Cuba and a New Special Period on the Horizon: Possible Responses from Havana

A brief review of the 1990-2004 crisis

Por Alfredo Fernandez

HAVANA TIMES – An old man eats a typical Cuban meal in a workers’ canteen, in front of TV cameras. TV viewers didn’t think too much of it: white rice, black bean stew, avocado salad and a juicy pork steak. Some people even found it to be mockery as getting your hands on a meal like that was quite the feat in Cuba back then (summer of 1993).

After cutting into the steak and enjoying that feast, the man looks at his compliant entourage and confirms what they had told him. The incredible likeliness of grapefruit peel with pork.

This is when TV viewers discover that this meat doesn’t exist, that the man isn’t eating animal protein, or any other living being’s meat, but is actually wolfing down a “grapefruit steak”; right in front of the National News on TV.

Although this wasn’t seen by every TV viewer, as there were blackouts lasting, eight, twelve and sixteen hours, it did reach enough people for it to be the word on Cuba’s streets the next morning. Oh, and the man was no other than First Secretary of the Cuban Communist Party and Head of the State Council and Council of Ministers at the time; Fidel Castro.

The above scene only gives you a hint at what the Cuban government was willing to do to smooth over, in some way or another, the extreme economic crisis Cuba was experiencing in the 1990s. Up until then, the island had been financially dependent on the USSR, and when it collapsed in 1991, it had to deal with its GDP falling 35%. This became the most violent financial disaster the country had experienced ever since it became a Republic on May 20, 1902.

In April 1994, a woman returned to the island to visit her daughter and grandchildren, eight years after emigrating to the US. Seeing the situation her family was in with her own two eyes, she prayed to God for a miracle so that she could take them to Miami, as soon as possible. She is a believer, but she had no idea just how quickly God was going to answer her. The woman, a Havanan through and through, urges her daughter, son-in-law and her grandchildren, to cross the bay in a boat to Casablanca. They would see the sunset from the Havana Christ statute. There, they would enjoy a snack bought with imported dollars.

Getting on the boat was a little bit of a bother this time. As a group of men carrying two cakes and some crates of beer to celebrate a wedding, got onboard in addition to the normal number of passengers. As they traveled over the trip’s distance of a little more than a kilometer, the woman was left stunned as she watched some men take guns out of the cake and threaten the captian with death if he didn’t change the boat’s route and head, in fact, for the US.

At high sea already, the owner spoke to some of the calmer hijackers, “there wasn’t enough fuel to cover such a distance.” The hijackers weren’t carrying beer in the many beer bottles they had brought onboard, but enough fuel for a boat of this kind to reach New York. Once in international waters, the boat was intercepted by the US Coast Guard. The passengers who wanted to enter the US were granted entry, the rest went back to the island. So, this woman, who thought about watching a sunset over Havana with her family from Christ, suddenly found herself involved in the luckiest event of her life, by absolute chance.

A few months later, the seaside town of Cojimar, to the east of Havana, became a place of farewells to makeshift rafts. Although, to tell you the truth, scenes of entire families boarding shaky boats to try and get to the US or the US Naval Base in Guantanamo, became an everyday occurrence in any coastal town in Cuba. Never-ending hugs, heartfelt sobbing, santeria rituals in plain sight, Our Ladies of Charity, or Regla, perched on the boat’s “prow”.

Meanwhile, the Cuban Government implemented unprecedented measures, especially against their socialist praxis, in order to save their project. This was how the foreign investment law was born, with unobstructed investments of this kind of capital in the nickel, tourism industries, for example.

Cubans were allowed to carry dollars as hard currency. People were allowed to work for themselves; licenses were created for restaurants, cafes, costume jewelry sales, etc. Agro-markets were allowed again; which had been closed down the decade before as the government believed them to be dregs of capitalism.

In December 1998, the former colonel of the Venezuela’s Armed Forces became that country’s president, winning the elections; Hugo Chavez Frias, who never hid his admiration for Fidel Castro, before coming into power. Now, Castro would be able to make his rancid dream come true (which had been put on standby ever since his first trip to Caracas in 1948): have access to Venezuelan oil so as to spread the revolution across Latin America.

Cuba and a new Special Period on the horizon

The gap left in the Cuban economy by the USSR’s collapse, would then be filled by oil-rich Venezuela. When Chavez passed away in early 2013, he passed on his power to his greatest confidant, former Foreign Relations Minister, Nicolas Maduro. From that moment on, the Venezuelan economy’s decline became even more apparent, with lower oil prices and a reduced leadership in particular. Venezuela’s financial disaster came soon after and, of course, it had a series of repercussions on the Cuban economy.

Right now, the aid that Venezuela sends Havana has declined greatly. 2012 was the peak of this aid with over 8.5 billion USD being sent to Cuba in collaborations. Compared to 2018, with only 2 billion USD being sent, a sharp drop. In the face of this situation, the Cuban government has opted to implement a series of its own measures. It’s worth analyzing them in today’s context.

On December 16th 2014, President Obama decided to withdraw various clauses from the US embargo against the Cuban government. It was pretty much a done deal in his eyes and he even released the Cuban 5 (alleged spies who were serving prison sentences in the US) as a greater gesture yet. While these gestures were initially celebrated by Cuban president Raul Castro, the government adopted a cautious stance. Convinced that Hillary Clinton would win the upcoming presidential elections, the Cuban government delayed the toughest decisions.

Certain that the Democrats would continue in power, Raul Castro knew that they wouldn’t be interested in walking away from this dialogue process. However, Fate punished so much restraint, and the unpredictable tycoon Donald Trump set up camp in the White House in January 2017.

Next? The dialogue came to an end, and the Republican party not only went back on everything outlined by Obama, but lifted the waiver on Title III of the Helms-Burton Act on May 2nd 2019. One of the most cutting sections for the Cuban economy in this statute. The title in question “authorizes Cuban exiles and US citizens to file lawsuits against those who traffic Cuban properties, or US properties seized in Cuba.”

The Cuban government’s most innovative responses to this crackdown on the embargo include the Cuban exile community’s ability to invest in the country. Ever since the beginning of the current decade, upmarket Cuban-American businessmen such as: Carlos Saladrigas, the Fanjul Gómez-Mena brothers, Jorge Perez and the Bacardi heirs, to name a few, have all been in talks with the Cuban government.

Right now, it’s crucial that the Cuban government finds investors who invest at least 2.5 billion USD per year, in order to save the economy from collapse. Foreign investments in Cuba today don’t even amount to 1 billion USD, so it will be impossible for the national GDP to grow any more than 2% per year.

Recent news of business plans to be established by employees of state companies themselves has come as a real surprise. As it seemed like every “change” would be in the powerful hands of foreign investment. The current president of the State Council and Council of Ministers, Miguel Diaz-Canel, has announced that beginning January 2020, businesses will be free to draw up their own financial plans, with their employees, and will also be able to discuss their viability. Yet, details are still unknown. The same goes for permits for Cubans living abroad to invest.

Cuba: This time there won’t be an escape valve

While there haven’t been clear signs of an immigration crisis from Cuba to the US (Cubans have been emigrating to the US via Central America for years now), there also hasn’t been any sign that the current US government will respond in the same way it did with the 1980 immigration crisis (Peruvian Embassy – Mariel) and 1994 (rafters’ crisis), when it was willing to welcome thousands of Cubans arriving on its shores.

While President Donald Trump hasn’t said anything about this yet, the way he has tried to put the brakes on Latin American and Muslim immigration. We can guess that this time there won’t be a new immigration crisis. As a result, the Cuban government won’t be able to use this escape valve that has worked so well in the past.

Will the Cuban government survive a new Special Period?

One of the answers to this question was shaped by FLACSO researcher Delia Luisa Lopez. According to whom: “the crisis (known by Cubans as the “Special Period”) won’t also lead to the collapse of the Cuban Revolution, even with its shortages of food, raw materials and poorer quality of life for the population.”

According to the researcher, the equation “economic crisis= political crisis and both = collapse of the entire system”, won’t happen in Cuba because while the government has faced many economic crises over the years, it has never suffered a political crisis and the Castros’ leadership was always stable and became even stronger with every economic crisis.

The above sheds some light on one of the possible routes of the potential “Special Period” that is threatening Cubans, today. You need to bear in mind the fact that an analysis of this kind that the collapse of the Soviet Bloc in Eastern Europe, was the result of purely political decisions and these aren’t visible on the Cuban landscape today.

It appears that the economic crisis that might befall the Cuban people in upcoming months, won’t be accompanied by a political crisis. Thus, it is very unlikely that the Cuban government will go anywhere in the short-term. At least this is what History has shown us, up until today. So, talking about the collapse of the Cuban government in the next six months or year is unlikely.