Cuba: the future uncertain
In the midst of severe economic crisis, the Cuban
regime has moved to free up sections of the economy and cut back
state-sector jobs. Obviously, this raises important questions for the
workers and youth of the island, but also for socialists
internationally. Do these measures spell the beginning of the end of
Cuba’s planned economy? If so, what would be the most likely scenario: a
repeat of Russian or East German capitalist restoration? Is this process
inevitable? TONY SAUNOIS reports on the recent important developments.
IN SEPTEMBER THE Cuban government announced a series
of economic ‘modernisations’. Among the most significant was the
proposal to slash 500,000 jobs in the state sector by March 2011 as a
first step to reducing employment by a million. Licences are to be
issued by the state to allow the creation of self-employed persons (‘cuentapropistas’)
with the legal right to employ others, not just family members.
These measures are the government’s response to a
worsening economic situation which has gripped the country, resulting in
food shortages and deteriorating living standards for the mass of the
population. The ‘reforms’ have opened a discussion within Cuba and among
socialists internationally about the future of Cuba and the planned
economy – which, although weakened by bureaucratic measures, remains
largely intact at present – and the prospect of capitalist restoration.
Such a development, should it take place, would represent a setback for
workers and the labour movement worldwide. It would be used by the
capitalist class internationally, and especially in Latin America, to
discredit the idea of socialism and propagate the idea that capitalism
is the only viable social system. The fate of Cuba, therefore, is of
crucial importance not only for the Cuban people.
Throughout the 1990s and the first decade of this
millennium, Cuba and, later, Venezuela under Hugo Chávez have been
perceived by significant layers of workers and young people as the only
countries on the ‘left’ which were prepared to stand up to George W Bush
and US imperialism, and to show that an alternative was possible.
Capitalism has not been overthrown in Venezuela,
despite some progressive reforms introduced under Chávez. Nonetheless,
together with Cuba, they defend the idea of ‘socialism’. Unlike
Venezuela, Cuba has a centralised planned economy, a universally
heralded healthcare system and free education. Its willingness to deploy
thousands of doctors and medical teams around the world to crisis-torn
countries after catastrophes, such as the earthquake in Pakistan and
Kashmir, has ensured massive sympathy from the oppressed in Asia, Africa
and Latin America and, especially, young people in Europe and the USA.
The restoration of capitalism in Cuba would be seen
as another setback, although not of the same magnitude as the collapse
of the Stalinist regimes in the former Soviet Union (USSR) and eastern
Europe in 1989-92. The situation facing world capitalism is entirely
different today than it was then. Yet, while Cuba does not have the same
international significance, capitalist restoration would have serious
consequences. After all, around the world there are more illusions in
Cuba than existed around the regime of the USSR at the time of its
collapse.
Worsening economic crisis
CUBA IS CERTAINLY confronted with its most serious
economic crisis since the ‘special period’ following the collapse of the
Soviet Union in 1991-92. This had devastating consequences in Cuba. GDP
dropped by a staggering 34%. Food rationing was introduced but, on
occasions, only one-fifth of the UN minimum nutrition levels were
reached. According to some reports, calorie intake fell from 3,052 per
day in 1989 to 2,099 in 1993. It was a testimony to the social base and
support for the revolution that the Cuban regime survived this period.
This is especially true following the introduction of the Helms-Burton
Act in 1996, which strengthened the US embargo in an orchestrated
attempt to strangle the regime and bring about its implosion.
The Cuban regime was compelled to take some
emergency measures to open up sectors of the economy, such as tourism,
to the private market and international investment. This, together with
other initiatives and, subsequently, securing oil agreements with Chávez,
was followed by a stabilisation and a certain economic recovery.
However, some measures, especially the introduction
of a parallel dollar economy in the tourist sector, widened inequalities
between those with access to the dollar economy and those left outside
it. While stores selling goods to the dollar economy were stocked with
an array of the most modern consumer items, the state stores selling in
the Cuban peso are sparsely stocked.
The economy grew steadily between 2003-07, reaching
a peak of 12.1% in 2006. However, since then it has contracted sharply.
In 2008, it recorded a fiscal deficit of 6.7% of GDP - an increase of
70% compared to 2007 – and a current account balance of payments deficit
of $1,500 million. This compared with a surplus of $500 million in 2007.
Cuba’s foreign debt had spiralled to $17,820 million in 2007, 45% of
GDP. It defaulted on its international debt repayments in 2008. Cuba has
also been hit by a fall in the price of nickel, which accounts for
approximately 25% of its exports.
It is in response to this worsening economic crisis
that the new measures must be seen, as well as the sharply worsening
social conditions of the masses that has flowed from them. The
adjustment package announced by the government included a large
reduction in its food imports. Prior to the revolution in 1959-60, 80%
of food consumption in Cuba was largely provided from within the
country. Today, 80% is imported.
Threatening the gains of the revolution
THESE RECENT DEVELOPMENTS are in stark contrast to
the great social and economic gains which took place following the
revolution. These were made possible by the overthrow of landlordism and
capitalism, and the introduction of centralised economic planning.
Fidel Castro justifiably defended the gains in 2008
when he pointed out that, since the revolution, life expectancy has been
raised by nearly 19 years, to 77.5 today. Infant mortality stands at 6
per 1,000 in the first year of birth – slightly worse than Canada.
Thirty thousand doctors are working in more than 40 countries. A highly
effective, free health system and free education were introduced.
Illiteracy was abolished within the first few years of the revolution.
These conquests were maintained even during the ‘special period’.
Nonetheless, housing conditions are extremely poor for many Cubans.
Many of these gains would be reversed with the
counter-revolution and restoration of capitalism. In Russia under
Vladimir Putin, for example, male life expectancy fell to 56! This is a
warning of the fate that could await the Cuban people. Cuba could be
dragged down to the economic and social conditions which currently exist
in Nicaragua or El Salvador. Yet, this is now developing as a serious
threat because of the economic decline which is taking place.
The reason for this emerging threat lies in the
character of the Cuban regime and its inability to develop further the
economy. Cuba is dependent on and integrated into the world market.
Globalisation means that all countries are linked and cannot escape from
developments within the world economy. In the past, this was partly
masked because Cuba was dependent on the subsidies from Stalinist
Russia. Since that system collapsed, Cuba’s growing trade with
Venezuela, Canada, China and Spain (its largest trading partners) has
not been sufficient to allow it to remain immune from world economic
developments.
Furthermore, its problems have been aggravated by
bureaucracy, inefficiency, waste and corruption within the Cuban economy
itself. The crisis is demonstrating in practice the impossibility of
building socialism in one country and the need to spread the revolution
and establish a democratic socialist federation of Latin American and
Caribbean states to democratically plan the development of these
economies. This could begin with the establishment of a federation of
Cuba, Bolivia and Venezuela to give a practical example of what is
possible.
The revolution in Cuba in 1959-60 eventually
resulted in capitalism and landlordism being snuffed out and a
centralised planned economy being established. However, despite enjoying
overwhelming support from the workers and peasants, this did not result
in the establishment of a regime of genuine workers’ democracy. Instead,
a bureaucratic state apparatus was constructed. This was in contrast to
the workers’ and peasants’ democracy which took power in Russia in 1917
under the leadership of Vladimir Lenin, Leon Trotsky and the Bolsheviks.
A bureaucratic state apparatus was established which
Fidel Castro rested on. Despite mass support, this regime ruled in a
top-down, administrative manner. It was not as brutally repressive as
the Stalinist regime which eventually emerged in Russia following the
isolation of the revolution and Lenin’s death in 1924. The mass purges,
and cult of the personality under Stalin have not been a feature of
Castro’s Cuba. However, repression of minorities and dissidents did take
place. Apart from some political opponents, there was also the
repression of gays and lesbians, something which Fidel Castro has now
admitted was a ‘mistake’.
A bureaucracy in crisis
IN THE INITIAL stages of the revolution, the
deficiencies of top-down administration were partly masked by the
general development of society and the economy made possible by
planning, and the favourable trading status Cuba enjoyed with the USSR.
Even then, however, it resulted in economic zigzags, waste, corruption
and inefficiencies. Since the loss of economic support from the USSR and
deepening economic stagnation and crisis, these have deepened along with
the re-emergence of other social issues such as prostitution, which the
regime boasted it had eradicated.
A planned economy needs democratic control and
checks at each level if it is to fully function and develop. Without
this, bureaucratic privileges, and top-down administrative methods,
which result in waste, inefficiency and corruption flourish. This
eventually leads to stagnation and regression. These features were
present from the beginning of the Cuban regime. They have now assumed
ever increasing proportions as the crisis has intensified. Trotsky
warned of this danger in relation to the former Soviet Union when he
posed the question: "Will the bureaucrat devour the workers’ state, or
will the working class clean up the bureaucrat?"
A section of the bureaucracy in Cuba has concluded
that steps towards capitalist restoration offer the way out. Esteban
Morales, director of the US Studies Centre at Havana University, and
left-wing socialist critic of the regime, warned in an article,
Corruption: The True Counter-Revolution (21 April 2010): "Without a
doubt, it is becoming evident that there are people in positions of
government and state who are girding themselves financially for when the
revolution falls, and others may have everything almost ready to
transfer state-owned assets to private hands, as happened in the old
USSR".
He cites the case of the removal of General Acevedo
as director of the Institute of Civil Aeronautics of Cuba without a full
public explanation. Morales concludes that was because it would
embarrass the regime to have to explain why "the people created and
formed by the revolution" have squandered the money and resources of the
people. He concludes with a hypothesis that "the chiefs are receiving
commissions and opening bank accounts in other countries". Morales, a
respected writer on the racial question in Cuba, was expelled from the
Cuban Communist Party following publication of this article.
This reflects the struggle and debate unfolding
within the Cuban Communist Party and the regime in general about which
road to take. There are certainly different wings within the
bureaucracy. The most pro-capitalist has its strength in the armed
forces – with its own enterprises in different sectors of the economy –
from which Raúl Castro, Fidel’s brother, comes. Since coming to power,
Raúl has replaced an estimated 60% of government ministers, bringing in
people closer to him. He has taken tentative steps to follow the
‘Chinese path’. A series of meetings and exchanges with the Chinese
regime has taken place. He drew on the experiences of eastern Europe
during a visit by the last leader of East Germany, Hans Modrow.
The cuentapropistas
RECENTLY, RAÚL ANNOUNCED the granting of licences
for people to become self-employed, the ‘cuentapropistas’, and employ a
limited number of workers. There have also been some changes in land
ownership and the opening of limited farmers’ markets outside state
control. While these steps are significant and represent the
introduction of some capitalist elements into the economy, they are also
limited and remain precarious at this stage. They are monitored by the
state and have not yet touched the decisive parts of the planned
economy.
These cuentapropistas will apply to plumbers,
electricians, hairdressers, and some other sectors. This ‘reform’ was
also introduced during the special period in the 1990s. At its peak,
they numbered 200,000. These were then reduced as Fidel re-centralised
the economy. The establishment of cuentapropistas will still require
state permission. Last year, the total employed in this category
numbered 143,000, out of a workforce of around 5.7 million. Added to
this, however, is a large number of state-employed workers who undertake
‘jobs on the side’ to make ends meet.
A tax system has been introduced for these small
enterprises for the first time. Taxes are not paid in Cuba. For the
first time since 1968, small enterprises in 83 job classifications will
be able to employ staff other than family members. In 1968, Castro
nationalised all small businesses and enterprises on the island.
(Militant, the forerunner of the Socialist Party, opposed this measure
at the time.)
The nationalisation of all small businesses, shops,
etc, undoubtedly increased the bureaucratisation and inefficiency in
many sectors. The introduction of a democratically planned centralised
economy needs to be based on state ownership and planning of the
companies and banks which dominate the economy. It is not necessary to
nationalise every hairdresser or minor enterprise. Rather, the
establishment of local co-operatives that can trade with and be linked
to the relevant state sector would enable these sectors to function more
efficiently.
These measures were partly in response to the
upheavals that had shaken eastern Europe – especially the movement in
Czechoslovakia – under pressure from the bureaucracy in the former USSR.
Castro admitted in 2005: "Among all the errors we may have committed,
the greatest of them all was that we believed that someone really knew
something about socialism" – referring to the Soviet Union. "Whenever
they said, ‘that’s the formula’, we thought they knew. Just as if
someone is a physician".
It is significant that Fidel Castro has recognised
this mistake. But the problem lay in not understanding what alternative
was needed: the introduction of a system of real workers’ control and
management, and spreading the revolution to the other countries of Latin
America and the Caribbean. This reflected the character of the state
formed after the revolution, which arose from the fact that the working
class had not been at its head. The dilemma facing Fidel, and Raúl
today, is that they are compelled to zigzag in policy in search for a
way out of the crisis as they have no alternative.
Cautious and hesitant
THE PROBLEMS THE current measures may yet encounter
have already been experienced in the agricultural ‘reforms’ introduced
in 2008. This was one of the most important announced so far: turning
over idle land to private farmers and co-operatives. By the end of 2009,
100,000 beneficiaries had received a total of 920,000 hectares,
equivalent to 54% of the country’s unused agricultural land.
Yet, while ownership has changed, no market system
has been permitted for purchasing inputs, equipment or technology, for
credit, buying hard currency and final sales. Acopio, the notoriously
inefficient and corrupt state purchasing and distribution agency, still
requires farm producers to sell 70% of crops to the state at low prices.
However, while the pressure towards capitalist
restoration is increasing, it is not at all certain it will be
completed. One obstacle is the fear within the bureaucracy that opening
up the economy would result in an influx of Cuban exiles reclaiming
property, land and factories, and the sweeping out of the regime. The
bureaucracy would not be able simply to seize state assets as happened
in the former Soviet Union. It is fearful that its fate could be more
like that of the former Stalinist regime in East Germany, which was
swept aside by capitalist West Germany and its state machine.
The Cuban regime is thus proceeding extremely
cautiously and hesitantly. In announcing recent economic reforms, Raúl
Castro insisted that "the socialist system was irrevocable". Economy
minister, Marino Murillo, stated that, while the role of the state would
be reduced in the small business sector, it would, "continue to direct a
centralised economy".
The international press gave a large amount of
publicity to the statement by Fidel Castro to the US journalist, Jeffry
Goldberg, when he declared: "The Cuban model doesn’t even work for us
anymore". This statement reverberated around the world, interpreted as
Fidel repudiating ‘socialism’. Less attention was given to his later
comments, at the launch of the second volume of his memoirs: "My idea,
as the whole world knows, is that the capitalist system now doesn’t work
either for the United States or the world, driving it from crisis to
crisis, which each time are more serious".
A volatile mix
THE REGIME FEARS triggering a social crisis which
could spin out of control and provoke a split within the bureaucracy and
state apparatus. The fourth Cuban Communist Party congress in 1991 was
preceded by the organisation of large ‘consultations’ and mass meetings
involving up to three million people throughout the country. These were
relatively open and reflected the attempts of the leadership under Fidel
to act in a bonapartist manner and try and rest on the masses as it
faced up to the effects of the crisis.
Significantly, following Raúl Castro’s speech in
Camaguey in 2007, the results of the consultations were kept secret. The
decisions taken relating to economic reform were kept in the hands of a
small group. This reflects the lack of confidence and hesitancy of the
regime at this stage.
It is entirely possible that, while further steps
are taken towards the introduction of capitalist measures, the state
will retain a central or powerful role in the economy. A hybrid regime –
where significant inroads towards capitalist restoration have been made
but where the state and the bureaucratic regime maintain a powerful
controlling influence – could emerge. In some respects, this already has
developed. It is also possible that, once embarked upon, the reforms
could gain momentum and a logic of their own, which could also provoke
social conflict.
The prospect of a deepening crisis in the world
economy could re-enforce the state maintaining a strong influence over
the economy. It could even result in the re-intervention by the state
into those sectors in which its grip was loosened – as happened
following the special period. The difference this time is that the
economic crisis is again becoming sharper in Cuba and is accompanied
with other threats.
In particular, there is the growing gulf between the
older generation, which identifies with the revolution and its
tremendous social gains, and the experience of the younger generation,
which has grown up under the current regime. Nearly three quarters of
the Cuban population were born after the revolution. The alienation of
the youth to the stifling effects of the bureaucracy, travel
restrictions, denial of internet access, suppression of music, etc,
risks an eruption of social upheaval. The replacement of Fidel by his
brother Raúl has only compounded the problem. The youth have grown up
under a regime which has managed shortages, a weakening healthcare
system, inadequate housing, etc. Their commitment to the revolution is
less, given the absence of a clear democratic socialist alternative to
the existing regime or a perspective for international socialism.
International democratic socialism
THE CUBAN REGIME is clearly entering a new stage
where capitalist restoration is emerging as an extremely serious threat.
Some significant steps along this road have been taken but have not been
completed, as yet. The debates that are beginning to open up at all
levels concern the direction society is to take. The way out of the
current impasse lies not in the direction of capitalist restoration but
by defending the centralised planned economy, implemented in a genuinely
democratic way. It is vital that all workplaces should freely elect
committees to oversee the day-to-day running of the factories and
offices. These bodies need to be linked up nationally to establish a
system of democratic workers’ management to plan the economy and work
out production targets and an emergency plan. All officials should be
elected and subject to immediate recall, and should receive no more than
the average wage of a skilled worker.
Restrictions on travel and internet use should be
lifted. Free trade unions, independent of the state, need to be built.
Workers and young people should have the right to form discussion
groups, tendencies and political parties which do not collaborate with
imperialism and its efforts to restore capitalism. These and other
democratic changes need to run alongside the opening up of the press and
media to democratic control by workers and young people.
These measures, together with an appeal to spread
the revolution and form a democratic socialist federation with Venezuela
and Bolivia are now necessary as a first step towards a socialist
federation of Latin America. Jointly planning these three economies
could demonstrate in practice how a planned economy could begin to work.
These urgent steps are needed to prevent the tendency towards capitalist
restoration, defend the gains of the revolution and begin to build a
genuine democratic socialist society.
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