CUBA: BETWEEN SOCIALISM AND THE MARKET

By Roberto Savio and - - Reprint | | Print |

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HAVANA, Mar 2 2011 (IPS) - The process of change now taking place in Cuba has given rise to radical analyses in which a part of the left denounces the betrayal of socialism while a part of the right proclaims the collapse of the regime. Seen from the island itself, things are no where near so simple. Quite to the contrary.

Since Raul Castro took power in July 2006, his main worry has been maintaining trustworthy statistics on the economy, in contrast to those Fidel dealt in, which his advisors manufactured for him and for the ideal world in which he firmly believed.

The result: there are simply not enough resources to continue providing free education, health care, housing, electricity, water, certain staple food items, and lunch at work to 12 million people; fifty percent of arable land lies fallow; the island’s sole mineral resource, nickel, has already been sold to Canada in an agreement from long ago that granted Cuba very poor terms; though oil has been discovered, there is no money to begin production; and the American embargo, however exaggerated its effects may be, is taking a heavy toll on tourism. Cuba now exports services -mostly doctors- in exchange for Venezuelan oil.

As a consequence, debates are now underway throughout the country about the “outlines of a five-year plan” that would be taken up in the Congress of the Communist Party (PCC) in April. The debates has created an atmosphere of candidness, criticism, and proposals, an absolute novelty for the island.

The broad strokes of the plan reflect a valiant effort to maintain a socialist framework while accepting the new reality. The Congress insists that Cuba remains a socialist country but recognises that there is a need for greater productivity, reform, and for the contribution of individual Cubans.

The three most important ideas set forth are: the PCC would cede management of the economy and production to the government; the government would be decentralised at every level possible in an effort to cut costs and eliminate waste; and the people would become the motor of economic growth, driven by individual initiative.

This latter element is a major novelty for Cuba. It does not constitute an opening to the private sector but rather to the idea that individuals (as opposed to businesses) can work for themselves and organise cooperatives (buying and selling common services).

This is being accompanied by the downsizing of the state sector, until now the island’s sole employer. It is said that as many as 1.3 million people out of a population of 12 million will be laid off, which supposedly will transform them into freelancers.

Thus far 500,000 have already been laid off. In my travels throughout the country it seems that personnel cuts at hotels, botanical gardens, etc, would be about 20 percent. The government is granting commercial licences to all who request one. But how many of these people will be able to start businesses without a plan to provide microcredit (there are no resources for it) and access to raw materials (which are scarce and hard to import)?

In my meetings with the theoreticians of the PPC, it was emphasised that Cuba was casting off its democratic centralism, a legacy of the Soviet Union, in order to forge its own socialist path, decentralised and democratic. Decisions would be made at the grass-roots level and the people would have greater responsibility. But in the new Five Year Plan, local cuts would be imposed by central planning.

Certain conclusions seem indisputable: in Cuba an atmosphere of unprecedented debate and frankness has begun. There is no opening to the private sector but a certain amount of free-market activity has been introduced. And while there is an effort being made to attract foreign investments, the conditions that would be imposed on them are rigid and harsh -hardly the best way to lure them. For the moment, self-employment generated by massive unemployment is supposed to be the route to boost production and cut costs.

This is clearly the result of a compromise between the two wings of the party and the government: the communist orthodoxy, which would prefer to keep in place the 50 plus-year old system and accepts some moves towards competition and efficiency, and reformers who favour modernization. Many say that in this way the members of the old guard (which will have disappeared in 8-10 years) are trying to minimise all change so that their world can continue as is.

It is, I believe, an irreversible process. The majority of Cubans saw what happened with the fall of Soviet Communism and the arrival of Yeltsin and those like him. They know that what awaits after communism is the most savage capitalism, albeit with an added Cuban element. There are almost 2 million Cubans in Florida, all of them fiercely competitive, mostly right-wing Republicans who have both capital and a powerful hunger for revenge. For example, there are in Miami twelve architectural studios each with a map of Havana divided into 12 sections, one for each of them; they have already worked out a major real estate blitz to transform the city into a copy of Miami.

The Cubans in Cuba are afraid that the Miami Cubans will return, reclaim their homes and belongings, leaving the current occupants with nowhere to go, and taking control of the island economy in the name of democracy, modernity, and the notorious free market.

But Raul is right. In 1932, with a population of 4 million, without roads, and using oxen for transport, Cuba produced 8 million tonnes of sugar; today it produces 1.5 million. Before the revolution there were 6 million people and 12 million cows; today it is the reverse. Eighty percent of construction materials and 32 percent of its food are imported.

Thus no one can know what will happen. With luck, certain socialist sectors will remain and suffering will be moderated. But the new socialism means that the vast majority will have to accept being truly poor, and given the images reaching them from the US a mere 90 miles away, that is not possible.

The irony is that all of this is happening precisely when the myth of the American dream is coming apart, slowly but surely, battered by the current economic conditions of the US. It will certainly be interesting to analyse the situation come 2016, at the end of the five-year plan, and see how things have worked out. (END/COPYRIGHT IPS)

(*) Roberto Savio, founder and president emeritus of the Inter Press Service (IPS) news agency.