Thursday, April 21, 2011

Cuba's regime buys time for aging leaders

Posted on Wednesday, 04.20.11
In My Opinion

Cuba's regime buys time for aging leaders
By Andres By Oppenheimer

Cuba's announcement at the end of its much-awaited Communist Party
Congress this week that it will allow Cubans to buy homes and cars for
the first time in five decades proves the wisdom of an old joke — that
communism is the longest road between capitalism and capitalism.

The VI Congress of Cuba's Communist Party approved a wide array of
pro-market economic reforms. Their details have not been disclosed at
the time of this writing, but some well-placed Cuba watchers say the new
rules are likely to lead to an economic opening, much like China's
economic reforms of 1978 or Vietnam's transition to a
"socialist-oriented market economy" in 1986.

Hours after the conclusion of the Congress — where 79-year old military
president Gen. Raúl Castro was appointed head of the Party's Central
Committee and 80-year old José Ramón Machado Ventura was named his No. 2
— I asked several economists and legal experts whether the party
congress will mark the official start of Cuba's economic opening.

Omar Everleny Perez, deputy director of the Center of Cuban Studies of
the University of Havana, told me in an e-mail from the island that "we
are witnessing a profound updating of the Cuban economic model, much
like those of China and Vietnam, with the existing differences of each

Everleny Perez said the economic "transformation" of Cuba will give the
private sector "a significant weight, which it has not had in the past."
He said that, among other things, Cuba will eliminate more than 1
million jobs to reduce its "bloated" government payroll — the figure may
be as high a 1.5 million — and that it will give land to private farmers
so that they can increase food production.

Rolando Anillo, an attorney with the Miami firm Fowler, Rodriguez
Valdes-Fauli who visits Cuba frequently, agrees that "for the first
time, there's a deeper economic reform" that allows things such as
private ownership of homes or cars.

Until now, Cubans could only "exchange" their state-owned homes, a
mechanism that has triggered a massive housing black market because
people wanting to move to a bigger house have to pay extra cash under
the table to the person giving up the property.

"It will have a huge impact," Anillo says. "It can unleash a big
movement of capital because there are people who have money, and they
will start to repair and improve their homes."

Carmelo Mesa Lago, a University of Pittsburgh economist who is one of
the most respected analysts of the Cuban economy, is more skeptical.
Barring surprises once the Congress's resolutions are published, this is
not comparable with China's or Vietnam's economic openings decades ago,
he said.

In China and Vietnam, the opening started with sweeping agricultural
reforms that gave farmers virtual ownership rights over their land. In
Cuba, farmers will only get usage rights of the land, which will be
limited to 10 years and subject to stringent restrictions, he said.

Mesa Lago said that the most important steps for Cuba to solve its
economic crisis would be — in this order — giving private farmers
greater property rights, implementing the announced layoffs of up to 1.5
million government workers, and implementing the new rules allowing
people to own homes and cars. "The latest reforms are very timid, and
with too many strings attached," he said.

My opinion: Unlike Cuba's previous economic reforms, which the regime
quickly reversed as soon as it got new subsidies from the former Soviet
Union or Venezuela, this one may go down in history as the first
official move toward a market economy. The reason: The regime's
octogenarian leaders are not likely to be around to convene a new
Communist Party Congress in another 14 years.

But the new reforms will not be implemented by the current crowd of
octogenarian political dinosaurs. As Cuba's military dictator Gen. Raúl
Castro himself reminded the Party's Congress, "it is useful to clarify,
to avoid misinterpretations, that the agreements reached at the Congress
are not automatically turned into laws, but are political and moral
guidelines" that must be implemented by the government.

What Cuba's gerontocracy has done is buy time so that they don't risk
opening a process of gradual freedoms that could land them in jail, like
Egypt's Hosni Mubarak. They want to die in bed, peacefully, making sure
that their successors will later credit them with having started Cuba's
economic opening.

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