Cuba's development priorities in the new landscape

Cuba's development priorities in the new landscape
By Elena L. Pasquini @elenapasquini19 February 2016

Last month, the United States announced measures to further ease
restrictions on Cuba — the latest in a series of amendments implemented
since December 2014, when U.S. President Barack Obama and Cuban
President Raul Castro divulged plans to resume diplomatic ties.

With Obama revealing Thursday that he is set to visit the Caribbean
island nation in March as part of a broader trip to Latin America, is
Cuba finally on a steady course away from isolation? What are the
impacts for the global development community and how can aid actors
ensure that transitioning to a market-based economy will not exacerbate
inequality in the country?

Following the reopening of embassies in Havana and Washington after more
than 50 years, Devex traveled to Cuba to gain a better understanding of
the challenges the country is facing and the roles development
organizations can play in this fast-changing climate.

Despite its isolation, Cuba has fought hunger and poverty successfully
through its social protection programs, and the middle-income country
provides its citizens with high-quality health and education services.
But as the country's economy opens up, there is a very real risk to this
progress if vulnerable populations are not "protected as they've been
until now," Laura Melo, World Food Program's country director in Cuba,
told Devex.

Melo explained that aid actors must support the Cuban government's
efforts to update the country's economic model "without making
significant losses in [its] … policies to protect the most vulnerable."
Preventing inequalities seen in other Latin American countries and
ensuring that "some of the well-established safety net programs remain
relevant and well-targeted" are areas where international cooperation
can play a pivotal role, she added.

Key areas for future cooperation

Despite Cuba's success in fighting hunger, food security remains a major
concern in the country's poorest regions. That is likely to be the key
area in which international cooperation is expected to focus in the
future, in addition to climate change and disaster risk reduction.

Cuba's gross domestic product, $77.15 billion in 2013 according to World
Bank estimates, does not reflect the realities of a country where the
level of development is uneven across provinces, according to William
Diaz, director of the department of Cuba's Ministry of Foreign Trade and
Development that deals with multilateral organizations, including United
Nations agencies.

Traveling across the country, it's evident that the standard of living
differs sharply between people living in Havana and those in Santiago;
for people working in the tourism industry and those who don't; and for
those who get paid in the convertible peso — the currency pegged to the
U.S. dollar — and those who gets paid in the lower-value "moneda
nacional," the lower-value Cuban peso.

In every town and city Devex visited, food was in short supply. The
variety was limited as well: Staples including rice, beans, tubers,
onions, and other poor-quality fruits and vegetables were often all that
could be bought in the markets.

José, who attended a three-year university course and now works as a
driver in the tourism industry, takes home a decent salary of about 400
Cuban pesos ($40) a month. But whether in the capital city, Havana; the
country's oldest town, Baracoa; or Cuba's third-largest city, Camagüey,
food prices are prohibitive: 100-200 Cuban pesos for a pound of beef, 30
Cuban pesos for half a chicken and 10 Cuban pesos for a liter of milk.

The agricultural sector is struggling due to soil degradation. Farmers
lack access to credit and advanced technologies and droughts and climate
change are further compounding the situation. Cuba imports more than 70
percent of its food and the poor quality of available supplies has
resulted in nutritional problems, including obesity, micronutrient
deficiency and anemia.

"People want to leave Cuba just because they are hungry," said Pedro, a
teacher who lives in Camagüey. He is hoping to be selected to
participate in a government program that sends skilled workers and
professionals (usually doctors) to other countries in Latin America, in
exchange for commodities such as oil. Through the program he is hoping
to earn about 4,000 Cuban pesos ($150) per month, just enough to move
into a bigger house with his elderly mother.

The growing size of the older population is straining the sustainability
and effectiveness of the country's social protection programs. And
there's an urgent need, according to WFP, to craft integrated strategies
to address the specific nutritional requirements of the elderly. It is
not just about providing food, but implementing "more tailored
programs," Melo said.

While food security is "an absolute priority [of the government] with
regard to cooperation," according to Diaz, addressing it requires a
holistic approach. In the U.N.'s 2014-2018 development action framework
for Cuba, social services, energy, climate change, resilience and
disaster response were outlined as development focus sectors, alongside
food security.

Melo explained that Cuba is exposed to natural disasters, such as
hurricanes and droughts, that negatively affect its food security.
Disaster risk reduction is thus a critical area of support for
development and humanitarian organizations, helping to improve the
country's disaster resilience. For its part, WFP is working with local
authorities to improve monitoring and drought alert systems as a way to
boost disaster resilience and climate change adaptation.

Donors in the 'starting blocks'

While Cuba has pressing development needs, it does not have an
environment conducive to attracting donor funds to address its
challenges — at least not yet, according to Theodor Friedrich, the U.N.
Food and Agriculture Organization's representative in Cuba. But
"everyone is in the starting blocks and getting ready," he said.

"Europe is changing policy, Germany is changing policy," Friedrich said.
"You see a certain expectation that donor money will come, adding that
the FAO is attempting to increase its project portfolio and to localize
donor funds, despite competition for scarce resources among development
actors.

The European Union, which is negotiating a new political dialogue and
cooperation agreement with Havana and is about to revise its partnership
with the African, Caribbean and Pacific Group of States, has been
focusing on agriculture and the environment since 2008.

"The resources of the cooperation are small [and] scarce, so we have to
focus to try to use the money as best we can in order to be catalytic,"
Ana Guallarte Alias, an attaché at the European Union delegation in
Cuba, told Devex.

Cuba's changing context will be taken into consideration, but for the
period 2014-2020, the EU will continue to focus on food security,
sustainable agriculture, the environment and climate change.

"We [will] focus on renewable energy and water [too]," she added.

William Diaz, director of the department of Cuba's Ministry of Foreign
Trade and Development. Photo by: Carlotta Gaudino
What role for development organizations?

For the Cuban government, international cooperation is a "complement to
the country's development effort" and should be aligned with the
development strategy outlined in its economic and social policy, Cuban
ministry official Diaz told Devex, adding that such cooperation should
not only comprise technical and financial assistance, but also knowledge
sharing and capacity building.

"We are engaged in a process of actualization of our economic model and
this actualization doesn't come from nothing. It comes from being aware
of other experiences," Diaz said.

Since 2008, the EU has been trying to convince Havana of the strategic
potential of development cooperation beyond the official investment
plan. Cuba needs investment capital, but according to Guallarte Alias
even a project of 7 million euros ($7.7 million) can be used to create
synergies, bring together people and institutions with their own funds
and resources, leverage more money, and demonstrate greater impact.

Despite the challenges, there are advantages to working in Cuba.

"It is a very interesting country to work in because it is kind of
unique ... the system, the whole model they are trying to put in place …
a new Cuban model where they can keep their social protection level
within a more market economy, and keeping the central planning,"
Guallarte Alias said.

Local counterparts also have highly qualified and competent staff,
according to the practitioners Devex spoke to.

"Education levels are very high and the people … are innovative,"
Guallarte Alias said. The high level of ownership is also a big plus.
Indeed, development projects often only take place after the government
has thoroughly evaluated and decided that it wants the program. "They
committed themselves, they allocated human resources … there's a real
ownership," she said.

For WFP, working on the ground in Cuba allows it to show how the role of
development organizations in middle-income countries can go beyond food
security and zero hunger.

"We can really introduce some changes ... to demonstrate how certain
models can work and can be taken to scale by the government itself,"
Melo said.

With the U.S. embargo still currently in place, however, project
implementation remains complex and expensive. "We need to do wonders and
it costs us a lot," Diaz said. "[The] majority of goods are bought in
very far away markets in Europe and Asia, and that's makes them more
expensive."

Some companies that do business with WFP, including IT equipment
providers, cannot supply to Cuba. In addition, development organizations
face banking problems and restrictions on financial movements and staff
travel. In most cases, WFP resorts to procuring from companies that are
"not so dependent" on the U.S. market, said Melo, which "adds time and
costs."

How to engage

Working in Cuba requires, first of all, the ability to effectively
liaise with the government. Until now the EU, which funds Cuba through
its Development Cooperation Instrument, has implemented programs — which
Melo explained are normally relatively large because "we cannot finance
small initiatives" — through the U.N. or member state development agencies.

National and international nongovernmental organizations support the
government in the implementation of development programs. Those NGOs
interested in taking part in EU exchange of expertise projects, for
instance, should contact the implementing agencies for the programs
already in place.

However, the most important thing is to continue to talk to in-country
counterparts and build a direct relationship with the government. The
Ministry of Foreign Trade and Investment is in charge with the
establishment of partnerships with NGOs. However, the first step to
entering the Cuban market is to contact the Cuban embassy in the country
where the NGO is headquartered, to explain potential projects and ways
of collaborating, and to show interest in taking part in the programs
implemented by the Cuban authorities.

The right project is the one that fits with the needs of a country that
is updating its economic model. It's a challenge, but "this is really
the time to act," said Melo.

And networking is key, explained Diaz, because there are no formal
procedures and "there are no requirements … It depends [only] on the
project."

Source: Cuba's development priorities in the new landscape | Devex -
https://www.devex.com/news/cuba-s-development-priorities-in-the-new-landscape-87683