Thursday, April 21, 2011

Cuba's challenge: Open up economy, but stay communist

Cuba's challenge: Open up economy, but stay communist
From Thursday's Globe and Mail
Published Wednesday, Apr. 20, 2011 9:07PM EDT

Cuba's leaders debated the document for days at this week's historic
congress in Havana.

Its pages contain 311 modifications to a law designed to chart a course
away from the economic stagnation in which the communist country is
mired and resuscitate its moribund revolution.

The paper, however, has not been made public.

And even though it has been touted as the solution to their country's
economic woes, most Cubans caught only a passing glimpse of it on their
evening newscast, which supplied a brief summary of what their country's
leaders had decided about their future.

The lack of transparency is just one sign, analysts say, that despite
Cuba appointing new leaders to the Communist Party and taking
half-measures toward privatization, reality will essentially remain
unchanged for average Cubans.

"I would characterize the changes to law as really timid ways of
reforming and they face a whole series of hurdles," said Christopher
Sabatina, a Cuba scholar who edits Americas Quarterly, and who saw an
early draft of the changes to law.

He characterized them as "not radical neo-liberal reforms by any
stretch" but rather "efforts to renew the socialist system by injecting
market incentives into it."

Some of the proposals meant to resurrect Cuba's economy are already in play.

Cubans have applied for more than 170,000 licences for new businesses
such as taxis, restaurants and flower stalls – small enterprises now
permitted under Communist rule.

Also on the table now are measures that are said to include the buying
and selling of private property, the eventual elimination of a ration
book which provides Cubans with basic, subsidized food necessities and
an end to the country's dual currency system.

Cuban leaders emphasized the changes did not stray from the principles
of communism.

"The economic policy [approved here] follows the principle that only
socialism can preserve the victories of the revolution," Marino Murillo,
a former economy minister who has been charged with implementing the
reforms, told The Associated Press.

Cuba's ambassador to Canada described the changes as improvements to the

"They are necessary changes to improve the system," Teresita Vicente
told The Globe And Mail. She said the changes were the results of
"looking for more efficiency in a very complex international economic

Analysts meanwhile say Cuba's efforts to liberalize its economy to
generate badly needed jobs and capital will be stunted by a series of
factors, most significantly, stale leadership that is set in its ways.

"The fate of these reforms depends on political will at the top which is
lacking," Mr. Sabatina said.

While Cuba laid the foundation for a new leader at its Communist Party
Congress, it failed to replace the old guard of octogenarian
revolutionaries embodied by the Castro brothers.

President Raul Castro selected Jose Ramon Machado, an 80-year-old former
revolutionary fighter as his No. 2. Ramiro Valdes, a 78-year-old vice
president, was named No. 3.

Fidel Castro, meanwhile, has relinquished all party and state posts for
the first time in half a century. He maintains, however, an almost
phantom-like presence across the country.

"I think I have received too many honours. I never thought I would live
so many years. Raul knew that I would not accept at this time any
position in the party," he wrote on a state website post published on

Still, he made an unannounced appearance at the congress, lending his
symbolic power to the changes it set forth.

"He is not on the central committee of the party but the important thing
is his historic leadership and his impact," Ms. Vicente said.

"I think the Cuban people are looking at him the same way as years ago.
He is Cuba for us," she added.

Beyond the problems of out-of-date leadership, observers were skeptical
that Cuba's nascent private sector would take root in a country where
the biggest employer has long been the state.

Without access to large markets, or sufficient access to credit,
economists predicted many of the new micro-enterprises would founder in
Cuba's cash-strapped economy. The fate of a million public-sector
workers expected to be laid off in the coming months was also unclear.

"Are these people suddenly supposed to become entrepreneurs? They are
starting from zero, so that's a huge constraint," Mr. Sabatina said.

Still, the changes are expected to be voted into law by the national
assembly in the coming weeks.

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