Sunday, September 19, 2010

Perestroika in Cuba?

September 19, 2010, 12:22 PM ET

Perestroika in Cuba?
By Stan Katz

In this morning's "Week in Review" section of the New York Times, Marc
Lacey writes that Cuba is "resetting" its revolution. He is referring
to what he describes as the September 13 "eye-popping announcement" that
the Cuban government would significantly cut public employment in the
expectation that the laid-off workers would find employment in the
private sector. Most of us who follow Cuban affairs have been hoping
for several years that Raul Castro (who has long been rumored to favor
economic reform) would move in this direction. Over the past eighteen
months he has made a few moves to broaden the private sector, but they
have not amounted to a real change in economic policy. His statement
last week was backed up by the country's sole labor federation, which
asserted that "Our state cannot and should not continue supporting
companies . . . with inflated payrolls, losses that damage the economy,
which are counterproductive, generate bad habits and deform the workers'
conduct." Quite right.

The Times last week quoted Julia Sweig of the Council on Foreign
Relations (the most astute U.S. observer of Cuba policy) as saying that
"They are in the process of massively reducing the size and
participation of the state in Cuban life. . . . There is a belief that
there is so much pent-up demand on the one hand and so much skill on the
other that the private sector will absorb them pretty rapidly." To
absorb the former state employees, however, Sweig noted that the state
would have to open up "a vast range" of private sector economic
activity. And this, of course, is what the Cuban Party has been
reluctant to do, even under Raul Castro.

The alternative model of political economy for a socialist state like
Cuba is of course the mixed models of Viet Nam and China. Both of those
countries, having seen what they thought was the disaster of Mikhail
Gorbachev's attempt to achieve both perestroika (market reform) and
glastnost (political democracy), opted for the former at the expense of
the latter. And, so far, both of those countries (China more obviously)
have succeeded in separating economic from political reform. That is
the course that foreign friends of Cuba have urged upon the regime
there, and Cuban economists have made careful study of the Chinese
model. Thus far, however, the Castro government has signaled what is
wrong with the existing economic situation (and they are clearly right),
but they have not detailed what policies they might implement to set
things right.

All of this is in the context of the unwillingness of the Obama
administration to make significant changes in U.S. policy toward Cuba.
Admittedly, President Obama has much bigger and more immediate problems
to address -- though he might have acted much more forcefully at the
very beginning of his term when he was not under such overwhelming
political pressure as he is now. Senator Menendez and a small number of
Castro-demonizers still seem capable of blocking any significant change
in the embargo, though the President could still open travel to Cuba
without going to Congress. Many of us who would like to see our country
assist the Cubans in changing its economic policy think that more
vigorous and open contact between the citizens of the two countries
might make a significant and positive difference. I am sure Senator
Menendez would not agree, but I for one would like to help Raul Castro
implement his new policy. Opening travel would of course be wonderful
for academic exchanges, like the undergraduate seminar Princeton sent to
the University of Havana last spring. We'll do that again this spring,
and nothing would please me more than if my students could be witnesses
to the beginning of real market reform in Cuba.

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