Informacion economica sobre Cuba
Posted on Sat, Feb. 17, 2007

The blockade from within

HAVANA — Feb. 3 marked the 45th anniversary of Presidential Proclamation No. 3447, which imposed a total embargo on Cuba and was signed by President John F. Kennedy. The proclamation took effect on Feb. 7, 1962. As it might be expected, the anniversary was commemorated in Cuba with a great deal of propaganda aimed at using the embargo as a justification for the disastrous situation that afflicts the Cuban people.

Years from now, when historians and analysts review today’s publications and official statistics, they will be very confused. Despite the talk of a ”ferocious blockade,” the United States has now become Cuba’s sixth-largest trade partner and its leading provider of food. Its volume of trade approaches $500 million per year, according to the National Statistics Office. U.S. exporters are the principal suppliers of poultry, soy, corn, powdered milk and a long list of food products that are vital for the population. U.S. exporters are also in a position to supply medicines.

$1 billion in remittances

In addition, possibly the largest net revenue consists of remittances from Cubans living in the United States, a sum that the U.N. Economic Commission for Latin America and the Caribbean places at about $1 billion per year.

To this should be added other financial flows toward Havana, such as the payments for telephone calls between both countries, which have monopoly prices fixed by Cuba. Those payments represent an annual revenue of more than $100 million.

Without a doubt, we’re looking at what has become a virtual embargo, while the real blockade exists within. It’s the blockade that the totalitarian regime has imposed on the Cuban people for almost 50 years, causing an enormous economic, social, political, demographic and ecological crisis.

Farm production, which used to be the foundation of the economy, generated only 3.3 percent of the gross domestic product in 2006, according to the latest official statistics. This is a lot less than the share of the sports and culture sectors (3.9 percent), an absolutely illogical situation that is repeated — revised and expanded — in the sugar industry, the manufacturing industries, transportation and other areas.

To boot, sectors that had shown a certain advancement based on traditions that existed before 1959 — such as education, public health and social assistance — are in an outright regression, both quantitatively and qualitatively.

The domestic embargo is the direct cause of the continuous devaluation of tangible assets, as well as the human capital accumulated during so many years of efforts and sacrifice. Whereas the gross formation of fixed capital, as a percentage of the GDP, was 25.6 percent in 1989, by the end of 2005 it had dropped to 8.3 percent, according to official statistics, in a process of undercapitalization that existed for years.

The same happens to the significant human capital that has been created, because the professionals and technicians are gradually lost for various reasons, either through the unstoppable exodus in search of better living conditions for themselves and their families, or by switching to activities such as driving taxis or working in the tourism trade. Those activities may be more lucrative but they are foreign to their professional training, leading the professionals to gradually disqualify themselves.

Earning $20 a month

Even those specialists remaining in jobs suitable to their knowledge lose their skills in an environment of apathy, lack of motivation and limitations of technical information that even bar the use of the Internet.

Let us remember that the average monthly salary established by the government is less than the equivalent of $20, while a liter of cooking oil at a state-run store costs $2.60.

The normalization of relations with the United States, a country that once was Cuba’s trade partner par excellence, undoubtedly would be a beneficial factor for the Cuban economy as a whole. The direct investments, flow of technology and American tourists would be important.

Nevertheless, the main obstacle to the advancement of Cubans today is the persistence of a political, economic and social model that has steered productive potential and creativity into a trap. Until this true cause of our misery is resolved and radically eliminated, there can be no real solutions to the Cuban drama.

Oscar Espinosa Chepe is a Cuban economist and independent journalist.

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