Raul Castro’s Questionable Optimism

Vicente Morin Aguado

Raul Castro addresses the Cuban parliament on December 21st. Foto: cubadebate.cu

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.

Photo: Juan Suarez

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.
Vicente Morín Aguado: [email protected]

20 thoughts on “Raul Castro’s Questionable Optimism

  • January 2, 2014 at 1:23 pm

    Exactly my point. For effect, castristas use the term “declared war” and it is completely incorrect.

  • January 2, 2014 at 11:23 am

    The United States never declared war on Viet Nam either.

  • January 2, 2014 at 4:23 am

    Cuba is doing bad because we do not produce anything, there is a cruel capitalist internal embargo against the people of Cuba by our own government.

    Of course we have to pay in cash for whatever we buy from the U.S.A. Even in our “socialist” schools we are taught that we have a debt with the U.S.A that we are not going to pay, and we are proud of that.

    The U.S.A can do whatever they want in their country, and they foreign policies against my government. That’s a diplomatic issue that only diplomats can fix. On the other hand, Cuba can’t produce food, we can’t feed ourselves we needed the Soviets, the Chinese and now Venezuela and Brazil.

    Go and freely talk about my country, you have that right. 90% of cubans do not. Hahaha. Lovely yanqui foreign policies are affecting the Human Rights of my country to the point police hurt protesters, and we have to import food from our enemy. Happy New Year.

  • January 2, 2014 at 4:16 am

    I am sorry but Cuba does not produce anything at all, that’s why we are importing 99% of what we consume.

    There is a French and British companies that own 50% or more of the national Tobacco and Rum production and export it to Latin America and Europe.

    What has Cuba to export other than that, when we can’t even harvest potatoes to feed our people? Did you know we have to import rice, sugar and salt (and many other products)?

    Cuba has a debt with the U.S.A that needs to be paid before making any open market business as you apparently expect.

    Sorry, I can’t keep writing to a stranger who obviously knows nothing about my country. Happy New Year.

  • December 31, 2013 at 11:09 am

    The US has never declared war on Cuba. You are playing fast and loose with terms that mean something very different than the lack of diplomatic relations. It may appear to help your cause by disparaging the US and our policies with demagoguery but you fool no one.

  • December 31, 2013 at 11:01 am

    John, it depends on what you compare. The Dominican Republic is comparable in many ways to Cuba. Culture, language, climate, and population. Self-reported health indices in Cuba are slightly better but incarceration levels are higher. Life expectancy is longer in Cuba but emigration is higher. Expenditures on health services is greater in Cuba but so are military expenditures. Cuban baseball has greater international recognition but there are more Dominicans playing in the Major leagues. It depends on your priorities. North Korean unemployment rate is 3% and in Spain it is still closer to 20%. Where would you prefer to live?

  • December 30, 2013 at 9:45 pm

    Cuba is doing as bad as it is because of the U.S. embargo.
    Were this not true they would have called it off years ago.
    Cuba has to pay cash for all purchases from U.S agriculture and cannot sell anything to what has always been a natural trading partner thereby hurting the economy and all Cubans .
    You cannot possibly be unaware of the U.S. foreign policy history in Latin America and the Caribbean in which they have intervened whenever a leftist comes to power whether through revolution of democratic elections .
    Cuba is no exception to that hard and fast foreign policy and your ignorance of that history has me now questioning the quality of Cuban schools.

  • December 30, 2013 at 9:37 pm

    You’re being your usual disingenuous self again.
    When you and other opponents of the Cuban people try to disparage the revolution, you do so by implicitly comparing conditions in a poor Cuba with conditions in the very wealthy U.S
    This is totally dishonest .
    You needn’t choose Haiti as a country with which to compare to Cuba but simply another developing/Third World country with similar resources that is capitalist and see how the poor do in that country compared to all Cubans who share what they have in a fairly equitable manner .
    You might take a look at the World Health Organization’s Human Development Index, first reading what that index entails and then see where Cuba appears on that list RELATIVE to other capitalist countries of like resources and thereby save a lot of that research
    time .

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