CHALLENGES 2005-2006: Cubans Surprised by Impressive Growth Figures

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Jan 2 2006 (IPS) - After registering impressive economic growth in 2005, Cuba now faces the challenge of devoting greater resources to improving the population’s quality of life, but without disregarding the need to more fully develop the country’s productive base, economists say.

In the meantime, President Fidel Castro’s declaration that the Cuban revolution can only be destroyed by Cubans themselves makes it almost a foregone conclusion that his government will continue to crack down hard on dissidents in 2006, while continuing its efforts to fight the diversion of state resources and other crimes.

The government’s announcement that Cuba’s gross domestic product (GDP) had grown by 11.8 percent in 2005 came as a surprise to a good many Cubans, who had just lived through a year of hardships provoked by a severe energy crisis, a continuing drought, several hurricanes and the stepping up of U.S. sanctions against this socialist Caribbean island nation.

Cuba experienced high growth and finished the year with a balance of payments surplus of 800 million dollars, but in order for this to translate into development, the country needs to expand its productive base in order to create more jobs and provide better salaries, said an economic researcher who spoke with IPS on the condition of anonymity.

He pointed to projects in the biotechnology sector – in which Cuba has achieved significant advances – which are being carried out by joint ventures with Cuba in China, Iran and Malaysia. “These programmes signify sustainable development,” said the researcher, adding that the challenge now is to create more industries to replace imports with domestically produced goods.

“If everything goes towards consumption, then we will fill our bellies, but the growth will not translate into development that could improve public transportation, agricultural production, and the food, clothing and footwear industries, to mention just a few sectors whose expansion would result in greater individual well-being,” commented the economist.

Foodstuffs and fuel account for a large part of Cuba’s imports, which increased by 36.4 percent in 2005. A total of 1.7 billion dollars was spent on food purchases abroad, according to figures from the state-run food importing company Alimport.

Cuba’s GDP growth of 11.8 percent outstripped that of Venezuela, a major oil producer that leads the Latin American region in GDP growth with nine percent, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

Cuba’s economic growth last year even surpassed that of China, one of the world’s most dynamic economies, whose GDP has increased by an average of nine percent annually for the last decade.

One of the reasons for these impressive results is the fact that the Cuban government began in 2004 to include expenditures on social services like education and health in its GDP calculations. These sectors are normally excluded, because they do not generate revenues, but Havana devotes considerable resources to providing these services free of charge to all of the country’s 11.2 million inhabitants.

Moreover, this year’s GDP calculation included a sizeable amount for the “export of social services to a number of countries,” particularly Venezuela, commented sources from ECLAC.

ECLAC did not include Cuba in its preliminary report on economic growth in the region, because it is still evaluating the Caribbean island’s results in accordance with the calculation methods normally used by the regional U.N. agency.

Statistics aside, Cuban families ushered in 2006 with high hopes that the country’s electric power generation crisis will finally come to an end, and that within six or seven months, frequent lengthy power cuts will be a thing of the past, as the government has pledged.

Castro estimates that by mid-2006, Cuba “will have more than enough electricity,” thanks to major investments in expanding electric power generation infrastructure.

The government is also counting on successful results from such initiatives as raising the rates charged for electric power service, sales of accessibly priced energy-efficient appliances, and the replacement of incandescent light bulbs with energy-saving bulbs in homes and businesses.

Castro is also heading up an anti-corruption crusade, launched in October with the “occupation” of the country’s state-owned gasoline distribution facilities and service stations by a veritable army of young social workers, in response to the astronomical amount of money and gasoline that was being stolen by the regular employees.

The campaign will be extended to everywhere it is deemed necessary, and will also involve the leadership and rank and file of the ruling Communist arty – the country’s only official political party – whose discussions over the previous months have focused on “the different ills associated with crime, illegalities and manifestations of corruption,” according to reports in the state-controlled press.

The goal is “to put an end to many wrongdoings of this kind: many acts of theft, many cases of the diversion of state funds, many sources of wealth for the nouveau riche,” Castro stated in a speech made in November, when he admitted for the first time that the revolution he has led for the past 47 years could collapse under the weight of its own errors.

“This country could destroy itself, this revolution could be destroyed, and today, they (the United States) are not the ones who can destroy it, but we can destroy it, and it would be our fault,” said Castro.

Foreign Minister Felipe Pérez Roque echoed these views in late December.

Pérez Roque, who at the age of 40 is the youngest member of the country’s high leadership, said that Washington – which has been caught up in an ongoing conflict with Havana for more than four decades – is not “staking its hopes” on defeating the Cuban revolution now, but rather “after” – in other words, after the death of Castro, now 79.

Pérez Roque then went on to enumerate three basic premises for preserving the socialist system after the “historic generation” that initiated the revolution has passed away.

The first is to maintain leadership based on authority that is earned by setting an example of austerity and dedication to the task at hand. It must be clear to the people that those who lead “do not have special privileges,” he said.

The second is to maintain the support of the people on the basis of ideas and convictions.

And the third and final premise is to prevent the resurgence of a ruling class. The key is to ensure that both income and ownership are concentrated in the people and the masses, not a minority that has “sold out” to “imperialism”, since in Cuba, there can be no such thing as a national and patriotic bourgeoisie, as in other countries, said Pérez Roque.

With cards like these placed so forcefully on the table, it seems safe to say that Cuba’s dissidents – viewed by the government as mercenaries on the payroll of the United States – can expect little in the way of concessions in 2006.

“The message (sent by the government) is zero tolerance, and I think this is going to be a rough year,” Manuel Cuesta Morúa, spokesman for the Arco Progresista opposition coalition, remarked to IPS.