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Cuba: Economic changes and the future of socialism -- interview with Cuban professor José Bell Lara

Urban organic food garden in Cuba.

Dr José Bell Lara, professor at the Latin American Faculty of Social Sciences, University of Havana (FLACSO-Cuba), interviewed by Johannes Wilm. Bell Lara has written essays such as "Globalisation and Cuban Revolution" (2002) and "Cuban socialism within Globalisation" (2007), and is part of the international advisory board of the journal Critical Sociology. This interview was conducted in Havana in September 2010.

[For more analysis and discussion on the economic changes in Cuba, click HERE.]

* * *

Johannes Wilm: The Cuban government recently announced some changes. Among other things, it will be possible for more people to work independently. What is it that Cubans expect from these changes?

José Bell Lara: This is a time of deep economic crisis globally. And of course Cuba is affected by this crisis. For the Cuban economy it has, taken together with the the embargo by the United States, a strong impact. To maintain the socialist project it is necessary to achieve an efficient functioning of the economy. In this sense, we must extend factors that can increase productivity and better conditions of life.

For a long time we have had a paternalistic policy on the part of the Cuban state when it came to state employment. There is more personnel than is needed. Where it takes five people, we have eight. Those who can produce more, produce less... We have to find the optimal number of employees in the state sector, while simultaneously giving opportunities for the extra workforce to be employed meaningfully.

In Cuba no one will end up unemployed due to our social protection mechanisms. In any country in Europe or North America, the surplus workforce would simply be sent home with four to six weeks' of state aid. Here, together with seeking greater efficiency in the state sector, other possibilities are opened, such as working independently and through the cooperatisation of many activities.

In agriculture we are speaking both about cooperatives for the production of food crops that can be grown without much technical help, and others who produce more advanced crops and have the technological means to do so. More than 100,000 people are receiving a title of a piece of agricultural land.

Also in our towns there sometimes is difficulty with some services: general repairs, shoemaking, plumbing, personal services. Now there is an opportunity for people to develop that, both personally and as cooperatives. One can imagine cooperatives that build and repair houses or make construction materials or provide a service such as repairs or carpentry. In this area there is the prospect of growing the sector to solve both a social problem and also contribute to the efficiency of the country, resulting in a stronger economy.

It is necessary that the central state and, in my personal opinion also the public sector at a more local level through the popular councils, develops certain economic activities that benefit the community, thus contributing to the enrichment of the country.

The important thing is, the state has to have the most basic means of production, which are decisive in the economy. But many basic services are very difficult to manage centrally.

In Nicaragua, cooperatives have been a fundamental part of the Sandinista program. Here in Cuba there are also cooperatives in sectors such as agriculture. But still not in other sectors, such as transport. Will we see them there as well?

There is a possibility. I cannot confirm that it necessarily will be that way, but we have a series of new mechanisms. For example, one could imagine that certain licences are handed out to cooperatives to operate in this sector, or that the state establishes a different kind of relationship with the drivers. There may be various forms within the transport sector. I think also with the production of crops, a series of foods can be meaningfully produced by cooperatives or individuals. For example, people can produce wine for themselves and their friends. Some might even produce enough to sell some.

And the mini-company? Will that be a small business that will produce a product?

The idea is not new. For example, in the city of Havana there are currently 23 state-owned mini-companies. They are not part of the central state, but rather properties of the municipalities. And others are cooperatives. There is a cooperative producing yoghurt and another producing soy sauce, for example. These companies are not that big and they get results. They are not used to produce hundreds of millions of gallons of sauce. In general, Latin America's largest source of employment is not big business. Small and medium enterprises are those that produce more jobs. Why? Because those small companies that do not depend on very complicated technology generally create jobs with an investment of under US$50,000. Big companies have to get more US dollars than that to be able to hire someone.

But if production is organised as a business, what is the difference between this and a capitalist system?

It is different in character. The basic means of production are state owned... such as the sugar, mining, biotechnology and electronics industries.

How exactly does the pension system work here?

You deduct 5% of your salary for the social security system. Retirement starts at age 65, and is automatic. A worker submits an application for retirement, and 90 days later it is approved. There is one central retirement fund. And in the state budget there is an item devoted to social security spending. Whenever workers or companies fail to meet the expenditure, the state assumes the difference. In general there is a deficit of 200 million pesos. The state has to provide this amount.

Are there plans to change this system?

No. The system is indispensable. Moreover, the experiences of Chile and the countries that privatised their pension systems were quite horrible. That will never happen in Cuba.

So what are the major problems of the Cuban economy today? Other than the changes announced, are there programs to address them?

These changes are not isolated. One of the fundamental problems currently is food security. And the state confronts this in different ways. For example, developing biotechnology together with vaccines. What I call our scientific-productive health constellation. And the University of bio-informatics is doing everything possible to computerise Cuban society. Another strategy is the establishment of organic agriculture in cities. There is also a program of suburban agriculture around different cities.

It is not just a spontaneous thing, although parts of it that people have created [themselves]. There is state leadership to promote this type of culture and to promote organic and urban agriculture. There state addresses many things like that, because food security is part of the revolution.

But is that really realistic? Will, for example, every bus driver have to be able to produce food they are going to consume?

No one here is forced to do anything. These are people who choose to participate. The countryside has great influence in the city. There are many people here with peasant backgrounds. They are taking up tilling the earth again. I personally could not do anything like that, I have a totally urban culture.

Land being handed over to individuals. And there are municipalities where demand for such land is already greater than the supply.

We have changed our conception of food production. Before, our concept was that of the "green revolution": big machines, chemicals, fertilisers, etc. Now we must also connect it with other objectives, such as the problem of climate change and the high cost of oil. So now we are trying to lessen the use of all those products.

Since the early 1990s there have been foreign capitalists operating in Cuba. In what sense is this different to the processes in Eastern Europe before 1990? There it also began like that. How do you prevent that these investments from leading to a capitalist lifestyle and dependence on foreign capital?

Capitalism is a relation of production that goes beyond the exact amount of foreign capital investment... A revolution, in order to compete and develop in a globalised world, has to understand the logic of capital and the ideology of the market. And foreign investment can provide some of that. Therefore it is a marriage of convenience. The foreign capitalist comes here to make money. We learn to work with the world of capital. To achieve a place in the market for some of our products and to prepare people to gain experience and work in the capitalist world.

Cuba in 1989 received a maximum of 200,000 tourists. Now we receive more than 1 million a year. That is the largest increase in the Caribbean. And so it is important to learn how to manage hotels. In the Caribbean, if you go to a hotel in any other country, the directors are all foreigners and represent gigantic companies.

We ensure first that the hotels continue to be Cuban property. And on the board of the hotels, there are Cubans. They are there to learn about the world of capital. And there are other hotels, like the Hotel Nacional, that are completely run by Cubans.

The second aspect is that the capitalists who comes to Cuba do not invest whereever they want to, but where the Cuban government needs investment. In addition, large investments are approved on a one-by-one basis. They are evaluated, and the impact is measured. It is a very rigorous process, but safer for the country.

But those who work with these tourists, do they not want that lifestyle? They mainly see foreigners throwing around a lot of money, right?

No doubt it has a cost, in the form of ideological influence. It is true that people who are associated with sectors handling foreigners earn much more than the rest. An engineer earns less than a person working in a hotel. But because there is this phenomenon, we cannot deny the necessity of the revolution.

The US embargo is likely the biggest problem of the Cuban economy. But at the same time, if the United States was to end the blockade tomorrow, would that not create chaos for the Cuban economy as well? Could it mean the fall of the socialist planned economy?

I wonder why one would come to such a conclusion. First of all, the embargo is not going to end. And second, if it were to be lifted, it would make the Cuban economy improve.

Yes, but a change so abrupt? If US President Barack Obama were to sign something tomorrow to end the embargo? What would happen if 500,000 US tourists were to arrive here next week! Would that not create any problems?

It may create some problems in terms of access to hotel rooms, but it will not end the revolution. When the pope was going to come, it was said "Here comes the pope and socialism will fall". The pope came, a million people went to see him, and the revolution continued. Of course, if the embargo was lifted, it would permit us to show exactly what we are capable of doing. For example, the internet: here if you need to download a document you have to wait 30-60 minutes. While in other countries the same download takes five minutes. In this sense, the end of the embargo would allow us to do a lot of things we need to do.

In any case, it is an illusion to think that today, tomorrow or any day in the future the embargo is going to be lifted. The US will not accept the revolution. It will always do everything possible to eliminate it.

Outside of Cuba many people probably think that when Fidel Castro dies, 20 minutes later the US marines will land in the centre of Havana, capitalism will be installed within six months, and the whole country will be sold off to multinational companies within a year. Is this a realistic prognosis?

It is an illusion. If the US marines show up here, the US will see its second defeat here. The first one was in the Bay of Pigs. The Cuban people are not going to allow them to land, and we have an armed populace.

Furthermore it is not only Fidel. There is an entire party. There are generations of people who have the ideology of the revolution and will stand up to defend it. The revolution is just going to move forward. In fact, Fidel already is no longer leading. When Fidel got sick, the revolution continued without any problem. Nobody here began to mourn or anything like that. I think people outside Cuba will have to learn that there are thousands here who are capable of leading the revolution and take the positions of Fidel and Raul.

For many years Cuba was very lonely. Now it has found new allies in the framework of the Bolivarian Alliance for the Peoples of our Americas (ALBA). What does that mean for Cuba?

It means a lot for both Cuba and Latin America. For Latin America it means that we can begin to walk on our own. The political map of Latin America has changed, slightly interrupted by the military coup in Honduras, which showed us that the rulers of the world and the local oligarchy will not allow change. However, we have not gone back to what things were like before, because there is now a group of countries that is no longer ruled by the big stick of the US.

And what does the ALBA mean for Cuba specifically?

The possibility of economic cooperation. There is the possibility of a different kind of trade. There is the possibility of a common currency, which at the moment is virtual, the sucre, which allows exchange without using the US dollar. All other treaties of commerce and integration projects serve the transnationals corporations and do not prioritise social development. ALBA means another type of integration. So it is obviously important for Cuba, for the countries that are part of ALBA and the whole of Latin America.

Abroad it is often said that Cuba is a dictatorship. But in letters to the editor in the newspaper Granma, and in discussions with students, it seems that there is quite some room for criticism of the government and the revolutionary processes. Has it always been like this or is this something new?

To be honest, it wasn't always like this. But without criticism, there is no real revolutionary process. There is no discussion of reality, and it is in reality that problems are encountered. Understanding that is a big step. In Granma newspaper on Fridays and in Juventud Rebelde on a daily basis, you can see letters to the editor criticising. That is part of a healthy revolutionary society -- to see where there are problems.

In Eastern Europe they believed that it could destroy socialism.

That's how we're different, because we believe it strengthens us. And life shows us that we're right.

So you don't fear that one day it will lead to ...

No, I have no fear.

I have not found students who would like to introduce the “savage capitalism” of the US. But some students tell me they would like to convert Cuba into a country like Denmark, which according to their point of view is not as capitalistic, due to its high level of social security. Do you think that capitalism could be introduced so that the standard of living in Cuba would be similar to that of Denmark?

I think that is an illusion, because we are an underdeveloped country. If capitalism gets here, it would be the capitalism of Honduras, Panama, Nicaragua or El Salvador. Objectively it is this way because capitalism is a global system in which peripheral countries are dominated by central ones.

So they cannot just turn Cuba into Denmark, just because they would like it to be that way. If we are to reach the standard of living of Denmark, it will be under socialism.

But they say “We have an educational level similar to that of the First World...”

... and a health care system.

So they wonder: “Why shouldn't we be a First World country?”

Because we are constantly being attacked by the US. We are only 90 nautical miles from Miami. Denmark, Norway or Sweden are not in that situation.

True, but wouldn't that end if Cuba changed to a capitalist system?

North American investors would come to take our wealth. They do not care about Cuba, but what they can earn. That is, simply, the real problem. There is a statement by Columbus: “I went to find gold.” And that's what they would come here to look for.

But the US knows that here there is no gold left!

Oh, there is! If they privatise the institute of bio-genetics, for example. That is worth a lot of money. We are underdeveloped because we had great wealth in gold and silver. That was shipped off to Europe. And now we're rich too, because we have human capital. And they want to take that.

Cubans read a lot and are aware of what's happening in the world. For example, Cuba now plays a central role in the fight to prevent a nuclear war between the US and Iran. But given the US embargo, internet access is through a slow and expensive satellite. Most Cubans still do not have access to this medium. Is that going to change?

They're working on it and possibly by the middle of next year Venezuela will have a cable installed that will allow faster and wider access. Meanwhile we have to use a system of privileges. In colleges we have internet, for example, because it is prioritised. It is not our fault, but we must work with that.

Critics say it is the Cuban government that wants to prevent ...

That is a mis-information. You can open any newspaper in Miami and it will tell you that. It does not affect us, but it can affect those who are intoxicated with North American propaganda.

So when you finally get this internet cable to Cuba, and access is given to more people, through public computers or something like that, will that change Cuban society?

I cannot say how exactly, but it will be good. I am no prophet, but I think no matter what, it will be for the better, even though the US has people paid to try to dominate public opinion on the internet and restrict access to it. At least it will help me a lot to do my job!

So it will not change the ideology of Cuban socialism?

On the contrary, I think it's going to strengthen us. People are going to have much more information about other countries and their problems. It will allow more development in social science.

In the northern part of Latin America, there have been three leftist revolutions that survived at least a few years during the last century: Mexico 100 years ago, Cuba a little more than 50 years ago and Nicaragua about 30 years ago. In the case of Mexico, the revolution ended in a deadly mix of corruption and neoliberalism. Will the same happen in Cuba? Is it impossible to make such revolutions last for more than a certain number of years?

Well, the problem is in the nature of the revolution. What social forces made these revolutions? In the case of Mexico, the fundamental social force was largely rural. It was a revolution against the Porforio Diaz dictatorship. But the leadership of this revolution was in the hands of the middle classes. And their social project went no further than to install a capitalism without the evils of the Porforio Diaz regime. And although there was a lot of participation by poor people, during the first decade of the revolution, most revolutionary leaders who had support among them were killed by other middle-class revolutionaries. It happened to Zapata, who represented the south and its peasant population and the most radical revolutionary project. The same happened to Pancho Villa.

A new group assumed the leadership of the revolution and decided the direction of where the revolution was going: rebuilding a capitalism that was the Latin American equivalent of European welfare states. It reached its high point at the end of the 1930s, during the presidency of Lazaro Cardenas. During those years the oil was nationalised and there were a series of measures to increase living standards.

However, the restructuring of the ruling class in Mexico and the readjustment of Mexico to the worldwide capitalist system, always followed the general trend of the system. And the general trend of the system today is neoliberalism. Because there is no competition with the Socialist camp anymore, all the social gains in Europe and North America are being lost. And that is also the case in Mexico.

The case of Nicaragua was also a revolution of the middle classes. However, it was a revolution that was immediately attacked by US imperialist aggression, and the revolutionaries committed some mistakes. It was a revolution that attempted to find a third position, although there was a project of the poor masses, the "Sandinista" project. Nicaragua sought non-alignment, political pluralism and a mixed economy. That led to something like Venezuela's capitalism today.

The Nicaraguan capitalist class did not have the political power, but continued to control much of the economy. The revolution was unable to resist imperialism and it led to a counterrevolution. The country experienced aggression in the form of low-intensity war developed by the US administration of US President Ronald Reagan. There was economic crisis. And some mistakes were committed in the war against the US-backed contras, such as the imposition of obligatory military service. All that accumulated in the minds of the population. In the end the revolution was finally ended through elections, which were lost by the revolutionaries.

However, it was not the end, and 16 years later Daniel Ortega has regained power, although not with the same force as before.

In Cuba, the middle class had a very important role. However, it committed suicide as a class and identified with the interests of the rest of the Cuban people. It ditched its own ideology and took as its own the ideology of the poor. Che Guevara wrote an article about it, "War and peasant population", that explained how people like him, coming from the urban middle class, identified with the rural peasant population. This identification led the middle class to be more radical. Besides, the revolution against imperialist aggression has not receded.

Imperialism cannot tolerate a revolution that is popular, that is anti-imperialist. No wonder Cuba has been blockaded 50 years. In the last 50-60 years, all popular revolutions in Latin America have been destroyed, minus that of Cuba: Guatemala in 1944/54, Bolivia in 1952, Chile in 1971-73 and Nicaragua in 1979-90.

Cuba has been able survive, although the US has committed sabotage, organised contra-revolutionary groups, and continues to publicly dedicate a tens of millions of dollars every year to defeat the revolution.

So it is impossible for neoliberalism to reach Cuba?

Objectively speaking, it is impossible. At what point should that happen? Today the system is in crisis and all Latin American governments have anti-neoliberal positions, although admittedly the economic practice of some countries is still the same. Neoliberalism did not come here in the 1990s when Cuba had a much bigger crisis either. So why now?

Speaking of how revolutions were structured: in Mexico many different groups of revolutionaries were part of the revolutionary process. In Nicaragua there was a strategy of uniting almost all radical leftist forces, everything from Marxist-Leninists to anarchists, under the title "Sandinista". But here in Cuba it is the Communist Party that is in charge. Does that make it easier?

Well, in the end it makes it easier, of course, because all revolutionaries are under the same flag. But that does not mean that it was easy to reach this unity. Creating a unified party was an experience we have had before, with José Martí and the struggle for independence from Spain. Martí founded a political party to lead the struggle for independence. That was the first time in the world that a political party led a war for national liberation.

[To make the Cuban revolution] Fidel managed to gather groups together in the early years, like the July 26th Movement and the Popular Socialist Party, which previously had also been called the Communist Party of Cuba. The new party took the name Communist Party, but it was a project unique to the Cuban revolution.

And the former communist party is part of this.

It was subordinated. Yes, exactly.

And the ideology of the new Communist Party ...

... is Marxism.

But was there a difference between the Popular Socialist Party's ideology and the new party's?

It was different because it had a very important national component... Socialism in Cuba is a system highly adapted to the Cuban reality. It is not a copy of models that exist in other countries. And each socialism in Latin America will be different. In Venezuela it will be marked by the Bolivarian component, in Ecuador it will carry an important project of citizen rights, in Bolivia there is the Indigenous part. If it were any different, it would not be Latin American socialism. Copies of Cuba or Venezuela will not succeed because the realities are different.

But everybody has always the option to learn, right?

... learn from mistakes?

Yes, for instance in the case of Nicaragua, the Sandinistas, they had the option to learn from Mexico and Cuba. Of the things that worked well and the things that did not work so well. But do you think they took this opportunity?

I think partly yes and partly no. Making a revolution is not like going to a school, as if you are an architect and you do X years of college, learning how to build houses and then do exactly that later.

You have to learn how to make a revolution while doing it. And what you're creating, you have to defend. We are not speaking about a single person, but millions of people who are to make a revolution, all learning and participating at the same time.

In addition there are a lot of illiterate people. The average Cuban had only reached the third grade when the revolution triumphed. In the case of Nicaragua, the number of illiterate people was much higher. The illiterates now suddenly have to organise a revolution and manage factories. Often it is the former workers who are managing the factories. And they have to learn all these things. That makes the process much more complex.

Plus you have to learn how to manage a state: social aspects, the economy, welfare, and be always think about all possible future developments. Then there's aggression from outside, not just military aggression. It also includes ideological elements through the press, radio.

Comments

Cuba Says Fired Workers Won't Be Left Defenseless

Sep 28, 2010 11:39 am US/Central

PAUL HAVEN, Associated Press Writer

HAVANA (AP) ― Cuba on Tuesday gave details of the severance packages it will offer state workers who lose their jobs in massive government layoffs slated for the next six months, reassuring a jittery public that nobody will be left defenseless amid the historic economic reboot.

Many of those fired will receive an offer of alternative work, and can appeal to labor authorities if they are not happy with it.

For those who cannot find new work immediately, the state will pay severance of 60 percent of their salary for up to three months, depending on their seniority, according to an article in the Communist Party newspaper Granma.

"Cuba will leave no one defenseless," reads the red-letter headline above the article.

The newspaper has been the preferred conduit of information on the most sweeping economic changes in Cuba since the early 1990s. No senior Cuban official, including President Raul Castro, has spoken publicly about the layoffs since they were announced on Sept. 14.

It was not clear what will happen to workers after the three-month severance period is up. Many outside economists and Cuba experts have expressed doubts that the private sector will be able to absorb so many workers �" one-tenth of the island's labor force �" in such a short time.

When it first announced the layoffs, Cuba said it was also reforming the economy to allow for more private enterprise. Since then, the government has said it would encourage a wide-range of small businesses, allow islanders to hire employees not related to them and even give credit to new entrepreneurs.

The changes have been welcomed by many, but there is also fear that they will cause upheaval in a nation where people are not accustomed to fending for themselves.

Cuba's communist government employs some 84 percent of the work force, paying workers about $20 a month in return for free education and health care, and nearly free housing, transportation and basic food.

President Raul Castro has said the state can no longer afford such deep subsidies. He says he wants to lay off 1 million workers in the next five years, and has complained that Cuba is the only country in the world where people expect to get paid for not working.

The goal of the reforms is to both trim government payroll and spur a private sector that will increase taxes paid into state coffers. The government has said the changes are not meant to signal a break with socialism or an embrace of free-market capitalism.

Context of reforms

Professor Jose Bell Lara does a wonderful job of explaining the facts
relative to the economic reforms underway in Cuba, he does so in a sober and
credible manner mindful of THE CONTEXT in which the reforms take place; he
mentions ALBA and the process of Latin American independence. This factor is
what western leftists do not want to look at, in context of eurocentric and
predictably doctrinaire denunciations of ongoing processes in Cuba. It also
destroys the usual criticism from the theoretically bankrupt self proclaimed
"trotskyist" section of the anglo-saxon left that cuba is seeking "socialism
in one country".

Al Jazeera: Cuba's changes: what would Che say?


 
Plans to sack 500,000 state workers in the next year might not spell an end to socialism, just a reconfiguration.
Last Modified: 09 Oct 2010

Cubans who previously worked for the state will be encouraged to take up farming under new economic policies [AJE]

It is hard to imagine what Che Guevara, the legendary communist revolutionary, would make of Cuba's plan to lay off 500,000 state workers by 2011 as the island moves closer to a market economy.

Since his death in 1967 at the hands of US-backed forces in Bolivia, Guevara's iconic image has been used to sell everything from soda pop to cheap Chinese made t-shirts. Even symbols of socialism have great commercial value, suggesting the philosophies that motivated Guevara resonate on some level with a wide variety of people.

Given this "revolutionary" legacy, market reforms might not spell the end for Cuban socialism, which has outlasted ten US presidents since the 1959 revolution. 

"Che would have understood that Cuba exists in the real world," Isaac Saney, a Marxist scholar and author of Cuba: A Revolution in Motion, told Al Jazeera. "You have to be able to live within your means and the state sector itself can no longer carry people who are not involved in productive activities."  

Presently, Cuba's socialist government employs about 90 per cent of the labour force, according to John Kirk, a professor at Dalhousie University in Canada, who has worked as a translator for Aleida Guevara, Che's daughter.

"You'll often have two or three bus drivers sharing the work of driving one bus … the bottom line is that the Cuban economy is not efficient," Kirk told Al Jazeera.

Formally announced in late September, the lay offs reportedly began this week. Unemployed workers will be encouraged to get small business licenses and start work in one of 124 chosen fields - creating their own jobs managing restaurants, driving taxis, installing plumbing, grooming dogs or operating farms, Kirk said. 

Margaret Thatcher in Havana?

At first glance, the massive lay offs may look like Cuba's adoption of neoliberalism, with Raul Castro, Cuba's president, taking on the role of a Latino Margaret Thatcher or Ronald Reagan – western politicians who gutted the public sector in favour of private enterprise and profit.

Kirk suggested that "the laid off people will work in three basic employment groups".

Some Cubans worry the economic changes could open the country to renewed foreign interference [Reuters]

"The largest portion will keep doing what they have already been doing - [illegally running small businesses]. The underground economy in Cuba is massive. The second largest group will go into farming. They don't want to do it but there is no alternative, and the government will make growing veggies attractive. The third group will go work for foreign investors."

In an attempt to avoid the massive inequality and dislocation that often follow market reforms, Cuba has vowed to maintain its public health and education systems. These so-called "jewels" of the revolution, which don't fit into the ideology of free market capitalism, have garnered praise from the United Nations, International Monetary Fund and many other international bodies.

"Cuba demonstrates how much nations can do with the resources they have if they focus on the right priorities - health, education, and literacy," Kofi Annan, the former UN secretary general, said in 2000.

Even after market reforms come into effect, Kirk says Cuba will still "have the best statistics for infant mortality and literacy in the developing world."

These public services provided by a socialist government may, ironically, be Cuba's ticket to a successful transition towards a market economy.

"Biotechnology exports earned Cuba approximately $300m last year, and they continue growing," Kirk said. "They produce 83 per cent of their own pharmaceutical products. The drugs are cheap and they don't depend on [Western pharmaceutical] cartels."

As nations in the global South search for cheaper drugs - lifesaving products that are not priced out of the poor's reach by Western drug companies - Cuba's well educated population could stand to benefit.

But for now, tourism and nickel mining, along with remittances from Cubans living abroad, are the country's largest sources of foreign currency. 

Red-tape and 'inefficiencies'

Biotechnology development and other advanced, knowledge intensive, export businesses which utilise the country's high levels of education, are hampered by a lack of investment capital, outdated machinery, and government red-tape.

"The [US] state department has already set up shop for people who want to work for 'civil society' in Cuba to build institutions to being down the government"

John Kirk, professor Dalhousie University

Colin MacDonald, a Canadian businessman who chairs the board of directors at Clearwater Seafoods Limited, a multinational fisheries company, experienced some of these economic irritants first hand.

He visited Cuba at the government's request several years ago as a consultant to the island's lobster industry, and what he experienced could be analogous to broader economic set backs.

During processing, lobsters need to be moved from ambient to cold water tanks to keep them healthy and tasty. "The cold water tank at the Cuban operation was broken and everyone knew it. Nobody reported it, including local management, as they did not want to be the messenger with bad news," MacDonald told Al Jazeera.

"The workers continued moving the lobsters as if the cold water tanks worked, which meant they would experience high mortality" when they were shipped to overseas markets. 

"The system was organised so people were disincentified to do a good job as they were paid, in money and compliments, the same no matter how well they did or did not do the job," the businessman said, underlying some of the historical critiques of socialism as an economic system.

The average government employee in Cuba earns about $20 per month, although food, accommodations and other necessities are heavily subsidised.

The China option

Some analysts believe Cuba will follow the economic trajectory set out by Deng Xiaoping, China's former leader, who proclaimed "getting rich is glorious" when he opened the country to market reforms in the 1980s. Or nominally communist Vietnam, which is experiencing high levels of economic growth due to a similar set of policies called Doi Moi or the opening.

But Isaac Saney doesn't see that happening. "Unlike [China or] Vietnam, Cuba has faced 50 years of financial and commercial blockades from the US."

The US first imposed a trade embargo in 1960, one year after Fidel Castro, Che Guevara and other revolutionaries overthrew the US-backed dictator Fulgencio Batista.

"So much hinges on the US normalising relations. That is the logical market for investment and exports," Kirk said. Despite the embargo, much of the seed money for new small business is expected to come from Cuban's living abroad, particularly in Miami.

With the fall of the Berlin Wall, it became fashionable for western intellectuals to link economic liberalisation with political freedom. But with the rise of state capitalism in single-party states like China and Vietnam, along with rapid growth in other market-orientated non-democratic countries such as the United Arab Emirates and Qatar, that interpretation does not seem correct.

Cuba remains a one party state with heavily censored media controlled by the ruling communist party. In a country with almost universal literacy and high rates of university education, Cubans deserve something better than Granma newspaper which carries "a very dry, one dimensional party line," according to Kirk. 

US intervention

Some hardliners in the government fear economic openings could lead to renewed violence from the US, who backed Cuban exiles linked to the mafia in an unsuccessful attempt to invade the island in 1961 at the Bay of Pigs.

Since then, the US has tried to assassinate Fidel Castro, the former Cuban president and Raul's brother, on several occasions. An exploding cigar was reportedly one of the plans.

"The [US] state department has already set up shop for people who want to work for 'civil society' in Cuba to build institutions to bring down the government," Kirk said.

Many laid off Cubans will likely seek self employment as taxi drivers [Reuters]

During the revolution in 1959, Delia Luisa Lopez Garcia was a student radical coordinating armed campaigns at the University of Havana, where she is now a professor of economics. Standing four feet, ten inches tall, Dr Garcia is fully trained with an AK-47 assault rifle and embodies much of the intellectual culture of socialist Cuba.

"After the end of the Cold War, it seemed as though the neoliberals won," she told Al Jazeera during a 2007 interview in Havana, Cuba's capital. Most observers in the US believed Cuban socialism would collapse along with the Soviet Union.

"Now, in many places, neoliberalism has been rejected because it was not successful," Garcia said. "Brazil kicked out the IMF [International Monetary Fund], as did Argentina… States need to take power back from companies in order to have control over economic policies."

In the wake of the 2008 economic crisis, when western governments spent hundreds of billions of dollars in public funds bailing out banks, it was Nicolas Sarkozy, France's conservative president, who proclaimed the end of "Anglo-Saxon capitalism".

"The approach in the media is that the Cuban revolution is on the skids," Kirk said. "Before you throw out the baby with the bathwater, look at what is happening in the rest of the world … look at capitalism, look at the bailouts and the recession."

As the global financial crisis holds large economies for ransom, it seems ironic that Cuba's economy breaks a long held tradition and edges closer towards the free market system.

However, with many different models of capitalism practiced throughout the world, there is nothing to prevent Cuba from defining a distinct system, appropriate to its modern history and better suited to its ideals.

Whether or not Che Guevara would support Cuba's economic changes is a matter for biographers, historians, and activists to try and decide because, in the next few years, Cubans are going to be busy cutting hair, growing crops, fixing tractors and seeking foreign investment.  

 
Source:
Al Jazeera

Cuba 's New Economic Policy

The current economic reforms in Cuba bear a close similarity to Lenin's New Economic Policy of 1921, outlined in his famous essay "On Co-operation", and continued in the policies of Nicolai Bukharin, until the ascendancy of Stalin in 1929.

Bukharin's policies promised the development of a pluralistic socialist democracy, based on a mixed economy consisting of small enterprises, cooperatives, and strictly regulated concessions to foreign capital investment, with the "commanding heights" of the economy owned by the state.

This experiment - replicated in Cuba today - is recounted by the historian, Stephen Cohen, in his book, "Bukharin and the Bolshevik Revolution".

The Cuban Revolution is definitely continuing: ridding itself of the historical baggage of its dependence upon the old Soviet Union, with its attendant Stalinist bureaucratic over-centralization; a system brilliantly critiqued by Nicolai Bukharin in his "Notes of an Economist", and by Leon Trotsky in his "The Revolution Betrayed".

It appears that the legacy of Nicolai Bukharin lives on in these recent and constructive developments in the Cuban Revolution.

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