Cuba and its Subsidized Pride

Haroldo Dilla Alfonso*

HAVANA TIMES, Nov. 22 — Despite the “national pride” that we Cubans show through thick or thin — as well as our obsession with looking at the world as a sphere that rotates around our problems — perhaps no other country in the world has been subsidized for a longer period of time and with so many resources.

For 52 percent of the time that we have existed as a post-Columbian country, we’ve been a subsidized nation.

The story began in 1582, when we were included on the list of beneficiaries of what was called New Spain. In this case, the Mexicans were forced to pay us for the security provided for their trade with the metropolis, as were Puerto Rico, Florida, the Philippines and Santo Domingo.

However, given the peculiar situation of Havana — in the mouth of the Gulf Stream, on one side of the Florida Straits and possessing a bay that seemed formed by the hand of God — the Cuban capital was by far the main beneficiary of the revenues.

Those colonial possessions making up New Spain were a key lubricant for the commercial development of Havana and its future position with respect to the metropolis, which would eventually dump millions of reales into that market to pay for troops and officials, to contract services and to implement overpriced public works.

In addition, Havana was the subsequent recipient and distributor of trade for all those possessions in the Caribbean, which became a sort of captive market for the voracious metropolitan oligarchy.

Cuba’s sustained relationship with the Spanish settlements in Florida is very illustrative. This region maintained a complicated historical relationship with Cuba – a relationship that is still not over.

Despite the early efforts of Menendez de Aviles, the Spanish settlement on the peninsula was limited to a military center — San Augustine — and a few forts such as San Marcos, San Luis and Pensacola, each with varying luck and ephemeral duration.

In reality, the colonial develop of that area was never possible — the agricultural projects never went beyond plots for mere survival — and the Spanish persistence was due mainly to its interest in protecting the passage of its fleet and in containing English expansion, which by 1607 had already established itself in what is now Virginia.

From the outset it was clear to the strategists in Madrid that the physical survival of their pathetic forts in Florida depended on supplies from Havana. Accordingly, for Havana merchants and officials this was an excellent opportunity to increase their profits.

In the end it was evident that Florida had become a sort of captive market, always in debt and always transferring resources to the oligarchy in Havana. Consequently, Florida became one of the most important colonial commercial destinations for Cuba.

The island supplied the peninsula with food — produced in its long western plain or re-exported — that Florida could only pay for with funds budgeted from the income of the colony. Havana was a very expensive port for the Floridians, compared to the US products that came mainly from Charleston.

Nevertheless Havana maintained control over high-consumption products (wine, rum, oil and sugar) and above all it controlled the money of those colonial possessions. It was usual for their entire annual sums to be spent in the city itself as payment for goods and services previously acquired.

As such, the soldiers of St. Augustine worked only for food, while the Havanans took care of their wages.

When the Florida colonies budget disappeared in 1814, the island had a sufficient level of capitalist development to continue its advance alone, though always under the attentive eye of Madrid. Similar situations occurred during the first Republic and in the early years of revolution between 1959 and 1965.

Back to Receiving Subsidies

However in the post-revolutionary period, especially since the 1970’s, Cuba returned to being the recipient of subsidies.

In a first step this involved the privileged entry of Cuba into the Soviet markets, at least until 1990. For two decades the island received very high volumes of subsidies; but unlike those at the time of its being a Spanish possession, these did not stimulate sustainable economic development.

This was due to two reasons.

The first was that the scheme that lured Cuba with those subsidies meant its subjection to a very backward technological model. The second reason was that the Cuban leaders were never interested in taking advantage of the gaps, even in the mediocre Soviet model, which would have permitted firmer traction for productive development.

Instead, they preferred to spend the surpluses on overseas military campaigns, mind-boggling economic experiments, and — undoubtedly the greatest part — on the expansion of social services.

Therefore it’s safe to say that, at least partially, that the epoch of the Soviet subsidies was linked to increased social spending and the creation of high quality human capital, which today is a factor in the nation’s economic development.

Then Came Chavez

When the Soviet Union disappeared and everything seemed lost, there appeared a black swan: Hugo Chavez and his Bolivarian ambitions. In other words, there was a leader who was willing to pay for the continental revolution and who had the money to do so.

The Venezuelan subsidies — sweetened with the myth of the sale of professional services — have served several purposes. Originally they served to demonstrate that in terms of squandering money, Fidel Castro could outdo everyone, including his past self.

In addition, he could do this while advancing an incoherent line whose script was learned by rote and repeated ad nauseam by officials and intellectuals on the island. Curiously, these were the same ones who, with the same passion, are now champions of Raul Castro’s “updating” of the model.

But beyond the stage of the senile fits and throes of the Commander — not from politics, but from biology — these subsidies are being applied toward economic re-development as well as to subsidize some areas of mass consumption. At the same time, these are keeping wages low and are accompanying capitalist restoration with very high rates of profit, which are also sources of joy for foreign investors and the competitive conceit of our technocrats.

The Price of Living on Subsidies

Another story is what happened to the providers of the subsidies. Mexican historians agree that among the reasons for the discontent that led to their independence in 1810 was the continued flow of resources to the Caribbean and the tensions that this produced for the colony’s finances.

I think there is also agreement that the US couldn’t have sustained one, two or three Vietnam (as Che Guevara advocated), but nor could the Soviets handle a single Cuba. Though Chavez has enough money to pay for services from Cuba and other allies, some authors have suggested that many of Venezuela’s economic problems are related to the de-capitalization of vital economic sectors there.

Some suggest that our ability to always get someone to pay our bills has been sheer luck, though others maintain that it was stark misfortune. Yet we all know that when a society bases its organization on subsidies, and these disappear, that society will pay a high price.

We paid in the 90’s, when Fidel was still at the helm, alive and talking, explaining to people for the fiftieth time that beyond the crisis was a better world. There he was, telling anyone who disagreed that they needed to shut up or leave the country. To ensure that there were no complaints, he organized wild migratory stampedes in 1994.

Today, though Fidel remains, I don’t think he’s able to convince anyone of anything. Cubans in 2011 are very different from those in 1990. The times don’t seem appropriate for organizing wild migrations.

In addition, indicators are always appearing that Chavez is hitting the bottom, sometimes for biological reasons and other times for political ones. This is a fatal combination of variables that I imagine disturbs the sleep of the general/president and his closest collaborators in this process of the so-called “updating” of the model.

In summary, we have an island that has spent a good part of its existence enjoying surpluses from one place or another; indeed we’ve spent half our modern history enjoying politically motivated financial subsidies.

This is a fact we should remember when we talk about our strengths as a people, whether claiming we have the best coffee, the best talent or the best music. In the end, though we have reason to be proud for being Cuban, I think this stems from a pride that itself has been subsidized in some fashion. Whether in Mexico, Siberia or Maracaibo, someone has been working for us.
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*A Havana Times translation (from the Spanish original) published by Cubaencuentro.