The Cuban leader Fidel Castro is making attempts to drag his country out of the guagmire he has landed it in since rejecting adopting market economic principles when its sponsor, the Soviet Union, fell apart in 1991. Even though his way of doing it -telling the Cuban population to save on energy and work harder- is not immediately likely to effect much change, perhaps his efforts evidence that the Cuban leader is losing hope of an impending end to the US trade embargo on his own terms.
The hours long speeches held in recent days by the Cuban 78-year old leader show that he’s by no means through with Leninist-style Marxism governing his rather undreamlike Caribbean island’s economy. The changes that the president is making since the beginning of March are a sign however that the Cuban leader is worried that he might be overthrown by the mob if he allows the economic situation to get even more untenable.
Castro’s renewed drive to doctor his country’s economy is almost certainly too little too late given the dire situation this country is in. Real change effecting a flourishing economy will likely only happen when the country’s rid of him, yet the leader is still firmly in command and the population’s been battered into submission so much that the ordinary Cuban has given up by now of hoping that there’s going to be a way out other than escape.
Like any of us, the leader could of course pass away tomorrow, but at 78 Castro is one of those old hands that is as unlikely to just die as he has been unlikely to let go of his leadership, many say has been so strong due mainly to the stringent US embargo against this country. Political analysts hold it for near impossible that the country will see another dictator after a Castro departure from the stage.
Judging where it all will go will in the near term depends on what you consider to be progress. On the one hand, the Cuban population has suffered so much it by now must have developed some means to get by whatever the circumstances dictate. On the other hand, real change might be taking place albeit very slowly. The renewed focus on the economy that Fidel has been displaying since 8 March might reveal slight evidence that he’s willing to water down the Marxist-Leninist wine somewhat.
The changes in economic policies are aimed at increasing exports and improving the conditions of trade with the outside world. Cuba, Castro himself admitted already in the early 1990s, is going through the most difficult period of its history as a republic. And since then, it’s gone downhill even more. The widespread hunger and hardship has continued. Most of the people are unable to look further than the next day, one academic report from the University of Texas some ten years ago. It termed the Cubans as suffering from ’societal depression’ which disallows people to think a better future is at all possible. Imagine the situation now.
The Cuban leader routinely blames the U.S. embargo for Cuba’s perils and reiterated the accusations only last week. Terming it the “criminal blockade” he believes that the US is the sole factor spoiling Cuba’s chances of ever becoming a healthy economy. The outside world agrees with him. And what’s more, most observers believe that the vicious treatment by the US is to blame for this leader’s longstanding rule, which has seen some of the worst human rights abuses ever.
Fidel Castro has held on to his power by fiercely battling the US and playing it off against the Soviets since his 1959 communist coup in which he displaced another dictator, Fulgencio Batista, yet it might now begin to dawn even on this leader that perhaps his days are going to be numbered if he doesn’t make really convincing changes to better things. The US’ May 2004 decision to tighten its embargo, designed to deliver another ‘final’ blow to this repulsive leader, might very slowly begin to pay off.
Because Fidel Castro’s attempts to bring about change might be the swan song of a man who is running out of ideas. He is trying to improve productivity at home by telling the population to save on all forms of electricity and by making empty promises that a turnaround will happen if measures like these are stuck to. Economists that describe the situation say that Cuba needs to dramatically improve on social security before the domestic economy can reasonably be expected to pick up again only slightly.
There is hardly any chance of structural changes that will benefit the Cuban economy in the near term, but a few positive outside factors exist. They include high prices of nickel, which Cuba exports, and a steady rise in tourism revenues. The outlook for the much battered sugar industry is not very hopeful because of low world market sugar prices, and shrinking volumes due to a shortage of spare parts for machinery, lack of adequate fertilization, breakdowns in the transportation system, and lack of fuel for field operations and mill boilers.
There is growing support inside the US to lift its embargo against Cuba since the country is not posing a military threat and since the embargo is not proving effective in removing the leader but only starving the Cubans. It is argued that lifting the embargo and a few clever moves might effect just the sort of speedy transition to a market economy that if it took off would possibly strengthen the people and give them just that much hope to actually stand up to the dictatorship in place. For a while in 1996, this looked a possibility, but recent governments have in matter of fact only worked out opposite measures. The US has recently tightened its 1992 Cuban Democracy Act which was initially adopted to bring down Castro “within weeks,” according to the bill’s primary advocate Robert Torricelli. Last year in May, the US government reduced the number of visits the 1 million or so Americans with ties in Cuba could pay their relatives in Cuba. And the White House furthermore also restricted their remittances to Cuba.
The reason for tightening up on remittances and visits to Cuba has been the perception in the US that Cuban leaders whenever they were under the impression that the embargo was imminently lifted would tend to feel encouraged to resist any real change.
The 1996 Helms-Burton act is particularly intended to dampen such illusions because it spells out exactly the kind of change the US wants to see on the ground. The conditions and terms for U.S. assistance to a post-Castro Cuba are outlined, as well as what markers will be employed to determine that a genuine transition to market economic principles is occurring. First of course is the departure from power of Fidel Castro and his brother Ra, currently commander in chief of the Revolutionary Armed Forces.
The response by Castro has been characteristic of the cat and mouse game that has been played between the two nations since 1960. He renewed his ban on US dollars. Yet the move is bound to have been inspired more than by a wish to retaliate politically. Cuba’s shortage of hard currency, already serious before the present crisis, has long been termed critical, yet even by Cuban standards a crisis was at hand last October, when Castro banned the use of dollars throughout the country. People were given the chance to change their dollars for equivalent amounts of pesos which were said to be convertible from then on against a commission of a grand 10%.
Cubans changed their pesos en masse taking advantage of the exemption of the commission. They propped up the country’s foreign exchange reserves up by more than USD1,476 million. Last month, the Cuban leader revalued the peso with 8% and people were given another chance to swap the cash they apparently still had lying around. This indicates there is a level of desperation not witnessed before.
The recent changes in the economy are believed to be evidencing the Cuban leader’s despondency at the loss of hope that the embargo is ever likely to be lifted. “In the past two or three years, Cuban economic policy has been on a kind of seesaw; when things looked so desperate as to threaten the regime seriously with street demonstrations or acts of civil disobedience, the regime grasped at a few straws of economic reform. The moment the crisis seems to have passed, the government has sought to reassert control”, according to Mark Falcoff, a scholar at the American Enterprise Institute.
Another sign that the Cuban leader is serious in effecting changes to his economy is his attempt to improve people’s spending power by doubling the minimum wage to around USD10 a month. To outsiders, this is more important as a sign of willingness that he is working on making real tangible changes, rather than the measure’s contents. As a measure the improved minimum wage is not really making all that much difference to the average worker in this country, which has seen productivity drop to incredibly low levels mainly due to poor organizational structures.
Cubans say the recent economic changes to benefit them are a drip in the ocean. Their economy really is at the end of its tether. Hampered by outtages in electricity, parts of the Cuban population also do not even have access to running water. Transportation is a big problem in nearly every industry and vegetable crops more often than not are rotting away on the field.
This is not to say the Cuban leader is not hoping for health - his wish for the trade embargo to be lifted so his country can trade with the US is an expression of this, even though it must undermine the very reasons for the Cuban revolution.
In estimating how people are likely to cope in the near future, with the Cuban system that impoverishes and controls every aspect of their lives, there are two options. The short answer is in this case more correct than the long one; it simply doesn’t. The highly controlled dictatorship rule which does not allow for anyone to speak their mind might however have seen its better days, even if the people of Cuba are unlikely to effect this.
The long answer looks to be as slow as it is long. It is real change. If this is coming about it might just be very slow and prone to misinterpretation from all sides. Even though corruption will be taken for positive moves and vice versa, it is well worth keeping up with what’s going on in this country.
It is likely that even the staunch anti capitalist Castro who abhorrs the workings of market rule, is not entirely able to avoid introducing some capitalist elements into his country’s economy. The fact that in contrast to over a decade ago, the recent Cuban decree barring use of dollars in the Cuban economy, falls short of penalising the possession of dollars as well could be taken for a sign. As a matter of fact, anyone who has an official dollar bank account will be “fully guaranteed” by the central bank. And the funds can be withdrawn in the form of greenbacks or the local currency at any date without charge, according to Joseph Potts.
The convertible peso is mainly aimed at established businesses in the country which are compelled to conduct trades in pesos rather than dollars. The currency ban also affects cash remittances and tourism.
The government also announced that Cuban state companies would have to sell the central bank any hard currency received from exports or domestic sales.
It is estimated that annually, some USD1 billion is sent to Cuba from the US. The 10% commission fee on dollar conversions are likely to make Cubans remitting cash back to Cuba to change dollars into Euros or Swiss Francs prior to sending them on. The move that is aimed at hurting the US dollar, but which is also enriching the leadership of the country at the same time.
Castro is hoping that forcing the population to depend on the home currency might also help domestic investment which is so low that companies are almost invariably unable to raise enough capital to keep their operations afloat. This leads to a high number of unfinished investment projects, excess productive capacity (factories forced to close or work only a few days or hours per week) due to lack of raw materials and supplies, progressive deterioration of the industrial base, as well as major transportation problems for workers.
The transportation and communications infrastructure is in shambles and continues to deteriorate. Impoverishment and environmental degradation are spreading. There is a huge and widening housing shortage. The only good commodity Cuba has are its people, who often turn out to be surprisingly well-educated even though their educational system is highly ideologically tinted.
There is a lack of almost everything in Cuba and this is translated in a scarcety of domestic financial assets in which people can save without throwing their money away. Hence the huge amounts of dollars that were changed last year, which dwarfed the country’s second largest foreign exchange earner, tourism, which brings in little more than USD2 million a year and is relied on heavily.
What remains a mystery hidden beneath the restrictions on freedom of speech is why the Cubans are so keen for the Americans to lift their embargo. It is no doubt likely that once US companies are allowed to trade with Cuban companies, the first effect will be tonnes of US tourists flooding the Caribbean beaches. One can’t help but deduct that the revolution’s original goal of getting the Yanquis out of Cuba somehow is conveniently being forgotten. Perhaps the next phase in the relationship between the US and Cuba is going to be entitled ‘Cuba-US, geriatric harkings’ - If the Cuban people don’t rise up first, that is.
About the Author
Angelique van Engelen is a former Middle East correspondent and currently runs a writing agency http://www.contentclix.com. She also participates in a writing ring http://clixyplays.blogspot.com/