Raul Castro’s Questionable Optimism

Vicente Morin Aguado

HAVANA TIMES — The Cuban president closed the last legislative assembly on Dec. 21st with the mandatory New Year’s greetings. His assessment of the country’s economic performance, however, could be described with a phrase I learned at home: “gray with black backstitches.”

The essential economic data addressed was the following:

– During 2013, the Cuban economy grew by 2.7%, as opposed to the 3.6% predicted.

– In 2014, the economy is expected to grow by only 2.2 %

– Such unimpressive figures, we are told again, are primarily owed to a drop in hard currency export revenues, particularly to the deficit in tourism revenues.

– Another negative element is the expected drop, next year, of the prices of sugar and nickel, two of Cuba’s major exports.

I want to focus on a number of considerations surrounding these predictions before commenting on Raul Castro’s remarks.

For average Cubans, a yearly growth of 2% is tantamount to nothing or next to nothing, which might not be the same thing but is close enough. The two-currency system, coupled with the arbitrary prices that characterize the country’s State accounting system, make the figures quoted even more dubious.

The president himself acknowledges that the planned elimination of this financial monstrosity will help “bolster efficiency, accurately assess economic data and incentivize those sectors that generate revenues through exports or import substitutions.”

With respect to the issue of hard currency revenues, I beg to differ. Judging from the information regularly published in our newspapers, the sectors that generate considerable hard currency revenues (the nickel, tobacco, tourism, beverage and fishing industries, as well as medical specialists and medicine) either experienced growth or remained as they were years before. The same holds for oil and gas production, the import substitution sector par excellence. We should also not forget Cuba’s privileged trade relations with Venezuela.

We should also devote some lines to the blatantly “overlooked” pillar of Cuba’s economy: family remittances.  Some weeks ago, I was at Terminal 2 of Havana’s Jose Marti International Airport. In one morning, I counted five flights arriving from Florida and a number of others to different cities in Cuba’s interior (and this takes place every day).

For some days now, we’ve been seeing long lines of customers in front of Western Union locales, generally located in shopping centers that take in hard currency.

According to figures published in the United States, nearly half a million Cubans visited Cuba in the course of 2012. Nothing indicates these figures will be any lower for this year.

Reliable institutions estimate the sum total of the annual remittances arriving from Cuba’s northern neighbor at over US $ 2.5 billion. We must add to this the far from insignificant sums arriving from Europe, where the Cuban émigré community is continuously growing.

Another phrase I learned in my childhood comes to mind when I think about remittances: “money free of dust and straw”, that is to say, money that comes at no expense to the person receiving it. It would be good to know what the country does with all of these dollars.

The sugar industry also merits some comments. We may be witnessing restructuring aimed at correcting past mistakes. Years ago, when the agricultural sector proved incapable of achieving the minimum sugar-cane per hectare performance, half of the industry was dismantled. Today, the nation’s traditional industry is again being acknowledged as an important source of revenues.

Making “slow but sure progress”, Raul Castro evinces his proven skills as an administrator, organizer and patient worker:

–       The State budget deficit will not excede 5 % of the GDP.

–       Cuba has gotten back on track in terms of paying its debts, and the country’s credibility has improved substantially in this connection.

–       The renegotiation of Cuba’s foreign debt – and the elimination of the debt owed to Russia in particular – is of special significance.

–       The systematic effort to mitigate the notorious problem of late payments and collections (and to honor agreements, particularly) is beginning to yield financial results nationwide.

–       The unshakable determination to fulfill the policy guidelines agreed to during the last congress of the Cuban Communist Party (PCC), to set up cooperatives in the non-agricultural sector and put an end to the two-currency monetary system is evident.

–       The Cuban president has announced and will most likely work to grant State companies greater autonomy and to respect the property rights demanded by cooperatives.

Raul Castro has reiterated he does not wish to accelerate the reform process he is heading and warned of the risks such a decision entails, reaffirming his determination to preserve the socialist project undertaken more than fifty years ago in Cuba.

On the one hand, we look back on a year whose financial figures aren’t very encouraging, eloquently confirmed by the reality we see at street level. I hope to see the day in which butchers beg customers to buy their meat at closing time.

On the other, we are witness to the decision to continue tracing the path towards a new form of socialism.

Stuck in the middle, we are assailed by the many doubts that stem from so many unknowns, from the lack of concrete results over the last few years, even after the elimination of long-standing and absurd prohibitions begin to contribute positively to the democracy everyone demands.

Estamos muy lejos de las expectativas. Cuando el actual Presidente nos deseó felicidades por el nuevo año, coincidente con los “cincuenta y cinco” de la Revolución de la cual él es parte esencial, queda por ver una promesa de este, su último discurso; un asunto para muchos enigmático, cuya decisión final tiene que ser discutida entre todos los cubanos:

We are still far from meeting people’s expectations. It remains to be seen whether the promise made by the Cuban president during his last address, when he wished all of us a happy New Year, fifty-five years after the triumph of the revolution of which he is an essential part, will be kept (it is a complicated issue which needs to be debated by all Cubans):

 “We are slowly putting short-term thinking, characterized by urgency and unpredictable developments, behind us. Now, on the basis of solid foundations and confidence in the future, we are in a position to anticipate the country’s development until the year 2030, a matter we will pay due attention to in 2014.”

Shedding all negative thoughts, I say farewell to 2013, wishing readers and my colleagues at Havana Times a very happy New Year.
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Vicente Morín Aguado: morfamily@correodecuba.cu