Self employed merchant.  Photo: Juan Suarez
Self employed merchant. Photo: Juan Suarez

By Dawn Gable

HAVANA TIMES — Last week economist Richard Feinberg presented his latest monograph Soft Landing in Cuba? Emerging Entrepreneurs and Middle Classes (62 pages) published by the Brookings Institution, a think-tank in Washington, D.C., that looks at Cuba’s changing economic landscape in terms of the emergence of an entrepreneurial class. Feinberg demonstrates: “the old narrative —that Fidel and Raul Castro had to pass from the scene before real change could occur — has been discredited.”

The text is packed with surprising data, for those interested in facts, and colorful anecdotes, for those who only vicariously know Cuba due to the U.S. prohibition on travel. As expected, it offers both the Cuban and the U.S. government recommendations for ensuring that Cuba experiences a “soft landing.”

The reader is encouraged to dive right into the report, rather than rely on me to insufficiently summarize it.

I prefer to use my few lines to reckon a guess at the definition of soft landing in this text (which I believe is, in general, the most commonly expressed definition and aspiration for Cuba). From my reading, the landing strip is located in the palm of the invisible hand of the capitalist market.

soft-landing-graph 1It is a Cuban economy that integrates weak State owned enterprises, with cooperatives, private enterprise, and international conglomerate participation and that encourages immense wealth accumulation, class stratification, worker exploitation, mass consumption and meager taxes to ensure some basic standards. That is, more “normal.

Feinberg presents practical steps for reaching this goal and a thoughtful look at where the process currently stands. He shows that the transformation is more advanced than one might think both objectively, with a 1% layer forming at the top, and in the attitudes of some Cubans, quoting one youth as saying, “we are no longer communists but consumerists.”  Warning: social, ethical, or environmental implications of such a transformation, and how these might be mitigated, receive only an obligatory one- sentence mention toward the end.

Images of the emerging economic order are vividly drawn throughout the report. In one chapter, it is noted that the monthly salary of a server at a private restaurant may be covered by the sale of one meal, presumably leaving enormous profits to the owner.

While that owner pays taxes, due to the mainly cash economy and uncomputerized state apparatus, revenues are grossly underreported and hence taxes are equally underpaid. It is not surprising then to find cuentapropistas complaining about the taxman hassling them about their books or even looking for bribes.

But how, on the same paltry state salary as other Cubans, did these new entrepreneurs acquire their start-up costs, which ranged from $7-36,000 USD among those in the report’s small sample?

soft-landing-graph-2Nearly half of those surveyed had relied on unearned foreign capital. The rest had sold possessions or saved compensation earned in hard currency from tips and missions abroad in Venezuela for example (in contrast to the story told by the right-wing exiles who claim that Cubans providing services in Venezuela are slave labor).

So far, there are still some reigns on wealth accumulation.  For example, it is only legal to own two houses (when a festering complaint in Cuba is the lack of sufficient housing). But there is hope for Feinberg’s recommendation that the Cuban government reduce disincentives to business expansion. It is found in the recent legalization of landlords, who can now rent space to entrepreneurs who aspire to reach beyond their personal real estate.

Just imagine it. A restaurant, that pays its server a monthly salary equivalent to the sale of one meal, could multiply across the island. With the proliferating profits, the restaurateur may eventually enjoy some influence on government decision-making, perhaps even regarding tax laws, labor protections and environmental regulations. Hmmmm… sounds vaguely familiar…

Paladar Tranvia.  Figure 4.2
Paladar Tranvia. Figure 4.2

The possible scenario makes imperative another recommendation, that is, to legalize professional self-employment, because that server will still be making more money than professionals in the state sector. Surely professionals have the right to join the newly-formed class of stuff collectors, and even sneak past the servant class a bit. Of course there must be stuff available to collect. Ooooooo, perhaps a Walmart!

However, not all those surveyed have such aspirations. Some, Feinberg explains, have only “primitive” household accumulation in mind. That is, they are content with supplementing their income in order to modestly improve their standard of living. Barbaric!

Some even continue to display a stubborn sense of “solidarity and community” as illustrated by the construction cooperative “Armando Mestre Martinez,” named after a martyr of the Revolution and chaired by a “National Hero of the Republic of Cuba,” which offers discounts to clients in Santiago de Cuba with less capacity to pay.

Some might say that I have wasted too much time on the “inside Cuba” details and, as a USian, I should have focused on the report’s recommendations for the U.S. government.

soft-landing-graph-3In a nutshell, Feinberg recommends that the U.S. abandon regime-change fantasies and instead take a suite of measures to support, encourage, influence and participate in building a prosperous and powerful non-state sector. He specifically leaves out any economic interaction with the State and even suggests a system for verifying that exchange is only taking place with private businesses. His suggestions are pragmatic, possible, and within the paradigm of most relevant decision-makers, making the report relevant and presumably impactful.

But preclude the establishment of a Walmart in Cuba as that would require Cuban government involvement…sorry.

In fact, some may see the recommendations as just a change in tack…using credits, trade, and trinkets to foster a hand-picked, wealthy, in-country ally-class. Hey, if you can’t beat ’em at Giron, if you can’t beat ’em with starvation, if you can’t beat ’em with ideas, well, then, buy just enough of them. It’s hard to imagine the Cuban government interpreting it any other way.

Nevertheless, people around the world have shouted, in more than a dozen languages, one much simpler and sane recommendation: END THE EMBARGO.

20 thoughts on “What does a Soft Landing in Cuba look like?

  • You should not even think about engaging me in debates over religion.
    Think about this: Humanity is at least 100,000 years old.
    This would mean that your god waited some 98,000 years before deciding to intervene .
    Your omniscient and omnipotent god decided that the best way to do this would be a human sacrifice in the primitive Middle East . How did that work out ?
    At the same time that Christ was killed for our sins, primitive tribes ( they were all primitive tribes) had the custom of annually figuratively loading the sins on the back of a goat which was then driven out into the desert to die of hunger and thirst . The tribe was thereby relieved of their sins for the past year.
    The Christians went the goat killers one better and sacrificed not just a goat and not just a human but the son of God such was the power of their god.
    And btw, since humankind’s evolution from the ancestor we humans share with the chimpanzees , we have had over one thousand gods.
    Each in its turn and in its time was as valid as the god you now have and each in his turn was discarded as bullshit .
    As Christopher Hitchens put it we are now down to one god which brings us ever closer to the actual number.
    Faith is making a virtue of not thinking.

  • It is said that there are no atheists in foxholes. I wish that God present you with a “foxhole” to expose your atheist views to test. I choose not to criticize your lack of belief. You should likewise resist criticizing those who believe. You criticize America and our form of government yet willingly accept the freedoms and benefits that come from it. Look up the word “hypocrite” and judge if it applies to you.

  • Again, the U.S. form of government is an oligarchy and not a democracy, nor even a representative democracy as the founders intended.
    The U.S system is not at all flawed .
    The control of our top elected officials through legal bribery is both deliberate and entirely effective in negating any chance for a democratic society.
    That control by “an unelected dictatorship of money” which works behind the scenes to veto any elected official who might seek to change the foreign or domestic priorities of the imperial U.S. regime ” (Herman and Patterson is a complete stranglehold on government and a complete dismissal of the wants and needs of the public.
    That so many agree with you is not surprising given the corporate ownership and control of the media .
    You have internalized the lies or found them to be merely flaws in an otherwise marvelous system that you had no part in designing or in establishing the priorities.
    You love totalitarian systems such as capitalism and oligarchies and have the need to justify them.
    “Thank God…..” ?
    That belief in fictitious deities ties in nicely with your belief in a fictitious democracy and the need obey things without question.
    Belief in God is belief in just another human-created totalitarian system .
    Evidently you can’t get enough of either fantasy or
    totalitarian forms.
    Evidently you can’t get

  • Keep it simple John. As a declared anarchist, there is no convincing you that the American form of democracy, while flawed, is still worth fighting to maintain and improve. Your problem is obvious. If I don’t agree with you, you believe it is because I am “blindingly naïve” or worse. Thank God there are more people who believe as I do and less who share your views.

  • Please define political reforms for me as you understand the term to mean in the context of the embargo .
    Raul has said that he will be stepping down before his term has expired.
    I do hope you do not mean the adoption of a U.S -type of electoral system .

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