The New Battle against Old “Evils” in Cuba

…once again, the flailing kicks of the drowning

By Osmel Ramirez Alvarez

HAVANA TIMES – The Cuban television news is once again featuring stories of government efforts to combat the line placeholders, the resellers, and the self-employed who someone has decided are charging “abusive” prices, even though there’s no official norm. We see the declarations coming from the highest authorities: the president assuming it as a task of the highest order and a council of ministers debating the issue. It’s become the topic of the moment.

Is this something new?

Not at all.  In fact, it’s a recurrent phenomenon, oft repeated, especially under the Diaz Canel government. That government has been marked by an unchecked deepening of the economic and general crisis in the system of state planning.  At the same time, they’ve placed greater brakes on the private sector, to keep it from surpassing the state as the principal economic motor.

We could call it a cyclical strategy. First, they allow the informal market and the private sector a little economic freedom, in order to cushion the shortages when these become unsustainable. Later, when that market seeks a real equilibrium, based on a productive capacity severely limited by the internal blockade, prices go up until they’re inaccessible to 70% of the state workers, whose lean salaries comprise fixed incomes, adjusted to an inexistant, nominal economy.

The logical solution would be to eliminate the internal blockade against economic freedom and allow the market to function normally. That would mean eliminating the currently prohibited activities, which left in private hands could generate the solutions that – little by little – would lower prices and raise salaries. In that way, they could possibly adjust the economic balance, so as to reach an accessible level for all. As greater economic efficiency is obtained, there’s a greater inclination towards improvement.  Without economic freedom, this is impossible, at least not in a sustainable way.

The Cuban Communist Party’s refusal to eliminate the internal obstacles to economic freedom (not to mention the blockade against political democracy and full human rights for Cubans) is the cause of our problems. It’s the principal factor, light years away from being the US embargo; or some cultural or geographical fatal destiny; or the consequences of colonialism. Although all these factors exist and have their consequences, they’re nothing more than the justifications of opportunists or failures.

Appealing for further repression of the active economic participants in our incipient and handcuffed private sector, or of those who are participating irregularly in the informal market, is tantamount to destroying a balance “by going backwards,” instead of “forward,” as represented by a movement towards greater economic freedom. It translates into more shortages and more unwieldy and unstable illicit markets. It’s equivalent to making sure the population can’t find what they need to live at any price, low or high. It destroys the market; it doesn’t heal it or improve it.

What’s won and what’s lost with these measures?

Most people don’t understand economics, nor do they have great recall of similar past events, nor do they compare them. They can’t deal with the inflation they’re suffering today with their insufficient salaries, and they don’t have union mechanisms to demand that these salaries be raised or adjusted to the real economy. They view state or government intervention (which in Cuba is the same thing) as their “salvation”, even if the relief be fleeting or even just psychological.

The government knows that. It’s well aware of the positive – if merely psychological or short-term – effect of these measures. They want to take advantage of that at this moment of maximum disapproval levels and a brutal deterioration of the official image in the public eye. At this moment when they’re not able to generate trust or hope, even among their most fervent supporters, they need to at least gain a little time.

They’ve chosen to do something that’s ultimately bad, but that looks good, can be interpreted as good, and that seems to put them on the side of the people. A kind of Communist Robin Hood. Unable to make the changes that Cuba needs, they resort to this damaging deceit, repeater of more misery.

They’re actions that neither in essence nor in practice will benefit the people or the government. But at first glance, they give the sensation of help, make the people feel protected, and allow them to dream for a small moment that maybe there’s hope. A kind of narcotic effect. Secondly, these actions will give them a tiny and limited respite of popularity, appealing to and pleasing the most conservative and allied sector. Even at the price of more disillusion and setbacks shortly afterwards, which in turn will translate into more emigration.

In 2018, when he was barely making his appearance as the maximum leader of the state and the government, Diaz Canel promoted a merciless struggle against the self-employed sector, imposing “price ceilings” for many of their products. That move generated an immediate period of critical shortages, so that the authorities had to retreat and abandon or ignore those measures.

In 2021, following the application of the controversial reforms which generated more imbalances than solutions in the Cuban economy, prices shot upwards. The government then launched a campaign – not against the causes, but against the consequences: the so-called abusive prices. They applied fines of up to 15,000 pesos, persecuting and demonizing the self-employed and those who charge money to hold places in the lines. All this took place amid horrific shortages, and the deepening crisis of the Covid 19 pandemic.

Following the social explosion of July 2011, which these policies contributed to in some measure, they ceased being applied. Cubans were granted some business freedoms, such as some easing in custom’s requirements, finally allowing garage sales without taxing them, unregulated prices, and an end to the harassment by inspectors and police. All this was allowed like an escape valve, in the face of the tense social situation.

However, the government’s inability to improve the economy, and their opposition to allowing greater openness, hinders them from putting a stop to inflation and the crisis. Now they’re back to the old method – sadly cyclical – of persecuting and criminalizing the free informal market.

They continue to feel sure of the social control they exercise, and this makes them confident that they can impede another social explosion. They see their bet as less dangerous for the continuity of their hegemonic and totalitarian power than allowing prosperity, freedom and the autonomous exercise of the people. That bet, without a doubt, is a dangerous one.

Read more from Osmel Ramirez here on Havana Times