Did the Cuban State have Money or Not?
By Ronal Quiñones
HAVANA TIMES – One of the effects of the mass protests on July 11th, and other protests that have taken place since then, sporadically and as isolated events, in different places across Cuba is the country’s highest leadership’s frenzied pursuit to try and satisfy age-old demands.
This is, of course, praiseworthy, and one of the objectives of a protest, although in this case the main demand will never be satisfied under this regime.
Cuba’s highest authorities have spent the past two months visiting critical places, the places they’ve prefered to only give a sidelong glance for decades, and where especially violent concentrations broke out on July 11th.
In Havana, the most obvious case is the La Güinera neighborhood, which has been marginalized forever, and where the only officially-recognized death as a result of the protests took place.
It has always been a low-income neighborhood, where very modest people live, and others come from the country’s interior, all of whom live in pretty awful conditions, especially in terms of housing, with many family members crowded together under one roof, and almost zero privacy, both inside their own homes as well as on the blocks.
They are people who have a low educational level on the whole, and are raucous in their behavior. However, they are very hard-working and willing to do what it takes to “keep going”, as we say here in Cuba, without asking for a lot in return.
These were the kind of people that were the driving force behind the protests in this area, and decision-makers have finally gone to them.
Of course, when they visit the area, they ensure that the people attending their meetings are Party members and other “revolutionaries”, many of whom I’m sure took to the streets two months ago, but are more willing to enter into a dialogue and are more inclined to be swayed over.
In recent weeks, high-ranking officials whether it’s been the president Miguel Diaz-Canel, prime minister Manuel Marrero or the Central Committee’s ideologist, former Health Minister Roberto Morales, have made appearances there, and in other similar places in Las Tunas, Camaguey or Santiago de Cuba, just to mention some provinces.
They have come with investment promises that have been requested for decades at every Assembly of local representatives, and they’ve always been given the same response: the country doesn’t have the resources.
However, by the work and grace of Divine Providence, they do have the resources now to undertake these investments, at the exact same time that the US blockade has tightened its noose, the eternal scapegoat of pro-government rhetoric.
The same thing happened last year with wage reform. Thousands of Cubans retired, and some died, waiting for their wages/pensions went up, and the answer was always that they couldn’t go up. Nobody knows where this money suddenly came from to quintuple public sector wages.
This is the same thing; now there is cement, bricks, rebar and sand to give a decent house to many people who have spent half of their lives living poorly in temporary residences in deplorable conditions, and where their children have been born.
Suddenly, I don’t know how the many measures the Trump Administration took to worsen the economic siege aren’t stopping construction trucks from moving, streets are being paved and the neighborhood’s image is changing.
So, the question is: did they really not have the money they needed to do this before? It’s clear that this money has always been there, because the Cuban people have contributed very little to the national budget in the past two years, as a result of the pandemic, just like everywhere else in the world.
Simply put these needs were never the government’s priority before. They’ve always had money in order to uphold the elite’s privileges (trips abroad, luxury hotels, holidays in Varadero, etc) or to carry out mass events (with corresponding fuel expenses and other resources). However, if it was to invest in public transport or housing, then they would do the math down to the last detail and let people’s dissatisfaction grows.
Of course, the volcano will erupt at some point, just like it did on July 11th, after it began to erupt last year by the people in the San Isidro Movement (whose repression has been especially violent) and the protest at the Ministry of Culture.
While they try to calm the lava with these actions, on the other hand, they are dictating laws that further restrict the Cuban people’s pretty much non-existent civic freedoms, and this will leave the volcano fuming, waiting to erupt again.
The underlying problem remains, because the cry that could be heard all over Cuba 60 days ago was a lot more guttural than remittances, a house or a food parcel.
Keep in mind that we are only talking about hundreds of millions of dollars, probably not in excess of 1 billion dollars in extra expenses. Relatively speaking, pocket change in international finance circles. It would not surprise me if Cuba received some secret loans from quasi private/public sources to fund these expenditures. Why would someone do this? On the promise of some future development access or mineral rights. Remember that the Castro dictatorship feels no obligation to disclose such transactions if doing so would cast the regime or the lender in a negative light. Its one way to avoid US embargo sanctions.
dani is correct about tourism, as it is the second highest source of revenue for the regime. The supply of medical and educational services is number one. But for example, the price of metals like copper has multiplied several times over only two years. The Achilles heal is the communist system and its application in particular to agriculture, which results in ever-declining production, and an ever increasing need for importation of food – even sugar! “Los ideas” do not come from collectives, but from individuals who if permitted, develop them and provide economic growth. But the very purpose of communism is to squash individuality in order to create “the mass”.
Another hidden source, is a consequence of the introduction of limited Internet and cell phones which has made the monopoly telecommunications company ETECSA a huge, but undeclared source of revenue, and 63% of that passes to GAESA. The other 27% going to RAFIN SA, the Castro family company. Much of that revenue is in the form of hard currency as family and friends in capitalist countries purchase time through the Cubacel/Nauta Internet systems. Following Raul Castro’s visit to the Elysee Palace in Paris as the guest of then President Francois Mitterand, ETECSA, unlike other GAESA companies, has purchased Peugeot vans and cars rather than the Chinese Geely junk. One presumes that payment is made in hard currency as compared with the Geelys being purchased on credit.
To answer the question directly from an economic point of view yes and no. If a country has its own currency then the government at any time can print more money and spend it on its priorities. But there is a downside. If the supply of money increases beyond a certain level then you are likely to get rampant inflation. Tied to this problem is the one of trust. If the currency loses trust the country ends up having to deal and buy things in another currency such as dollars.
The Cuban government has concentrated on building hotels and developing tourism which in one way makes sense as it brings in a lot of hard currency from outside. But has neglected other sectors. Which is not good when a pandemic puts tourism on hold.
Yes, the dictatorship has money to buy police’s gear for repression, police patrol cars, handcuffs, and anything that would keep them it in power, but no ambulance, medicines food, or any other things that would make Cubans better existence. Just blame the Embargo and literally the best goes on.