• This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' 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 that was brought to my attention by Andrew Johnston of Ottawa: ".. ... 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."

    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.

Juan Tamayo citing Oscar Chepe on the Revised PCC Sixth Congress Guidelines

Juan Tamayo,

El Nuevo HeraldMay 10, 2011
External Link: http://www.miamiherald.com/2011/05/09/v-fullstory/2209271/cuba-publishes-list-of-proposed.html

Cuba’s ruling Communist Party finally published its pie-in-the-sky list of proposed economic reforms on Monday, raising both high hopes for a more efficient economy and deep questions about exactly how that would be achieved.

The 313 “guidelines” proposed expanding the sale of homes and cars and the ability of Cubans to travel abroad as tourists, creating production cooperatives and slashing state subsidies and payrolls, among many other changes.

Endorsed last month at a Communist Party Congress, the proposals are designed to rescue a crisis-plagued economy by opening the doors to private business activity without totally abandoning Cuba’s half-century of Soviet-styled central controls.

But the proposals published in the Granma newspaper, the official voice of the party, provided few details on how those changes would be carried out, leaving optimists and pessimists alike to read whatever they wanted into the list.

Cars already can be bought and sold if they were manufactured before 1959 — the year that Fidel Castro’s guerrillas seized power — and houses can be legally exchanged in a complicated system of “permutas” or swaps.

Cubans already can travel abroad as tourists — as long as the government grants them “white cards” — the coveted permissions to leave the country, and return without being considered permanent émigrés who loses all their properties on the island.

Dissident Havana economist Oscar Espinosa Chepe said he was still analyzing the guidelines but considered it “very positive” that they recognized the need for various forms of production, including cooperatives and what Cuba calls “self-employment” — micro enterprises such as family restaurants and party clowns.

But he added that guideline 265 — “to study a policy that would make it easier for Cubans to travel abroad as tourists” — could easily create chaos because “a lot of people would leave for good because of the economic conditions that we face.”

Though officially only “guidelines,” their sensitivity is reflected in their history.

Raúl Castro first proposed 291 items that closely matched his own thinking on reforms late last year, then threw it open to a national debate. By the time the Communist Party Congress opened April 16, more than 40 items had been dropped, one-third had been reworded and the total had grown to 311. And when the government announced Sunday that they would be published on Monday, they had grown to 313.

They are expected to be put into effect by either government decrees or laws approved by the National Assembly of People’s Power, which usually meets only for two brief sessions a year.

The latest list of 313 proposals was not available outside Cuba as of late Monday, but news agency reports from Havana noted some of the details mentioned or left out of the items.

The section on buying and selling home, for example, made no mention of what kinds of taxes or fees will be charged on the transactions, according to the Associated Press. Blogger Yoani Sanchez told journalists that she was skeptical about item 265 because it made no mention of lifting the need for the “white cards.”

Many Cubans already now receive permission to travel abroad, for tourism or family reunions, to any country that would issue them visas, though the “white cards” are often denied to dissidents, physicians, minors and members of the military.

One proposal on foreign investment described it as needed but noted that it should bring with it advanced technologies and management methods as well as new export markets in order to create skills and capital for new jobs.

Mid-sized government enterprises could be spun off as cooperatives run by their current employees, according to the news reports, and would be allowed to sell their products on the open markets. But there was no word on who would set the prices for the goods produced.

Some state-owned buildings could be turned into private residences to ease Cuba’s critical housing shortage, according to an Associated Press report. The government also wants to eliminate the country’s burdensome two-currency system and legalize the sale of construction material at unsubsidized prices.

Other guidelines calls for the continued shrinking of the ration card, which provides all Cubans with a basic basket of food and personal items per month at highly subsidized prices, and replacing it with a system of subsidies for poor families only.

One big issue now is whether any reform enacted will have the desired impact in a country where tight government controls mean that few things can be done legally — but almost anything can be done illegally — Espinosa Chepe told El Nuevo Herald.

Cubans have been illegally buying and selling cars and homes for decades, often paying bribes to the very government officials who were supposed to be blocking or catching and punishing such deals.

“Now comes the strong fight over these points,” Chepe said, “truly the most profound changes in 52 years but one could argue that not enough for the level of crisis that we face in Cuba.”

 

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Finally, the Guidelines Documents Approved at the Sixth Congress of the Communist Party of Cuba

By Arch Ritter

Finally, courtesy of Cubadebate, 10 de mayo de 2011, the key economic documents from the April Party Congress have been published. Here they are:

Lineamientos de la Política económica y Social del Partido y la Revolución, Aprobado el 18 de abril de 2011. VI Congreso del PCC

Información sobre el resultado del Debate de los Lineamientos de la Política Económica y Social del Partido y la Revolución

More on this later.

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Documents from the Sixth Party Congress

We are sorry, but most documents are available only in Spanish.

Discurso de Raúl Castro en la Clausura del Congreso http://www.cubadebate.cu/noticias/2011/04/19/texto-integro-del-discurso-de-raul-en-las-conclusiones-del-congreso-del-pcc/

Resolución sobre los Lineamientos de la Política Económica y Social del Partido y la Revolución http://www.cubadebate.cu/especiales/2011/04/18/resolucion-sobre-los-lineamientos-de-la-politica-economica-y-social-del-partido-y-la-revolucion/

Resolución sobre el perfeccionamiento de los órganos del Poder Popular, el Sistema Electoral y la División Político Administrativa http://www.cubadebate.cu/noticias/2011/04/18/resolucion-sobre-el-perfeccionamiento-de-los-organos-del-poder-popular-el-sistema-electoral-y-la-division-politico-administrativa/

Central Report to the Congress http://en.cubadebate.cu/opinions/2011/04/16/central-report-6th-congress-communist-party-cuba/

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Sixth Congress of the Communist Party of Cuba: Will Raul Forge His Own Legacy?

The Sixth Congress of the Cuba’s Communist Party, meeting from April 16 to 19, may be a turning point for Cuba. It may also be the beginning of President Raul Castro’s attempt to forge his own “legacy” and to emerge from the long shadow of his brother. In order to succeed, the reformist thrust of the Congress must be ambitious and courageous, moving Cuba away from the defunct economic and political approaches copied from Soviet orthodoxy in the 1960s.

How likely is Raul to succeed?

There seems to be no chance that Raul will abandon Cuba’s Soviet-style political institutions and Communist Party monopoly. While Cuba is a signatory to Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Labour Organization’s Conventions, there is virtually no possibility that Raul will use the opportunity of the Congress to honor fully Cuba’s commitments to the human, political, civil and labor rights enshrined in these covenants.

But economic reform in a “market friendly” direction is probable.  In various speeches since 2006, Raul has indicated that he recognizes the problems that Cuba confronts in terms of the production of agricultural and industrial goods and improvement of Cuba’s infrastructure. He is well aware of the unbalanced structure of the economy, the monetary and exchange rate pathologies and the dysfunctional incentive environment. He has approached the problems systematically and deliberatively – though perhaps somewhat leisurely.

Raul’s new approach is embodied in the “Draft Guide for Economic and Social Reform” published in November 2010. This constitutes an ambitions and comprehensive “wish-list” or statement of aspirations designed principally for popular discussion. It represents a strong commitment to reform. While there are internal inconsistencies and opaque elements among the 291 recommendations, there are deep-cutting proposals on many aspects of economic organization and policy. However, there were no priorities indicated among the recommendations. There was no suggestion of the sequencing of policies. There was no apparent coordination among the proposals.

In order to forge a viable reformist strategy from this wish-list, a new document is required. This indeed has probably been prepared for approval at the Congress. This document may include a clearer statement of specific objectives. It also would need to prioritize policies and include some sequencing of actions and generally to provide some “focus” to what is in effect a check list of good intentions.

In such a reform process many things would be changing simultaneously with symbiotic impacts and consequences that will likely be painful and are difficult to foresee. Will Raul have the courage to take the risks inherent in an ambitious process of economic change? This was not apparent in view of his earlier “go-slow” approach prior to the Congress.

There undoubtedly is opposition, of indeterminate strength, to the prospective reform process. Former Minister Jos Luis Rodriguez, for example asserted that

“…essentially, the model could be sustained; the proof is that the economy continued growing since 1994. ….the fact is that there was not a recession despite all the problems”

If the model was not in crisis, ambitious and deep-cutting reforms obviously would be unnecessary and perhaps foolish.

However, while the “Fidelistas” will run interference, the reform process is likely sustainable. There are a variety of reasons for this conclusion:

  • Cuba’s economic problems must be dealt with;
  • As the micro-manager of the economy for some 45 years, Fidel himself is discredited:
  • All of the “Fidel Models” are discredited by current realities, by the “Draft Guide,,,”; by Raul’s statements and speeches and by the publicity regarding the need for a reform;
  • The “Fidelistas” appear to be on the wane;
  • Generational change is under way;
  • The climate of opinion seems to have changed and large numbers of Cuban citizens appear to be ready for reform – despite the risks that are already apparent;
  • Heightened popular expectations for change will be increasingly difficult to contain.

Moreover, the Fidelista Ministers have been replaced by President Raul Castro and he has moved his military colleagues into management positions throughout the economy – though this also is problematic.

Finally, at this stage of his life Raul is probably thinking about his “legacy” and his place in history. It is unlikely that he wants to be judged as the minor appendage of his older brother. He seems to want his own “economic model.”  Perhaps he recognizes that while “History will (not) absolve” Fidel, perhaps it might absolve him. If he were to introduce major political reforms he would earn a very significant place in “History.” However, introducing deep-cutting economic reform is a start.

The Sixth Congress of the Communist Party of Cuba is indeed Raul’s main chance.

Primer Congreso del Partido Comunista de Cuba

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Cuban Public Opinion Survey, 2011, International Republican Institute

The International Republican Institute has just published the results of a public opinion survey taken in Cuba, the fifth such survey since 2007. A series of questions were asked concerning general perspectives on Cuba, attitudes towards political and economic change, and access to information technology. Some of the same questions have been asked since 2007 providing some interesting comparisons over time.

The complete survey is located here: Cuban Public Opinion Survey, 2011, Int’n’l Republican Institute

The survey methodology was as follows

  • Dates of Interviewing: The fieldwork was conducted Jan, 28 – Feb. 10, 2011.
  • Data Collection Method: Stratified-intercept methodology based on personal, face-to-face interviews in Cuba.
  • Sample Size: 463 Cuban adults (age 18 and older).
  • Sample: Interviews were conducted in twelve (12) Cuban provinces
  • The sample was stratified by province, then by sub-units within each province. Interviewees were allocated by gender and age quotas. The final selection of each interviewee was random.
  • Respondents: The sample selection for province, gender and age are based on the last available Cuban census data, released in 2002.
  • Maximum Sample Margin of Error: Margin of error of ± five percent for a 95 percent level of confidence.

There are a number of interesting results of the survey. Here are a couple.

1. What do you think is the biggest problem in Cuba?   60.7% said that Low Salaries / High Cost of Living were the most serious, up from 40% in 2009,  while 12.7% said that food scarcity was the most serious. 1% of the respondents stated that the Lack of Freedoms / Political System was the most serious. This suggests that Raul Castro’s priority on the economy is not misplaced.

2.      If you were given the opportunity to vote to change from the current economic system to a market economy system – with economic freedoms, including opportunities for Cubans to own property and run businesses – would you vote in favor of, or against, that change?  90.7 of the respondents were in favor. The prospective pro-market reforms of the Sixth Congress would appear to be in line with public opinion.

3.      Do you believe the current government will succeed in solving Cuba’s biggest problem in the next few years?     77% say no, a higher proportion than in any IRI survey since 2007.

4.      If you were given the opportunity to vote to change from the current political system to a democratic system – with multi-party elections, freedom of speech and freedom of expression – would you vote in favor of, or against, that change? 78.2% were in favor.

5.      Do you regularly use a cellular phone?  25.3% said yes, up from 10% in 2007.

Presumably the Government of Cuba conducts similar studies but with differently worded questions that produce results somewhat more congenial to the status quo.

But the results of the IRI surveys certainly must be of deep concern to the Government and the Party.

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Chronology: Raul Castro’s Road to Reform in Cuba April 13, 2011

By Marc Frank, Reuters, April 13, 2011

External Link: http://www.reuters.com/article/2011/04/13/us-cuba-reform-chronology

HAVANA (Reuters) – Cuba’s pace of economic reform is expected to pick up after a congress of its ruling Communist Party that begins this weekend and whose main agenda item is “modernizing” the socialist economy.

Reforms up for discussion include: decentralization of government decision-making and revenue flows; giving more autonomy to state-run companies; slashing state payrolls and subsidies and reducing the state’s role in agriculture and retail in favor of a growing “non-state sector”.

The congress crowns President Raul Castro’s efforts to build a consensus for major changes in how the Caribbean country runs its economy and how its people live.

Since he took over day-to-day rule from his ailing older brother Fidel Castro in 2006, Raul Castro signaled that one of the world’s last Soviet-style economies was due for overhaul. But he has ruled out any switch to Western-style capitalism.

What follows is a chronology of Castro’s most important reform measures and statements:

2007

July – In his first major speech, Raul Castro calls the state milk collection and distribution system “absurd” and says farmers will deliver directly to local consumers where possible.

“To have more, we have to begin by producing more, with a sense of rationality and efficiency,” he said.

August – Castro signs a law ordering all state companies to adopt a system of “perfecting” management. This was developed by the military when Castro was defense minister to improve performance using capitalist-style management techniques.

2008

February – In his formal inaugural address as the new Cuban president, Castro says: “We must make efforts to find the ways and means to remove any deterrent to productive forces. In many respects, local initiative can be effective and viable”.

March – Computers, cell phones, DVD players and electric appliances go on sale for the public and bans on Cubans renting cars and staying in tourism hotels are lifted.

A sweeping reform of agriculture begins. This includes decentralization of decision-making, increases in state prices paid to farmers, leasing of fallow state land and loosening of regulations on farmers selling directly to consumers.

August – A significant labor reform ties wages to individual productivity, and caps on earnings are eliminated.

Government announces domestic freight transport and housing construction will be decentralized to the municipal level.

2009

March – Castro purges his brother’s economic cabinet and places trusted military men and reform-minded technocrats in key economy and planning posts. The central bank head Francisco Soberon quits two months later and is replaced.

April – The new cabinet slashes the budget and imports. Plans are unveiled to develop suburban farming around most cities and towns, using mainly private plots.

July – Castro is quoted as stating “ideas chart the course, the reality of figures is decisive,” an unusual statement in a nation where ideology and politics trump economics.

August – National Assembly establishes office of the Comptroller General of the Republic. Castro says it will aim to improve “economic discipline” and crack down on corruption.

He calls for “elimination of free services and improper subsidies — with the exception of those called for in the constitution (healthcare, education and social security).”

Santiago mountain dwellers are allowed to sell fruits and produce at roadside kiosks. Spreads to adjoining provinces.

September – Licenses are issued to food vendors in various cities, making them legal.

October – Granma announces state work place lunchrooms will close in exchange for a daily stipend.

December – Economy Minister Marino Murillo tells parliament: “We have begun experiments … to ease the burden on the state of some services it provides.”

2010

January – Municipal governments are ordered to draw up economic development plans that may include cooperatives and small business. A pilot project where taxi drivers lease cabs instead of receiving a state wage begins in Havana.

April – Barbershops and beauty salons with up to three chairs go over to a leasing system. Rules for home construction and improvements are liberalized.

June – Sale of construction materials to the population is liberalized. The government authorizes farm cooperatives to establish mini-industries to process produce.

August – New rules authorize Cubans with small garden plots and small farmers to sell produce directly to consumers.

The state increases from 50 to 99 years the time foreign companies can lease land as part of tourism and leisure development projects, such as golf courses and marinas.

Stores open where farmers can purchase supplies in local currency without regulation.

September – The government announces the lay-off of more than 500,000 state workers and 250,000 new licenses for family businesses over six months. Some 200,000 of the state jobs will go over to leasing, cooperatives and other arrangements. Unemployment benefits are cut.

Self-employment regulations are loosened and taxes tightened. Family businesses are authorized for the first time to hire labor, do business with the state and rent space.

December – Castro gives most explicit reform speech yet urging change of “erroneous and unsustainable concepts about socialism that have been deeply rooted in broad sectors of the population over the years, as a result of the excessively paternalistic, idealistic and egalitarian approach instituted by the Revolution in the interest of social justice.”

2011

January – State banks begin issuing microcredits to would-be farmers who have leased land.

March – Castro announces the original timetable to lay-off 500,000 state workers by April has been scrapped and there is no fixed date to complete the process as workers resist losing their jobs and balk at the high cost of proposed leasing arrangements. Castro creates new post to oversee economic reform and promotes Economy Minister Murillo to the job.

April – Authorities announce 120,000 people have leased land since 2008 and 180,000 people have taken out licenses to work for themselves and rent space to new entrepreneurs since October. State banks are authorized to issue microcredits to new entrepreneurs and state bodies to do business with them.

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Cuba’s Economic Agenda and Prospects: An Optimistic View!

By Arch Ritter

Published originally in FOCALPoint, April 2011, Volume 10, N0. 3.

The Sixth Congress of the Communist Party of Cuba, taking place April 16-19, 2011, will focus on a comprehensive range of economic reforms, labelled an “updating” of its model, but ostensibly not a movement away from Cuban socialism. This reflects the depth of Cuba’s economic problems as well as the unwillingness of the regime to tolerate discussion of political reform, which is not on the agenda.

The Cuban economy faces severe difficulties, despite purportedly high GDP growth figures. The real state of the economy can be summarized as follows. There has been minimal recovery from the near 80 per cent collapse in the population’s real income levels since 1989. De-industrialization brought 2010 industrial output to 51 per cent of its 1989 level. Sugar production has declined catastrophically, from roughly seven million tonnes in the 1980s to approximately 1.3 million tonnes per year at present. Reduced production of foodstuffs has resulted in major increases in food imports. Investment has been insufficient, at 8.5 per cent of GDP (compared with 21.9 per cent for Latin America in 2008). There are high levels of under-employment in the state sector —an estimated 1.2 to 1.8 million workers, or 20 to 35 per cent of the labour force— compared to the official unemployment rate of 1.6 per cent. These factors are combined with a half-century of monetary pathology, 20 years of the dual exchange rate and monetary systems, and heavy reliance on special trade arrangements of dubious sustainability with Venezuela.

President Raúl Castro has spoken forcefully on the need for economic reform (in contrast with the complacency of his brother Fidel), stating in April 2010:

“We face unpleasant realities, but we are not closing our eyes to them. We are convinced that we must break dogmas, and we undertake with strength and confidence the modernization, already underway, of our economic model.”

The character of socialism has also been redefined under Raúl’s regime as spelled out in the Draft Guidelines for Economic and Social Policy, a document released in November 2010 as part of the lead-up to the Congress: “In the economic policy that is proposed, socialism is equality of rights and opportunities for the citizens, not egalitarianism.” This may be of game-changing significance, suggesting that Cuba is moving toward “social democratic” orthodoxy.

When Raúl succeeded his brother in 2006, there were heightened expectations that he would introduce reforms, given his reputation for pragmatism. However, few significant changes were introduced in his first four years, with the exception of postponement of the retirement age and the granting of 10-year leases on unused state-owned farmlands to private farmers.

In October 2010, Raúl introduced a program to downsize the state sector that would lay off 500,000 redundant workers by March 31, 2011, and ultimately, 1.8 million workers in total by 2015. These workers were to be absorbed in an invigorated small-enterprise and co-operative sector. In order to encourage small enterprise, the licensing process, regulatory system and tax regime were liberalized. These measures were headed in the right direction, but were too modest to stimulate the required expansion of self-employment. By January 2011, some 83,400 new self-employment licenses had been granted —far below the 500,000 target for March 31. Because of this, the implementation of the state sector downsizing was decelerated and indeed appears to be on hold until after the April Congress. Few if any workers have actually been laid off, although some have been told that they are to be let go, prompting informational and procedural discussions in many workplaces.

The Draft Guidelines for Economic and Social Policy document was issued by the government to serve as the basis for public discussion of the reforms and prepare a more definitive strategy to be approved at the Congress. These Guidelines include 291 recommendations for changes in every area of economic and social policy. It is a statement of aspirations, with no indication of policy priorities, sequences or co-ordination. The reforms are to be within the framework of the socialist planning system.

There are a variety of views among analysts regarding the possible outcome of the Congress. Some expect no meaningful policy changes. But others —including some dissident economists and mainstream analysts alike— are optimistic and expect reforms. Indeed, the climate of opinion within Cuba decisively favours reform.

Can Raúl’s administration forge a workable strategy from the Guidelines’ wish list? Given the deliberative and systematic way in which Raúl has proceeded so far, this appears probable. A process of economic —but not political— reform will most likely begin after the Congress. Where it will lead is hard to predict. Presumably Raúl’s regime would like the process to end with a new balance between public and private sectors, with a controlled movement toward the market mechanism in price determination and the shaping of economic structures, and with the construction of a rational configuration of incentives shaping citizens’ daily economic actions so that their private endeavours become compatible with Cuba’s broader economic well-being. This, however, remains to be seen.

Third Congress of the Communist Party of Cuba, Bohemia, 8 April 2011.


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Ana Julia Faya: “The Sixth Congress of the Communist Party of Cuba: Walking a Fine Line”

Cuba’s leaders are currently facing a serious internal crisis.

The Sixth Congress of the Cuban Communist Party (PCC) will take place in Havana April 16-19, 2011, during which an ambiguous process of economic reform that the governing elite calls “updating the system” will be sanctioned. Reluctant to admit that they are undertaking reforms, Cuba’s leaders face a serious internal crisis; meanwhile they continue to express loyalty to socialism and rely on a fledgling and confined private sector to save the national economy.

In December 2010, Raúl Castro, the president of Cuba and second secretary of the PCC, said that the island now finds itself at the edge of an abyss, and analysts across the political spectrum agree. The regime is facing serious financial and credibility crises.

On the one hand, Cuba is having difficulty fulfilling its financial promises: the country does not receive credit from international institutions; oil reserve prospects have not materialized; and aid from Venezuela seems to have bottomed out.

On the other hand, the sources of the government’s legitimacy are dissolving quickly among a population that is struggling to survive in the midst of basic shortages and shrinking state subsidies. The struggle against the U.S. embargo has become a tough sell as an instrument for internal cohesion since the Cuban government itself has publicly admitted that a good part of the island’s economic problems is due to inefficiency and bad policy decisions rather than the embargo. Services such as education and public health, which have historically been presented as achievements of the system, can no longer receive the same level of subsidies that they did in past years and are now subject to scrutiny by a population enduring their gradual deterioration.

Given this situation, the Cuban government faces the dilemma of making changes it has qualified as “pressing,” such as decentralizing the state, to ensure the system’s survival. However, such changes could jeopardize the totalitarian model that has existed until now and, ultimately, support for the elite in power. It is within the context of this dilemma that after 13 years of postponement, the Congress, which according to the statutes of the PCC “decides on all of the most important policy issues,” will meet to focus the discussion on the meager Draft Guidelines for Economic and Social Policy.

The Guidelines seek to perfect a dysfunctional model while walking a fine line: the document introduces a private sector that will have to absorb more than one million unemployed workers from the public sector (excluding coercive and security agencies, which have grown), yet warns that concentrating capital in private hands will not be permitted. This ambiguity has generated criticism from all sides. Some militant orthodox communists have expressed their dissatisfaction with the reforms and have labelled them “state monopoly capitalism”; reformists within the system and others from the opposition describe the guidelines as “cosmetic” because they do not include an actual restructuring of the current regime and as “lacking a real base,” as there are no resources or financing to allow the private sector to expand.

What is certain is that Cubans have expressed their opinions both in the assemblies convened by the PCC to discuss the Guidelines and on the Web, and on March 1 Raúl announced that the beginning of the layoffs would be postponed. Perhaps the government took into consideration one of the most reiterated arguments offered by specialists: Wait until the private sector consolidates before proceeding with dismissals. Perhaps the government also decided to show caution given the explosive social climate created by the layoff announcements and cuts to social benefits —such as the closing of workers’ canteens and the gradual disappearance of the rations book— in addition to the international context of protests against long-lived dictatorships. Raúl has announced that due to the “complexity” involved in “updating the system,” it will take at least five years to implement the new model completely. We will have to wait until the Congress meets for a clearer outline of these plans, which are currently vague and shifting.

It also remains to be seen if Congress will take into consideration proposals by specialists on Cuba that include: abandoning the planning model; abolishing the 10-year limit for leasing new plots of land; creating legal support to protect the new private sector; legalizing the buying and selling of homes and vehicles; adding flexibility to the onerous tax system for the self-employed; and creating industrial and service co-operatives from state-run companies.

Despite the fact that Raúl has asked the leadership for a “change in mentality,” what has been left out of discussions is the role that the Cuban diaspora should play in the reform process given its support for the new private sector through remittances, of which the government has made a utilitarian use. The Congress will also exclude topics such as ending repression, arbitrary arrests and “repudiation meetings” against peaceful opposition; it will disregard important political and civil issues, such as abolishing permits for Cubans entering and leaving the country or ceasing control of communications and the Internet; and it will not discuss freedom of association. Yet, these issues constitute the basis for reaching sustainable economic development in any society.

According to Raúl, this Congress will be the last one held by the “historic administration.” It will have to approve the new Central Committee and make appointments to the positions of first and second secretaries of the PCC, currently held by the official leaders, Fidel and Raúl Castro.

To date, everything indicates that the decisions of the Sixth Congress will prolong the status quo by adopting ambiguous reforms under strong controls. But the consequences of introducing these reforms are difficult to predict; in politics, when one walks a fine line any of the tendencies in play can prevail. Clearly, Cuba’s economy will change as Cuban society already has. The elite in power should change, too. After 52 years, it is about time.

Ana J. Faya is an independent consultant and policy analyst.

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Cuba’s Economic Reform Process under President Raul Castro: Challenges, Strategic Actions and Prospective Performance

The Bildner Center at City University of New York Graduate Center organized a conference entitled “Cuba Futures: Past and Present” from March 31 to April 2. The very rich and interdisciplinary program can be found here: Cuba Futures Conference, Program.

I had the honor of making a presentation in the Opening Plenary Panel.  The Power Point presentation is available at “Cuba’s Economic Reform Process under President Raul Castro.”

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Recuperation and Development of the Bahi ́a de la Habana

By Arch Ritter

The Bahia de la Habana has been a centre for international shipping and trade since the early 1500s. It served as a haven from storms and pirates, a fortification against the British, a provisioning center and a gathering point for the Spanish fleet sailing between Seville and Cadiz and the ports of the New World. It is still a hard-working port, handling much of Cuba’s container and bulk shipping, as well as naval installations, cruise ship facilities and industry. After almost 500 years as a working port, however, it appears to be in the process of transformation to a modified and redeveloped tourist and transport center.

“His Britannic Majesty’s Land Forces Taking Possession of Havannah (sic.), August 14, 1762 and Sloops of War Assisting to Open the Booms” Artist: Philip Orsbridge.    Less than a year after Havana was captured by the British in the Seven Years War it was returned to Spain in exchange for Florida by the Treaty of Paris. By the same treaty, France chose to retain Guadalupe and Martinique in exchange for Quebec which went to the British.

The Oficina del Historiador de La Habana, established in 1938 by Dr. Emilio Roig de Leuchsenring for the restoration of historic Havana has played a vital role in restoring Old Havana under the leadership of Eusebio Leal Spengler in 1967. His work has been exemplary, and the historical quarter certainly deserves its UNESCO designation of “World Heritage Site”, awarded in 1982. The restoration and preservation of historic Havana continues to radiate out from the Cathedral quarter and now includes the Plaza Vieja and various locales alongside the Avenida del Puerto to the Iglesia San Francisco de Paula.

It now appears that the whole port area has been designated as a development zone. The old derelict wharves and warehouses are being dismantled and removed. The Arts and Crafts Market has been transferred from close to the Cathedral to the old Almacenes San José into the interior of the port, which have been restored and renovated.  New hotels such as the Armadores de Santander have opened. The new Russian Orthodox Church is in this areas as well

Bahia de La Habana

Removing Derelict Wharves, February 2011, Photos by Arch Ritter

Furthermore, the container port and much of the bulk shipment port will be moved to a new facility in the excellent harbor at Mariel, 50 kilometers west of Havana, which will also generate some regional development impulses in that region. The old Havana petroleum refinery, formerly owned by Esso and Shell, will shut down when to the new refinery in Cienfuegos opens. And the electrical generation plant at the edge of the port, a heavy air polluter for the capital, will relocate to Matanzas. In time, the serious pollution of the port will be reduced, and one hopes cleaned up definitively. [For a glance at current pollution in the harbor, check this web site: Pollution from the Oil Refinery]. This will be an expensive process taking many years. It is also likely that there are significant toxic residues in much of the land used for industrial purposes for past decades. Cleaning this up also will be costly and time-consuming.

At this time, there seems to be no master-plan for the development of the harbor region available to the public. However, there was some talk in February 2011 of such a plan becoming available in May of 2011.

In time, it is expected that new hotels will ring part of the harbor. With normalization of relations with the United States, the port of Havana also will become a key destination for virtually all of the cruise ships entering the Caribbean region. Quick access to Casablanca and the fortifications on the east side of the harbor will likely be provided with transit by improved cross-harbor ferryboat. One could imagine as well circum-harbor excursion ferry boats plying a vigorous trade. With normalization of travel between the United States and Cuba, high-speed hydrofoil passenger transportation and normal traditional ferry boat service from Key West and Miami to Havana will likely be established, providing further stimulus to the port area. A good deal more of the area around the port thus will become an attractive tourist, commercial and perhaps residential zone. It may also be possible that office complexes are eventually developed in the area as well, shifting part of the commercial center of gravity of Havana from the far west back to the harbor zone.

If the redevelopment of the harbor area proceeds with the same deliberativeness as the restoration of Old Havana, we can anticipate a fine citizen- and tourist-friendly extension of the Old Havana zone southwards into the Baha de La Habana and across the harbor to Casablanca, Regla and the Fortaleza San Carlos de la Cabana area.

[Note: The basic idea for this note came from Omar Everley Perez, Centro de Estudios sobre la Economa Cubana on March 8, 2011]

New Artisanal Center at the restored  Almacenes San José, Avenida del Puerto, Photo by Arch Ritter, February 2011

Russian Orthodox Church, Avenida del Puerto, Photo by Arch Ritter, March 2008

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