The celebrations of the 50th anniversary of Cuba’s revolution take place against the background of a deep crisis for the world economy, which poses the question of an alternative to capitalism
By Marcus Kollbrunner, Socialismo Revolucionário (CWI Brazil)

The conquests of Cuba’s revolution, like free, world class health and education systems, still stand out like a beacon in a continent where the havoc created by the neo-liberal onslaught has left the majority of the population in misery. But the future is still uncertain. Many are speculating on the possibility of Cuba following the Chinese path and opening up for a restoration of capitalism, especially now that Fidel Castro is not playing the same central role.

The specific character of the Cuban Revolution

On New Years Day 1959, the hated dictator, Batista, fled from Cuba, two years after a small group headed by Fidel Castro and Che Guevara landed on the island and started a guerrilla war in the countryside. Their guerrilla force never had more than 3,000 people within its ranks, but the dictatorship was so rotten that this was enough to topple it.

The Cuban Revolution is an example showing that capitalism can be brought down even in a poor country, but also of the limitations imposed by isolation and the influence by Stalinism. Fidel Castro and others in the leadership of the “26th July Movement” came from the Orthodox Party, a radical nationalistic movement, but there were also communists in this movement, like Fidel’s brother Raul, and Che Guevara. The program of the 26th July Movement did not go beyond demanding the end of the dictatorship and the implementation of democracy and social reforms, without attacking the capitalist system.

Fidel Castro’s plans for social reforms met immediate resistance from the US companies, which at that time totally dominated Cuba’s economy, who refused to pay any taxes or share their wealth. The new government responded by nationalising US assets, which gave the government almost total control over the economy. The reply from the US government was to try to topple the new government and later to implement an embargo. To avoid isolation, Cuba sought support from the Soviet Union.

In a short period of time the capitalist system was abolished in Cuba and the economy was being run under a plan. But in contrast to the Russian Revolution in 1917, the working class played no independent and conscious role in this revolution. Instead, the new regime was moulded in the shape of the Stalinist system of bureaucratic control, sponsored by Moscow. In spite of this, the Cuban regime has always enjoyed popular support, thanks to the improvements implemented, in the teeth of the US blockade, with a planned economy, which gave a glimpse of what would be possible under socialism. Castro’s regime never took on the same level of repression as Stalin’s or Mao’s regime. Notwithstanding this, it was a top-down system, where only one party is allowed.

For a planned economy to function effectively, worker’s democratic control and management is required, but also the spread of the revolution to other countries, so an international division of labour can be established, that is not based on exploitation. The dead hand of bureaucracy upon the planned economy leads to mismanagement, waste and corruption.

Collapse of Stalinism

The collapse of Stalinism in the Soviet Union and Eastern Europe had a devastating effect on Cuba’s economy. The Eastern block stood for 80% of Cuba’s foreign trade and the aid from the Soviet Union was very important for its economy. Between 1990 and 1993, Cuba’s GDP fell by 34%. This imposed enormous sacrifices upon the population, with shortages of almost all consumer goods. Cuba was forced to shift its industrial base from sugar to tourism, with some opening to foreign investments.

Another measure was to introduce the use of the dollar, which was linked to the development of the tourist industry. This led to a big gap between those who had access to dollars, and thereby could go to the special dollar shops with plenty of goods, and those who only had the state-regulated wages paid in pesos. Since then the private sector has grown. In 2006, 78% of the labour force were employed by the public sector, compared to 22% in the private sector. In 1981, the share of employment in the public sector was 91.8 %, and just 8.2 % in the private sector.

Private companies were allowed mainly in the tourist industry, where 13 international companies are currently administrating 62 hotels on the island. But there has also been foreign investment in other sectors, like telecommunication and mining.

However, the capitalist system hasn’t been restored, as in Eastern Europe and Soviet Union. The state-owned planned economy still dominates. This has meant that the important conquests within education and health sector could be maintained. It’s not difficult to see the effects of this for the population. In Russia, after the break-up of the Soviet Union and the restoration of capitalism in the 1990s, life expectancy dropped to 56 years, 20 years lower than in Cuba.

The Cuban economy has recovered in the last period. The supply of cheap oil from Venezuela, in exchange for thousands of Cuban doctors that operate in Venezuela, the growth of tourism and a growth in trade with the rest of the world, have played an important role. The income from Cuban doctors abroad, not only in Venezuela, is the most important source of foreign currency, and the country also has a growing bio-tech industry. The pace of market reforms has slowed down and in some cases has been reversed. In 2004, the dollar was banned from the internal market, but it was replaced by the “convertible peso”. Fidel Castro’s role in this period has been to hold back the pro-market reforms, while Raúl Castro is widely regarded as more open to the market. Fidel’s illness in 2006, when Raúl to over the helm, triggered a lot of speculation about what will happen the day Fidel Castro dies. Clearly there is a layer within the ruling bureaucracy that is attracted to the “Chinese path”, where pro-market reforms are combined with a continued grip on power by the communist party.

When Raúl Castro formally took charge of the presidency in February last year, he talked of the need to abolish unnecessary regulations, open for more private initiatives in agriculture, and implement wage differentials. In March, the sale of DVD-players, mobile phones, and computers was liberalised.

A problem for the Cuban economy is the low productivity within the agricultural sector. Half of arable land, all owned by the state, is idle. So, the island that could be self-sufficient in food, is forced to import 60-80% of the food it consumes. Raúl has therefore said that private farmers will be given the right to use plots of state land, to stimulate food production.

Raúl also announced that he will cut in the huge bureaucratic apparatus, even its privileges. Official international travels will be cut by half, and also holiday benefits to party officials will be cut. But social benefits for the population will also be cut. On 27th December the Cuban parliament approved a pension reform that raises the retirement age by five years, to 60 years for women and 65 years for men. In the same session of parliament Raúl announced that in January the proposed new wage system will be presented. Wage differentials will be increased, by connecting wages to productivity.

The 6th congress of the Communist Party is planned to be held this year. Raúl wants the congress to discuss “structural changes”. The sum of all these changes will be a growing economic divide within Cuban society, which risks tearing apart the current social cohesion. There is pressure, especially within the younger generation, to abolish bureaucratic rules and open up society. 73% of Cuba’s population was born after the revolution and do not have the same emotional attachment to the government.

Raúl Castro has encouraged more open debates, even if he’s not considering abandoning one-party rule. In the beginning of 2008 there was a debate in one of Cuba’s universities between the speaker of the parliament, Ricardo Alarcón, and students. A video from the debate was spread on the Internet. One of the students asks:
“Why do the retail trade in the whole country use the convertible peso, when our workers and peasants are paid in the ordinary peso that is worth 25 times less? You need three days to earn enough to buy a toothbrush.” He also questioned why travels are restricted, as he would like to be able to visit the place where Che Guevara was killed. The question is whether this critique will be captured for its own ends by a pro-capitalist wing of the bureaucracy, or if a coherent socialist left can be built in Cuba.

New economic problems

Last year Cuba suffered the devastation of three hurricanes. The damage totalled almost US$10 billion, equivalent to 20% of GDP. More than half a million homes were destroyed or damaged, and many crops were destroyed. According to Raúl Castro, it will take 3-6 years for the country to overcome this.

The whole economy grew considerably slower during 2008, with a GDP growth of 4.3 %, compared to the targeted 8%, and with growth of 7.5 % during 2007. Besides the effects from the hurricanes, the country suffered from an increase in food prices, at the same time as the price of its main export commodity, nickel, dropped sharply. This led to an increase of 70% in its trade deficit.

The international economic crisis has also led to lower investments by foreign companies. The Canadian mining company Sherritt International has decided to postpone investments on increased capacity in the extraction of nickel. Telecom Italia has announced it will sell its stake in Cuba’s telecom company, Etecsa. Only the tourist sector managed to remain strong, breaking a new record in 2008, with 2.35 million visitors. Cuba has got cheap oil from Venezuela, but the sharp fall in oil prices will make it harder for Venezuela to be as generous the coming period.

New hope with Obama?

Pressure is growing on the new president of US to drop the embargo against Cuba that has been in place since 1962. In June the EU lifted its political sanctions against Cuba, implemented in 2003, in spite of US protests. Cuba has also been more integrated into the different Latin American governmental institutions. During the summit of Latin American presidents in Brazil in the middle of December, there were new demands that the US must end the blockade. Evo Morales, president of Bolivia, even proposed that all countries should threaten to cut diplomatic relations with the US if Obama doesn’t end the sanctions before the summit of the OAS (Organization of American States) in April. Cuba was also let into the Rio Group (organisation of Latin American and Caribbean states created in 1986 as an alternative body to the Organization of American States dominated by the United States).

The UN General Assembly voted in October for the 17th year in a row for a resolution urging the US to drop the sanctions. Only Israel and Palau voted against, together with US, while 185 countries voted in favour.

The support for the sanctions in US is also diminishing, especially amongst the second generation of Cuban-Americans. According to a recent opinion poll made buy the Institute for Public Opinion Research of Florida International University, 55% of Cuban-Americans are now against the embargo. 66% are in favour of lifting the restrictions on travel to Cuba, and 65% are against the limit on remittances to families in Cuba. 23% believe the embargo is functioning poorly, while 56% thinks its not functioning at all.

The BBC spoke to Carlos Saladrigas, a 60-year-old Cuban-Amercian from Miami. He has voted Republican all life, but at the last election he voted on Obama.
“You don’t have to be very smart to figure out that after 50 years of trying something that hasn’t worked, maybe it’s time to try something new”, he says. He thinks that a better way to change Cuba is by allowing Cuban-Americans to visit the island acting as “agents of change”.

Obama said during the election campaign that he will abolish the tougher restrictions implemented by Bush in 2004, when the number of visits to Cuba was limited to once every three years (compared to once a year before this). Bush also reduced the amount of remittances visitors could take with them to Cuba from $3,000 to $300. Many US companies would like to establish themselves in Cuba and follow the example of Canada, which has become Cuba’s main trading partner. Many bourgeois strategists also understand that a more effective way to get Cuba on the capitalist road is to flood the country with cheap goods, while the sanctions if anything have helped sustain support for the Cuban regime.

We socialists call for an immediate end to the sanctions, without strings attached. The future of the Cuban revolution is closely linked to the struggle for socialism in the whole of Latin America. A restoration of capitalism would be a catastrophe for the population of Cuba, but also for the left on the continent. At the same time, a socialist breakthrough in other countries in Latin America would open the way for a socialist federation that would be decisive for safeguarding the conquests of the Cuban Revolution.

This entry was posted on Thursday, January 15th, 2009 at 1:38 pm and is filed under World news and analysis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.