What Cuba Can Do Amid Crisis and Despite US Sanctions
Eight economists speak out
The sanctions, which the Cuban government considers the “main cause” of the island’s deep crisis, are once again in the spotlight ahead of the upcoming debate and vote at the United Nations General Assembly on the resolution that Havana presents each year demanding their removal.
By EFE (La Estrella de Panamá)
HAVANA TIMES – US sanctions weigh heavily on the Cuban economy, but Cuba could still do much to overcome the deep crisis it is mired in, agree eight of the country’s most prominent independent economists in interviews with EFE.
The sanctions—which the Cuban government insists are the “main cause” of the island’s severe crisis—are back in the news because of the upcoming UN General Assembly debate and vote on Havana’s annual resolution calling for their repeal.
However, the experts consulted believe there are other factors of at least equal weight. They urge Havana—beyond that diplomatic battle—to focus on areas where it can make changes, instead of lamenting the effects of US sanctions, whose impact none of them deny.
The situation on the island is critical. To the ongoing economic crisis, now entering its fifth year, one must add the energy, food, health, production, agricultural, banking, financial, and monetary crises.
“Of course the embargo affects us, but it doesn’t depend on the government’s will. What does depend on them is ending hyper-centralized planning and granting more autonomy to all existing forms of property, reducing bureaucracy, and, finally, not fearing the market,” observes Omar Everleny, professor at the University of Havana.
The task is not easy, as explains Tamarys Bahamonde, a professor at the City University of New York, who emphasizes that the problems go beyond structural issues. “The crisis is systemic, and all the problems are interconnected. It’s like a spider web—you can’t address one without touching all the others,” she explains.
Ricardo Torres, a researcher at American University in Washington, insists that “even amid sanctions, there is much that can be done”—such as encouraging investment, protecting private property, building a stable legal framework, promoting competition, and seeking financing from international organizations. “The current model has to be dismantled—but that’s what they don’t want,” he notes.
Mauricio de Miranda, professor at the Pontifical Javeriana University in Cali (Colombia), has no doubt where to begin his list of reforms: the political realm. He calls for “democratization” and inclusion of Cubans abroad, who could contribute ideas, human capital, and financial resources.
He then turns to the economy, calling for an end to “centralized administration”—to “free the productive forces”—along with dismantling the military-controlled conglomerate GAESA and lifting restrictions in the agricultural and external sectors. In the legal sphere, he calls for equal treatment of all economic actors and predictability.
Economist Pedro Monreal also begins with politics. He argues that the first step would be to remove from the 2019 Constitution “the planned direction of the economy,” which the text characterizes as “a central component of the system for directing economic and social development.”
He believes Cuba is in a type of crisis from which a country cannot recover “within the framework of the existing system,” but only through substantive reforms. “The Cuban government does not appear willing to implement changes of that magnitude,” he says.
Cuban-American economist Carlos Martínez focuses on measures Havana could take to stop “obstructing” the revitalization of certain sectors—from liberalizing agriculture (where most land remains state-owned) to opening up “competition” in industries now dominated by state monopolies, such as telecommunications and energy.
Investment
Pavel Vidal, also a professor at the Pontifical Javeriana University in Cali, believes the Cuban government “must take at least some steps to convince others that it really intends to carry out a deep reform of that economic model, which is not credible.” “These are things that have to be done—and until they are, not even Cuba’s allies will truly put substantial resources into the Cuban economy,” he argues.
“Historically, Cuba has sought international allies. But that strategy is no longer working because of a serious loss of credibility, even among historic partners—the Russians, the Chinese… They understand better than anyone the problems of the Cuban economic model and the need for reform,” Vidal affirms.
Miguel Alejandro Hayes, coordinator of the Institute for Caribbean Basin Studies, points out that Cuba—with the lowest per-capita income in Latin America, “a paralyzed business system,” and infrastructure investment needs he estimates at 60 billion dollars (51.26 billion euros)—can no longer aspire to economic recovery through minor reforms.
“The only economic solution available to the Cuban government to reverse the current collapse—a more appropriate term than crisis—is to create an economic and political transition that allows for the design and implementation of a national reconstruction plan for Cuba,” he concludes.