Cuba's Economic Reforms: A Step Towards Progress or Just a Facade?

[russ_watters]

Good news, but it also highlights some of the issues that we don't hear much about, wrt how rough Cubans really have it. Of particular interest is that the country uses two separate currencies, one for the ruling class (which is "hard" currency, ie, real money) and one for the poor that is worth 1/24th what the ruling class's currency is.

For the first time in decades, Cubans can stroll through and even spend a night in the Nacional and the Riviera, iconic hotels with ocean views that had previously been reserved for tourists.
But the average salary for Cuban workers is $19 a month, and a night in a hotel runs at least $150, so some Cubans see the gesture as an empty one...

For the first time in their lives, Cubans can legally buy DVD players, microwaves, cellphones and computers...

What the changes mean for average Cubans and whether they are a sign of broader economic and political changes to come on the island is a mystery...

Phil Peters, a Cuba expert at the Lexington Institute, a Washington-area think tank, says the agricultural reforms could be the most significant of the changes Cuba has implemented...

Peters says the country is working to decentralize most of the decision-making in the agricultural field, paving the way for negotiations on how much the farmers must hand over to the government and how much they pay for fuel.

http://www.usatoday.com/news/world/2008-04-03-cuba_N.htm

Cuba has a two-tiered currency system; Cuban state workers are paid in the Cuban peso, but many products are only sold in the convertible peso, worth 24 times as much.

http://www.cnn.com/2008/WORLD/americas/04/02/cuba.freedoms/index.html?iref=newssearch

They have a long way to go, but it's a start. Whether it is a sign of more substantive changes to come is still an open question, though.

 

[Jimmy Snyder]

I visited the PRC in 1990 and there was a two tier system there too. One for locals and one for tourists like me. The locals weren't forbidden to buy things, they paid less for them. I thought it made a lot of sense in my case. I gladly paid the higher price for museum entrance fees since they were still very cheap by American standards. But the locals were paying pennies to get in. In the name of 'fairness' either they would have to charge me pennies too, or price the thing out of range of the locals.

 

[Art]

Crocodile Tears

Good news, but it also highlights some of the issues that we don't hear much about, wrt how rough Cubans really have it.

Do you think their hardships might be somehow related to the US trade embargo imposed since 1960

No doubt as you are so concerned by their plight you have been actively campaigning to have the embargo lifted or then again perhaps not?

To refresh your memory on how Cuba became a socialist state I'll quote myself from an earlier thread,

When one examines Cuba's history it is clear that the original revolution did not start off as a Marxist-Leninist revolution but was actually an attempt to restore democratic rule to the country by removing General Batista who had gained power in a coup in 1952. One of the first things the rebels did was to restore the 1940 constitution, which Batista had suspended, and promise free and fair elections within 2 years. The delay was to give other parties (which had been banned under Batista) time to form and a chance to organise themselves.

Things began to go wrong very soon afterwards. Batista in return for US military and financial aid had been very generous to US business and so the country was effectively owned by corporate America. (They owned ~50% of the total assets of Cuba and employed just 1% of the work force)
These businessmen and thus their political leaders were extremely concerned about the consequences of the revolution as to how it would affect their investments.

And so the US decided on a 3-pronged approach to overthrow the new gov't.

First to finance and support anti-revolutionary propaganda to try and erode the revolution's popular support.

Second by supporting counter revolutionary groups both directly through covert CIA operations including terrorist style bombings and overtly by channelling money and weapons to anti-Castro groups in the US who staged some rather pathetic attempts to invade Cuba.

Finally they imposed stringent economic sanctions on Cuba and to make them as tough as possible leant heavily on Cuba's other trading partners to support the sanctions. eg President of Ecuador, Josh Maria Velasco Ibarra, announced the U.S. had demanded that his country break off diplomatic relations with Cuba as a condition to the approval of various loans.

Meanwhile Russia who were always keen to extend their influence came along and offered oil, loans ($100 m credit line) and trade to replace the holes in the economy created by US policy. Before agreeing to this offer Castro requested negotiations with the US gov't but was refused outright by US Secretary of State John Foster Dulles and so that is when Russia became heavily involved in the revolution.

From that point on things continued to snowball. For example Cuba's oil refinaries owned by Texaco, Esso and Shell were instructed by the US gov't not to refine the Russian oil and so Castro nationalised them which further infuriated corporate America. The US retaliated by passing the Sugar Act eliminating Cuba's sugar quota and Cuba retaliated by nationalising the rest of the US companies in it's territories and signed a deal with China to sell their sugar to them instead.

It was in fact 3 years into the revolution, by which time he was very heavily indebted to Russia and to a lesser extent China, that Castro declared he had decided to be a Marxist-Leninist. Which given the politics of his backers isn't too surprising.

Shortly after the successful revolution American journalist Walter Lippmann wrote:

"For the thing we should never do in dealing with revolutionary countries, in which the world abounds, is to push them behind an iron curtain raised by ourselves. On the contrary, even when they have been seduced and subverted and are drawn across the line, the right thing to do is to keep the way open for their return."

and in fact Kennedy finally woke up to this fact when in Nov 1963 he asked French journalist Jean Daniel to tell Castro that he is now ready to negotiate normal relations and drop the embargo. According to former Press Secretary Pierre Salinger, "

If Kennedy had lived I am confident that he would have negotiated that agreement and dropped the embargo because he was upset with the way the Soviet Union was playing a strong role in Cuba and Latin America…"

In conclusion Cuba was not so much an experiment with socialism as accidental socialism. But for the initial policies of the US gov't both Castro and Cuba might have had a very different political system today. It is also interesting that many of the human rights violations, erosions of civil liberties and indeed their totalitarian gov't many are so critical of can be traced back to being derived from emergency measures introduced to combat terrorism. Perhaps Cuba today is an indicator of where America could find itself tomorrow.

 

[russ_watters]

Do you think their hardships might be somehow related to the US trade embargo imposed since 1960

Could be. Could also be due to the oppression of their government. Afterall, their problems aren't substantially different from those that plagued Russians during the USSR years. And Cuba does, of course, have quite a healthy tourist market for Europeans that provides a steady stream of income for the people who are allowed to have real income.

No doubt as you are so concerned by their plight you have been actively campaigning to have the embargo lifted or then again perhaps not?

I'm in favor of lifting the embargo in exchange for Castro II's continued de-socialization. But campaigning? Me? No.

To refresh your memory on how Cuba became a socialist state I'll quote myself from an earlier thread...

How it happened really isn't relevant to where they are now. The point is they are in a bad place now and need to fix it.