Tuesday, July 27, 2010

Crisis in Cuba?: an analyst's insight

Crisis in Cuba?: an analyst's insight
27/07 20:21 CET

Euronews interviewed Carmelo Mesa-Lago, originally Cuban but now a US
citizen and Professor Emeritus of Economics and Latin American Studies
at the University of Pittsburgh.


"Mr Mesa-Lago, last year you returned to Cuba for the first time in 20
years. What is your view of the economic situation in Cuba? Is the
island in a state of economic emergency?"

Carmelo Mesa-Lago:

"Yes. The island is in its worst economic state since the crisis of the
1990s, after the fall of the global communist model. In Cuba I asked
many people the following question: what's the current situation like
compared to that of 1993 and 1994, the hardest years of the crisis? And
almost unanimously the answer was: it's not as bad yet, but we're
getting there."


"As an economist, what emergency measures would you recommend to the
Cuban government to help it out of this situation?"

Carmelo Mesa-Lago:

"Well, for example the Cuban government brought in a reform called the
"Delivery of Usufruct Land" or leasing abandoned land to farmers. But it
also imposed a series of huge restrictions and very few incentives. It
involved a contract for 10 years only, which a peasant farmer could
renew if he fulfilled his obligations. But the law was rather vague in
cases where the farmer invested in the land, whether he can keep his
investment if the government broke the contract or took back the land.
It did not have the desired results and in fact in the first trimester
of this year there was an overall fall in agricultural production.

So Cuba needs reforms that are better adapted, like those in China or
Vietnam, countries where historically there has been a massive lack of
food and huge famines. After their land reforms, these countries were
even able to export food products. In fact today, Vietnam exports rice
to Cuba.

And how did they manage this? Simply by giving open ended contracts to
farmers, cooperatives and villages. The main factor was that farmers
could produce whatever they wanted, sell to whomever they wanted and set
their own prices.

If Cuba did this, and it would be the first reform to introduce and most
people agree on that in Cuba, the food problem, which is the
government's worst problem, would be solved within a few years."


"One last question: What do you make of Raul Castro's silence at
yesterday's Revolution Day rally?"

Carmelo Mesa-Lago:

"I think it's a bad signal in terms of economic reforms. It was Jose
Machado, the vice president, who addressed the crowd and he just said
they would continue with studies and tests but that they would not be
rushed into anything or forced into knee-jerk reactions; that they would
do things one step at a time so as not to repeat the mistakes of the past.

I think what he means by mistakes are the small changes made in the
1990s to some elements of the market economy.

In Machado's speech and the speech given by the Communist Party leader
in the Villa Clara province, they both underlined the importance of
ideology, the ideological battle. And that reminds us of Fidel Castro's
famous battle of ideas at the start of this century, which spoke of the
importance of militancy and the need to support Venezuela, Hugo Chavez's
idea of a war with Colombia.

Before July 26, they signed, in Caracas, a very important agreement on
300 projects between Venezuela and Cuba. The July 26 ceremony was in
honour of Bolivar and solidarity with Venezuela because, of course,
Venezuela is crucial to the survival of the Cuban system."


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