los votos reportados para los miembros del BP. Ocho de los 17 miembros del BP quedaron en el primer lugar entre los diversos candidatos de sus respectivos municipios, pero los otros nueve no. Entre los miembros del BP, solamente el presidente Raúl Castro logró la mayor proporción de los votos en su respectiva provincia. Solamente cuatro de los miembros del BP se encuentran entre el 20 por ciento de los candidatos más votados en sus respectivas provincias (Raúl Castro, la Primera Secretaria del PCC en La Habana Lázara Mercedes López Acea, el Presidente de la Asamblea Nacional Esteban Lazo, y el Primer Vicepresidente Miguel Díaz-Canel).

Observemos también ciertos rasgos generales. Hay tres generales en servicio activo en el BP. La proporción relativa de votos que recibieron los ubica en la mitad inferior de los candidatos en sus respectivas provincias. Hay dos líderes sindicales en el BP. Uno es el actual secretario general de la Central de Trabajadores de Cuba, Ulises Guilarte, que resultó el quinto de seis candidatos a elegir en su municipio y septuagésimo-quinto en la provincia de La Habana. El otro es un antecesor, Salvador Valdés Mesa, que quedó en último lugar entre los tres candidatos en su municipio y en el penúltimo lugar de todos los candidatos en la provincia de Mayabeque.

En el último Congreso del PCC, celebrado en 2016, cinco nuevos miembros ingresaron al BP, logrando así su composición actual. Entre estos cinco, solamente la secretaria general de la Federación de Mujeres de Cuba, Teresa Amarelle, fue la más votada en su municipio, pero ninguno de estos cinco logró quedar entre el 20 por ciento de los candidatos más votados en sus respectivas provincias; dos de los cinco quedaron en la mitad inferior de los candidatos en sus respectivas provincias.

El peor resultado entre los miembros del BP fue para Marino Murillo, Vicepresidente encargado de la aplicación de los Lineamientos para la actualización de la política económica. El Canciller Bruno Rodríguez, quien jugó un papel importante en el proceso de cambio de las relaciones entre Cuba y Estados Unidos durante 2015 y 2016, fue el siguiente con la menor proporción de votos. Murillo quedó en quinto lugar, entre siete candidatos en su municipio, y Rodríguez quedó en séptimo lugar, entre diez. Es decir, tanto los miembros más nuevos del BP como aquellos asociados a innovaciones importantes recibieron una proporción relativa menor.

Tres candidatos históricos obtuvieron buenos resultados. Quedando en primer lugar en sus respectivos municipios, ellos fueron: Raúl Castro, José Ramón Machado, y Ramiro Valdés; aunque solamente Raúl Castro despuntó en su provincia. También en primer lugar en sus municipios, y muy bien en sus provincias, quedaron López Acea, Lazo, y Díaz-Canel; Amarelle quedó en primer lugar en su municipio, pero escasamente en la mitad superior en su provincia.

Diversos factores inciden sobre estos resultados. Por lo general, el electorado en La Habana es el más exigente, ya que el voto selectivo representa el 25,8 por ciento de los votos válidos, y el voto inconforme el 30,8 de quienes acudieron a las urnas, ambos los mayores porcentajes en el país. En segunda instancia, el electorado en las capitales de provincia también recurre al voto selectivo con mayor frecuencia que en pueblos y zonas rurales.

La combinación del voto inconforme y de los resultados relativos de los diversos candidatos parece implicar resultados que deberían ser muy mejorables para estos importantes candidatos. Sugiere, también, una cierta reticencia a votar desproporcionadamente por nuevas caras o por candidatos asociados a innovaciones políticas importantes, así como por generales o por líderes sindicales. Ocho de los 17 miembros del BP nacieron antes de 1945. De los nueve más jóvenes, quizás la mitad han impactado a sus respectivos electorados. En general, es una elección que indica cierta impaciencia, pero sin determinar claramente cuál debe ser un rumbo a seguir.

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DISASTROUS CUBAN SUGAR HARVEST MAY FORCE IMPORTS – AND REFORM

Posted on May 25, 2018 by Arch Ritter

Marc Frank

HAVANA, May 24 (Reuters) – Rainfall has shuttered all but a few of Cuba’s 54 sugar mills, with output down nearly 40 percent to the lowest level in more than a century, which could force the island to import, official media and industry sources say.

While inclement weather played a big role in this season’s disastrous performance, local experts and officials also blamed inadequate reforms and decapitalization, reflecting more broadly the socialist country’s struggle to update its economy.

The Communist Party has already tasked President Miguel Diaz-Canel, who replaced Raul Castro last month, with carrying out a series of reforms aimed at making the state-dominated economy more efficient, according to party insiders.

The Cuban sugar ministry was eliminated in 2011 and Azcuba, a state-run monopoly, formed after output declined to a similar low comparable only to the first decade of the 1900s. Production is far below the 8 million tonnes produced in 1990 before the collapse of the Soviet Union, Cuba’s former benefactor.

The Caribbean island nation, where sugar was once synonymous with its name, planned to produce 1.6 million tonnes of raw sugar this season, compared with 1.8 million the previous harvest due to damage from Hurricane Irma in September.  It then reduced that figure to 1.3 million tonnes due to rainfall as the harvest began, but production is now pegged at 1.1 million tonnes of raw sugar.

The decline is more bad news for Cuba, which is struggling with a cash shortage due to ally Venezuela’s economic collapse, a hostile and sanctions-wielding Trump administration, a drop in tourism and its own inertia.

The sugar industry also contributes to electricity production and derivatives such as rum and animal feed.  Cuba consumes between 600,000 and 700,000 tonnes of sugar a year and has an agreement to sell China 400,000 tonne

Not quite the 10 million tons of sugar that Fidel attempted to produce by 1970.

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CAN CUBA’S MIGUEL DÍAZ-CANEL COMPLETE RAÚL CASTRO’S ECONOMIC REVOLUTION?

Posted on May 7, 2018 by Arch Ritter

BY WILLIAM M. LEOGRANDE ON 5/3/18 AT 12:18 PM

Original Article: MIGUEL DÍAZ-CANEL

When Miguel Díaz-Canel formally accepted the presidency of Cuba in April, he became the first non-Castro to run the country since Fidel’s revolution swept the island in 1959.

In his inaugural address, the new president pledged to continue Raúl Castro’s vision, most notably his unfinished “updating” of the economy, a Cuban form of market socialism launched in 2011 to replace the former Soviet-style central planning system. If he is successful, his reforms would produce the most profound transformation since Fidel took power six decades ago and lay the groundwork for what his brother Raúl called “prosperous and sustainable socialism.”

Salvador Sanchez Ceren recibe a VicePresidente de Cuba, Miguel Diaz Canel.

Miguel Díaz-Canel

But, in taking the helm of government, Díaz-Canel faces strong political headwinds. He has to force Raúl’s economic reforms through a resistant bureaucracy—something even Raúl had trouble doing. He has to hold together a fractious political elite, which is divided over how far and how fast to push economic change for fear of unleashing forces beyond its control. And he has to deliver the goods to a population increasingly vocal in its demands for a higher standard of living and a greater say in politics.

Never has the pursuit of continuity seemed so hard.

Progress has been slow. A total of 313 specific economic reforms were approved by the Cuban Communist Party in 2011. By 2016, less than a quarter of them had been achieved. The plans call for state enterprises that are subject to market prices and efficient enough to show a profit, a vibrant private sector to generate jobs and tax revenue, and an open door for foreign direct investment to provide the capital for growth.

But the reforms are stalled, held back by recalcitrant bureaucrats loathe to give up their authority and perks, and by senior Communist Party leaders who worry that the reintroduction of markets, private property and foreign investment betrays the revolutionary values for which they fought. Raúl called their attitude “an obsolete mentality based on decades of paternalism.”

Foreign investors have been wary. Minister of Foreign Trade and Investment Rodrigo Malmierca says Cuba needs to attract $2.5 billion a year in direct foreign investment. But in the three years since Cuba adopted a new investment law with attractive concessions, it has raised just $3.4 billion. Cuba’s opaque and unresponsive bureaucracy still deters all but the most intrepid foreign companies.

On the domestic front, most state enterprises lack adequate cost accounting systems. Introducing them and requiring that state enterprises make a profit has been an excruciatingly slow process. Some 20 percent of the state budget still goes to cover deficits from failing state companies. But closing them en masse is something the government has been unwilling to do, as it would create a huge unemployment problem.

The government has licensed 580,000 private businesses—a five-fold increase since 2010—and the agricultural sector is composed almost entirely of private farms and cooperatives. In total, the private sector now employs 29 percent of the labor force.

But in the eyes of some Cubans, private businesses have been too successful. Hemmed in by unrealistic regulations, many private companies skirt the law—buying supplies on the black market because there are no wholesale markets, evading taxes because the rates are extortionate and operating beyond the terms of their licenses because the permits are so narrow.

To conservatives in the Communist Party, this looks suspiciously like incipient capitalism run amok. To the average Cuban, the private sector’s growth has fueled rising and visible inequality. Today, unlike a decade ago, you can find fashionably dressed Cubans eating at the most expensive restaurants and staying at tourist hotels once reserved for foreigners. Meanwhile, most people struggle to get by on inadequate state salaries.

Raúl understood that market reforms would produce inequality, but he expected the changes to boost productivity, stimulate growth and raise everyone’s standard of living, thereby blunting discontent over the inequality. It hasn’t worked out that way. Because the state sector is so resistant to change, growth has been anemic, undermining the political logic of the reform process. A Cuban economist advising the government told me that Cuba’s senior leadership understands what economic steps it needs to take to put the economy on sound footing; what worries them is the political risk.

That explains why Cuba still has two currencies—the Cuban peso and the Cuban convertible peso, which is has the same value as the U.S. dollar—and multiple exchange rates. Introduced in the 1990s to attract remittances from the Cuban diaspora, the two-peso system is now a huge drag on economic growth, making realistic cost accounting almost impossible. But currency unification is complex and will ripple through the economy in unpredictable ways. With a chronic shortage of foreign reserves and no access to help from international financial institutions, Cuba will have to manage the conversion on its own.

So while Díaz-Canel’s most urgent tasks are economic, his bigger problems are political. Independent opinion polls conducted in Cuba consistently show that discontent with the economy is pervasive, and faith in the government’s ability to improve things is low. In a 2016 poll by NORC (formerly the National Opinion Research Center) at the University of Chicago, 70 percent of Cubans cited the economy as the country’s most serious problem, and half thought that inequality had become too great. Discontent is even higher among younger generations, who have no memory of the revolution’s halcyon days in the 1960s and 1970s.

As Díaz-Canel tries to navigate the ship of state through these dangerous shoals, he also has to keep an eye out for mutiny among the crew.

Although decision-making among Cuba’s top leadership is opaque, signals point to divisions over the economic reforms and how to respond to expressions of popular discontent that have grown with the expansion of the internet. Raúl Castro’s authority as a revolutionary veteran enabled him to manage these disagreements and maintain elite cohesion—an advantage Díaz-Canel will not enjoy. Although he is a seasoned politician who has spent three decades working his way up the political ladder, he is not well known outside the two provinces where he served as Communist Party first secretary. But he will not be alone. Raúl still serves as Community Party leader, and he promises to be there supporting Díaz-Canel, telling the National Assembly that he expects the new president to ultimately become leader of the party as well.

So Cuba’s new president is no mere puppet. Through a calibrated handover of power, he will become the man in charge. And he has his work cut out for him.

William M. LeoGrande is a professor of government at American University in Washington, D.C., and co-author with Peter Kornbluh of Back Channel to Cuba: The Hidden History of Negotiations Between Washington and Havana (University of North Carolina Press, 2015).

 

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