Informacion economica sobre Cuba

Commentary: Cuban illusion and reality
Published on Monday, May 21, 2007
By The Nassau Institute

Fidel Castro in Cuba is faithfully following today the course of Russian
Communism of the last century. And like the Russia of the past, Cuba
enjoys widespread international sympathy and support despite the tyranny
it imposes on its own people. For instance, the recent Bahamian
administration seemed eager to lend Cuba support; and most tourists
experience the country's warmth and hospitality without ever perceiving
the reality of Cuban life. It takes a keen observer to do this.

Tony Mendoza, an Associate Professor of Art at Ohio State University,
left Cuba with his parents in 1960 and graduated from both Harvard and
Yale before moving into the arts. In 1997 he returned to Cuba as a
tourist and wrote "Cuba – Going Back". It is based on 200 interviews and
is an accurate portrayal of Cuban reality.

The economic problem. "While issues dealing with the absence of the most
basic freedoms came up often in conversations, the problem that
continually grates on people is more fundamental: it's not possible to
eat two meals a day for one month with the monthly salary the state
pays. There is food available…but state employees, who make up a large
majority of Cuban workers don't make enough money to buy there." (All
quotes are taken from "Cuba – Going Back" by Tony Mendoza, University of
Texas Press, 1999.)

This situation is created by low economic productivity and is seen in
the two currency system, a system where the government sells in US
dollars at its dollar stores and in Cuban pesos at its peso stores. In
this system the US dollar is worth 22 Cuban pesos as of 1999. A member
the Communist Party's Central Committee stated in an interview with
Frontline, India's National Magazine, that "edible oil, fruits, coffee,
fish, eggs and other essentials are rationed. These rations may be
enough for just 20 days in a month. Supplies for the remaining 10 days
have to be bought in the free market." One should deduce from his
statement that the free market prices were much higher.

According to a retired doctor, "what you have to understand…is that
there is a very repressive system…There are 75,000 plainclothes spies
in the streets, and we have the largest army in Latin America. It costs
money to maintain a repressive system like this. That is the main
priority…Before tourism, money was spent on sugar…actually billions of
Soviet dollars in aid was spent on sugar. And the sugar industry is in
shambles. And before that, millions were spent on cattle, and the cattle
industry is in shambles. Before that, money was spent on coffee, and
nothing has worked. We now produce less sugar, a lot less than what was
produced before the revolution. We have fewer cattle than we had in the
fifties, and now we have twice the population."

According to a mid-level government economist, "Fidel ruined everything
in 1968 when he nationalized all the small businesses. Up to then, only
the land and the big enterprises, like the sugar mills, had been
nationalized. But the bars, restaurants, stores, repair shops, small
businesses-all those were individually owned. You could find anything,
not as before, but you could find any kind of food, and have anything
repaired. But Fidel has a problem. He wants to control everything. So he
nationalized all the small businesses, even the vendors who sold food by
the side of the road. When he did that, he ruined Cuba. This place has
been a mess ever since."

"The only possibility is for us to produce more by allowing a free
market of goods and services to function. Our problem is simple. We are
not producing food because there are no incentives to produce. Everyone
gets paid the same inadequate wage. And Fidel won't allow a real free
market. Historically, whenever farmers in Cuba have been allowed to sell
their own produce, they've produced plenty of food. But you can count on
Fidel to resist any attempts to free the markets. Castro has always
exhibited an irrational hatred toward market mechanisms, entrepreneurs,
capitalism, small private business, you name it. There are some free
markets, but they are overloaded with restrictions to prevent them from
thriving."

Fidel Castro allowed two periods of economic liberalization, one in the
late 1970s and the other in the early 1990s. During both periods
production and private enterprise grew significantly.

"But starting in 1982, Fidel became disappointed in these policies and
started denouncing the self-employed workers and the farmers…He felt too
much capitalism was corrupting Cuban socialism and what proved to be the
fatal sin, too many self-employed workers and farmers were making too
much money…Hundreds of self-employed workers were arrested for becoming
too rich, and the taxes for independent workers were doubled. But the
Cuban entrepreneurs persisted. In 1986 Fidel put an end to it all when
he announced the Process of Rectification of Errors [PR]….The free
farmers' markets were eliminated, as well as self-employment" In the end
"it was another disaster. The purified socialist economy was incapable
of producing the products and services eliminated by the PR."

In 1991 the Fourth Party Congress again allowed self-employment with
restrictions. "Undermining the whole idea of self-employment is the law
of May 1994 that states that any excessive accumulation of riches is
illicit. Thus anyone making too much money through self-employment is
breaking this law and can be put in jail and have their assets seized.

Tyranny. Every Cuban is clear about human abuses. "If you are vocal in
your opposition to the regime, you end up in jail. It's that simple" The
Penal Code prohibits disrespect, insult or abuse to the dignity or honor
of the authorities, enemy propaganda, resistance to authority and any
special proclivity to commit crimes as demonstrated by behavior that
manifestly contradicts the norms of socialist morals.

The Cuban people are watched by the Committees for the Defense of the
Revolution located on every residential block. The Singular System of
Vigilance and Protection watches the streets and buses; government
labour unions watch the workers, the Cumulative Dossier registers the
academic record, political tendencies and voluntary activities of
students; the Ministry of Interior watches and infiltrates work and
play, the Police and Military Guard are stationed throughout the
country; and the Rapid Response Brigades put down illegal activity
without a military appearance.

What does the future hold? In the short run no one expects a popular
uprising…"no one wants to be a martyr and no one wants to end up in a
Cuban prison." In the longer run Cuban Marxism will likely collapse as
it did in Russia.

The Nassau Institute is an independent, a-political, non-profit
institute that promotes economic growth in a free market economy with
limited government, in a society that embraces the rule of law and the
right to private property

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