• 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."

A Further Step in the Liberalization of the Regulatory and Tax Environment for Small Enterprise Has Raul Now Got the “Horse before the Cart”?

Posted on May 27, 2011 by Arch Ritter

By Arch Ritter

On Friday May 27, 2011, Granma, the official Cuban Newspaper announced a number of additional measures that would reduce the restrictions on micro and small enterprise, notably the “paladars” or small restaurants. (Continuar facilitando el trabajo por cuenta propia http://www.granma.cu/espanol/cuba/27mayo-continua.html)

The objective of the policy changes is to facilitate the expansion of employment in the small enterprise, creating new jobs to absorb workers to be declared redundant in the state sector.

The Government seems to now have the “horse before the cart: rather than the “cart befor the horse” in that job creation is being promoted first, with presumably the lay-offs coming afterwards, or perhaps through a normal process of letting those state sector work centers in personal service areas shut down, if they continuously make losses and have to be subsidized by the state.

There are a number of interesting measures:

1.      The most conspicuous measure is to permit the paladares or small restaurants to expand their capacity from 20 to 50 chairs – up from 12 before October.

2.      Loss-making state enterprises, notably state restaurants, may be offered for rental to self-employed individuals and operated as “cuenta-propistas”

3.      The hiring of up to 5 workers has been extended to all self-employment activities.

4.      The “minimum employment requirement” whereby for purposes of paying a tax on each employee a minimum number of employees were required, has been dropped.

5.      An exemption on paying the tax on each employee has been granted for the rest of 2011.

6.      Some additional new activities have been designated for self-employment;

7.      The payment of monthly taxes has been waived for taxi and bed and breakfast operators for up to three months while they repair their vehicles or rental facilities.

8.      The monthly up-front payment for bed-and breakfast operators has been reduced for the rest of 2011 from 200 to 150 pesos or convertible pesos (depending on whether they rented to Cubans in Moneda Nacional or foreigners in Convertible Pesos.

A Great New Paladar, with a Lucky Location on the Callejon del Chorro, Plaza de la Catedral

These changes are all reasonable. The government states that it is “learning from experience” (“rectificar en el camino”.) Pragmatism seems to be the growing vogue in economic management and that can only be positive.

Anothe Great Paladar, 23 y Calle G (Avenida de los Presidentes)

Cuenta Propista

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Up-Date on Canadian-Cuban Economic Relations

Posted on May 27, 2011 by Arch Ritter

By Arch Ritter 1. Canadian Tourism in Cuba Canada continues to be the largest national source of tourists in Cuba, a position that it has had consistently since 1990. Canadian tourists numbered 555,872 out of a total of 1,179.963 from January to April 30, 2011, according to Cuba’s Oficina Nacional de Estadisticas. This is almost 10 times more than the second source country, Britain. Excluded from the ONE Chart are visitors from the United States who have been increasing rapidly and at this time must be a not-too-distant second to Canada Total Canadian tourism to Cuba will likely approach 1 million for all of 2011. It seems almost rare to encounter a Canadian who has not visited Cuba. While many visit only once, many others are repeat visitors, and obviously like their visits to Cuba. Tourism is of course a major source of foreign exchange earnings for Cuba, larger than any single merchandise export but also smaller than other service exports (mainly medical services.)  Foreign exchange earnings from Canadian tourism were likely in the area of US$ 882 million for 2008, (calculated as 37.6% of total tourism earnings of U.S. $ 2,347.  million.) If one takes both Canadian tourism plus Canadian merchandise imports (mainly nickel) from Cuba into consideration, Canada contributed about U.S. $1.6 billion in 2008, a substantial proportion of Cuba’s foreign exchange availability. One partial consequence of the steadily increasing contacts between the citizens of Cuba and Canada is the expansion in Cuban immigration to Canada. This has increased slowly but steadily reaching 1,421 individuals in 2009, up from 845 in 2000. (Citizenship and Immigration Canada www.cic.gc.ca;  http://www.cic.gc.ca/english/resources/statistics/facts2009/permanent/10.asp) Chart 1.          Principal Sources of Tourists, January to April 2011 Source: ONE, Turismo. Llegada de Visitantes Internacionales Enero – Abril 2011 2. Canadian Foreign Investment in Cuba. The first trimester of 2011 has been good for Sherritt International, the largest Canadian investment in Cuba by far, as well as for the nickel sector in Cuba. As a result mainly of a 27.5% increase in nickel prices, metals’ earnings from operations were  $57.4 million for January to March 31, 2011 and were $18.6 million higher than in the same period in 2010. Higher operations costs had a small negative impact on metals earnings, however. (Sherritt International Corporation, 2011 FIRST QUARTER REPORT, for the January to March 31, 2011, p.21) Another major Canadian investor in Cuba is Leisure Canada – headed by the legendary Canadian mining financier Walter Berukoff.  This firm is planning the construction of at least three major hotels, namely Monte Barreto in Miramar Havana, Jibacoa between Havana abnd Varadero (with a small “boutique beach”) and Cayo Largo as well as a golf course and a marina.  Perseverance has won out for Leisure Canada which succeeded in obtaining the rights – a 99 year lease presumably – to a 34,000 square meter-oceanfront property in the Miramar section of Havana.

The Monte Barreto Project

Here is some description of the projects from Leisure Canada’s publicity:

“The Monte Barreto site is located on the last significant piece of oceanfront property in Havana’s Miramar business and trade district. The property is 34,500 square metres and sits across from the new Miramar Trade Center, and adjacent to Havana’s National Aquarium. The proposed 716-room hotel project will have a significant retail and convention/entertainment component. With a planned 737-room hotel accompanying significant convention and retail space, Monte Barreto will stand as Cuba’s foremost luxury hotel catering to the world’s most sophisticated traveler. “ http://www.leisurecanada.com/monte_barreto.htm

“Jibacoa – Leisure Canada’s site spans 5.5 square kilometers of oceanfront property, which is located 65 kilometers east of Havana. The site is being developed as the first high-end destination resort in Cuba, and it will host six luxury hotels, two PGA championship golf courses, and timeshare villas.”

Cayo Largo – This small limestone quay, located 50 kilometers south of the main island of Cuba, possesses the most spectacular white sand beaches in all of the Caribbean. Cayo Largo is also rated as one of the world’s best diving sites. Leisure Canada’s project will involve the construction of 900 rooms, and a central pedestrian village that will offer retail and amenity experiences currently not offered on the island.

Another Canadian enterprise Standing Feather International spear-headed by Vincent McComber from the Kahnawake Mohawk reserve outside Montreal, is planning a 36-hole golf course, a beachfront hotel, spas, shopping centres – and, in a first for the island, villas owned privately by foreigners. This will be in a joint venture arrangement. If the foreign ownership of villas is accepted, it will constitute a major change for Cuba.   3. Cuba-Canada Trade Canadian trade with Cuba has begun to recover from the sharp contraction of 2008-2009 that reflected the impacts of the world recession on commodity prices, notably nickel, and on Cuba’s reduced foreign exchange earnings and lower capacity to purchase imports. Cuba’s exports to Canada continue to far exceed Canada’s exports to Cuba largely because of the importation into Canada of nickel concentrate from the Sherritt operation for refining in Fort Saskatchewan Alberta.  

Perhaps Raul Likes Golf

 

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Mark Frank: “Cuba cracks down on “Guayabera” crime”

Posted on May 22, 2011 by Arch Ritter

One morning this month the nearly half a million inhabitants of Sancti Spiritus, a leafy province in central Cuba, woke up to find their local government had fallen.

Rather than some kind of US-inspired coup, however, the removal and subsequent arrest of five senior provincial officials was part of the increasing drive by Raúl Castro, president, against white-collar corruption – or white “Guayabera” crime as it is called after the distinctive Cuban dress shirt.

The crackdown, launched two years ago, has already cost hundreds of senior Cuban Communist party officials, state managers and employees their jobs and sometimes their freedom, as Mr Castro has struggled to shake-up the country’s entrenched bureaucracy and move the country towards a less centralised and more market-driven economy.

Although such campaigns are not new, the intensity of the current drive is unprecedented, as are the number of high level targets and breadth of their illicit activities, Communist party and government insiders said this week.

As well as Sancti Spiritus’s wayward officials, Havana’s mayor resigned last month after most of the capital’s top food administrators were swept away in another probe.

Last year, in the all-important nickel industry, which exports some $2bn annually, managers from mines and processing plants up to deputy ministers of basic industry were arrested after “diverting resources” and padding export weights, according to industry sources. Yadira García Vera, the minister, was eventually fired.

The drive began in earnest in 2009 when Mr Castro, 84, opened the Comptroller General’s Office, saying it would “contribute to the purging of administrative and criminal responsibility, both the direct perpetrators of crimes and the secondary ones . . . [who] do not immediately confront and report them.”

The move is designed to try and allow state-owned companies to operate more profitably, as Mr Castro wants them to, while also preventing the kind of corruption that marked Russia’s and China’s own moves to the market.

“The creation of the Comptroller General in 2009 was a significant step in the first phase of Cuba’s reform,” said Arturo López-Levy, a former analyst at Cuba’s interior ministry and now a Cuba expert at the University of Denver in the United States.

“East Asia demonstrated the wisdom of creating an anti-corruption agency early in the economic transition from a command economy.”

Cuba is fertile ground for corruption. After 20 years of economic crisis, and with state wages worth around $20 a month – a level that the government admits does not cover necessities – almost all Cubans engage in illegal activities to survive.

At the same time, the government is loosening regulations on small private business even as it cuts subsidies and lays off government workers, thereby requiring more sacrifice from state employees and pensioners.

“Raúl Castro has clearly gone to extraordinary lengths to make it clear that corruption – particularly at the higher levels – will not be tolerated, signalling he means business and higher-ups must sacrifice too,” said John Kirk, a Latin America expert at Dalhousie University in Halifax, Canada.

Cuba does not suffer from drug-related corruption like many of its neighbours, said western diplomats and foreign security personnel who work closely with Havana on interdiction.

Rather, according to foreign investors, the biggest problems they face when forming domestic joint ventures are the long delays starting and then operating a Cuban business – in part due to draconian regulations designed to prevent white-collar crime.

That is not the case in the external sector, where foreign trade and off-shore activities make corruption easier.

“The huge disparities between peso salaries, worth just a few dollars a month, and the influx of strong currencies, even in very small amounts, create extremely strong incentives to become corrupted,” said one western manager, who requested anonymity.

Cuban cigars have become the most emblematic case. Distributors in Canada and Mexico had long complained that millions of valuable “puros” – high quality cigars – were somehow making their way to other Caribbean islands and then being smuggled into their franchised territories.

But it was not until last year that the Cohiba-puffing Manuel García, the long-time vice-president of Habanos S.A., a joint venture with London-listed Imperial Tobacco and the exclusive distributor of the island’s famous cigars, was arrested along with a number of other executives and staff.

“Turns out we were complaining to the very people who had set up the sophisticated operation, complete with shell companies and paths to avoid import duties,” one foreign distributor said.

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Arturo Lopez-Levy: “Change In Post-Fidel Cuba: Political Liberalization, Economic Reform and Lessons for U.S. Policy”

Posted on May 20, 2011 by Arch Ritter

Arturo Lopez-Levy

Here is the Hyperlink: Arturo Lopez Levy,Change In Post-Fidel Cuba: Political Liberalization, Economic Reform and Lessons for U.S. Policy” New America Foundation, May 2011,

Executive Summary:

This report explores the historic reform process currently underway in Cuba. It looks first at the political context in which the VI Cuban Communist Party Congress took place, including the Cuban government’s decision to release a significant number of political prisoners as part of a new dialogue with the Cuban Catholic Church. It then analyzes Cuba’s nascent processes of economic reform and political liberalization. To conclude, it discusses the challenges and opportunities these processes pose for U.S policy toward Cuba.

In his essay “Change in Post-Fidel Cuba”, Arturo Lopez-Levy, (a lecturer and PhD Candidate at the Josef Korbel School of International Studies at the University of Denver and also a graduate of the Carleton University-University of Havana Masters Program in Economics!) presents a wide ranging survey and careful analysis of economic and political changes in Cuba since Raul replaced Fidel in 2006, organizing his analysis around the pivotal Sixth Party Congress of April 2011.  Lopez-Levy tries hard to be even-handed and objective in his analysis. He succeeds well, though virtually no-one anywhere on any of the various political spectrums relevant to Cuba will be pleased with all of his assessments. His knowledge of Cuba at this juncture of its history is deep. He is particularly well qualified for undertaking such an analysis not only on the basis of his knowledge of Cuba and also given his academic work. His examination of Cuba’s political situation, the reform process, and US-Cuba relations is worth serious attention.

On the whole, Lopez-Levy is optimistic that the economic reform process, still in its initial phases, will be pragmatic, deep-cutting and irreversible but possibly excessively gradualistic.  He sketches the various elements of policy change that are slated for implementation and that will lead to a more decentralized and marketized economic framework that should help unleash and harmonize the economic creativity of Cuban citizens.

He is also optimistic that meaningful political liberalization will occur and indeed characterizes the regime under President Raul Castro as “Post-Totalitarian” – following some works of Juan Linz and Alfred Stepan (Problems of Democratic Transition and Consolidation, Baltimore: John

Hopkins University Press, 1996.) In Lopez-Levy’s words (p. 13), “Totalitarian practices have softened.” This obviously indicates that the author judges that practices indeed were totalitarian under Fidel and that they continue, though now somewhat “lighter”. (Political prisoners were released and independent critics have not been imprisoned.)

Lopez-Levy seems ready to be quite critical of Fidel but tends to give Raul the benefit of the doubt in a number of cases.  His euphemistic characterization of Fidel’s dictatorial rule is in fact damning if also humorous.

“By virtue of his historical leadership, Fidel Castro, in and of himself, embodied the minimum number of votes needed to establish a “winning coalition” in Cuban politics.”

But Lopez-Levy seems to want to find good things to say about Raul. For example,

“As Raul Castro hinted in his inaugural speech to the VI Party Congress2, this reform process will occur in tandem with political liberalization and the emergence of a Cuba more open toward the outside world.”

He also rather generously explains Raul’s selection of Jose Ramon Machado Ventura as First  Vice-President, and Second Secretary of the PCC as follows:

The decision to promote Machado (one year older than Raul)  to the second in command, first in the government, and now in  the Party, can be explained by two factors: 1) the triumph of the alliance of military leaders and provincial party czars as the dominant force in Cuban elite politics (versus government bureaucrats and Fidel’s appointed ideologues), and Raul Castro’s conviction that Fidel’s policy of promotion of young cadres “by helicopter”, not in a step by step Leninist fashion was a mistake.

The author’s own position on the political monopoly of the Communist Party of Cuba, sanctified by Article Five of the Cuban Constitution, does not seem clear. Lopez-Levy does speak supportively of political liberalization and refers to Fidel’s monopoly of the votes. But nowhere that I can see does he raise the over-arching central political issue and confront what he labels Raul’s “softer totalitarianism.”

The New America Foundation’s U.S.-Cuba Policy Initiative, directed by Anya Landau French, seeks to take advantage of recent developments to redirect U.S.-Cuba policy towards a more sensible, mutually beneficial relationship. Learn more at http://cuba.newamerica.net

 

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Special Revista TEMAS Panel on the “Special Period”

Posted on May 13, 2011 by Arch Ritter

TEMAS, Ei Periodo Especial veinte anos despues

TEMAS: no. 65: 59-75, enero-marzo de 2011

http://www.temas.cult.cu/revistas/65/059%20Mesa.pdf

A special section of the TEMAS issue of January-March 2011 includes a Panel discussion on the causes, character and consequences of the “Special Period.” This still seems to be the epoch that Cuba is in officially, as there has been no official termination of the epoch nor a declaration of a new label for a new era. The panelists include Mayra Espina, sociologist ath the Centro de Investigaciones Psicológicas y Sociológicas (CIPS). José Luis Rodríguez, once again at the. Centro de Investigaciones de la Economía Mundial (CIEM) but formerly Minister of Finance and Planning,  Juan Triana, an economist at the. Centro de Estudios sobre la Economía Cubana (CEEC) and Rafael Hernández the Director de TEMAS

The questions addressed to the panel by Rafael Hernández include (in paraphrase):

1.      What was the character of the “Special Period” (SP)?

Were its causes essentially external?

Was it predominantly economic in character?

For how long has it continued?

2.      How effective were the policies implemented to deal with ot”

Were the policies based on scientific research?

Were the policies coherent and effective?

Were there unintended consequences?

To what extent did the policies succeed?

3.      Has the SP generated positive or progressive advances?

4.      Questions from the floor.


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Esteban Morales Domínguez, “FRENTE A LOS RETOS DEL COLOR COMO PARTE DEL DEBATE POR EL SOCIALISMO” and Commentary by Juan Tamayo

Posted on May 13, 2011 by Arch Ritter

In his personal Blog, http://estebanmoralesdominguez.blogspot.com/, Esteban Morales presents an analysis of the place of Afro-Cubans in Cuban society entitled .”FRENTE A LOS RETOS DEL COLOR COMO PARTE DEL DEBATE POR  EL SOCIALISMO.”

Though his position and presentation seem to be well within the confines of acceptable discourse in Cuba, his argumentation is challenging. He calls for open analysis of the race issue at all levels, including the National Assembly and the Party Congress. He advocates “Affirmative Action” to rebalance the historic wrongs and injustices faced by Afro-Cuban citizens.

A.R.

Esteban Morales Domínguez

By Juan O. Tamayo

Black Cubans, already with the worst jobs and lowest salaries, will need “affirmative action” as the government tries to slash its inflated payrolls, a black Havana economist and former Communist Party member wrote Wednesday.

Esteban Morales, 68, made it clear in his lengthy essay that he supports Cuba’s “extraordinarily humanist” revolution and believes it took great pains to outlaw racism and provide equal opportunities for blacks over the past 52 years.

An economist who has written previously on race, he also attacked black Cubans who criticize the revolution as racist, saying they have embraced a U.S. strategy for sparking a “political confrontation” that would change the island’s regime.

In unusually direct language, however, Morales also complains that blacks rank at the bottom of several economic measurements, that Cuban schools do not teach courses on race, and that government socio-economic statistics should be broken down by skin color.

He was “separated” from the Communist Party last year for a similarly harsh essay in which he warned that a burgeoning string of corruption scandals was a bigger threat to the country’s stability than “the counterrevolution.”

Morales’ latest essay essentially argues that questions about race must be a priority for the Raul Castro government as it tries to fix the stagnant economy by slashing state spending – on jobs and subsidies — and allowing more private enterprise.

Blacks and mestizos “have always historically been the least qualified, the most disadvantaged in the workplace, with the worst jobs, the lowest salaries and the lowest retirement benefits,” Morales wrote in his 4,311-word essay, published in his eponymous blog.

Castro himself spoke of the need to increase the number of blacks and women in leadership positions during a speech last month to a Communist Party congress last month. The 2002 census shows 65 percent of Cubans identify themselves as white, and 35 percent as black or mestizo.

Morales went well beyond that, noting that fewer blacks than whites have relatives abroad who can send them cash remittances. He added that black Cubans in Florida also earn less – and therefore can send less to the island – because of U.S. racism.

Blacks and mestizos on the island also have a harder time finding well-paying jobs and tend to “take refuge … in illegal activities, prostitution and pimping, the illegal re-sale of products,” he noted. They make up 57 percent of the prison population, he added.

Morales’ essay notes that Cuba faces many challenges in race relations but adds that he would focus only on four, — starting with the need to create an array of school courses on modern-day racism.

“How is it possible that in a multicolor nation like Cuba … there’s no scientific treatment of those problems” he wrote . University-level education is “especially plagued by prejudices on the racial issue, weak institutional attention to it, ignorance and even fear of studying it.”

Cuba’s National Statistics Office (ONE) should include racial breakdowns when it reports economic and social data such as unemployment, salaries, housing conditions, education levels and life expectancy, Morales noted in his second challenge.

In his third, he urged Cubans to demand equal racial representation in all fields, and in his last he urged Cuba to embrace “the so-called affirmative action” as a way “to balance out the different historical points of departure for the racial groups that today make up our society.”

Cuban government officials have long cringed at the possibility of using affirmative action on the island, arguing that it would explicity admit that the revolution had failed to eradicate race-based discrimination.

Morales’ harshest criticism went to Carlos Moore, a black exile who has attacked Cuba’s leadership as almost exclusively white and argued that blacks were denied the most visible jobs when Cuba opened its doors to foreign tourism in the 1990s.

Morales alleged that some of Moore’s publications were financed by groups that received CIA money. Moore, a black rights activist now living and teaching at a university in Brazil, could not be reached immediately for comment.

Read more: http://www.miamiherald.com/2011/05/12/2213836/black-economist-says-cuba-needs.html#ixzz1MFkcZZ00

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

Posted on May 10, 2011 by Arch Ritter

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

Posted on May 10, 2011 by Arch Ritter

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

Posted on April 20, 2011 by Arch Ritter

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?

Posted on April 16, 2011 by Arch Ritter

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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