Ever since President Castro first announced that Cuba was embarking on a far-reaching process of economic change there have been concerns about the implications this may have for the rest of the region.
This concern, however, seems to arise from a fundamental misunderstanding about the nature of what Cuba is trying to achieve. Amid sometimes wild speculation, led largely by North American media commentary about Cuba’s changing basis for the ownership of property, cars and smaller enterprises – in many cases simply regularising legally what was already the norm – many of the facts have been lost. A careful reading of what Cuba is saying makes clear that it fundamental intent is to increase its economic efficiency by separating the role of the state and enterprises, giving the latter the freedom to manage and act independently on all but the most important strategic decisions.
In March of this year, Cuba’s Sixth Party Congress took what its leadership described as an “irrevocable decision“: this was to implement a large number of economic guidelines that will reform, decentralise and liberalise aspects of the Cuban economy. Although much has been written about this, it still seems not to be widely understood that this process does not aim to create a market economy. Rather it is intended to accelerate economic growth and remove bureaucracy while continuing to relate development to nationally planned objectives.
Nor does it seem very well understood that Cuba hopes that by creating better managed and more efficient enterprises, it can fully integrate its economy into the regional and global economy in order to guarantee in perpetuity the continuance of its social system.
To achieve such economic efficiency it will be necessary “dismantle the paternalist state,“ President Castro suggested. What this direct language describes is a policy that eventually involves up to 1 million workers becoming self-employed in non-state agriculture or service oriented occupations; most non-strategic state and corporate decision-making being dealt with at the provincial or enterprise level; loss-making state companies being closed or restructured; and a new approach being developed for foreign investment.
In order to ensure that this process is not turned back as were some earlier attempts at reform, a standing committee led by President Castro and ministers has been established to control and coordinate the process.
This reflects continuing tensions at all levels and ages between reformers and conservative elements within the government and the party as the extent of the changes becomes clear and the role of the party and government is adapted.
One sign of how the internal debate may be resolved is expected to come in 2012 in relation to the ongoing reorganisation of government. Already greater numbers from the military, younger people and women now serve on the Central Committee but a clearer impression of the nature of future change may become apparent when the National Conference of the Cuban Communist Party meets in 2012. The event is likely to determine the parameters for and attributes required of Cuba’s future leadership. It is also expected to establish time limits for holding positions at all the levels of the party.
Irrespective, most experts believe that no one in a position of power in Cuba’s collegiate leadership can realistically afford to reject what is now happening, as without change the likelihood of political renewal, economic growth the resource necessary to sustain the economy, its social character and by extension the future of the Cuban model, will be limited.
One consequence is that Cuba is expected to become more engaged with external investors in 2012. Next year it is likely that Cuba will formally begin to promote the establishment of special development zones aimed at encouraging new foreign investment under terms and conditions different from those in the domestic economy. Foreign investments in such zones may operate under different more beneficial legal principles relating to property and other matters than those under newly decentralised conditions on national territory in the domestic economy.
Much of Cuba‘s new emphasis in these development zones will be on using foreign investment to promote the inflow of human capital and technology by forming strategic partnerships to produce high quality value-added goods and services exports with a preference for those with the highest technological content. This reflects a desire to make use of Cuba’s advanced scientific and technological achievements in health care, pharmaceuticals, genetic engineering, biotechnology and the high levels of education that have been achieved.
The intention is to also encourage linked projects including leisure and real estate development in these zones. One of the first of these will be at Mariel where a Special Development Zone is being created with the support of Brazilian and other international partners.
Cuba is a Caribbean country and a regional partner. Recent conversations indicate that it wants to more closely integrate its economy with those of its neighbours in a manner that is complementary rather than competitive – all matters confirmed in the positive exchanges that took place in the recent Cuba-Caricom exchanges with Caribbean heads of government in Trinidad. Despite this understanding Cuba’s internal dynamics are far from easy.
It is on the one hand a nation that constantly brings the need for higher social values and actions to the world’s attention, while on the other it is a far from perfect society, prone at times to excessive control despite its argument about special circumstances. It is rightly proud that it has survived against the odds to celebrate on January 1, 2012 the 53rd year of its revolution, having withstood continual external pressure from the US and the collapse of the Soviet Union, but has suffered mistakes of its own making.
A few years ago I had the chance to discuss this with a now very senior member of the Cuban government. He reminded me that the Cuban revolution did not begin in 1959 but in the late nineteenth century with the Spanish-American War which led to Cuban independence in 1902. In doing so he was providing a clue: he was pointing out that the Cuban people are and will always be committed nationalists. The consequence is that the Cuban people will continue to manage change themselves and in their own way.
Previous columns can be found at www.caribbean-council.org
(Editor’s note: There will be no column from David Jessop next week.)
