• 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."

Johann Sebastian Bach, the “Stasi” and Cuba

By Arch Ritter

My wife Joan and I completed our J. S. Bach “Pilgrimage” in late November, 2011, travelling to the various locations where he lived and worked. Our first stop was his birthplace Eisenach where he attended the same school as Martin Luther – but about two centuries later. Then came Ohrdruf, where he lived from age 9 to 15 with his eldest brother, J. C. Bach, also an organist and composer, with whom he studied the organ – both its music and its maintenance and construction. Bach then was capellmeister, organist or court musician in a variety of locations, namely Arnstadt, Mühlhausen, Weimar, and Köthen before moving to Leipzig for his last 23 years.

Our journey was indeed memorable, not only as a homage to Bach who in my view is undoubtedly the greatest musician in history, with a vast musical “oeuvre”, sacred and secular, for organ, piano, choir and numerous individual instruments and combinations of instruments. Exploring by car some of the rural areas and small towns of Thuringia in what was the Deutsche Demokratische Republik (DDR) or “East Germany” was also a great pleasure and an eye-opener.

In following the footsteps of Bach through Eastern Germany, one cannot avoid the dark side of German – and human – history. For example, Weimar, which was an outstanding focus of German cultural achievement for a couple of centuries, is five miles from the Buchenwald concentration camp. Ohrdruf was also the location of a major concentration camp, liberated by American forces on April 4, 1945, and visited by Generals Eisenhower, Patton and Bradley as well as by the press from much of the world.  Erfurt, where Bach’s mother was born, was the scene of a series of pogroms against its Jewish population in the 1400s. Muhlhausen was the center of a brief communistic theocracy under Thomas Muntzer and is near the battle site where his peasant army was defeated during the German Peasant’s war of 1524-25.

But what was particularly striking for us was that the Thomaskirche in Leipzig where Bach worked for 23 years is located three city blocks from the “Runde Ecke” (the round corner”) which was the Leipzig headquarters of the Ministerium für Staatssicherheit (MfS),commonly known as “the Stasi”. The Stasi was probably the most effective and repressive intelligence and secret police agencies in the world. It was an out-of-control behemoth, ultimately with 91,000 full-time employees, 350,000 formal informers, a budget of 22.5 million Marks and 160 kilometers of files. It engaged in widespread telephone surveillance, postal service surveillance (opening 1,500-2000 letters daily in Leipzig alone), and border controls. All this was done with German diligence and thoroughness.

The uprising that resulted in the overthrow of the DDR regime was centered outside the old “Runde Ecke”. This is now a museum set up by the “Citizen’s Committee Leipzig” which also coordinated the uprising. The town‘s churches served as the organizing locales for the early stages of Leipzig’s “Peaceful revolution.”

The Museum on the Stasi diverted my thoughts away from J.S. Bach and back to Cuba.

Stasi Files – before the age of the computer

Paper Pulping Machine for destroying documents. These machines broke down from overuse in the last days of the Leipzig Stasi. Documents were then ripped up by hand, filling some 90,000 bags of paper. The documents are now being pieced together using computer technology.

Cuba’s Ministry of the Interior (Minint) had close contact with the Stasi – so close that it could almost be considered as a little brother of the Stasi. (The Stasi was also linked to the KGB, and Vladimir Putin served time as the KGB liaison officer to the Dresden HQ of the Stasi.) Cuba’s domestic spying operations are conducted by the Department of State Security (DSE), an arm of MININT, which has authority to monitor the general public. According to the Encyclopedia Britannica, Cuba’s Ministry of the Interior (MININT), which was modeled on the Soviet KGB, rivaled the East German Stasi for effectiveness and ruthlessness.

The role of the Stasi in supporting and advising Minint is not something that I know much about. Nor do I know much about Minint and have had only one minor contact – that I know of –  (being filmed with Pascal Fletcher, now with the Miami Herald, in a bar in the Hotel Nacional in Havana.)  However, one indicator of its role is the lack of trust among Cuban citizens and indeed among émigrés, with so many suspecting that others are in the service of state security. Another indicator is telephone surveillance, which is widespread and was commented upon recently by Yoani Sanchez (See her Blog entry: ETECSA: From Surveillance to Indiscretion.)

Ministry of the Interior, Havana

An article by Michael Levitan in 2007 for the Miami Herald details some of the interaction between the Stasi and Cuba’s Minint (“East Germans drew blueprint for Cuban spying.” Levitan draws on the work of Jorge L. García Vázquez, a Cuban exile who was jailed in a Stasi cell in 1987. García Vázquez produces a Research Blog on the Stasi-Minint relationship (“Conexión La Habana -Berlin.  Secretos de Estado y Notas sobre la Colaboración entre la STASI y el MININT) at http://havana-berlin-connection.blogspot.com/.

Here are a few quotations from Levitan’s essay:

(Quoting García Vázquez)  ”The repressive system that existed in East Germany . . . is the same one that exists today in Cuba,” he says. “What MININT learned from the Stasi has not been forgotten. On the contrary, [the strategies and techniques] are alive today despite the fall of the Berlin Wall.”

The Stasi’s menacing control over almost every aspect of private and public life in East Germany can be seen in this year’s Oscar-winning film The Lives of Others“, the tale of a Stasi officer’s inner conflict as he protects a dissident playwright whose apartment has been thoroughly bugged by the Stasi.

Germans taught the Cubans how to mount effective camera and wiretap systems for eavesdropping — for example, at what height on the wall to install microphones, which color wallpaper provides the best concealment, and which shade of lighting for the best video recordings.

The Stasi provided computers and introduced new archiving methods that better organized, protected and sped up the Cubans’ processing of security information. It delivered one-way mirrors used for interrogations and provided equipment to fabricate masks, mustaches and other forms of makeup so that when the Cubans sent out covert agents, ”they went in dressed with wigs, false noses — the works — credit of the Stasi,” Vázquez says.

At the Thomaskirche, Leipzig

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Paul Hare: “Cuba: What Might Happen Now?”

Paul Hare has just published a valuable analysis on Cuba’s current overall economic and political situation. It is certainly worth some careful attention. Especially interesting is the Appendix which presents a detailed and comprehensive comparison of the positions of the Government with those of dissident groups on a broad range of issues.

Paul Hare was the British Ambassador to Cuba from 2001-2004. He is  currently a Lecturer in International Relations at Boston University.

Paul Webster Hare, Cuba, What Might Happen Now in Cuban Affairs: Quarterly Electronic Journal, Volume 6 Issue 2, 2011


It didn’t happen 20 years ago. It hasn’t happened so far in 2011. Despite massive popular uprisings against totalitarian governments elsewhere in the world, Cuba continues to buck the trend. If there are no mass protests and sit-ins at the Plaza de la Revolución, what might happen now in Cuba? What changes are taking place in Cuba, and what are the implications for its economic and political future?

This paper analyzes the new political and economic space that is opening up in Cuba. The space is developing because the government has recognized that it needs to salvage the economy if it is to salvage the Revolution. This paper argues that Cuba is unlikely in the near-term to see a grass roots movement that demands the wholesale replacement of its leadership. But the surge of interest in the economy, perhaps unwittingly stimulated by the government, is shifting activity to territory that favors the opposition. Raul Castro is promoting a language of reform, even though his own definitions require some linguistic contortions. His speeches are still more of the parade ground, rather than of a CEO growing a business in the world market. And there is no new product; instead a striving to perfect the old one – socialism – through greater efficiency, reducing state spending and cutting imports. But so far there is no acceptance by Raul Castro that by allowing individuals to get rich, the Cuban economy will grow.

None of this means that democracy with features such as freedom of expression, freedom of movement, and an end to communist party monopoly is around the corner in Cuba. Indeed there have been many times in the 52 year revolution when signals of greater openness were withdrawn. But in 2011 the scenario is moving away irreversibly from the communist comfort zone. The debate is not yet in the political center but it is hard to see how it can be contained, given the principles that are being discussed.

The government is seeking to implement limited reform, change economic calculations, revise revolutionary definitions, and deal with a potential explosion in cell phone use (now 25% of all Cubans) plus demands that internet access be unrestricted for economic and political reasons. The goalposts of 52 years of government are moving slightly. The objective remains a state-controlled economy where the ilitary/government dominates the strategic sectors and not one where a private sector will be given free license. This suggests that those who want an increase in fundamental freedoms in Cuba, and greater political and economic openness, need to engage and show by example in politics, economics and above all in business what works and what offers Cubans a better future. This paper examines how such actions might develop and how a new cadre of “civic entrepreneur” might have a significant influence. The annex provides a summary of what Cubans on the island are saying about current issues of debate.

Annex: How Far Apart are Cubans?

It is difficult if not impossible to gauge opinions on key issues of Cubans on the island. As an attempt to measure the scope of the debate, I have compared below what the government has been saying on a variety of issues with public comments of Cubans not in government positions who live on the island. Some are from members of the “opposition,” some from semi-official centers of studies, and some from popular cultural figures. All are producing the critical comments and new ideas which Raul Castro professes to value. These issues are some of those on which Cubans must join in a debate and where the civic entrepreneurs will have a key contribution.

Ambassador Paul Hare

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Eusebio Mujal-León: “Survival, Adaptation and Uncertainty, The Case of Cuba”

Professor Eusebio Mujal-Leon, of Geogetown University, has just published a valuable analysis of Cuba’s current economic reforms and the changing political configuration under President Raul Castro.

The article was published in the Journal of International Affairs, Fall/Winter 2011, and can be found here: Mujal-Leon_JIA “Survival, Adaptation and Uncertainty, The Case of Cuba”


The Cuban Revolution recently experienced a major transition of leadership as power shifted hands from Fidel Castro to his younger brother, Raúl. Eschewing the role of caretaker, Raúl embarked on an ambitious program aiming to streamline a cumbersome and inefficient state while reforming the economy in ways that will increase agricultural production, encourage self-employment and lead to sustainable economic growth. At the same time, Raúl Castro refashioned the ruling coalition and proposed major changes to the ruling Communist Party, including term limits, leadership rotation and the separation of party and state functions. This article analyzes the emergence of a new Cuban political elite, explores how power is distributed between its military and party wings and examines the major challenges this coalition must overcome if it is to successfully manage the transition from the Castro era and  stabilize Cuban autocracy.

Below are two of Professor Mujal-Leon’s tables that summarize the changes in the membership of Cuba’s central political institutions.

ProfessorEusebio Mujal-Leon


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Centro de Estudios de la Economía Cubana (CEEC)

By Arch Ritter

Centro de Estudios de la Economía Cubana (CEEC)

The University of Havana’s Centro de Estudios de la Economia Cubana has made itself the foremost research institution on the Cuban economy since its establishment in 1989.  Its faculty includes many of the best-known analysts on the Cuban economy, including both senior and newer faculty members. The work of the Cuban Economy Team is especially impressive and is certainly worth careful study by anyone interested in Cuba. I have often thought that Cuba would benefit immensely if some of the members of CEEC were in key Cabinet positions in the Government of Cuba responsible for the management of the economy.  I expect that this in fact will happen before too long! Cuban Economy Team: Dr. Juan Triana Cordoví, Dr. Omar Everleny Pérez (Director), Dr. Armando Nova González, Dr. Hiram Marquetti Nodarse, Dr. Jorge Mario Sánchez Egozcue, Dr. Pavel Vidal Alejandro, Ms. Betsy Anaya, Ms. CamilaPiñeiro Harnecker, Ms. Ricardo Torres Pérez and Lic. Saira Pons Pérez Enterprise Management Team: Dr. Orlando W. Gutierréz Castillo, Dr. Humberto Blanco Rosales, Dr. Rosendo Morales González, Dr. Jorge Ricardo Ramírez, Dra. Aleida Gonzalez-Cueto, Dra. Dayma Echevarría León, Dra. Ileana Díaz Fernández, Ms. Mercedes González Sánchez, Ms. Maria Isabel Suárez González,  Lic. Dayrelis Ojeda Suris and Lic. Mariuska Cancio  Fonseca The CEEC publishes a number of “Boletínes” each year that usually include valuable analyses of various aspects of Cuba’s economy and economic policy. Here are the Tables of Contents of the last three issues. The “Boletínes” are hyper-linked to the CEEC Web Site and some of the essays are linked to the PDF files for rapid access.

Boletín Agosto 2011

El sistema de gestion y direccion de la economia hoy. Ileana Diaz,  Dra.Ileana Diaz Experiencias noruegas relevantes para la agricultura cubana, Dr. Anicia Garcia La propiedad en la economia cubana. Armando Nova,  Dr.Armando Nova Los sistemas de direccion  de la economia  1961- 1975,  Dra.Ileana Diaz Turismo de salud en Cuba. David Pajon Dr. David Pajon

Boletín Abril-Agosto 2010

Competitividad e innovacion, donde esta Cuba. Ileana Diaz, Dr. Ileana Díaz El impacto del postgrado en la educacion superior Cuba- Venezuela. Rosendo Morales Dr. Rosendo Morales El mercado y el estado, dos partes que forman un todo. Armando Nova, Dr. Armando Nova González Entre el ajuste fiscal y los cambios estructurales, se extiende el cuentapropismo, Dr. Pavel Vidal y Dr. Omar Everleny Pérez Fuerzas favorables y restrictivas a la dirección estratégica de la empresa. Dayrelis Ojeda y Humberto Blanco Lic. Dayrelis Ojeda y Dr. Humber

Boletin Enero-Mayo 2010

El mercado libre agropecuario en 2009. Armando Nova, Dr. Armando Nova González El sector energetico cubano entre 2005 y 2009. Ricardo Torres_0 Ms. Ricardo Torres Pérez La política fiscal actual. Pavel Vidal_0 Dr. Pavel Vidal Alejandro Estrategia. Mito o realidad. Ileana Diaz y Roberto Cartaya_0 Dr. Ileana Díaz y Dr. Roberto Cartaya La producción agricola y ganadera en 2009. Armando Nova_0 Dr. Armando Nova González La universidad, la economía y el desarrollo. Juan Triana_0 Dr. Juan Triana Cordoví Los cambios estructurales e institucionales. Pavel Vidal_0,  Dr. Pavel Vidal Alejandro

Universidad de la Habana, “Alma Mater”

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Cuba Calls for “Cyberdefence” of the Revolution

Original here: Cuba calls for “cyberdefence” of the revolution

By Isaac Risco Dec 2, 2011, December 2, 2011

HAVANA: Just days after Cuban dissident blogger Yoani Sanchez was named one of the world’s 100 “most influential global thinkers” by US magazine Foreign Policy, the Cuban government is

preparing for “active cyberdefence”.

Despite poor Internet access for the average Cuban, which the authorities in Havana blame on the US embargo, Cuba is now stressing the importance of “occupying the web”. The website Cubadebate, the main pro-government online news outlet, has called for a move “from cyberwarfare to active cyberdefence”.

Cuban Foreign Minister Bruno Rodriguez on Wednesday urged more active involvement in the web and for greater defence mechanisms to fight what the island regards as the hostile attitude of major media outlets. “Euphoria over social networks co-exists with the risk of regime change operations, which has increased, as has the threat to peace. But these dangerous conditions make it necessary and urgent for us to make those platforms our own,” he said. “It is essential to have a political strategy in cyberspace.”

Rodriguez was addressing a workshop on “Alternative Media and Social Networks” with participants from 12 countries, to which Sanchez complained she and other bloggers critical of the government had not been invited. The authorities continue “to exclude the alternative part of (Cuba’s) blogosphere and twittosphere,” Sanchez wrote on Twitter. On her Twitter feed, @yoanisanchez, the 36-year-old regularly criticises Cuban authorities for their attitude to the Internet, among other things. Her campaign to denounce what she termed “political apartheid” at the event reached her more than 180,000 Twitter followers.

Indeed, on Wednesday, Foreign Policy said Sanchez’s influence shows “that the Internet really does go everywhere, even Castro’s Cuba”.

Sanchez, in turn, wrote on Twitter of the limitations of online stardom in communist Cuba. “Beautiful paradoxes of life. My name on FP’s list of 100 thinkers, and me now ‘thinking’ how to stretch the rice so as to get to the end of the month,” she wrote in a post.

Such “cyberwarfare” has been waged for some time. Blogs like Vision desde Cuba, which openly support the government, seek to counter the influence of those like Sanchez’s.

Despite “the limitations inherent to narrow bandwidth” and the “archaic and extremely slow dial-up connections”, Vision desde Cuba writes that “revolutionary bloggers” like himself back the government against those who, they argue, are being financed from abroad. Havana has traditionally accused dissidents of accepting funds from the United States.

Cubadebate has carried out a broad campaign to promote the use of social networks. Editor Rosa Miriam Elizalde asked in an article that readers “accept the technological challenge”. “I do not have the slightest doubt that if (Cuban national hero) Jose Marti were alive today he would be on Facebook and Twitter,” she said.

Mariela Castro, daughter of the Cuban leader as well as head of Cuba’s National Centre for Sex Education, also recently entered the world of Twitter. She openly confronted Sanchez, among others, in defence of the Cuban government.


Mariela Castro, Daughter of the Regime

Yoani Sanchez, Daughter of the Revolution

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Craig Wong of the Canadian Press: “Ian Delaney, Sherritt CEO Retires”

Ian Delaney, CEO of Sherritt International is retiring, but will remain active as Chairman of the board. Delaney’s visionary linking of Cuba’s nickel concentrate production with Sherritt’s unused refinery in Fort Saskatchewan Alberta has been of immense benefit to both Cuba and Sherritt. A fact not widely known inside or outside Cuba is that the Government of Cuba is now a foreign investor in Canada as joint owner of the Refinery in Alberta.

Ian Delaney and Raul Castro Appreciating a Comment

Long-time Sherritt chief executive Ian Delaney to retire, remains chairman

By: Craig Wong, The Canadian Press, November 24, 2011

The long-time chief executive of Sherritt International Corp., who transformed the company by flying in the face of conventional wisdom and betting big on Cuba, is retiring at the end of the year. Ian Delaney, who turned 68 last month, will remain chairman of the Toronto-based miner while Sherritt’s chief financial officer, David Pathe, will replace him as CEO on Jan. 1.

Delaney took over the struggling company — then Sherritt Gordon — in 1990 after winning a proxy battle with the help of Eric Sprott, then-president of Sprott Securities, and Bruce Walter of Delaney Walter & Co. But it was his defiance of the U.S. trade embargo and investment in the Moa joint venture in Cuba that helped Delaney, a former investment banker with a reputation as “the Smiling Barracuda of Bay Street,” make his mark.

Delaney, who was Sherritt’s CEO for much of the last two decades, was often called Fidel Castro’s favourite capitalist. His deal with the Cuban dictator provided the communist country with hundreds of millions of dollars in badly needed foreign exchange in return for mining rights that turned Sherritt into a diversified resources company. Raymond Goldie, senior mining analyst at Salman Partners, said Delaney once pronounced that he wanted to turn Sherritt into the “Canadian Pacific of Cuba,” referring the Canadian railway that once owned coal mines, hotels, ships, and oil and gas assets before it spun them all off. “He bet big on Cuba,” said Goldie, who noted Sherritt would later sell its hotel, mobile phone and other non-core investments in Cuba.

When Delaney took over Sherritt the company was floundering. It had a nickel refinery in Fort Saskatchewan, Alta., but nothing to refine. “Sherritt had a smelter refinery all dressed up and nothing to feed into it,” Goldie said. So Delaney turned to Cuba for supply, a move that Goldie said the company had considered before, but rejected because of the risks involved with angering the United States. The company’s investment in 1994 would eventually lead to Delaney and his family, as well as several top executives, being blacklisted by the U.S. State Department and barred from visiting the United States. “He was brave enough to say ‘I’m never going to set foot in the United States again,'” Goldie said.

While the deal turned Sherritt into a major player in Cuba, it also made him an enemy of some U.S. politicians. “Ian Delaney has made a deal with the devil,” like those who “did business with Hitler’s Germany or Stalin’s Russia,” Marc Thiessen, an aide to Senate Foreign Relations Committee chairman Jesse Helms, was quoted as saying at the time. Helms, the ultra-conservative Republican Senator from North Carolina, was the co-author of the Helms-Burton Act, which tightened U.S. sanctions against foreigners who invest in Cuba. But Delaney thumbed his nose at the insults and in 1996 Sherritt became the first foreign capitalist company to hold a board meeting in Cuba since Castro’s revolution in 1959.

Archibald Ritter, a Carleton University economics professor and expert on Cuba, said Sherritt has been a driving force in the modernization of the Cuban resource sector. “It has been mutually beneficial,” he said. Ritter said Cuba had been relying on old Soviet-era technology, but Sherritt changed all of that with modern technology for mining and drilling for oil that boosted exports and increased production for the country.

Nearly two decades after its initial investment, Sherritt’s Moa joint venture produced 33,972 tonnes of nickel and 3,706 tonnes of cobalt in 2010. The company also owns oil and gas operations in Cuba as well as a stake in power utility Energas, which has power plants across the country with a combined capacity of 356 megawatts.

Since the Cuban deal, Sherritt has also cashed in on the global commodities boom of the last decade, also betting heavily on coal, expanding its operations in Canada beyond nickel and other metals. In 2001, Delaney partnered with the Ontario Teachers’ Pension Plan and acquired the Luscar coal business in Alberta that supplies fuel to coal-fired power plants in Alberta and Saskatchewan. More recently, though, Sherritt has faced difficulties. Its shares (TSX:S) were unchanged in trading Thursday at $5.09, but down from their peak of more than $17 in 2007 during the commodities boom.

In 2009, Sherritt saw an oil production-sharing contract between the Cuban government and Sherritt’s partner Pebercan Inc. (TSX:PBC) scrapped nearly 10 years early after months of efforts to have the Cuban government catch up on missed payments to the company.

Earlier this year, Sherritt extended its work schedule and increased estimated costs for its Ambatovy project in Madagascar. It cited a litany of problems including poor performance by contractors and inaccurate estimates on the project in the island country off the east coast of Africa. The company has said the capital cost of the project will come in at US$5.5 billion, about 16 per cent more than it had previously predicted. In the quarter ended Sept. 30, Sherritt more than doubled its profits to $45.5 million or 16 cents a share. That was up from $22.5 million or seven cents a year ago. Revenues rose to $466.4 million from $412.7 million. Besides its nickel and cobalt operations, the company is the largest producer of thermal coal in Canada. It also is the largest independent energy producer in Cuba, with extensive oil and power operations across the island.

Sherritt, which has more than 6,800 employees and a stock market value of more than $1.5 billion, also licenses its nickel mining technology to other metals companies.

See also:

Bad News for Cuba’s Nickel Industry and Sherritt, June 28, 2010

Does Sherritt International Have a Future in Cuba?, October 20, 2010

From The Cuba Standard: “Piñón on Energy: Analyzing Sherritt”, February 25, 2011

Up-Date on Canadian-Cuban Economic Relations, May 27, 2011

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Richard Feinberg via Brookings Institution: “Reaching Out: Cuba’s New Economy and the International Response”


The full document can be found here:Richard E. Feinberg, Cuba’s New Economy and the International Response, Brookings, November 2011

“Reaching Out: Cuba’s New Economy and the International Response,” a new report by Brookings Nonresident Senior Fellow Richard Feinberg, urges the international development community to reach out to Cuba to promote its economic renewal. The report offers a detailed pathway for a gradual, systematic rapprochement between Cuba and the international financial institutions (International Monetary Fund, World Bank,
and Inter-American Development Bank). In the first such survey, it also provides an overview of the existing foreign assistance programs sponsored by capitalist nations in Cuba.

The study further analyzes the reform process occurring in Cuba today and describes Cuba’s strategy of engaging with the dynamic emerging market economies, largely
overlooked by U.S. analysts. The report finds that since the dissolution of the Soviet Union, Cuba has reached out to Europe and Canada, and most dramatically and successfully to the emerging market economies of China, Brazil, and Venezuela. Far from isolated by U.S. sanctions, the Cuban economy has become deeply integrated into global trading and investment markets.

Feinberg asserts that the international financial institutions (IFIs) house a wealth of accumulated knowledge and financial resources that fit well with the needs of a
reform-minded Cuba seeking greater economic efficiency and competitiveness. As
evident in their successful relations with Vietnam and Nicaragua, the IFIs –
having reformed their own terms of engagement – can perform effectively in
proud, strong states allergic to external interference. The study reviews the foreign assistance programs of donors such as the European Union, Spain, and Canada and concludes that development cooperation can achieve results in Cuba, improve the lives of beneficiaries, empower independent small producers, and promote decentralized decision-making to local communities.

Based on these research findings, Feinberg offers these specific policy recommendations:

· The international development community should support Cuba’s incipient economic reform process and bolster the struggling reformist factions within Cuba.

· The U.S. government should recognize that in Cuba today the opportunity is in economic reform, legitimized by the regime and openly debated by the Cuban public. Promoting economic reform is the most realistic option for advancing political pluralism in Cuba.

· The IFIs should complete their historical goal of full universality and bring Cuba in from the cold. The gradual warming of IFI-Cuba relations should begin with the provision of policy advice and technical training – prior to full membership.

· The US should not stand in the way of Cuba’s gradual re-admission to the IMF/World Bank. There is no better way to encourage progressive market-oriented reforms in Cuba.

According to Feinberg, the U.S. and international community can do more to help strengthen reform factions on the island. Feinberg concludes that inside Cuba, the forces of progressive change and the forces of bureaucratic inertia and resistance are locked in a fierce struggle. The United States should join with the international development community to bolster Cuba’s forces in favor of forward-looking economic reform.

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Juan Tamayo: Espacio Laical Urges Communist Party to Embrace Significant Reforms

From Juan Tamayo, Miami Herald, Wednesday, 11.16.11

Espacio Laical Article Here: Espacio Laical, November 2011 Rectificar el Rumbo

A Catholic magazine in Havana has  complained that a plan for an upcoming Communist Party conference shows the party is tied to “failed dogmas” and called for profound changes in Cuba’s economy, its tightly controlled news media and its rubberstamp legislature.

The editorial in the magazine, Espacio Laical, used unusually direct wording to argue that the published agenda for the National Conference of Cuba’s ruling and only legal political party on Jan. 28 falls far short of what is so desperately needed. While any changes must be well-considered, it noted, “we do not have the luxury of confusing gradualism with a lack of clarity or speed” because “it would be painful if the current generations of Cubans must suffer the pain of seeing their aspirations truncated.”

Yet, the agenda for the conference shows the party remains “attached to failed dogmas and obstinately holding on to a very vertical relationship with society,” added Espacio Laical, published by and for lay Catholics in the archdiocese of Havana.

The most important reform needed would be to give common Cubans more opportunities to run their own lives and truly influence government decisions, the magazine argued, calling it a “re-founding of citizenship.”

For its part, the magazine added, it favors allowing small and medium private enterprises as well as all types of cooperatives, and freedom for professionals such as doctors and lawyers, who can now exercise their professions only in government jobs. Cuba also must promote the growth of civil society — that part of a country’s life not controlled by the government — by allowing independent social organizations and opening the heavily censured mass media “to the diversity of criteria in the nation,” it argued.

Reforms also are needed within the Communist Party, the magazine added, as well as “the mechanisms of people’s power, so that the institutions of public power can have the authority they need.” Cuba’s rubberstamp legislature is the National Assembly of People’s Power.

Espacio Laical’s arguments coincided on many points with recent columns by Pedro Campos, a well-known Havana historian and former diplomat sometimes described as the voice of Cuba’s democratic communists. Campos has argued that the party must end its “neo-Stalinist” ways and develop a version of socialism that includes more direct citizen participation in government decisions as well as the productive sector, through workers’ cooperatives.

The Raúl Castro government has launched a string of reforms designed to improve the economy, by slashing public spending and allowing an increase in private enterprise. It also has legalized the sale of dwellings and expanded the legal sale of cars and trucks. But some of the reforms remain in the planning stages, and there’s been no sign that the government would agree to any political changes that could endanger the Communist Party’s hold on power.

The Espacio Laical editorial acknowledged the Castro reforms so far and noted that others no doubt will follow, but added that Cubans “feel that there’s nothing big, capable of renovating life and driving away the hopelessness.”
The announcement that the party would hold a conference in January sparked “great expectations” for change, added the editorial. But the recent publication of the agenda “worried many who had hoped for renovation.”

With most of Cuba’s revolutionary rulers in their 80s, the editorial called the conference “the last moment for the so-called historical generation” and urged it to “propose substantial changes and convene the people to carry them out. Don’t lose this opportunity.”


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Oakland Ross in the Toronto Star: Adios, Fidel. Hola, Hugo. Cuba charts new course

From the Toronto Star, November 14, 2011

The new hero of the increasingly creaky Cuban revolution is a bumptious, 57-year-old politician burdened with what may well be grave medical problems — a former army officer who doesn’t sport a beard and isn’t even Cuban.

But Hugo Chavez is the president of Venezuela, and that means oil. Unfortunately, in this case, it also means cancer. The now bald-pated Chavez insists he’s licked the disease, but his prognosis is a matter of dispute.

Upon such slender, unpredictable strands do the destinies of small, socialist, island states depend — or at least those that bob above the Straits of Florida, just 170 kilometres from Key West.

“Without the Venezuelans, we’d have nothing,” says Oscar Espinosa Chepe, a prominent Cuban economist and dissident, speaking on the phone from his cramped Havana apartment. “If we lost this, I don’t know what would happen.”

This is the massive infusion of assistance — estimated to be worth about $3.5 billion a year — that Chavez now funnels into Cuba’s struggling economy, largely for ideological reasons and mainly in the form of petroleum.

Without that largesse, the island’s wilting economy might keel over, dead.

“The support from Venezuela has been phenomenal,” says Arch Ritter, an economics professor at Carleton University and an expert on Cuba. “If anything happens to Chavez, Cuba could be in trouble again.”

Cuba already is.

Two decades have spiralled past since the Cold War’s end, when Moscow hastily abandoned its only Caribbean satellite state. During those years, the island’s industrial output has shrunk by more than half, the result of rusting Soviet-era infrastructure and poor management.

“We are importing things we can make in Cuba,” says Espinosa. “We are importing coffee. We are even importing sugar. It’s crazy.”

It would be crazier still without Venezuelan support, which meets approximately two-thirds of the island’s annual petroleum needs and is delivered in at least nominal repayment for the services of tens of thousands of Cuban doctors now deployed across Venezuela and in other left-leaning Latin American states.

“Assistance from Venezuela is now the basic element of the Cuban economy,” says Espinosa. “Venezuela has converted itself into the new Soviet Union.”

Behold Cuba, 52 years after the triumph of Fidel Castro’s revolution: a country whose rulers are mainly geriatric, white and male, where the average salary works out to just $18 a month, where sugar production — once the backbone of the economy — now lurches along at about one-half the average international level of output per hectare, and where the economic future depends to a worrisome degree on the dubious health of a man named Hugo Chavez.

Who isn’t even Cuban.

By almost all accounts, Chavez and Fidel Castro share an intimate bond, but the elder Castro was laid low five years ago by a life-threatening gastrointestinal ailment. Now 85, he has surrendered all formal claims to power and has largely disappeared from public view.

Fidel’s successor — his slightly younger brother, Raul, now aged 80 — is trying to steer the country in a new economic direction, without actually calling it that and without diluting central political control.

Meanwhile, Cuba’s largest natural trading partner remains its bitterest political foe, an increasingly nonsensical standoff that has prevailed for more than five wearying decades and betrays little sign of changing now, especially not with a U.S. presidential election in only a year.

“I don’t know what it is about Cuba,” says Wayne Smith at the Center for International Policy, a Washington-based think tank. “Obama has done very little. It’s very disappointing.”

Shortly after taking power, U.S. President Barack Obama removed restrictions on Cuban Americans who wish to send money to relatives on the island or visit family there.

But that was about it.

The Americans still squander millions of dollars a year on provocative but ineffectual propaganda efforts aimed at destabilizing the Castro regime.

And the infamous U.S. economic embargo remains in place, still with the professed purpose of dealing a crippling blow to the Cuban revolution, something it has never done, isn’t doing now and never will do.

The reasons the punitive barrier has not been lifted have more to do with domestic U.S. politics than events in Cuba. Now, as in decades past, neither Republicans nor Democrats in the U.S. are inclined to cosy up to anyone named Castro, not if that means alienating more than a million Cuban-American voters.


The already bleak outlook for rapprochement between the two sides only got bleaker last March when Cuban authorities sentenced American Alan Gross to 15 years’ imprisonment on charges of distributing illegal communications equipment to members of the island’s small Jewish community.

Smith says Gross got what he deserved. After all, he had been making repeated trips to the island, delivering what Smith calls “rather sophisticated” devices, without proper documents. The Cubans finally lost patience, he says.

“I’m only surprised they waited that long.”

Others believe the Cubans are looking for a trade.

Cue the Cuban Five, a group of men sentenced in 2001 by a Florida court to jail terms ranging from 15 years to life on charges of espionage, in what many regard as a blatant miscarriage of justice.

“The case of the Cuban Five is a blot on the honour of the U.S.,” says Smith. “The trial was totally biased.”

Last month, one of the five was released from prison after his sentence was reduced for good behaviour. That was dual citizen René Gonzalez, who will be obliged to serve out his probation in the States. The others remain behind bars.

In Cuba, where the men are celebrated as heroes, the authorities fervently want them back.

But an exchange — Gross for the Cuban Five — seems a long shot at best. Besides, the most pressing challenges for Cuba right now are economic.

Raul Castro has warned that the country’s socialist economy is perched upon a precipice and last year announced his intention to lay off 1.3 million public-sector workers.

Layoffs there have been, combined with several cautious nods to small-scale entrepreneurship. Cubans may now own beauty parlours, restaurants and the like. They may buy and sell cars and even real estate.

The pace of reform isn’t fast enough for some. But even restless dissidents such as Espinosa acknowledge that Cuba has changed.

“The government has lost the ideological battle,” he says. “The majority of Cuba’s people, including the Communist party and the government, are in favour of change. There’s no turning back.”

In the meantime, there’s Hugo Chavez — and imported sugar.


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Center for Democracy in the America: New Analysis of U.S. Policy towards Cuba

A new analysis of U.S. policy towards Cuba has just been published by the  Center for Democracy in the Americas. It is another well-balanced and eloquent call for a change in the failed US approach towards Cuba, a failure that has endured for a half-century.

The Table of Contents and part of the concluding comments are presented below. The complete study can be found here: Center for Democracy in the America, CDA_Cubas_New_Resolve: Economic Reform and its Implications for U.S. Policy (Hyperlink)

Table of Contents

About this Project 1
Preface 3
Section One: Raúl Castro Addresses Cuba’s Economic Crisis 7
Section Two: How the Economy is Changing for Everyday Cubans 35
Section Three: Listening to the Cuban People . 45
Section Four: Findings and Recommendations 59
The Center for Democracy in the Americas’ Cuba Program 75
Acknowledgments . 77
Endnotes 81

What Should U.S. Policy Be?

U.S. sanctions are premised on the belief that strangling Cuba’s economy will lead the system to fail, motivating the Cuban people to rise up against their government and establish a multiparty liberal democracy. After five decades, it has failed to achieve its goal. Instead, it is inhumane and counter-productive. In addition to inflicting pain on the people we are ostensibly trying to help, the sanctions could even prompt a mass  xodus out of Cuba, putting the stability of the Caribbean at risk.

Twenty years ago, amidst the wreckage of the Special Period, U.S. Congress and the Executive Branch tightened sanctions with the hope of capitalizing on Cuba’s difficulties. American policy missed the chance to align itself with the humanitarian interests of Cubans and their leadership muddled through. As U.S. sanctions became more restrictive, we ceded the playing field to allies and competitors—Spain and Brazil, China and Venezuela—who are still in Cuba today, investing and trying to help its economy grow.

While the fate of Cuba’s economic reforms rests primarily with the government and the Cuban people, actions taken by President Obama, however limited, are now playing an important supporting role. But the

United States can do more. We have a new opportunity to be seen by Cuba’s people and its future leaders supporting their efforts to build a new economy and to help the Cuban people lead more prosperous lives. The greatest contribution our country can make now is to demonstrate we want the reforms to succeed, because we want the Cuban people to succeed. If this were a core principle of our democratic policy, a series of logical steps could then follow.

First, President Obama and other U.S. policy makers should acknowledge  that Cuba’s reforms are real; that this program opens the way to a greater role for the market, and the changes are likely to exact great hardships on the Cuban people. They should also acknowledge that the reforms represent an important beginning. Until that all happens, our ambivalence plays into the hands of hardliners in Cuba who oppose reform or rapprochement with the United States. Second, Cubans lack cash and credit to make full use of their newly granted right to form businesses. The embargo and its byzantine sanctions prevent U.S. banks and developers from financing investments in Cuba. By loosening restrictions on travel and remittances, President Obama  mobilized the financial capital and support of a good portion of the Cuban American community on behalf of Cuba’s economic revival. There are additional executive decisions the president can take to ease the flow of financing to Cuba and to spur demand for the activities the emerging private sector is performing.

For example, the president could further loosen restrictions on U.S. citizens to travel to Cuba. Although repeal of the statutory bar against tourist travel to the island would require an Act of Congress, unlikely in this political climate, President Obama could use his executive authority to open and expand categories of opportunities for Americans to visit Cuba.


President Obama can, for example, order general licenses provided to freelance journalists, professional researchers, athletes who want to attend international sports competitions in Cuba, persons engaged in humanitarian activities, private foundations doing research, and business-related travel for authorized activities such as telecommunications,informational materials, and some marketing. He could also broaden the licensing for advisors from firms who could assist the Cubans in safe drilling and environmental protection as Cuba explores for oil in the Gulf of Mexico (as CDA recommended in the 21st Century Report on energy).

There is a broad consensus extending from the U.S. travel industry to the international human rights community that travel to Cuba should be expanded: travel is a constitutional right of U.S. citizens and has the added virtue of providing U.S. businesses broad opportunities. For Cuba’s citizens, it provides a source of profits and jobs for small businesses.

We also encourage the Executive Branch to clarify remittance expansion rules established in January 2011. President Obama has said any American is permitted to send remittances to an unlimited number of qualified Cubans of up to $2,000 per year each, but guidelines for sending remittances to non-family members are vague and need to be better defined. The regulation has no mechanism to open the door to Americans without family ties who wish to contribute remittances to Cubans they do not know and, if they could, no means for accountability exists for U.S. citizens to see if their donations were making a difference. Neither does the rule say whether the U.S. government allows Cuban recipients to seek or aggregate remittances from U.S. citizens. And answers are also needed from the Cuban government—it could identify recipient institutions which could distribute remittances to Cubans in need. Cuba should also be removed from the U.S. State Department list of State Sponsors of Terrorism. This designation subjects Cuba to sanctions including restrictions on U.S. foreign  assistance; controls over exports of certain dual use items; and miscellaneous financial and other restrictions.

Cuba’s presence on the list of State Sponsors of Terrorism is both substantively wrong and harmful to the Cuban economy, because it punishes Cuba for legal trade and financial transactions and deprives its people access to modern technology. The president can remove Cuba unilaterally from the terror list. He should do so.

The International Financial Institutions (such as the International Monetary Fund and World Bank), have provided useful support to countries undergoing economic transitions but are off limits to Cuba because of U.S. objections. The U.S. should allow Cuba to have access to their experts and advice.


Our final recommendation is to stop funding the USAID Cuba program. The U.S. government wastes millions of dollars each year to bring about the type of economic and political transition it sees fit for Cuba but the effect of the program increases suspicion and tension between the two governments. A failure of the program in 2009 resulted in the arrest and imprisonment of Alan P. Gross, a U.S. subcontractor. It is impossible, under the current circumstances, for USAID to take part in meaningful programs welcomed by the Cuban government, such as those that Brazilian and Spanish development agencies carry out. “Development assistance,” USAID’s actual mandate, should be discussed bilaterally between the two countries, leading to the establishment of programs agreed upon by both countries (as is done in the rest of the world). It will take time for trust to be restored, but it’s in the interest of both countries to start now.

In the final analysis, ending the embargo and normalizing relations with Cuba ought to be a foreign policy priority of the United States. As Steve Clemons, editor at-large of The Atlantic, noted: “Failure of the U.S. to finally snuff out the last vestiges of the Cold War in the U.S.-Cuba embargo signals impotence in American strategic vision and capability. Those who support the embargo undermine the empowerment of Cuban citizens, harming them economically and robbing them of choices that could evolve through greater engagement—exactly what we have seen in transitioning communist countries like Vietnam and China.”133

In the interim, these recommendations could make an important difference.They would put the interests of the United States into alignment with the humanitarian interests of the Cuban people, send a long overdue message of encouragement to the advocates of reform on the island, and demonstrate that our country is finally ready to move beyond Cold War policies of the past and modernize our approach toward Cuba for the 21st Century.

None of these actions would sit well with the hardest of the hardliners in the Cuban American community or their representatives in Washington. Their terms of surrender for Cuba, as Phil Peters pointed out in his Cuban

Triangle Blog, are written into the statutes of the U.S. embargo. In Congress, legislators including   Representatives Mario Díaz-Balart, David Rivera and others, are trying to reverse President Obama’s travel reforms, dialing back family travel and remittances to the levels imposed by President Bush. They will certainly fight actions that loosen restrictions to help push along Cuba’s economic reforms.

Nevertheless, we believe that the political dynamic of the Cuban American community has already shifted—many have moved from supporting isolation and aggression toward the island’s government to building on family ties and helping their relatives prosper and live more autonomous lives in Cuba’s new economic environment. The potential for home ownership in Cuba, and the U.S. expansion of travel and remittances, are enabling Cuban Americans to invest in the goal  of helping Cuba succeed. But this effort should go far beyond the Cuban family. It should become the motivating force behind U.S. policy.

These changes are in the broad national interest of the United States, and it is time for our policy makers to respond affirmatively and creatively to the process of reform underway in Cuba today.

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