Focusing on the objectives of Cuba’s new Foreign Investment Law (Part III)

Yasser Farres Delgado*

Coffee for sale.  Photo: Juan Suarez
Coffee for sale. Photo: Juan Suarez

HAVANA TIMES — Below are a number of ideas with which I hope to conclude the reflections in my two previous posts (Cuba and its New Investment Law: From Sustainable Development to Neo-Liberalism Part I and Part II), I will focus on a fact which the Cuban government and the economists behind its Foreign Investment Law seem to be unaware of, that economy and ecology are two concepts that have a common etymological root.

Unfortunately, people don’t often link these two concepts. If we did, we would clearly see the fallacies contained in the concept of “sustainable development” and the need to come up with alternative life projects.

Let us recall three things: 1. The prefix “eco” comes from the greek oikos (house, household, home); 2. The suffix “nomy” comes from nomos (law, science, understanding, dispensing, distributing); 3. The suffix “logy” comes from logos (reasoned word, treaty, a person who reasons). Seen this way, when we speak of economy or ecology, we are speaking about a way of distributing “the things we have at home.”

The problem with the notion of “development” in any of the disguises we’ve known so far (economic, human or sustainable development) is that it is an insatiable project, in which “the things we have at home” are never enough. We always demand more, we always need more. That is to say, “development” and “need” are two sides of the same coin.

This is what Serge Latouche calls “the paradox of need creation”: on the one hand, development creates needs that are so real they are almost physiological and, on the other, a psychological need that resides in the feeling that we need more.

The history of “developed” countries demonstrates this: historically, the plunder of nations has generated extreme poverty in these. At first, this was done through colonization. Now, it is accomplished through Free Trade agreements and debt mechanisms. When necessary, military force is also used.

Decades ago, Cuban economists were more or less clear on this relationship. Today, this no longer seems to be the case. Decades ago, Fidel would say the foreign debt was illegitimate and unpayable. Today, Raul hopes to negotiate it.

Why does he want to negotiate? In order to have access to international financial resources. Why does he need these resources? Because the ones at home are not enough to meet internal needs, they tell us.

Are they really not enough? “In today’s globalized world, no country can sustain itself on the basis of its own resources alone. One way or another, they require foreign resources for their development,” economist Omar Everleny Perez tells us without giving the matter much thought.

Part of the Havana skyline.  Photo: Juan Suarez
Part of the Havana skyline. Photo: Juan Suarez

What are the implications of resigning ourselves to this idea? Let’s have a look: if no country can maintain itself through its own resources alone, then the world’s countries cannot maintain themselves with the world’s resources alone. Therefore, this world cannot sustain itself!

This is what political ecology and bio-economics have been saying for decades, but classical economists believe this is a form of alarmism. In this connection, the Ecological Trace is an indicator that affords us a very clear illustration of our decadent global reality.

We live in a global society in which the average ecological impact is of 2.7 global hectares per capita (hgpc). This means that the “average inhabitant” needs that much surface area (including sea and land) to satisfy its “needs” the entire year (food, energy, water, etc.) The planet’s bio-capacity (the level of exploitation it can endure), however, is of 1.8 hgpc.

How is this 0.9 deficit solved? It’s simple: some consume and others do not. People compete for resources. This is the dilemma classical economics does not want to reveal when it recommends that we should continue to compete, compete and compete. This discourse has made a deep impression on Cuban economists: the word “competitiveness” or “competitive” is repeated in the Party Guidelines as much as “sustainability” and “sustainable”, while words such as “ecological” or “ecology” don’t appear once.

Is the Cuban government becoming an accomplice of the present world economic system when it makes a Foreign Investment Law at the center of its reform process? Wouldn’t it be more ethical and ecological to make the “things we have at home” the center of our attention?

Shouldn’t a real micro-credit policy and a transparent revision of how the nation’s resources are being used, an Internal Investment Law, be the center of the country’ economic reforms?

According to international estimates, Cuba’s ecological impact is of 1.8 hgpc. If this value is right, Cubans have rational consumption levels in order to more or less meet their basic needs. In other words: the US blockade is an “external factor” whose effects are sufficiently counterbalanced today.

Our basic needs, however, aren’t being met. We know this from everyday life, and it is confirmed by the government’s insistence on the country’ lack of resources. How is this contradiction explained in terms of the ecological impact indicator? We must look for the answer in the country’s internal productive logic (uneven distribution, inefficiency in terms of distributing the fruits of production and the rendering of services, the misappropriation of resources, etc.)

When Cuba’s economic reality is assessed from the perspective of political ecology and bio-economics, the country’s internal contradictions become doubly evident. Let us look at some figures:

Yearly consumption in productive hectares

1.8 hgpc x 11,242,628 inhabitants = 20,236,730 hectares
Cuba’s Surface Area – 110,860 km2 x 100 ha= 11,086,000 hectares
Consumed Hectares / National Surface Area – 20,236,730 hectáreas/11,086,000 hectares = 1.825

This means Cuba consumes a volume of resources equivalent to twice the country’s productive surface every year. The country is totally dependent! Can this problem be solved with a foreign investment law that will increase our dependence?

From the perspective of ecology and bioeconomics, the answer would be a resounding no. The most basic common sense leads us to the same conclusion. But the idea of “development” is far too powerful. As Canadian-born US economist John Kenneth Galbraith explained decades ago in The Affluent Society (1958):

“What we call economic development consists in large part in imagining a strategy that allows us to overcome the tendency human beings have of imposing limits to their income objectives, that is to say, their efforts.” (Quoted by Jean Baudrillard in The Consumer Society).
There is a fundamental difference between an ecosystem and human (economic) systems: balanced ecosystems use external resources but are never in debt. The question would be: is it possible to conceive of economic relations with the external world that do not lead to debt?
—–
(*)  Lecturer at the Faculty of Architecture of the Polytechnic University José Antonio Echeverría (Havana, 2003-2007). PhD in Urbanism Planning and Environment (Spain, 2013)


5 thoughts on “Cuba and Development: Where It’s Headed

  • Actually, even in the 1990’s Cuba did not stand on its own. The joint venture with the Canadian firm Sherritt International began in 1994, with investments in mining, oil and electricity. Sherritt’s operations in Cuba bring in about $1 billion to the Cuban government. Cuba also opened up to tourism, forming joint partnerships with European & Canadian hotel & tourism operators.

    Were it not for this help from foreign capitalist corporations, the Castro regime would sure have collapsed during the Special Period.

  • Are you kidding? Cuba would not have survived but for the billions of rubles they received from their Soviet puppetmaster and later with the oil from their Venezuelan nursemaid. The only time Cuba stood on their own was during the 90’s and that was the ‘Special Period’. You remember that time in Cuba don’t you? Cubans made pizza’s with condoms and hamburger meat with grapefruit rinds. Yum!

  • By the measure of the falling standard of living, the crumbling infrastructure, the steady emigration of Cubans, the collapsing buildings, the decaying healthcare system, the useless education system, the lack of freedom, the violation of human rights, and the pervading sense of hopelessness among the Cuban people.

  • Disastrous ? By what measure ? Number of billionaires or number of homeless children ?

  • For 55 years, the Castro brothers have dictated what form & direction economic development will take on the island, and their decisions have been uniformly and profoundly disastrous. There is no hope the latest scheme from the regime will be any different.

    Now here’s an idea: why not let the Cuban people make their own choices for how they want to develop their economy?

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