July 05, 2002

Thirteen Years After the Fall of the Berlin Wall, Cuba Remains Reactionary

One would have thought--I certainly did--that there would be some movement in Cuba since 1989. Instead, the country remains locked in Brezhnevite stasis. One would think that the second and third ranks under Castro would have taken some action long before now: after all, the longer the current system lasts, the worst their chances when Castro finally becomes incapacitated.


The Economist: Cuba's economy: The disaster is now "irrevocable"

ONE more European firm suspended operations in Cuba recently. The company, a building firm working in partnership with the Cuban government, found that its partner was dipping into company funds and that workers were selling materials on the black market. Another European company wants to be available to serve its customers 24 hours a day, seven days a week; but company cars, easily identifiable by their licence plates, may be used only at certain times. No es facil, as people say all the time in Cuba. It's not easy for foreigners to do business here.

Cuba, out of necessity, has allowed capitalism into its socialist system. But it then keeps capitalism down, as it feels it must, with a mass of complex and sometimes contradictory rules and regulations. Just when foreigners find out how things work, the rules change again. There are rewards, of course: most obviously, a firm foothold in a market just 90 miles (145km) from the United States, which Americans are forbidden to enter. But they barely outweigh the frustrations, and foreign investors are growing impatient. Now the European Union has presented a document to the Cuban government, laying out investors' complaints and suggesting improvements.

Government decrees, the report says, are being applied in an arbitrary and haphazard way. Bank and customs charges are prohibitively high. Cuba's comparative advantages are being eroded by excessive overheads and by unnecessary difficulties. "There are times when the Cubans seem to go out of their way to create obstacles," said one European businessman with several years' experience in Cuba. "They need us, we can do business here, so I don't understand what the problem is."


Cuba's economy

The disaster is now “irrevocable”
Jul 4th 2002 | HAVANA
From The Economist print edition


A non-working system is enshrined forever

ONE more European firm suspended operations in Cuba recently. The company, a building firm working in partnership with the Cuban government, found that its partner was dipping into company funds and that workers were selling materials on the black market. Another European company wants to be available to serve its customers 24 hours a day, seven days a week; but company cars, easily identifiable by their licence plates, may be used only at certain times. No es facil, as people say all the time in Cuba. It's not easy for foreigners to do business here.

Cuba, out of necessity, has allowed capitalism into its socialist system. But it then keeps capitalism down, as it feels it must, with a mass of complex and sometimes contradictory rules and regulations. Just when foreigners find out how things work, the rules change again.

There are rewards, of course: most obviously, a firm foothold in a market just 90 miles (145km) from the United States, which Americans are forbidden to enter. But they barely outweigh the frustrations, and foreign investors are growing impatient. Now the European Union has presented a document to the Cuban government, laying out investors' complaints and suggesting improvements.

Government decrees, the report says, are being applied in an arbitrary and haphazard way. Bank and customs charges are prohibitively high. Cuba's comparative advantages are being eroded “by excessive overheads and by unnecessary difficulties.”“There are times when the Cubans seem to go out of their way to create obstacles,” said one European businessman with several years' experience in Cuba. “They need us, we can do business here, so I don't understand what the problem is.”

The Cuban ministry for foreign investment has held a series of meetings with European businessmen to try to iron things out. But the minister, Marta Lomas, made it clear that Cuba was not about to change its spots. “You know the rules when you get here,” she told her audience. President Fidel Castro, too, has always made it clear that he will not let such paltry matters as economic growth dilute the purity of his revolution. No dabbling with the IMF or the World Bank for him.

Meanwhile, the economy lurches on. Few people know the true figures for how bad things are, and those who do aren't telling; but tourism, the island's main foreign-currency earner, is down, and the sugar industry, its largest employer, is facing continuously low prices. Almost half the country's ageing, decrepit sugar mills are to be closed down. Meanwhile, peso shops are empty of goods, while essential items are increasingly being removed from ration books and sold for dollars only.

If the government is worried, it is not admitting it. Mr Castro's latest piece of showmanship has been to shut down factories, banks, schools and offices for three days so that Cubans could watch on television a special session of the National Assembly. The assembly was passing an amendment to the constitution to make Cuba's socialist system “irrevocable”.

In the run-up to the session, more than 8m voters—99.7% of all those registered—signed a petition supporting the measure. In hospitals, the dying were helped to sign. A few days earlier, 9m of the country's 11m people (by government estimates) took to the streets and fields in a mass rally. To celebrate, Mr Castro spoke, for several hours, about his achievements and the evils of capitalism in general. Somewhere, that EU petition gently gathers dust.


Posted by DeLong at July 5, 2002 07:18 AM | TrackBack

Comments

What makes Castro's regime politically sustainable is the state of perpetual war against the US. In other words, the hostile actions of the US government, and the embargo against Cuban goods, perpetuate Castro's grasp on power.

If there was more trade and free movement of travellers, the pressure to reform the Cuban economy would grow.

This is reminiscent of Iraq: the aggressive western stance has actually strengthened Saddam Hussein's grasp on power: a unification against a common external enemy.

Perhaps after we are done invading Iraq, we should invade Cuba?

Posted by: john on August 16, 2002 01:26 AM

there is nothing worse than loosing a loved one and after the wall went up i know alot of ppl lost their family members and their beloveds and the day i heard that the wall came down i was jumping for joy thank u soo much for listening to this entry i had to say I will try and keep in touch with this post Luv

Kylie Grennavill

Posted by: kylie on October 23, 2002 09:33 AM
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