Cuban economy on the road to recovery

On 23 July, Carlos Lage, Vice President of the Council of State and Secretary of the Executive Committee of the Council of Ministers, reported on the current state of the Cuban economy, in particular its performance over the first six months of 1996. This report is of particular interest, since it tells us the effects of measures taken in the 'Special Period'.

The Special Period
As a result of the demise of the Soviet Union, between 1989 and 1991 Cuba lost 85% of its markets; in particular 95% of its main export, sugar had previously been traded through Comecon, which was also the source of Cuba's main import, oil. The market for Cuba's nickel also disappeared. Between 1989 and 1994, Gross Domestic Product (GDP) fell by 34% and imports by more than 70%.

As a result of this dire situation, all agricultural and industrial production, transport, construction and powers sources were badly affected. Unemployment grew. These were hard times for the Cuban people. On top of this, the situation was exacerbated by the USA's Torricelli Act which tightened the blockade. It is no coincidence that it was in 1994 that the mass exodus of 'rafters' took place and the 'black market' in Cuba was becoming entrenched.

The Cuban response to this was unavoidable. After nationwide consultations, measures were introduced to encourage foreign investment and mediate the effects of the crisis. Joint ventures with foreign capital were encouraged in the fields of tourism and oil and mineral exploitation. The possession of hard currency was decriminalised in 1993. Some state farms were transformed into cooperatives, where the land is still state property, but over and above state quotas, farmers from cooperatives and campesinos can sell produce at special farmers' markets. Self-employment was also legalised to ameliorate unemployment levels. This was now called the Special Period.

We should make no mistake: the Special Period is the introduction of market forces into the Cuban economy. It is, in a special, restricted sense, the beginnings of capitalism. As a result of Special Period measures, some people can become wealthy in contrast to the majority. If these nouveaux riches were allowed to buy land or the means of production, and to exploit the labour of others, then capitalism would be restored in Cuba. Of course they are not allowed to do any of this, but as time goes on the pressure from these latent bourgeois forces will grow, both for consumer goods to express their status as an elite and the means to grow wealthier through exploitation. Cuban communists are well aware of these dangers, and view the Special Period as a distinct period of time needed to deal with the crisis, and to restructure the economy for the future. In other words, the Special Period is intended to end, unlike the 'reforms' introduced in the Soviet Union in the 1980s which were a recognition of the failure of their economic system.

That is the background to Lage's report. Are the special measures working?

Economic recovery
At the end of July this year, Lage reported that 'the tendency to economic recovery continues'. GDP grew by 9.6% in the first half of 1996, revealing greater efficiency in the economy. Overall, wages increased by 2.5% and productivity by 8%. The starting point for this recovery was, as we have explained, very low: GDP fell by 34.8% between 1990-93. In 1994 there was only 0.7% growth; in 1995, 2.5%. The 1996 figures are in large part due to the sugar harvest (production grew, for the first time in the Special Period, by 33.6%), and since the sugar harvest comes in the first half of the year, the overall growth in GDP will be somewhat lower for the whole of 1996 - a projected 5%. Growth in industrial production is also reflected in other areas of the economy: nickel 31%; cement 23%; steel 19%; oil refining 40%. Agricultural production has also improved: vegetables 25%; tobacco 30%; citrus fruit 10%. Due to Special Period measures, tourism grew by 46%.

These improvements took place against an unfavourable background: not least the US blockade which means that Cuba only has access to short-term/high interest loans. Also, over the last year import prices (oil and food) have risen 13%, and export prices have fallen 7%.

Nonetheless, liquidity has improved as a result of higher prices for non-essential goods and the other measures of the Special Period. Many of these measures make it tough for the Cuban people, but in the long term there will be a better correlation between money in circulation and the supply of goods: the peso exchange rate has dropped from P150:$1 to P22:$1.

Whilst economic growth has not been swallowed by consumption, there has been an improvement in living standards: in 1993/4 power cuts were scheduled to take place for 14-16 hours a day; now they are scheduled for 8 hours per week. Compared with the first half of 1995 incomes rose 7%. This is not evenly spread: it is higher in the co-operative farm/campesino sector and lower in the state sector. Cuban communists are well aware that this is unfair: 'There are people who have earned as much as 3,000 pesos in one day. A government minister doesn't even earn 3,000 pesos in six months, nor does a teacher. There are people who earn more in a day than a teacher earns in a month, or an eminent doctor for that matter.' (Fidel Castro, Granma 14 August 1996). They know this is the result of the Special Period but 'measures must be constantly analysed and readjusted in accordance with the current situation'.

Sales in farmers' markets have grown by 27%, but at the same time prices have fallen by 35% - there has been no price hike. One of the measures introduced in the Special Period was incentives in the form of a proportion of wages in some sectors paid in convertible currency. The use of hard currency stores has gone up by 33%: in 1993 5-10% of people had access to these stores; in 1996 the figure is 40%. But both the farmers' markets and the use of hard currency represent a small part of the economy as a whole. To redress the balance, taxes were introduced for the self-employed and those who have done well out of Special Period measures.

The problems ahead
There are still fundamental problems and the Cubans are the first to state these. They need to restructure the economy, formerly dependent on Comecon markets, to produce goods which are more viable on world markets. They need to make their industries more efficient. Fuel consumption is always a problem while Cuba has no oil of its own, making productivity even more vital. Tourism brings with it problems like prostitution and black markets. Nonetheless they are well aware of these problems and are prepared to face them.

The Cuban economy still has to face the effects of the Helms-Burton Act, the full implementation of which has been shelved until after the US Presidential election in November. Nevertheless the Cubans are optimistic. They have survived the US blockade since 1961. They recognise that Helms-Burton is intimidatory towards those who want to trade with Cuba, but the reality is that the US blockade simply removes competition from US companies. It is also blatantly illegal and will face action through international treaties: the EU has signalled that it will take retaliatory action against US business if the provisions of the Helms Burton Act are used against European firms.

A conscious way forward
Fidel Castro has repeatedly said that these signs of economic recovery do not spell the end of the Special Period; on the contrary, Cuba is at the height of it and still has much to do. Nevertheless, it is important to remember that even though Special Period measures have introduced inequality and privilege in a limited sense, the balance of power lies with the working class, and the distribution of wealth reflects this. In the world in 1960, the richest 20% owned 30 times more than the poorest 20%; in 1990 they owned 60 times more. The richest in Cuba own four times more than the poorest, and both extremes are very small percentages of the population. Even now, at the height of the Special Period, the infant mortality rate has reached its lowest ever at 8.2 per 1,000 live births.

The Cuban working class is the driving force behind economic recovery. Cuban communists have a very big advantage: they do not make a virtue out of necessity. They know that the Special Period measures have been forced by circumstances - there is no choice. But their conscious relationship to the problems these measures bring allows for continual flexibility and adjustment to ensure that the gains of the Revolution are protected. Their own history shows that this works. In the 1980s the economy followed Soviet models, which in turn led to bureaucratic distortions: what price productivity if nurseries and creches have to close? As soon as the problems were clear, a rectification programme was introduced to ensure that working class interests remained to the fore. With such a history, we can expect the Cuban Revolution to survive.

Carol Brickley

From Fight Racism! Fight Imperialism! 133 October/November 1996

Cuba notes

Going for gold at Olympics
Cuba's biggest delegation ever, 241 athletes representing 24 sports, competed in the Sydney Olympics this year. Remarkably Cuba ranked ninth in the world medal league table with 11 gold, 11 silver and seven bronze - 29 medals in all - one place higher than Britain, which achieved its best results since 1924.

This is no small achievement for a tiny, Third World country just emerging from the worst economic crisis in its history and is the well-deserved fruit of its policy of participation in sport being a right of all.

However, the Cuban Olympic Committee has criticised the growing commercialisation of the Games which ensures, for example, that no poor country has been picked as a candidate to host the 2008 Olympics.

The Cuban newspaper Granma has also covered in depth the oppression of Aborigines hidden behind the glamorous facade of the Sydney Games.

Green Cuba
Cuba has been nominated by the United Nations Environment Programme (UNEP) to host World Environment Day next June, in recognition of the major steps it has taken to advance environmental protection within Cuba. Achievements listed included the accelerated pace of reforestation - up 21% on last year - and the fact that 95.5% of the Cuban population now has access to clean, safe drinking water. Cuba has recently set up an Environment Fund with a 5 million peso (£150,000) state contribution to fund socio-environmental projects.

World crisis 'knocking at door'
Cuba has continued the round-table TV discussions initiated during the battle over Elián Gonzalez as a way of involving the whole population in political education and discussion.

Two recent programmes, led by the Cuban Central Bank and the Centre for Studies of the World Economy, conducted a withering analysis of the International Monetary Fund and World Bank. They criticised the US veto over their operations and the power of rich nations, with their larger contributions, to impose conditions on poor countries such as adjustment packages in exchange for loans.

Such 'neoliberal adjustment' has in the last 20 years left more than 220 million Latin Americans, almost 50% of the population, living in poverty - 90 million in abject poverty. The per capita gross domestic product in Latin America is the same as it was in 1980. 'The Third World's external debt is a vicious circle with no way out... the global crisis is knocking at the door.'

Payout for image of Che
Cuban photographer Alberto Diaz Gutierrez, better known as Korda, has won a 'substantial' payout from an advertising agency for their unauthorised use of his world-famous 1960 portrait of Che Guevara in a vodka advert.

While Korda has never objected to use of the image for revolutionary purposes, he objected to his photograph of 'our national hero' being used in a way 'that slurs his memory.' Korda has promised to donate any profits from the case to fund medical care of children in Cuba. Korda's revolutionary photographs can be seen, together with the work of Raúl Corrales, Jose A Figuera, Jose J Martí and others in a free exhibition of Cuban photography, Cuba Si! at London's Royal National Theatre on the South Bank, Mon-Sat 10am-11pm, till 11 November.

Cat Wiener

From Fight Racism! Fight Imperialism! 157 October/November 2000

Castro denounces globalisation at Millennium Summit

The UN Millennium Summit was held in the United States at the beginning of September and attended by over 100 world leaders, including the president of Cuba, Fidel Castro. Amid the pious bleatings of Western leaders about the need to reduce world poverty and disease, he was the only world leader to point a finger directly at those responsible - the handful of robber baron nations that dominate the world, squeezing the lifeblood out of the oppressed nations. In contrast to the hypocritical handwringing of the imperialists in the face of the genocidal spread of AIDS through Africa - even while they back the multinationals who refuse to allow cheap drugs to be made available to those devastated countries - Cuba has offered 3,000 doctors to help combat the spread of AIDS and other diseases in Africa. Despite being limited to only five minutes in which to speak, Castro continued to show the lead Cuba offers the oppressed with a clear and concise indictment of globalisation and the destruction it brings for the majority of mankind. He also continued Cuba's campaign to expose the undemocratic nature of the United Nations as simply a mouthpiece for the rich and powerful. Below, we reproduce the text of his speech.

'Excellencies, there is chaos in our world, both within the countries' borders and beyond. Ignorant laws are offered like divine norms that would bring peace, order, well-being and the security our planet so badly needs. That is what they would have us believe.

Three dozen developed and wealthy nations that monopolise the economic, political and technological power have joined us in this gathering to offer more of the same recipes that have only served to make us poorer, more exploited and more dependent.

There is not even discussion about a radical reform of this old institution formed over half a century ago, when there were few independent nations, to turn it into a true representative body of the interests of all the peoples on Earth, an institution where no one would have the irritating and undemocratic right of veto and where a transparent process could be undertaken to expand membership and representation in the Security Council, an executive body subordinated to the General Assembly, which should be the one making the decisions on such crucial issues as intervention and the use of force.

It should be clearly stated that the principle of sovereignty cannot be sacrificed to an abusive and unfair order that a hegemonic superpower uses, together with its own might and strength, to try to decide everything by itself. That, Cuba will never accept.

The poverty and underdevelopment prevailing in most nations as well as the inequality in the distribution of wealth and knowledge in the world are basically at the source of the present conflicts. It cannot be overlooked that current underdevelopment and poverty have resulted from conquest, colonisation, slavery and plundering in most countries of the planet by the colonial powers and from the emergence of imperialism and the bloody wars motivated by new distributions of the world. Today, it is their moral obligation to compensate our nations for the damages caused throughout centuries.

Humanity should be aware of what we have been so far and what we cannot continue to be. Presently, our species has enough accumulated knowledge, ethical values and scientific resources to move towards a new historical era of true justice and humanism.

There is nothing in the existing economic and political order that can serve the interests of humankind. Thus, it is unsustainable and it must be changed. Suffice it to say that the world population is already six billion, of whom 80% live in poverty. Age-old diseases from Third World nations such as malaria, tuberculosis and others equally lethal have not been eradicated, while new epidemics like AIDS threaten to exterminate the population of entire nations. On the other hand, wealthy countries keep investing enormous amounts of money in the military and in luxurious items and a voracious plague of speculators exchange currencies, stocks and other real or fictitious values for trillions of dollars.

Nature is being devastated. The climate is changing under our own eyes and drinking water is increasingly contaminated or scarce. The fisheries are being depleted and crucial non-renewable resources are wasted in luxury and triviality.

Anyone can understand that the United Nations' basic role in the pressing new century is to save the world not only from war but also from underdevelopment, hunger, diseases, poverty and the destruction of the natural resources indispensable to human life. And it should do so before it is too late!

The dream of having truly fair and sensible rules to guide human destiny seems impossible to many. However, we are convinced that the struggle for the impossible should be the motto of this institution that brings us here today.'

From Fight Racism! Fight Imperialism! 157 October/November 2000

Guantanamo rocking to solidarity disco

This summer, a Rock around the Blockade brigadista returned to Cuba to catch up with the mobile disco we donated to the Union of Young Communists (UJC) of Guantanamo in April. She writes:

Thousands of young Cubans are enjoying free music as our Rock around the Blockade 2000 disco rocks around the province of Guantanamo. The mobile sound system has played a staggering 40 nights since our brigade launched it in the seaside town of Baracoa at the end of April.

In August the disco, which is based in Guantanamo city in the middle of the province, returned to Baracoa twice for a total of five nights of partying on the town's seafront. Around 500 local young people flocked to the disco for an evening of salsa, ragga, techno and Euro and Cuban house. Earlier that month, the disco had thrilled farmers' children when it played at an agricultural fair in the mountains. 'It even had violet lights!' one small child said, impressed if a little confused by the system's ultraviolet strobe lights.

Guantanamo province is mainly rural and many areas lack recreational facilities for young people. With the disco, Rock around the Blockade, working in collaboration with the local UJC, has been able to provide fun and music for its most remote towns and show solidarity with Cuba in the face of the US blockade. The campaign had spent 18 months raising £5,000 for the disco - our fourth sound system to Cuba to date - with sponsored events, street collections, dayschools and a series of Rebel Music club nights in London. For the UJC, the discos have played an important part in allowing them to maintain the revolutionary unity of Cuba's young people during some of the most difficult times of the Special Period. Our brigades to Cuba have in turn allowed people from Britain to experience a little of Cuba's socialism for themselves and return inspired and invigorated to continue the struggle in Britain.

As the disco's DJ Pepe said, 'The disco is an important symbol of friendship with the people, with Guantanamo, with Cuba and with all those who are fighting for liberation and a social system that allows each person to live humanely and decently.'

From Fight Racism! Fight Imperialism! 157 October/November 2000

US anti-Cubans crumbling in Elián wake

Thank you for sending FRFI 155. Your reportage on Cuba was very good. And thanks to all who donated time or resources to the Rock around the Blockade caravans.

As you noticed, the US right wing miscalculated the Elian affair, which boomeranged against them and united the Cuban people as nothing had since the early 1960s. Clearly Cubans today back their revolution more than ever since the early days, while the US anti-Cuban propaganda has crumbled.

The main pitch of imperialist propaganda was the alleged 'colonial status' of Cuba with respect to the ex-USSR. That was never true, but whatever credibility that myth had, it lost it after 1991. It was a matter of time till other features of the US anti-Cuban apparatus also rotted away and collapsed, the CANF having been thoroughly discredited.

Yet CANF and the Miami right wing still continue to receive US government fat cheques via operations such as Radio Martí (owned by Voice of America) and others. No doubt the US bourgeoisie will not abandon the Miami mafia but will do its best to reconstitute it and use it in future anti-Cuba crusades.

The sentiment in the US is to at once lift the blockade and re-establish full diplomatic and commercial ties with Cuba. That was the result of the Elián saga. But the ruling elite will try to compromise that clamour and tie whatever opening is finally done to this or that condition aimed at later on stabbing Cuba in the back.

Whether or not the fierce and genocidal US blockade against our small sovereign republic is lifted or not, it will always have proved a failure.

Ana Lucia Gelabert
# 384484, 1401 State School Road RS, Gatesville TX 76599, USA

Free Ana Lucia Gelabert
Ana Lucia Gelabert is a progressive Cuban-American political prisoner. She has already served 16 years in prison (of two concurrent life sentences) for her political activity.

The state of Texas seems determined to punish her for her revolutionary ideas and determination to struggle for prisoners' rights, with prison authorities taking out over 300 disciplinary cases against her in 15 years. She has spent much of her time in prison in solitary confinement.

Ana Lucia is mounting an appeal for clemency, asking the Judicial District Court of Texas for a reduction in her sentence from life to time already served, which would result in her immediate release from custody.

Would you like to help support Ana Lucia's struggle? Copies of a model letter supporting her campaign are available from FRFI, BCM Box 5909, London WC1 3XX

From Fight Racism! Fight Imperialism! 157 October/November 2000