Monday, September 13, 2010

What on Earth is Going on in Cuba?

First Fidel Castro told Jeffrey Goldberg of the Atlantic that the Cuban economic model didn't work, not even for Cuba. Then he said he didn't say that, instead that capitalism didn't work and the whole episode didn't really make any sense at all. I mean, if that was a translation error that's a pretty huge translation error...

José Cárdenas (former a Latin American policy official in the Bush administration) tried to explain it on Foreign Policy by suggesting Raul Castro had failed and Fidel was stepping back up to the plate to right the ship:
The hapless Raul also displayed a marked incapacity to institute any meaningful economic reforms to save the Cuban economy from its current tailspin. In addition, the hoped-for salvation -- that the Obama administration would open the gates to U.S. tourist travel to Cuba -- shows no sign of happening anytime soon.
But then today, Cuba announced it would cut one million public sector jobs and that "those laid off will be encouraged to become self-employed or join new private enterprises, on which some of the current restrictions will be eased."


There are around 11 million Cubans in total and the state employs 85% of the workforce. So this is what you might call a major shift.

I have no insight into who makes decisions in Cuba, but assuming that Fidel is indeed more front and center and in charge now that he's healthy again, this strikes me as an attempt to shore up his legacy before he dies. Potentially, the father of the Cuban Revolution could now also go down as the one who opened the doors to a second fundamental change in the Cuban state.

There had been rumblings previously that Cuba, inspired by the success of China, would look to move towards more market-based reforms. The Obama admin will reaction shortly, but the most interesting changes will happen organically by Cubans moving into the private economy. The next few years in Cuba will likely be very interesting indeed.

Image Source:
Online Sources: BBC News, Foreign Policy, The Atlantic, CNN


Tambopaxi said...

At this very late date (for them, anyway), the Castro brothers are opting for the Chinese approach, albeit in a hasty, improvised way.

The Castros should have started this process many years ago, and I can only assume that they're trying to do the hurry-up approach before they die, because they know the system they created will not long survive them. If so, they're too late. You can't just dump a million people on a virtually non-existent job market system and assume that all will go well, not to say, peacefully.

This is not the German scenario, where you could close down East Germany knowing that West Germany could pick up the slack; there's no West Cuba in this scenario.

Whlle I think the whole Castro system was hopeless to begin with, I'd argue that a slower, better-thought out transition process is needed to move the economy and society toward a post-Castro (can I say it? Capitalist/neo-liberal?) arrangement as the Chinese have been working on for years - and which isn't done yet. Like I say, Cuba isn't Germany, and Cubans as a cultural group are much more volatile than Germans. If you suddenly bounce these people out of their guaranteed sinecures after 50 years, a lot of them are going to be very, very upset...

Ben G. said...

I agree that this is a shockingly abrupt move with potentially enormous political, social and economic consequences for Cuba. It's one thing to privatize industries and quite another to just dump public sector workers into the "private economy."

To continue your example, the closest thing Cuba has to a West Germany is Miami. I don't want to be alarmist, but 1 million workers in a country of 11 million is a lot to absorb and the natural escape route for Cubans is across the Florida Straights.