Raul Castro’s government has allowed farmers of the island to acquire supplies necessary to support limited productivity where they can pay with the national currency for goods in small private shops. This is a step toward modernizing the strongly centralized farming sector. [Europa Press]
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Army General Raúl Castro gave Cubans a reprieve by allowing them to open small businesses, but doubts exist if the measure meets with the goal of reducing a bloated bureaucracy and help reanimate the economy “without market reforms.” The enlargement of “self-employment,” expected by many Cubans and suggested by economists, was announced by Raúl Castro on Sunday before the National Assembly as part of “structural changes” that seeks to make the economic model more efficient and avoiding a collapse of the socialist system. [AFP]
Tags: bloated bureaucracy, cubans, National Assembly, Raul Castro, self-employment, small businesses
Der Spiegel on the political and economic realities facing the Castro regime in its fight for survival:
But the release of the dissidents could also be a message to the Europeans, who have not been entirely sure what to make of the new president since he officially assumed office in February 2008. Raul is believed to be less of a fundamentalist and more of a pragmatist than his brother Fidel. “He is not someone who is out to change the system, but he does show an understanding for the problems,” says one of the Europeans in Havana.
At first, Raul Castro sparked hopes that reforms could be on the way. But so far his fellow Cubans have seen little change, except that they can now own mobile phones and computers with limited Internet access.
Europe, however, wants to see clear signs of liberalization, as a precondition of more intensive cooperation with Havana, especially “progress in the area of human rights and political freedom.” European governments reached this conclusion long ago, in December 1996, and the same conditions are still in place today. However, Castro has forced the Europeans’ hand by releasing the dissidents.
Faced with a catastrophic situation in Cuban agriculture, Raul Castro is urgently in need of aid from Europe. The sugarcane harvest this summer, once an important source of foreign currency, is the worst since 1905. It is even about half a million tons shy of the harvest in 2009, when hurricanes wreaked havoc on the country.
Cuba is now forced to import more than 80 percent of its food, while foreign investment and exports have declined dramatically. At the same time, the sugar island is practically bankrupt and has had to reduce imports of food products and spare parts by at least a third.
Tens of thousands of well-trained young Cubans are leaving the country every year to earn money for their families elsewhere. The numbers would probably be even higher if the government let them go. For this reason, EU diplomats expect more signals from Raul on July 26, a Cuban national holiday: more privatization in agriculture, more freedom to buy homes and a relaxation of restrictions on travel abroad.
Tags: Cuban agriculture, cubans, Europe, Europeans, Fidel Castro, Havana, human rights, political freedom, Raul Castro
Spanish journalist Vicente Botín has written a new biography on Army General and Cuban President Raúl Castro entitled, Raúl Castro: la pulga que cabalgó al tigre (Raúl Castro: The Flea that Rode the Tiger), which will be published later this week.
The title of the book is derived from the Chinese proverb: “He who rides a tiger can never get off or the tiger will devour him.”
In his book preview editorial in La Razón, Botin writes, “In the shadow of his brother Fidel, the political life of Raúl Castro has been dark and hard; he has been the executive arm of the maximum leader’s desires.”
Interesting tidbits from the editorial:
- GAESA (Grupo de Administración Empresarial, S.A.), the Cuban Armed Forces’ holding company (managed by Raúl’s son-in-law Luis Alberto López Calleja), controls almost 70% of the country’s economy through transient businesses that generate almost 90% of exports, 60% of tourism revenues, around 25% of services revenues, 60% of currency revenues and more than 65% of all minor commerce in currency exchanges. The volume of annual profits surpasses $1B;
- Raúl’s daughter Mariela Castro has taken the family’s monies out of the country with ease of travel as she is accompanied by her Italian husband, Paolo;
- Raúl Castro visited Italy (after Fidel fell ill in 2006) to deposit millions of pesos, affirms exiled Cuban General José Quevedo;
- Leninist machismo enjoys good health in Cuba as the perks of Raulistas within the military working in GAESA companies. They are a privileged class with higher incomes and a much higher standard of living not only to the civilian population but to their own comrades in arms serving a strictly military function in locations far away from the resorts.
[H/T: The Cuban Triangle]
Tags: Cuba, Cuban armed forces, Fidel Castro, GAESA, Grupo de Administración Empresaria, José Quevedo, La Razón, Luis Alberto López Calleja, Mariela Castro, Military, MINFAR, Raul Castro, Raúl Castro: la pulga que cabalgó al tigre, Revolutionary Armed Forces, Vicente Botín
Carlos Ominami. Image: The Clinic
Former Chilean leftist Senator Carlos Ominami (whose adoptive son is Marco Enríquez-Ominami, a Socialist who ran as an independent in the recent Chilean presidential election supported by Max Marambio) said the distancing of the Cuban regime with businessman Max Marambio (background here and here) is due to a “settling of scores” after the departure of Fidel Castro from power, in an interview he gave to The Clinic.
Ominami adds: ”I think what happened to Max (Marambio) falls within the same process that took as its latest victims Carlos Lage, Felipe Perez Roque and Gustavo Ramirez and (Rogelio) Acevedo, who is none other than the last living guerrilla with Che in the Sierra Maestra.”
He goes on further to say:
I think there are political reasons for the settling of scores. Fidel and Raul are not going to fight ever because they know that the minute they do, the Cuban revolution collapses. But they have allowed the existence of political power subsystems that will. And it is clear there are two lines: the Revolutionary Armed Forces (FAR) and Ministry of Interior (MININT). In Cuba, both institutional leaderships have troops and those troops have rivalries. MININT Special Troops have rivalries with the FAR and finally what you’re experiencing is a history of that conflict.
[H/T: La Nueva Cuba]
Tags: Carlos Lage, Carlos Ominami, Cuban regime, FAR, Felipe Perez Roque, Fidel Castro, Gustavo Ramirez, Marco Enríquez-Ominami, Max Marambio, MININT, Ministry of Interior, Revolutionary Armed Forces, Rogelio Acevedo
Cuban Vice President Jose Ramon Machado Ventura during the sessions of the National Association of Small Farmers (ANAP) of the provinces of Matanzas, Ciego de Avila and Sancti Spiritus on Sunday announced that the country invests more than $1.5 Billion dollars annually buying food, part of which can be substituted by national products if the areas of cultivation and the yields increase.
Also in attendance were Cuban Minister of Agriculture, Ulises Rosales del Toro, and ANAP President Orlando Lugo Fonte addressing key elements on the development of Cuban agriculture.
Tags: ANAP, Ciego de Avila, Cuban agriculture, Cuban Minister of Agriculture, Matanzas, National Association of Small Farmers, Orlando Lugo Fonte, Sancti Spiritus, Ulises Rosales del Toro
Today’s The Economist addresses the Cuban government’s failed agricultural reform:
TWO years ago last month Raúl Castro formally took over as Cuba’s president from his convalescent elder brother, Fidel. The switch raised hopes of reforms, especially of the communist country’s long dysfunctional agriculture. But change has been glacial. Official figures show that in the first two months of this year deliveries to the capital’s food markets were a third less than forecast. Nobody starves, but hard-currency supermarkets go for weeks without basics such as milk and bread.
What has gone wrong? Cuba’s state-owned farms are massively inefficient, and rarely provide more than 20% of the country’s food needs. Three hurricanes in 2008 made matters worse. Raúl Castro has acknowledged the problem, and introduced some changes. Idle state land has been leased to private farmers. The government has raised the guaranteed prices it pays for produce. Farmers can now legally buy their own basic equipment such as shovels and boots, without having to wait for government handouts.
[...]
But Raúl continues to move very cautiously. So Cuba will buy much of its food from foreign suppliers. Foreign exchange, never abundant—partly because of the American economic embargo—is again in short supply. The world recession cut Cuba’s earnings from nickel and tourism last year. Imports fell last year by almost 40%.
A foreign businessman in Havana says there have been signs of a further squeeze this year. Transfers abroad by foreign businesses have been blocked, or delayed, for months. The Spanish owner of Vima, a food importer which supplied many hotels and state-run restaurants, made the mistake of publicly criticising delays in getting paid. His contracts were promptly revoked. Foreign companies have been warned that the government may stop selling them staples, such as meat and rice, for their staff canteens. “They told us bluntly that their priority is feeding the general population, that the situation is very serious, and that we should make our own arrangements,” says a manager of one joint-venture.
Tags: agriculture, food markets, foreign companies, hard-currency supermarkets, Havana, Nickel, state-owned farms, Tourism, Vima
EcoMin Marino Murillo (Image: cuba.cu)
Cuban economic minister Marino Murillo announced before a meeting of the National Association of Cuban Economists (Asociación Nacional de Economistas de Cuba) that the lack of liquidity in currencies is an urgent problem for the government, reported Cuban state media.
Tags: Asociación Nacional de Economistas de Cuba, Cuban economic minister, foreign exchange, Marino Murillo, National Association of Cuban Economists
Image: AFP
via The Economist:
Small though the change is, it is of huge symbolic import. It is the first step in a wider, albeit stealthy, abandonment of Fidel Castro’s half-century effort to forge a “new man” in Cuba by limiting individual reward in favour of all-embracing social provision, with the state imposing its choice of consumption as well as of production. Granma said that after the plan was “perfected” some 3.5m Cubans could expect their 24,700 workplace canteens to close too, and would get a similar wage increase.
…
Cuba is close to bankruptcy. Foreign businesses have been waiting for months for permission to transfer abroad hundreds of millions of dollars in profits from joint ventures that are sitting in local banks. The government has slashed imports by more than 30% this year, and budgets for state companies and ministries have also been cut. Cuba does not produce enough and its population is ageing. Theft and absenteeism are rife in workplaces across the island.
Raúl has placed trusted military men in charge of economic policy. Their aim is to save foreign exchange and raise output. They reckon that Cubans do not value the true cost of free services. Workplace canteens used some $350m in imported food last year, according to Granma.
…
What nobody is saying publicly is that Raúl is tossing into the dustbin of Cuban history the idea espoused by Ernesto “Che” Guevara, at the start of the revolution that Cuba’s communist economy should be based on “moral incentives”, rather than material ones, and that this process would create a “new man”. Through various zigzags Fidel never wholly relinquished that idea. When opponents criticise Cubans’ derisory wages (averaging $20 per month), officials always point to the additional “social wage” of free housing, health, education, transport and food rations.
Some of this will now go. Raúl, a practical man, has no time for Utopianism. He gives every sign of knowing that if Cuban communism is to survive its founders it will have to supply people with a few more material goods. But he may find it hard to raise wages by much without more radical reform.
Tags: bankruptcy, Fidel Castro, foreign exchange, Raul Castro
Via Reuters:
Cubans began taking a hard look this week at entrenched customs like food rationing, pilfering on the job, cradle-to-grave subsidies and black market trading in a national debate called by Army General Raul Castro. Authorities have circulated a ten-point agenda for thousands of open-ended meetings over the next month at work places, universities and community organizations to “rethink” Cuban socialism, focused on the economic themes highlighted by Castro in a speech to the National Assembly in August.
Tags: Army General Raul Castro, black market trading, cradle-to-grave subsidies, food rationing, pilfering on the job
Image: The Economist (13 AUG 09)
The RAND Corporation examines China’s role as a global actor in the int’l system in its latest monograph titled: “China’s International Behavior: Activism, Opportunism, and Diversification.”
RAND describes Chinese global activism as “continually changing and has so many dimensions that it immediately raises questions about its current and future intentions and the implications for global stability and prosperity.”
Moreover, the study “examines how China views its security environment, how it defines its international objectives, how it is pursuing these objectives, and the consequences for U.S. economic and security interests.”
Chinese expanded strategic interests (including business interests) in Latin America and Cuba is accelerating at a fast pace.
As this study points out:
China is building political relationships to diversify its access to energy and other natural resources, with a focus on Africa, the Middle East, and Latin America. Energy security encompasses diversifying both suppliers and supply routes.
…
China’s expanding involvement in Latin America is primarily (but not exclusively) driven by economic considerations: gaining access to markets, investments, and resources. The growth in China’s merchandise trade and investment in the region offers strong evidence of Chi- na’s economic motives. Trade between China and Latin America and the Caribbean has rapidly increased over the last several years, and as a result, this region has become more important to China. From 1999 to 2006, total merchandise trade increased from $8.2 billion to close to $70 billion, an almost tenfold increase. In 2006, Latin America and the Caribbean accounted for 4 percent of China’s total world trade, increasing its share by 1.7 percent since 1999.
…
China’s investments in Latin America are growing as well. China currently has projects in Argentina, Brazil, Chile, Cuba, the Domini- can Republic, Guyana, and Venezuela, among other nations. China’s investments in Brazil, Argentina, Chile, and Venezuela are mainly focused on facilitating access to such natural resources as iron ore, copper, and oil (in the case of Venezuela); as such, its investments have been in the mining, transportation, manufacturing, and petroleum sectors.
Tags: Argentina, Brazil, Caribbean, Chile, China, Chinese global activism, Cuba, Dominican Republic, energy and natural resources, energy security, Guyana, Latin America, manufacturing, mining, petroleum, strategic interests, transportation, Venezuela
David Ronfeldt, a former senior political scientist at the RAND Corporation who is now retired, has written several reports and monographs on Cuba’s political system and politics dating back to the mid-1970s.
Dr. Ronfeldt continues to write his musings at his weblog Visions from Two Theories which I have enjoyed reading especially for his analysis and commentary on Mexico’s drug war.
In his Cuba: ready to exit its evolutionary cul-de-sac? — a TIMN perspective post, he assesses the current state of Cuban society by using a TIMN framework to analyze the social evolution of events.
The TIMN model refers to Dr. Ronfeldt’s “review of history and theory, four forms of organization — and evidently only four — lie behind the governance and evolution of all societies across the ages: tribal, institutional, market, and network.” (For further analysis see his working paper from RAND.)
Dr. Ronfeldt states: “I think Cuba is an interesting case for illuminating some theoretical principles that may be important for building the TIMN framework and understanding its implications for how to achieve social evolution.”
He further illustrates:
“One aim of the TIMN framework is to provide clarity as to why systems like Cuba’s are so limited — in fact, self-limiting. The framework also shows how to think about Cuba’s future from an evolutionary standpoint.
Briefly stated: In the name of revolution, Fidel Castro committed a strategic error of devolutionary proportions. He rejected developing Cuba in T+I+M directions, and fell back to construct a hyper T+I system. If this could have served to prepare Cuba for an eventual new transition to a +M system, the outlook for post-Castro Cuba might be promising. But his regime’s practices have not assured that Cuba will get a +M transition right, even though it is the inevitable next phase. Meanwhile, +N forces are even more suborned and restricted, especially among civil-society NGOs.
Fidel represents a supreme contemporary expression of the fusion of T+I ideals and principles. Accordingly, he has believed that if people would just behave like one big family under his chieftaincy, then everything would work fine. He did not see that the organizational forms on which his ideals rested — the tribal and institutional forms — have performance capabilities that are self-limiting, especially with regard to economic growth. Indeed, Cuba’s low level of development today reflects the inherent incapacity of T+I designs to promote and manage increasing levels of economic complexity. As with the feudal and absolutist systems of long ago, as well as recent Soviet systems based on central planning and social exhortation, this design can produce a strong, aggressive state and military, but not an advanced, multi-purpose economy and society.“
Dr. Ronfeldt also addresses current U.S. policy regarding greater channels of information and communication flows.
He argues for sustaining the embargo as evidenced in the following:
“Idealistic notions are sprouting anew — here and here, for example — that ending the embargo would ameliorate Cuba’s hard-line T+I behaviors and induce +M effects: Thus, it is said, lifting the embargo would deprive the regime of an anti-American rationale — a scapegoat — for maintaining its tyranny and explaining away Cuba’s economic woes. It would generate maneuvering room for reformers who want political and social as well as economic liberalization. It would encourage free-market reforms, and a more open, pluralistic civil society.
Yet, there is no evidence — only speculation — that ending the embargo unilaterally would have such positive effects under current circumstances. More likely, it would reinforce Fidel’s sense that he is winning and provide him with extra resources and rationales for staying his course. And there is evidence for this contrary prospect.
The infusion of foreign investments and tourists from Canada, Europe, and elsewhere since the mid-1990s, by providing new income for the regime, actually enabled Fidel to slow or reverse the modest liberalizations he had grudgingly permitted in order to ease the economic shortages following the collapse of the Soviet Union. Little new liberalization has occurred since then. Moreover, European governments that have increased their trade and investment with Cuba have been rebuffed when they have pressed for even modest shifts in the regime’s human-rights behavior.”
Dr. Ronfeldt succinctly sums up his analysis on future perspectives with this viewpoint:
“In sum, Fidel Castro remains committed to a theory of social evolution that is fundamentally erroneous. He is not entirely wrong to rail against the evils of capitalism — it can have detrimental effects, and what’s happening in the United States today provides new evidence. But by failing to see that the market system is essential for continued social evolution, and by not figuring out how to make it apply in a balanced, positive way in Cuba — even so that it deserves a name other than capitalism — he keeps Cuba’s potential arrested in an evolutionary cul-de-sac of his own fabrication.
Eventually a breakout will occur. Odds are, a multitude of U.S. actors will then rush ahead with their usual patterns about promoting democracy and freedom, including free enterprise. But if the objective is to see Cuba turn into a balanced T+I+M system, new kinds of advice and assistance may be needed. The United States has policies and strategies for promoting capitalism — basically saying, open your markets, and we will come. But do we really have adequate policies and strategies for building a properly free, fair market system? I gather not, for that’s never been as major a goal as promoting capitalism. It’s time to rethink. Otherwise, assuming that the post-Fidel regime endures, the model it prefers next may be a mild kind of fascism rather than a potential liberal democracy.”
Parliamentarians begin analyzing economic situation
28 July 2010 at 1606 in Commentary, Debt, Economy, Government, Havana, Market, National Assembly, Nomenklatura, Ricardo Alarcon by Armando F. Mastrapa 3d
The Committee on Economic Affairs of the Cuban National Assembly of People’s Power (Asamblea Nacional del Poder Popular, ANPP) began today studying different issues related to the situation on the island, specifically, the precarious economic performance, which has increased demands for fundamental change by the populace.
Ministers and other leaders also notified members of the Committee on the implementation of the state budget in the first half of 2010, low labor productivity and import substitution. [El Financiero]
Tags: ANPP, Asamblea Nacional del Poder Popular, Committee on Economic Affairs, National Assembly of People's Power