Changing Times and the Need to Hasten Reforms

Cuba: Changing Times and the Need to Hasten Reforms
December 10, 2015
Fernando Ravsberg

Venezuelan President Nicolas Maduro with Cuban doctors.
HAVANA TIMES — I don't like to be the bearer of bad tidings, but the
results of Venezuela's elections should make us entertain the
possibility that Chavismo could lose the next presidential elections,
depriving Cuba of its main economic partner, which supplies the island
with oil.

The agreement has been highly advantageous for both countries. Caracas
has had tens of thousands of medical doctors, teachers and sport
trainers, while Cuba has been able to cover two thirds of its total
energy needs, paying the bill with the sale of professional services.

This agreement, however, may now be in danger. With 112 seats in
congress, the opposition can "subject international treaties,
conventions or agreements that undermine national sovereignty or
transfer faculties to supranational organizations to a referendum."

Many believe the defeat of Chavismo could bring back the economic crisis
that scourged Cuba in the 1990s, when the USSR collapsed. The situation,
however, is fairly different, though it will still undeniably have
serious repercussions for the island's economy.

The chief difference is that Cuba has since diversified its commercial
relations internationally. China, Brazil, Russia and Angola are its
better known partners, but there economic agreements and projects with
numberless other countries.

The change in the United States' policy towards Cuba favors investments
by companies in third countries that refrained from dealings with the
island fearing reprisals from Washington. European and Latin American
companies are today looking for a niche in the country's economy,
particularly in the tourism sector.

Today, Cuba has sources of revenue that did not exist in 1990. Even if
it was forced to withdraw its medical doctors from Venezuela, incomes in
the sector would continue to be in the billions, while tourism takes in
more than 3 million visitors a year and family remittances are estimated
at over US $ 1.5 billion.

A change of government in Venezuela, however, will be a blow that is
sure to shake the whole of Cuba. There's very little time left to
prepare ourselves for the worst possible scenario and to try and reduce
the social, economic and energy repercussions of this to a minimum.

Cuba's reform process no longer has all the time in world to move things
about and there many important issues pending. Cuban economists insist
that the country needs to diversify more and balance the productive
sector in relation to the services sphere.

The numbers say that, to achieve this, foreign investment is vital, but,
contradictorily, the process continues to be slow and the bureaucratic
hurdles that stand in its way are maintained. Some entrepreneurs have
returned to their countries, telling Cuba to let them know "when it's
ready."

When an investor comes to Cuba, they are faced with a two-currency
system and multiple exchange rates, the high prices of electricity and
water, ridiculous automobile prices and the generalized corruption of
State importing companies.

If the interested party arrives at the Mariel Zone, they will also run
into the lack of facilities, a mechanism for hiring personnel through
intermediaries that pocket most of the salary and a government that
processes their requests unhurriedly.

On December 17 last year, a window with a view to the future was opened
for Cuba. The US economic embargo is still effective, but the business
world regards it as a terminally ill patient. Companies are starting to
lose their fear and to redirect their gaze towards the island.

But, after they've leapt over the fence set up by the United States,
they land in a swamp where they find it next to impossible to make
progress. It is the same swamp that Cubans wishing to set up
cooperatives have to wade through, to have their right to create a
"collective socialist company" recognized.

That is where the self-employed are mired and the reason the sector
hasn't grown in years. Despite the fact the State needs to downsize, it
still refuses to open wholesale markets, no new trade licenses are
authorized and a gang of corrupt inspectors are deployed to attack
existing businesses.

Cuba's evolution is begin sabotaged from within. It is a war without any
frontal combats, a strategy aimed at wearing down the opponent, where
they would seek to meddle in all changes and drive sticks through the
wheels of the reforms to "demonstrate" that these do not work.

They have been fairly successful in this: increasingly, more and more
Cubans believe the changes aren't making their lives any better. Some
hope they will begin to look back on "real socialism" with nostalgia,
but, if the reforms fail, what the nation will reap is frustration,
hopelessness and emigration.

Source: Cuba: Changing Times and the Need to Hasten Reforms - Havana
Times.org - http://www.havanatimes.org/?p=115425