Cuba: Changing Times and the Need to Hasten Reforms

Fernando Ravsberg

Venezuelan President Nicolas Maduro with Cuban doctors.

HAVANA TIMES — I don’t like to be the bearer of bad tidings, but the results of Venezuela’s elections should make us entertain the possibility that Chavismo could lose the next presidential elections, depriving Cuba of its main economic partner, which supplies the island with oil.

The agreement has been highly advantageous for both countries. Caracas has had tens of thousands of medical doctors, teachers and sport trainers, while Cuba has been able to cover two thirds of its total energy needs, paying the bill with the sale of professional services.

This agreement, however, may now be in danger. With 112 seats in congress, the opposition can “subject international treaties, conventions or agreements that undermine national sovereignty or transfer faculties to supranational organizations to a referendum.”

Many believe the defeat of Chavismo could bring back the economic crisis that scourged Cuba in the 1990s, when the USSR collapsed. The situation, however, is fairly different, though it will still undeniably have serious repercussions for the island’s economy.

The chief difference is that Cuba has since diversified its commercial relations internationally. China, Brazil, Russia and Angola are its better known partners, but there economic agreements and projects with numberless other countries.

When business people interested in investing in Cuba arrive at Mariel, they become mired in complicated bureaucratic processes. Photo: Raquel Perez Diaz.

The change in the United States’ policy towards Cuba favors investments by companies in third countries that refrained from dealings with the island fearing reprisals from Washington. European and Latin American companies are today looking for a niche in the country’s economy, particularly in the tourism sector.

Today, Cuba has sources of revenue that did not exist in 1990. Even if it was forced to withdraw its medical doctors from Venezuela, incomes in the sector would continue to be in the billions, while tourism takes in more than 3 million visitors a year and family remittances are estimated at over US $ 1.5 billion.

A change of government in Venezuela, however, will be a blow that is sure to shake the whole of Cuba. There’s very little time left to prepare ourselves for the worst possible scenario and to try and reduce the social, economic and energy repercussions of this to a minimum.

Cuba’s reform process no longer has all the time in world to move things about and there many important issues pending. Cuban economists insist that the country needs to diversify more and balance the productive sector in relation to the services sphere.

The numbers say that, to achieve this, foreign investment is vital, but, contradictorily, the process continues to be slow and the bureaucratic hurdles that stand in its way are maintained. Some entrepreneurs have returned to their countries, telling Cuba to let them know “when it’s ready.”

When an investor comes to Cuba, they are faced with a two-currency system and multiple exchange rates, the high prices of electricity and water, ridiculous automobile prices and the generalized corruption of State importing companies.

If the interested party arrives at the Mariel Zone, they will also run into the lack of facilities, a mechanism for hiring personnel through intermediaries that pocket most of the salary and a government that processes their requests unhurriedly.

Venezuela is Cuba’s main economic partner and the source of the oil that powers the island. Photo: Raquel Perez Diaz.

On December 17 last year, a window with a view to the future was opened for Cuba. The US economic embargo is still effective, but the business world regards it as a terminally ill patient. Companies are starting to lose their fear and to redirect their gaze towards the island.

But, after they’ve leapt over the fence set up by the United States, they land in a swamp where they find it next to impossible to make progress. It is the same swamp that Cubans wishing to set up cooperatives have to wade through, to have their right to create a “collective socialist company” recognized.

That is where the self-employed are mired and the reason the sector hasn’t grown in years. Despite the fact the State needs to downsize, it still refuses to open wholesale markets, no new trade licenses are authorized and a gang of corrupt inspectors are deployed to attack existing businesses.

Cuba’s evolution is begin sabotaged from within. It is a war without any frontal combats, a strategy aimed at wearing down the opponent, where they would seek to meddle in all changes and drive sticks through the wheels of the reforms to “demonstrate” that these do not work.

They have been fairly successful in this: increasingly, more and more Cubans believe the changes aren’t making their lives any better. Some hope they will begin to look back on “real socialism” with nostalgia, but, if the reforms fail, what the nation will reap is frustration, hopelessness and emigration.

19 thoughts on “Cuba: Changing Times and the Need to Hasten Reforms

  • December 15, 2015 at 2:07 pm

    Once the new Panama Canal is completed the mega container ships from China will port in Marial and their containers will be put on smaller ships for – Canada – Europe – Africa – South America – Mariel is the Hub.

  • December 14, 2015 at 1:37 pm

    The Economist Magazine 20016 had a great story about the new Panama Canal :::
    Cost + – $ 6 b. – to be completed Apr. 2016 new canal will handle ships with 13,000 containers. Many of these ships will off load at Mariel and then return directly to Asia with Atlantic cargo. China owns the most merchant ships. U.S. is no. 8 in tonnes.

  • December 14, 2015 at 12:53 pm

    No. It has nothing to do with Mariel.

    First of all, the container port is in Sydney, not Halifax. The Chinese corporation planning to build it is looking to gain low cost access to North American markets for Chinese exports, and the export of Canadian raw materials.

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