Cuba: The Story of Two Blockades

By Pilar Montes  

Samantha Power addresses the United Nations General Assembly on Cuba.

HAVANA TIMES — Last Wednesday, in New York, the US, through its Ambassador speaking before the UN, Samantha Power, announced that it would abstain from voting in the 25th vote of the resolution that demands the end of the US blockade on Cuba.

For 24 years, Washington has voted against this resolution, even in 2015, when diplomatic relations between the two countries had been reestablished. Power recognized that the US has remained alone in its attempt to isolate Cuba, due to its failed policy to cut off the island.

Nevertheless, as this resolution doesn’t force the US to abide by it, the long-lived siege continues to remain in force, until the US Congress either gets rid of it once and for all or a Presidential Decrees render it useless.

In the US, President Barack Obama himself, some members of his administration and the Democrat Party’s presidential candidate, Hillary Clinton, have stated that the “embargo” in force since February 3rd 1962, has proved to be an unsuccessful policy and should disappear.

With five sets of presidential decision directives in the last two years, Obama has contributed to making the embargo less arduous, even though its main purpose remains in place. Legislative power is controlled by the Republican Party, the conservative and most powerful party economically-speaking.

This is the case when risk assessment companies of international prestige have increased their assessment of opportunities in the Cuban market for investors and business people and the government renegotiated most of its debt payment with its main partners.

fihav-2016The highest-ranking dignitaries in countries such as the US, Russia, Japan, France, Italy, China, the EU, leaders of the Russian Orthodox Church and the Vatican, as well as twenty odd leaders from Latin America, the Caribbean, Africa and Asia, have all visited Cuba in 2016.

The 34th edition of the FIHAV-2016 Havana International Fair, will also take place soon, where business interests from 75 countries have confirmed their presence.

The Foreign Investment Law, which was approved in 1995 and amended in 2015 and has created new investment opportunities this year and a more attractive landscape to do business in Cuba, if it weren’t for the embargo’s extraterritorial persecution and other domestic problems which derive from national inefficiency and structures that suffocate our productive forces…

The domestic obstacle 

In an article written by Cuban economist, Humberto Perez, in the Havana magazine Temas, published on October 6th, he said that “the Cuban economy today has three weaknesses which require urgent attention, unless it wants to lose everything it has achieved.”

The former president of Cuba’s Central Planning Board (1979-1986) highlighted that the economy’s first weakness is that “in spite of all the measures taken in recent years, our economy still has low productivity and efficiency on the whole, which is even more noticeable in the State sector,” due to the excessive centralization of State assets and management as well as a “vertical and bureaucratic” administration.

The second Gordian knot lies in the “division of society into many different and inequal sectors, economically and socially speaking, where the majority of the population (public sector employees and workers, between 60-70% of Cuba’s workforce) doesn’t receive a reasonable salary to lie off of, in spite of them having free healthcare and education services as well as some limited basic food products at a subsidized price.

The third pitfall, in this expert’s opinion, which is key for any chance of progress in the future, is to resolve the exchange duality or plurality, as there are rates for the public sector, other rates for cooperatives and yet another rate for the general population, 24 CUP (regular pesos) for 1 CUC (Convertible Peso), or 2×1, 7×1, 10×1, depending on your economic sector and activity.

This problem is the one that causes the “most negative, disfiguring and counterproductive effects,” explains Professor Perez. Similarly, “it contaminates, adulterates and makes the accounting of public institutions untrustworthy, undermining the norm that our country’s leadership has to make decisions.”

Remittances from abroad are estimated to bring in two to three billion USD, Perez points out, to which you have to add direct revenue in foreign currency or CUC – from rental houses and rooms – when there are around 18,000 of them, as well as independent businesses for around 200 activities that are recognized by the National Tax Administration Office of Cuba (ONAT).

Cuba’s Mariel Special Development Zone makes very slow progress. Photo: Raquel Perez Diaz
Cuba’s Mariel Special Development Zone.  Hopes remain high although progress has been slow.  Photo: Raquel Perez Diaz

Humberto Perez reminds us that the government has said that for “the increase in our Gross Domestic Product (GDP) to be mirrored in our domestic economy, this has to increase by between 5 and 6% on an annual average. However, this indicator has only stood at 2.8% in the past five years, while in 2016, it will only increase by 1% or there won’t be any growth at all.”

Based on indicators provided by the highest levels of Cuba’s economic management, “in order to achieve 1% of GDP growth, imports will have to grow by between 2 and 3% however, they’re planning to reduce them by 3.3%.”

Ileana Diaz, a researcher at the Association for the Study of the Cuban Economy, states in an article that “50 years of centralization and hyper-centralization haven’t shown increases in efficiency” and suggests that “the policy that limits autonomy be revised.”

The number of companies has been falling due to the successive restructuring of the public sector on various occasions. At the end of April 2014, there were 2,163.

Meanwhile, in a report published in the official Granma newspaper about one of the most recent parliamentary sessions, legislators brought to light the “social consequences” of these shortcomings and criticized the problems in the “management” of agricultural companies, the “shortcomings” in their administration and the “lack of development programs” based on scientific findings and investment.

As President Raul Castro pointed out in December 2010, “the time to continue on the edge of the precipice has come to an end, we will sink or we will sink the effort of all our generations.”

12 thoughts on “Cuba: The Story of Two Blockades

  • November 5, 2016 at 4:50 pm

    In recent years the US has been willing to sell some foods to Cuba while not allowing Cuba to sell anything to them. Which is hypocritical, but also it complies with some of the UN stipulations ie that you can’t restrict food and medicine to a country under siege. That doesn’t make it any better and there are still plenty of other things that are blocked like donated pianos from the UK.

  • November 5, 2016 at 9:47 am

    Read it for yourself dear! But you are smart enough! Did you know that the USA is one of Cuba’s biggest trading partners? –

    CUBA IMPORT AND EXPORTS: The Observatory of Economic Complexity (OEC): Cuba – Profile of Exports, Imports and Trade Partners – In 2014 Cuba imported $5.91B, making it the 126th largest importer in the world. What does Cuba import from the United States? (2014) – 51% of Poultry Meat, 9.7% of Corn, 10% of Soybeans, 23% of Soybean Meal, 3.2% of Animal Food with a TOTAL : $292 Millions.Cuba is the 140th largest export economy in the world. In 2014, Cuba exported $1.74B and imported $5.91B, resulting in a negative trade balance of $4.17B. The top exports of Cuba are Raw Sugar ($392M), Refined Petroleum ($314M), Rolled Tobacco ($236M), Hard Liquor ($116M) and Raw Nickel ($108M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Wheat ($234M), Refined Petroleum ($228M), Concentrated Milk ($207M), Corn ($204M) and Poultry Meat ($196M). The top export destinations of Cuba are China ($311M), the Netherlands ($157M), Spain ($141M), Senegal ($92M) and the United Kingdom ($67.3M). The top import origins are China ($1.05B), Spain ($920M), Brazil ($507M), Canada ($389M) and Mexico ($360M).

  • November 2, 2016 at 7:50 am

    While the embargo continues to have little effect on the daily lives of Cubans as originally intended, it remains in place as a symbol of US anti-socialism.

  • November 2, 2016 at 12:38 am

    I was born in that island . I lived in Cuba in the 60’s and 1970!’s when the dictaroship received billions from the old Soviet Union and had the power to buy any where in the world I remembered the Policie patrol cars where Alfa Roneo bought in Italy, the Taxis Chevy Chevrolet from a factory in Argentina, the buses were Leyland from England, and I can go on for ever. Back then the Blockade or Embargo hardly ever was mention it. After the socialist block collapsed the Castro’s monarchic started to cry because they want to buy on credit and then no pay like they own to the entire world and probably will never paid when mean while Castro’s older son was in Grece last year on vacation in a Yate and $ 5000 presidential suite. The Castro economic is a mess the fact they have to buy Toilet paper in Mexico and Mangos in Dominican Republic it says all. The fact the Havana is falling, is dirty, nothing works except Represion is not body else fault that the Castro’s family who turned the island and their own private Hacienda.

  • November 1, 2016 at 7:35 pm

    The failure on and off the Island of economic model is know well known. What Castro perfected was authoritarian rule. The end of the embargo when it comes will be the beginning of the end.

  • November 1, 2016 at 5:04 pm

    It is a Blockade not an embargo.

  • November 1, 2016 at 12:17 pm

    Moses, if the economic embargo is a paper tiger, as you say, then you also shouldn’t have any problem with supporting it’s immediate termination to (at the very least) help advance American economic interests on the island. The Cuban government too has been calling for an end to the economic embargo for many years. Why would the Cuban government be so relentless in calling for the prompt end to the economic embargo if it is really only being used as a scapegoat for their inefficiencies? I see that as more than contrary to what you profess to be the real problem. The real problem has always been your own government’s insane interventionist policies affecting only the Cuban people while they continue to wait to survive the siege.

  • November 1, 2016 at 11:58 am

    I think a definition between “embargo” & “blockade” is needed!

    An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is imposed. Embargoes are similar to economic sanctions and are generally considered legal barriers to trade, not to be confused with blockades, which are often considered to be acts of war.[1]

    A blockade is an effort to cut off food, supplies, war material or communications from a particular area by force, either in part or totally. A blockade should not be confused with an embargo or sanctions, which are legal barriers to trade, and is distinct from a siege in that a blockade is usually directed at an entire country or region, rather than a fortress or city. Most blockades historically took place at sea, with the blockading power seeking to cut off all maritime transport from and to the blockaded country; although stopping all land transport to and from an area may also be considered a blockade. In the 20th century air power has also been used to enhance the effectiveness of the blockade by halting all air traffic within the blockaded air space.

  • November 1, 2016 at 11:30 am

    That’s right. The blockade/embargo has had little or no adverse effect on the Cuban economy. Just a paper tiger. But come heaven or hell the US Government will maintain it in full effect regardless. Makes perfect sense. .

  • November 1, 2016 at 7:04 am

    With regards to the first weakness it is the difficulty of working collectively without really knowing who you are working for. Everyone is entitled to love their work, but nobody wants to love what is not right. Studies have shown that humans only have the capacity to associate knowingly with 150 people in their mind at any one time, decentralization therefore is a biological necessity. Computers offer the chance for forcing evolution but they too can become prisons. The Chinese generals need to step up, the indigenous ones, not the home guard.

  • November 1, 2016 at 6:51 am

    Bla, bla, bla. The Castros have known for a long time that the Cuban economy is dysfunctional. Fidel Castro said so publicly himself. However the seduction of power has prevented the dictatorship from implementing real change. The US embargo is a paper tiger. It remains the whipping boy for the regime to be blamed for all things that go wrong in the Castros Cuba. The real problem is Castro socialism. Until Cubans are set free, nothing in Cuba will reach its lofty potential.

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