Informacion economica sobre Cuba

Friday, July 18, 2008

Raul Castro seeks alternatives to Venezuela


BRASILIA — Raul Castro has begun a gradual process of changing Cuba's
economy and international relations. Within Cuba, he hopes to legitimize
his government by improving standards of living. Outside of Cuba, he
does not want to be held captive by Cuba's one international supporter:
Venezuelan President Hugo Chavez.

Castro believes in giving farm workers greater incentives. He has
authorized the sale of farm machinery and tools — centralized until now
— directly to farmers, as well as handing over idle land to private
cooperatives and other organizations that request them. He also canceled
the debts of some small producers and raised the prices paid by the
state for milk and meat.

In another measure intended to improve the lives of ordinary Cubans, he
has removed restrictions on acquiring computers, microwave ovens and
other appliances. Cuban officials stress that the purpose of these
changes is to increase efficiency, "not alter the socialist model."

But, like China and Vietnam, the government will have to embrace the
market more openly if it is really to improve living conditions. Only
with foreign investment and economic liberalization — a process that has
already begun in some measure — can Cuba hope to offer its 11.2 million
people more consumer goods and comfort, improve the social welfare
system, and rehabilitate the country's infrastructure.

This is essential not only in order to build a "better socialism," as
Castro has promised, but especially to legitimize the continuity of the
regime established by his brother Fidel's revolution.

For now, Cuba is politically stable. The evolution of its internal
situation leaves no doubt about the consolidation of Raul Castro's
authority. There is somewhat greater freedom of expression, with debates
and criticism of several aspects of Cuba's socialist model, such as low
salaries and the dual monetary system, which has caused income
inequality by favoring those who work in tourism and for foreign companies.

But greater political liberalization is unlikely in the short or medium
term. Cuba's government argues that America's financial and political
support for the opposition impedes that.

Nevertheless, with Felipe Perez Roque as minister of foreign affairs,
Cuba continues to conduct a pragmatic foreign policy. Venezuela and
China have become Cuba's main economic and commercial partners, and may
continue to be so.

But Raul Castro wants to avoid dependence on one or two countries alone.
His objective is to diversify Cuba's foreign relations and prevent
problems that any change in these countries could cause his regime — a
constant imperative since the collapse of the Soviet Union.

As a result, relations with Latin America's giants, Brazil and Mexico,
are being put on a more normal footing and relations with Spain are
being improved. Moreover, negotiations with the European Union have
resumed, greater understanding with the Vatican is being fostered, and
Castro himself has publicly suggested the possibility of dialogue with
the United States.

Although Venezuela provides between $1.5 and $2 billion annually to
Cuba, Castro regards Chavez as something of a headache, owing to his
rhetoric and his confrontational attitude with several countries. Chavez
is simply not the right person to help Cuba normalize its international

Moreover, Venezuela has its own economic problems, despite its enormous
dollar reserves. Shortages of medicines and basic foodstuffs such as
milk, sugar, eggs, beef, and chicken abound as a consequence of price
controls and mounting inflation. This reminds Castro of the economic
dislocations that led the Soviet Union to slash its aid to Cuba in the
years before it collapsed.

Venezuela's problems make collaboration and support from Brazil — the
Southern Hemisphere's largest industrial power — even more important.
During President Luiz Inacio Lula da Silva's visit to Havana in January
2008, Brazil and Cuba signed several economic and commercial agreements.

Indeed, Brazil doubled its loans to Cuba for the purchase of foodstuffs
and medicines, to $200 million, and has arranged projects to
rehabilitate Cuba's infrastructure with the participation of Brazilian

Other agreements include a project in which Brazil's state energy
company, Petrobras, and Cuba's Cupet will extract oil in the Gulf of
Mexico, and another that involves technological aid from the Brazilian
company Pessquisa Agropecurria for the development of soya production in

As these initiatives suggest, rapprochement with Brazil and Mercosur
appears to be Cuba's best international alternative as Raul Castro seeks
to avoid falling into America's economic orbit.
Luiz Alberto Moniz Bandeira, a former professor at the University of
Brasilia, is the author of more than 20 books. © 2008 Project Syndicate

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