Cuba Must Get Its Act Together
By Michael Ritchie
HAVANA TIMES – Reuters is now reporting that Cuba has defaulted on its payments for a restructured loan from the international financier, the Paris Club. That 2015 deal with the Club forgave $8.5 billion of $11.1 billion that Cuba owed.
A hell of a deal.
This default is unforgivable not only because of the high interest Cuba will now owe Paris Club in addition to its principal, but because of the message it sends to the rest of the financial world that Cuba is not only broke, but a bad business investment as well.
Who or what is at fault here? The U.S. Embargo? The Regime?
In truth, both.
Yes, the Embargo has made it increasingly difficult for Cuba to do international business— to buy equipment and materials it greatly needs. The country is limited in most cases to cash transactions only. And that means US dollars, which are fewer and further between with the loss of cruise ships, flights and US tourists.
But at the same time the Regime simply does not have its priorities in place, at the fore.
Cuba’s new president, Miguel Diaz-Canel, has maintained a very high public presence. He’s made speeches. He’s dutifully quoted Marti and Fidel.
He’s criss-crossed the country looking at things– all sorts of things.
He’s kissed abuelas and babies. He’s examined flour plants. And tobacco farms.
In short, he’s looked especially presidential.
Which has gotten Cuba exactly nothing.
The National Assembly of People’s Power ponders currency unification, which will throw the country into even greater financial confusion and peril.
The Regime has embarked on massive construction efforts— all directed at luxurious new hotels which, once completed, sit empty of Cubans or tourists.
At the same time, entire barrios such as Centro Habana are crumbling from erosion and falling down every day. The water system is failing. There are hours-long waits for what little gasoline is available. Food and basic essentials like toilet paper and personal hygiene items are difficult to find and hard to afford on the still-meager Cuban income.
Priorities
It’s time for both Diaz-Canel and the Assembly to sit in days-long discussions of how to rebuild the overall Cuban economy.
The answer is staring them in the face. The country itself.
Flying into Cuba for the first time, every new visitor is stunned at how much open green space there is on this huge island. Undeveloped, unplanted, unfarmed land, offering some of the richest soil in the world.
There is no real reason that Cuba should import any meat or produce. The country should be a major exporter of both. And exports are a major boost to any national economy.
Again, the problem with producing those exports rests with both the Embargo and the Regime.
First the Regime needs to act.
Oxen won’t cut it any longer. The Regime must beg, borrow or steal tractors — lots of them. Get some cattle. Get some chickens. Start planting sugar cane again. Raise produce. And allow farmers to produce as much as they can and at a reasonable profit.
Next, beg, borrow or steal some trucks — lots of them, refrigerated and unrefrigerated, to deliver product to market. Horse carts will no longer do.
Call it a Second Agrarian Reform Act. A revolutionary movement to produce.
Forget currency unification. Forget new hotel construction.
Fix what is broken. That is the Cuban infrastructure. All of it.
I have written many articles for Havana Times, most of which have included suggestions such as these. In most of those articles I referred to these as “baby steps,” meaning patience was needed.
I now reject that. Giant steps are now needed if Cuba is to survive and to, one day, prosper.
I just returned from Cuba,visiting family for my birthday/my wife birthday. She was Cuban born and still holds her citizens card. I am all American. You talked about the green areas and infrastructure issues, but the bigger issue is Medical, her grandmother needed antibiotics and when they went to get them they were not available, I actually ordered them from overseas to send to her. Took almost 7 weeks to get them to her.
Her dad needed some this trip, and again no luck. I went the hospital and could not believe how dirty and bad it was, they have no latex gloves to wear, they have no syringes for blood test, we actually brought some with us. They have no soap for personal or for clothes, they have the police at stores when they do get soap.
I hope to see it get better there, my family there treats me with so much love that it melts my heart, if i had millions i would give it to them, but that would never change anything.
just my take,
pj
Good article. The comment that Cuba should grow more nutritional fruits and vegetables is also correct. The problem in Cuba is the government. The embargo is a toothless tiger. Cuba has the capacity to buy EVERYTHING they need from China and Russia and Mexico. The lack of money and access to international credit has little to do with the embargo and everything to do with the poor management skills of the Castro dictatorship.
Cuba knows how to fix many of the problems loosen the rigorous controls.
It just is not interested that would mean less control by the regime over time and it’s eventual downfall.
It’s a catch 22. More of the same incompetence.
The author of this article is correct.
Cuba has the natural resources to produce all its own food and export plenty to earn crucial hard currency.
The actual produce it should go on to produce is debatable.
Fchow888 makes good points on this.
The problem is that Cuba is stymied by obsessive state control.
I would not expect ‘The Revolution’ to suddenly resign and turn to free market capitalism, but what it can so is look at China and Vietnam.
A certain degree of marketisation is required. Soon.
This would unleash some of the huge potential.
I live in Europe and we get coffee from Columbia, bananas from Dominican Republic, cocoa from Peru etc.
All such products and more are grown in Cuba. But just not on a big enough scale.
“Instead Cuba needs to plant nutritious fruits and vegetables which have a world wide demand: avocados, melons, nuts (almonds, walnuts), cacao, these products contain an abundance of vitamins, are healthy, and will be in great demand in the future. California cannot produce enough almonds to keep up with the unprecedent demand for this nutritious nut.”
100% true. High yield crops like Jackfruit, Carambola etc. could feed people and livestock. Nuts, mushroom cultivation, etc.. All possibilities. But the government is afraid of developing inequality, so any entrepreneurship, beyond the street vendor hawking peanuts, is stifled.
In 1969 the king Fidel got thus great idea to produce 10 Millions of tons of sugar and the king ordered to plant sugar cane everywhere a lot of tropical fruit trees were tore down in order to more land for the sugar cane. For those ppl that do not the process of soil in the soil where sugar cane is planted nothing would grow for ten year or more. In 1968 the king Castro had another brilliant idea that time was was plant Coffee around the metro circle of Havana ( El cordón de La Habana) ) Coffee is only good when in planted in mountains area and needless to say Havana in very flat.. So the reason Cuba today has to import sugar from France and Mangos from the Dominican Republican has nothing to do with the “embargo” Trumps ir USA.
Let me start by saying I do not agree with the emabargo, never have. It makes the poor Cuban people suffer, while the regime suffers not. However I have to disagree with blame of the US embargo as for lack of anything in Cuba, ie where do most all consumer goods in the USA come from today? China, China is a communist country. Cuba can/could buy all it wants needs from them alone, much less all of south America! Cuba is broke, look at this story? They can’t pay their debt, they have no money to buy anything, import anything
when you promise the people everything free, pay them nothing, add 60 years of Utopia and sacrafices for the revolution, you get what you have today. Every communist revolution (Russia, Korea, Pol Pot) promise an agrarian Utopia but never deliver! I have 25 years of Cuba travels, 11 months on the ground there last 2 years alone. Nothing grown in Cuba is export grade, as to produce.They can not produce an onion bigger than a golf ball, the tomatoes suck, look horrible, the pepinos (cucumber) are black not green, watermelon all white inside, horrible stuff. Why? Maybe no one cares, that’s why, maybe they are waiting for a free lunch? The attatude of the work force is bad, to say the least. 11 mil people in cuba, 700,000 cars, transportation is a huge issue, shortages abound, while goods rot in warehouses, no trucks and or fuel for transport, all the chicken sold in Cuba is low grade and imported frozen, sold at very high prices, mainly thigh y led quarters imported from SA. Yes the countrywide expansion of new tourist hotels, while the old ones sit vacant makes no sense at all, none! Wanna know the real problem in Cuba today! The government WONT GET THE HELL OTTA THE WAY AND LET FREE ENTERPRISE REIN, PRIVATE INVESTMENT REIN! They insist on total control, won’t let go. Investors stand in line by the hundreds of thousands, for the day they can freely import and sell goods in Cuba! And at a fraction of the price the government can. 6 months wait to maybe get a sack of cement today, building materials for the people are the lowest priority. PCV or metal outlet boxes totally unavailable in La Habana, much less ANY COPPER ELECTRICAL WIRE OR CABLE, beef or fresh milk totally unavaible. People no longer buy the story “you have to have nothing and live with nothing, as a sacrafices for the revolution” after 60 years of that excuse, it rings hollow today!
Why not marijuana ? It’s legal in alot of states here .
Just a thought
In general all true, but…instead of letting ‘modern’ ‘western’ agribusiness come in and do what they do everywhere, Cuba would be missing a golden opportunity to install its own system that could consist of cuban businesses and cuban farmers. Why on earth give up their land to businesses from other countries? That would be a huge regrettable irrevocable error. An odd twist of cuba’s arrested development is that it gets a chance not to emulate what western or modern agribusiness has done, but to try a different version of it. And I sure hope they do something better than what modern agribusiness has done. Putting small farmers out of business all over the country. Cuba could do better. But of course they are so deep in their unique hole that they first have to agree to climb out of it conceptually–the cuban government would need to accept major change. Then they’d have a chance to learn from the world’s perhaps honest mistakes, and try something new, different, better, unique and, yes, Cuban.
Yes, Michael, the Regime has CUBA hobbled with it’s ‘Power and Control’ of what happens i.e. whether it is what crops you can grow or the number of cattle one can have, etc. I have traveled the entire island of CUBA and there is a vast open land mass from one end to the other. The Cuban people are suffering from the lack of food sources, having a choice of work or housing, stagnation of socialization whether it is the control of the internet or advancement in employment or income. In the end, Their Human Rights are violated for sure!
Michael is spot on.
I am one of those visitors who has been shocked by the lack of agricultural production in Cuba. The land is perfect for farming. Flat, fertile, and moist. I have commented many times that, if western agribusiness companies were allowed to operate Cuban farms, production would soar. Horses and oxen would not be involved. (Indeed, in the developed world, they have been gone for at least 80 years.) Modern farming requires huge tractors, trucks, and fertilizer.
The problem is the Cuban economic system. Agribusiness will not come to Cuba if they can’t make a profit. Agribusiness will accept reasonable regulations, but will not want the Cuban government as a partner …especially a government that has a history of expropriating private assets. Let western companies buy land, develop it, hire laborers, and sell its resulting produce at a price set by the international market.
Ignore Stephen’s advice to “farm healthy foods” only. Produce products that are in demand and profitable. If initially that is only sugar cane, so be it. If it is almonds or avocados, that would be better, but it should not be the government’s decision. The farmers… the agribusinesses…. will farm what is practical and profitable. Let the market decide….and be ready for the market to grow and the people to prosper.
Michael,
I agree with parts of your article especially the part whereby a person flying into Cuba sees vast expanses of fertile agricultural land lying undeveloped. The country sits in one of the most prized geographic zones in the world in terms of year round hospitable weather for agriculture. Why the underdevelopment?
“Start planting sugar cane again”. I disagree. The world’s population, because of a variety of reasons, is entering or has already entered an obesity crisis. Fifty per cent of North Americans are, or will soon
be, obese. Sedentary life style is one culprit and, yes, the over consumption of sugar – particularly sugar extracted from sugar cane – is another culprit.
Doctors and nutritionist are advising people to reduce drastically their consumption of sugar. Major food corporations, listening to consumer demand, are changing the ingredients in their products to make them more nutritious, or appear more nutritious.
So, if Cuba embarks on increasing its production of sugar cane it is going to be sitting in Cuba because foreign buyers will not buy it because there will be no demand. Sugar cane exports worked well in the 1950s/60s/70s when obesity was not a major health problem in society; however, today it is an epidemic and unfortunately sugar has been identified as a major contributor. Quite frankly, sugar, is a health hazard – not healthy.
Instead Cuba needs to plant nutritious fruits and vegetables which have a world wide demand: avocados, melons, nuts (almonds, walnuts), cacao, these products contain an abundance of vitamins, are healthy, and will be in great demand in the future. California cannot produce enough almonds to keep up with the unprecedent demand for this nutritious nut.
Besides the Helms Burton Law irritant which makes any economic activity handicapped, once that is resolved, the Cuban government also needs to look at more privatization in the agricultural sector whereby a farmer who takes a risk in planting crops is rightfully rewarded and allowed to expand as long as, dare I say it, a profit is realized. That would be a “giant”, not step, but a leap forward.
As your apt title to the article rightly states – “Cuba must get its act together” – otherwise, the sun seeking tourist flying to Cuba will continue to see large expanses of prime agricultural land sitting idle and pondering: What a waste, why?