Cuba’s Economy Progressing, Despite Obstacles

Elio Delgado Legon

HAVANA TIMES, May 3 — The enemies of the Cuban Revolution never tire of repeating in any and every way they can — even in social networks — that Cuba’s economy is a disaster, the socialist system has been a failure, the revolution has destroyed the economy, etc., etc.

All this is a colossal lie.

Sure, we could be much better if we didn’t have that fierce US blockade on us that has been maintained for more than half a century and has cost the country nearly one trillion dollars.

For those people with poor memories, I should remind them that due to US pressure, all of the Latin American countries (with the sole exception of Mexico) broke off relations with Cuba in the 1960’s.

Due to that blockade in our own geographic area, Cuba had to develop most of its trade with the socialist countries of Eastern Europe and Asia. In the case of the East Europeans, this was through the mechanism known as the Council for Mutual Economic Assistance (Comecon).

These trade relations, being outside the system of capitalist speculation, maintained fair and stable prices for goods – both imported and exported ones. In the case of the Soviet Union, it would buy — at a fair price — all the sugar that Cuba was capable of producing.

In addition it offered low-interest loans to finance development projects, in keeping with the economic relations between fraternal countries. These were not like the usurious credits extended by loan sharks like the IMF or the World Bank.

They didn’t give us anything, and nor did they subsidize us as is insidiously argued by some, and nor did they exploit us. It was a mutually beneficial relationship.

As is widely known, at the end of the 1980’s and the beginning of the 90’s, Eastern European socialism was destroyed do to a multitude of factors, which aren’t my purpose for discussion here. Subsequently the Soviet Union was dismembered and dragged into capitalism.

With the disappearance of those mechanisms for commerce with that geographical area, Cuba found itself practically without foreign trade. The country’s economy was left paralyzed to a great degree and, forced by this circumstance, to begin what was for all Cubans an exceedingly difficult period: the so-called “Special Period.”

Many of the enemies of Cuba bet that socialism on the island would disappear, just like it did in Eastern Europe. This was a logical way of thinking for those who were unfamiliar with the Cuban people, their ability to sacrifice and their determination to defend the achievements of the revolution.

Any country in the world that would have faced a situation like what Cuba faced would have had huge riots bringing the government down to its knees. However the Cuban people are determined to defend their revolution at the cost of any sacrifice.

The United States tightened its blockade with the passage of the Torricelli Act in October 1992, claiming that this would be the coup de grace to the revolution. The main objective of this law was to isolate Cuba from international trade to cause the economy to collapse.

Photo: Danny Gazi

Failing to achieve the expected results with the Torricelli Act, in March 1996 Bill Clinton signed the Helms-Burton Act. This legislation prohibits Cuba from trading with subsidiaries of US companies in other countries and sanctions foreign businesspeople so that they will not invest or trade with Cuba. This acted in unison with other actions to form a veritable fence around the Cuban economy.

Despite all these obstacles and anti-Cuba laws, the economy in Cuba is developing and growing each year. In 2011, the GDP grew at a rate of 2.7 percent and plans for 2012 envisage a growth of 3.4 percent.

In Cuba there is no unemployment; rather, there are labor shortages in many areas of the economy.

If we compare the Cuban economy with those of the major capitalist countries in the world — which are either in a recession or on the edge of one, with millions of people out of work, with just as many people having lost their homes and many having to live in the streets, where there are large demonstrations in which people are brutally repressed by the police, and where governments are going bankrupt — then we have to ask: Who are the ones who have failed?

I think the economy that’s a disaster and a failure isn’t exactly Cuba’s.

23 thoughts on “Cuba’s Economy Progressing, Despite Obstacles

  • May 15, 2012 at 4:10 pm

    I am so tired of your tirades! You are not interested in facts, you are not interested in having a serious debate (which implies listening to an other person), you are just filled with hate towards the actual regime in Cuba. Pleas, loook for a Miamibased website where you can find your friends. Leave this space for us who are interested in the developpment in Cuba, who seriously want to take part in what is going on in Cuba and who respect the Cuban people.

  • May 15, 2012 at 4:03 pm

    I don´t like generalisations like “What is wrong with the Cuban people?” There is nothing wrong with the Cuban people on the whole: they are well informed, educated, independent thinkers. But there is absolutely something wrong with quite a lot of Cubans living in Cuba and abroad who are nourished by information from a capitalist point of view. When I defend many things (not all!) in Cuba I am told: You don´t live here. You don´t understand”. Let me answer you: ” I live in a capitalist country, I know many other capitalist countries, I have been to many countries in the 3rd world. You haven´t lived there, so please don´t give meany opinions about life there.”

  • May 13, 2012 at 9:35 pm

    grady: in argentina workers have taken over the factories that were closed from the owners and the workers ran the factories and took a pay cut. this has also been done in america but has usually been less successful. there is always the question of ownership and how much will be paid for the means of production. some american factories were closed not because they weren´t making money but weren´t making enough money. anyway, fidel doesn´t like globalization but globalization has hollowed out american power. american industrial power has moved to china except for war industries. there are bigger profits making everything in asia so america owns banks and money. money is paper or blips on a computer screen.

  • May 13, 2012 at 3:50 am

    Cuba is starting to export a few products so some marketing books would be useful for exporters. “why we buy.” paco underhill. “differentiate or die.” jack trout. “expand your brand” merrill perera. the bookshops are full of revolutionary comics and che´s theories on economics 50 years ago.

    World food prices are predicted to rise by 50% over the next 10 years. cuba could have a perfect storm. hugo chavez could die soon. no more petroleum subsidies. then rising petroleum and food prices. continuing recession with a downturn in tourism revenues. there are alternatives. target every potential tourism group. spend some tourism revenues developing agriculture. food prices will rise and a large part of food costs will be caused by the cost of petroleum which will rise. the recession will continue but some countries are not affected much and they are the countries which should be targeted by the ministry of tourism. one question that ministries of tourism don´t ask themselves is “what percentage of chinese can afford international travel?” 1%? what percentage of danes, norwegians, swedes, luxembourgers, finns and dutch can afford international travel? nearly all. what´s the GDP of britain? what´s the GDP of denmark and norway?

    Grady: what´s a state co-ownership form of socialism? a ball and chain on only 1 leg? the state´s job is to ensure the money supply and credit but to a large extent that is not necessary now. most central banks are independent now. but if a government has a bad taxing and spending policy it is up to the reserve bank to fix the damage. grady, try a classic. “wealth of nations.” adam smith. the hidden hand of the market. but adam smith was not a believer in unbridled capitalism. whenever 2 men in the same trade get together there starts a conspiracy against the public. teddy roovevelt´s fair labor laws and the pure food act were scrapped by george w. teddy roosevelt´s anti-trust laws were ignored during the presidency of george w. richard nixon´s clean air and water laws were scrapped by dick cheney so that gas could be extracted by toxic fracking chemicals. coal burning power stations were not required to have good scrubbers so mercury got in the air. president johnson stopped above ground atom bomb testing because strontium 90 was in the milk. now it´s mercury. so there is a place for government but not the george w. kind of government.

    Freud: if the ruling elite wants no changes that´s O.K. there is always another economic storm coming. the belief in unending economic growth before 2008 was an illusion. food prices will rise 50% over the next 10 years and with other factors predictable and unforeseeable cuba could have the perfect economic storm ahead. this will lead to greater dissent which the government will not like. in europe there is the CAP, the common agricultural policy for food security. it has always been too generous to farmers like kibbutz subsidies. europeans pay a lot for food but they certainly have no shortages. elio: certainly the capitalist system is in a crisis. so both systems are no good? the japanese economy went through a bad period when the real estate bubble burst but reports of japanese poverty are greatly exaggerated. the japanese cry poor whenever another country wants a handout. foreign aid. judging by the number of GUCCI stores i´d say that the japanese are doing very well. over investment in various sectors in various countries led to the asian economic crisis of 1997. there were naifs in south korea donating their gold jewelry to the goverment. that crisis didn´t last long. now that the greeks and the french have elected governments that want to spend their way out of recession there is hope in europe. obama bailed out the banks but the banks still won´t loan money but continue with foreclosures rather than refinancing those who can pay. america may be in deeper shit. the last 3 soviet leaders before gorbachev didn´t want changes either. now there is no soviet union and russia is an oligarchy and is a democracy with managed elections and journalists with a short life expectancy. without oil and gas exports the russians couldn´t feed themselves.

  • May 12, 2012 at 12:33 pm

    grady, i wrote this on another page. the kibbutzim and co-op moshavim survived because they had massive state subsidies and were fortified towns against the palestinians. sharing agricultural equipment like in moshavim is a good idea though and israelis have promoted this with foreign aid in africa but food exporting countries don´t like the idea. kibbutzniks tend to be lazy and uncompetitive. i was on the first kibbutz to go bankrupt. 7 out of 200 kibbutniks were engaged in money making work that was not housekeeping and child care. the secretary was a dope smoking american who got subsidized loans for new buildings when the old ones were still servicable. the dirty work was done by foreign volunteers, slave labor, and the dirtiest work was done by palestinians. a union owned department store in melbourne, australia failed. a co-op in boston was privatized long ago. the coop is still there. you must have an interest in making money by knowing what the consumer wants. many department and variety stores have failed after the founder passed on. some australian department stores are in trouble. they have forgotten the basics. toys on the top floor, and santa, so that kids will drag mom through the whole store to get to the top. grady, a better idea would be share options for EVERY worker, not just a few often useless executives at the top. workers can then take their shares and move on and not be tied to a company like kibbutzniks are tied to a kibbutz with no property rights. corrupt secretaries have property rights though. workers can sell their shares if the company is not well run whether they leave the company or not. one good thing about unemployment is that it moves workers on to a growing well run company or a growing part of the economy. share options are an incentive for executives but share options are also incentives for ordinary workers. but share options have destroyed american companies and the present crisis is due to share options. short term planning in the car industry. pretty garbage cars. planned obsolescence. mercedes benz doesn´t change the styling every 2 or 3 years. benz improves the engineering. quick profits in the short term for share options by loaning people who couldn´t pay money for large houses. then we have the PIGS in europe. they were pigs who overspent and the european central bank, and idiot politicians, did nothing to stop it. unemployed and need a pension? do i know a politician to help? a common currency needs a common financial policy and this was known from the start and the countries that opted out were the smart ones. fraudulent numbers were used so that some countries could get in the euro zone. that was known at the time too. there is a book called “faster, cheaper, better” on industrial production, marketing and distribution systems. efficient companies keep workers in a job. spent his days, not in an office, but on the factory floor socializing with workers and talking to workers about ways to improve production. many japanese companies pay workers for ways to make or save money. i worked for a few weeks in a factory once. i improved a loss making industrial process but someone else took the credit and i wasn´t paid. the manager arrived in a rolls royce and went straight to his office and was never seen on the factory floor. a factory floor manager told me not to try and improve production. the top management weren´t interested. australian industry survived on protectionism. import taxes are like other taxes. taking money from the voters and bribing voters by recycling the money back to them. this is O.K. if the money is used wisely.

  • May 12, 2012 at 1:20 am

    michael landis: backpackers are NOT the low end. that´s my point. in 1993, japanese in australia spent $4,000 in 8 days. they spent their money on japanese hotels, restaurants and in japanese owned duty-frees buying japanese cameras and electronics, cognac, french perfume and scotch. most food was imported from japan. the only australian thing they used was the sewerage system. backpackers spent $10,000 in 2 months on average in mostly australian businesses. hostels, supermarkets and pubs. grady is on about about changing the system or leadership style or something again. political systems tend to perpetuate themselves. the soviet union was run by provincials who promoted other provincials. i don´t expect multi-party elections in the foreseeable future and you can´t eat elections. when the north korean economy failed, and was in worse shape than cuba´s, people went into the hills and planted food. free farmer´s markets appeared. if the north koreans had waited for the government to act they´d be dead and buried. the cuban government provides with imports the basic food necessary for life and this will continue as long as hugo chavez is alive and in power and providing subsidies like the soviet union did. what the government is not doing is starting new agricultural industries for domestic consumption and export which would also provide employment. why are cubans not doing this like the north koreans? they are not hungry or hungry enough. i don´t know why it is necessary for the minister of foreign trade to be in south korea or for the government to be involved in imports but south korea has some good turquoise jewelry for jewelry tourism. i know where to source most things in the world worth having. does the government or their amigos have a monopoly on imports? if so, that´s a problem too.

  • May 11, 2012 at 1:22 pm

    The number of people planned to be laid off this year is 170,000 There may be up to a million laid off over five years. However not all of these are automatically unemployed. Many are still doing the same jobs but are now self employed or have been encouraged into forming new cooperatives. The only time that there was officially 1.5 million unemployed was 1958.

    If you think that both the CIA and the UN figures are Castro propaganda then who’s figures would you believe.

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