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by Michael Kline, Ph.D.

A long time analyst of Cuban affairs looks at the latest economic “reforms” in the island nation and finds that the measures come up short.  —Ed.

The Cuban government, which has experimented unsuccessfully with minor reforms since the early 1990s, has apparently decided that a deeper overhaul is required to repair the island’s failed economy.  In an address to the National Assembly in August, Raul Castro admitted: “We have to erase forever the notion that Cuba is the only country in the world in which people can live without working.”  He further admitted that the decades old US embargo – “a crippling, punitive measure” – could no longer be blamed for all the island’s woes.

The measures announced so far do not amount to real reform, but rather constitute an attempt at a controlled correction. The AP obtained a leaked 26-page internal Communist Party document, dated 24 August, which at first reading seems to envision a radically revamped economy, with a new tax code, legalized private cooperatives and a drastically smaller state payroll.  The document details plans to lay off 500,000 superfluous government workers by March 2011, and to encourage those workers to shift to private enterprise.  Firing a half million workers is indeed a significant step;. the number represents 10 percent of the total Cuban work force of  5.1 million, 85 percent of which is employed by the State.  More telling, however, is that even with such huge layoffs, 74 percent of all Cuban workers will still be State employees after March 2011.

Although the plan does represent the largest shift to private enterprise since the early 1990s, there is nothing to suggest that the regime intends to promote a true free enterprise system, or relinquish control over the economy.  The plan does  little more than to encourage laid off workers to start “small businesses,” or form cooperatives for farming, construction, taxi services, auto repairs, etc.  On 24 September, Granma printed the entire list of 178 approved private activities, only seven of which are entirely new – including accountants, bathroom attendants, tutors and fruit vendors.  The remaining 171 approved activities include such everyday jobs as bricklayer, garbage collector, automobile mechanic, hairdresser, etc.

The list also borders on ridiculous in its specificity, e.g., muleteer, pony rides for infants, clown, magician, floral wreath arranger, baby sitter, pilot of ferries crossing Havana’s bay, etc.  Absent is anything related to the major state managed industries (petrochemical, bauxite, agriculture, tourism, etc.), which will remain in the hands of the Military and the Party.  Viewed in its entirety, the Plan simply expands a small private sector within the existing two-tiered economic system with continued state control at the top, and a limited free market of micro-enterprises at the bottom.  Rather than seriously emulating other socialist economic models such as the successful Chinese or Vietnamese models, these limited reforms are primarily intended to preserve Cuba’s current form of government in the post-Castro era.  It is more likely that post-Castro Cuba will follow the post-Soviet model in which military and government bigwigs change hats and take over ownership of the major state industries, and perhaps leaving the majority of Cubans in slightly improved economic conditions.

In addition to its inherent deficiencies, the Plan has major risks for the Cuba’s state dominated economy should it be implemented.  Jorge Sanguinetty, a former high level Cuban economic official, and president of the Association for the Study of the Cuban Economy, is correct in saying that “things move very slowly in Cuba because they are very, very concerned about breaking the balance of power with economic reforms. They don’t want to emulate Gorbachev when he started making reforms in Russia and the whole thing came down.”

U.S. relaxation of the embargo presents yet another potential risk.  The purpose of Fidel Castro’s Revolution was to eliminate all aspects of U.S. political and economic domination.  Removing trade and other restrictions could improve the plan’s chances for success in the short term by reestablishing access to Cuba’s most natural source of finance, supplies, and entrepreneurial skills for the private sector.  Over the longer term, however, Cuba risks political and economic penetration by the U.S., and increased “Yankee contamination” by, for example, U.S. tourists whose purchases are necessary if small businesses are to succeed.

Notwithstanding such risks, the Cuban government has begun a major diplomatic offensive to overturn remaining international sanctions.  One aspect of this offensive is a campaign to convince the European Community to repeal its Common Position on Cuba, which was adopted in 1996 “to encourage a process of transition to pluralistic democracy and respect for human rights and fundamental freedoms” and seeks “the reform of internal legislation concerning political and civil rights, including the Cuban criminal code, and consequently the abolition of all political offences, the release of all political prisoners, and the ending of the harassment and punishment of dissidents.”   Convincing the EU to drop the Common Position probably is seen as a major step to increase pressure on the U.S. to lift its 50-year embargo.

The Council of the European Union will meet in October to evaluate the Common Position.  In advance of the meeting, Cuba released 54 political prisoners to show Europeans that basic reforms have been or are being enacted.  By releasing all or the majority of its political prisoners, Cuba is attempting to whitewash its human rights record, thereby making its point that there is no further justification to maintain the Common Position.  Cuba also will have a strong ally at the October meeting in Spain’s Foreign Minister Miguel Angel Moratinos, who negotiated the prisoner release, and who plans to press Cuba’s case.

The U.S. has maintained a “wait and see” position on Cuba’s recent “reforms” and overtures even to the U.S., including allowing the wife of detained American Alan Gross to visit him.  There has been no change to date in U.S. demands that Cuba release all political prisoners, respect human rights and freedom of speech and the press, institute  democratic reforms, and remove the Castros from political power.  There is no need to rehash the reasons for the continued U.S. hard-line stance, but this may be the best opportunity in decades for the U.S. to influence the course of events in Cuba by relaxing the embargo, and travel and other restrictions for all U.S. citizens who want to visit, or do business with, Cuba. Cuba’s form of government will not change in the foreseeable future, but its socialist “model” will be different.  Communist Party functionaries and military officers will remain in charge, but the U.S. can live with a “socialist” Cuba as it does with any other country that conducts itself within generally accepted international norms.

Michael Kline, Ph.D., retired from the CIA as a Senior Intelligence Officer in 1990. From 1988 to 1990, he was the CIA officer-in-residence and adjunct professor at the University of Miami in Florida, where he also earned his doctorate in international relations theory.

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