Revolution in retreat

SPECIAL REPORT
CUBA
March 24th 2012
Revolution in retreat
SPECIAL REPORT
C UBA
Revolution in retreat
Under Raúl Castro, Cuba has begun the journey towards
capitalism. But it will take a decade and a big political battle to
complete, writes Michael Reid
ACKNOWLEDGMENTS
Apart from those mentioned in the
text, the author would like to thank
the following people for their help in
preparing this report:
Marc Frank, Julia Sweig, Hal Klepak,
Susanne Gratius, Emily Morris,
Bertrand de la Grange, Ivan Docampo of the Cuban Embassy in
London, Alberto Ibargüen and
Sergio Bendixen in Miami, and a
number of people in Cuba who must
remain anonymous. It is more than
usually important to stress that
none of the above bears any
responsibility for the views expressed in the report.
The Economist March 24th 2012
WHEN ON JULY 31st 2006 Cuban state television broadcast a terse statement from Fidel Castro to say that he had to undergo emergency surgery
and was temporarily handing over to his brother, Raúl (pictured below
with Fidel, left), it felt like the end of an era. The man who had dominated
every aspect of life on the island for almost half a century seemed to be
on his way out. In the event Fidel survived, and nothing appeared to
change. Even so, that July evening marked the start of a slow but irreversible dismantling of communism (oˆcially, Œsocialism) in one of the tiny
handful of countries in which it survived into the 21st century.
Raúl Castro, who formally took over as Cuba’s president in February 2008 and as †rst secretary of the Communist Party in April 2011, is trying to revive the island’s moribund economy by transferring a substantial chunk of it from state to
private hands, with profound social and political implications. He
has abolished a few of the many
petty restrictions that pervade
Cubans’ lives. He has also freed
around 130 political prisoners.
His government has signed the
UN covenants on human rights,
something his brother had jibbed
at for three decades. Repression
has become less brutal, though
two prisoners have died on hunger strikes. Cubans grumble far
more openly than they used to,
and academic debate has become a bit freer. But calls for democracy and free elections are
still silenced. The Communist
Party remains the only legal political party in Cuba. And Raúl Castro has repeatedly dashed the
hopes of many Cubans that the
hated exit visa, which makes it hard (and for some, impossible) to leave
the country, will be scrapped.
The economic reforms, set out in 313 Œguidelines approved by a
Communist Party congress in April 2011, are being implemented slowly
and with great caution. That is because they face stubborn resistance
from within the party and the bureaucracy. Indeed, the leadership shuns
the word Œreform, let alone Œtransition. Those terms are contaminated
by the collapse of the Soviet Union, an event that still traumatises Cuba’s
leaders. Oˆcially, the changes are described as an Œupdating in which
Œnon-state actors and Œco-operatives will be promoted. But whatever
the language, this means an emerging private sector.
The new president often says his aim is to Œmake socialism sustainable and irreversible. The economy will continue to be based on planning, not the market, and Œthe concentration of property will be prohibited, Raúl Castro insisted in a speech to the National Assembly in
December 2010. He is careful not to contradict his elder brother openly:
his every speech contains several reverential quotes from Fidel, who despite his semi-retirement is consulted about big decisions. (For brevity
and clarity this report will refer to each Castro brother by his †rst name.)
Fidel’s frail and ghostly presence in his compound in Siboney, a 1
CONTENT S
5 Inequality
The deal’s o…
6 Population
Hasta la vista, baby
7 The economy
Edging towards capitalism
9 Politics
Grandmother’s footsteps
10 Cuban-Americans
The Miami mirror
12 After the Castros
The biological factor
A list of sources is at
Economist.com/specialreports
An audio interview with
the author is at
Economist.com/audiovideo/
specialreports
1
KEY FIGURES
SPECIAL REPORT
GDP: 2011 - $120bn*
C UBA
Exports†: 2010 - $5bn
HAVANA
Miramar
Siboney
Mariel
La Salud
ARTEMISA
Imports†: 2010 - $11bn
Population: 2011 - 11.2m
Havana
Matanzas
El Cacahual
MAYABEQUE
CIENFUEGOS
Gol fo d e
Bat a b a nó
Cienfuegos
Bay of Pigs
ISLA
DE LA
JUVENTUD
2 leafy enclave of mansions on Havana’s western outskirts,
doubtless checks the speed of reform. But he no longer controls
the levers of power and rarely comments on domestic politics.
This special report will argue that whatever the intentions
of Cuba’s Communist leaders, they will †nd it impossible to prevent their island from moving to some form of capitalism. What
is harder to predict is whether they will remain in control of the
process of change, or whether it will lead to democracy.
No turning back this time
When the Soviet Union collapsed in 1991, many outsiders
believed that communism in Cuba was doomed. Massive Soviet
subsidies and military aid for Cuba had o…set the economic embargo imposed by the United States in 1960. By the 1970s they had
also brought stability after Fidel had all but bankrupted the island by his manic shifts from forced industrialisation back to exaggerated reliance on sugar, the economy’s mainstay since colonial days. The overnight withdrawal of Soviet subsidies and
trade links caused Cuba’s economy to contract by 35% between
1989 and 1993 (see chart 1).
In response, Fidel declared a national emergency, dubbed
ŒThe Special Period in Peacetime. He opened the island to foreign investment and mass tourism and legalised small family
businesses and the use of the dollar. But then he found a new
benefactor in Venezuela’s Hugo Chávez, who began to provide
Cuba with cheap oil. A big chunk of that is oˆcially counted as a
swap of oil for the services of some 20,000 Cuban doctors,
sports instructors and security advisers working in Venezuela.
China, too, emerged as a new source of credit.
Thus bolstered, Fidel reversed course again. Many family
businesses, as well as some foreign ventures, were shut down;
the dollar ceased to be legal tender in 2004. The ageing leader
1
No longer special
GDP, % change on previous year*
Current-account balance, % of GDP
F’CAST
2011†
Cuba Chile
Gross fixed 10.5 21.8
15 investment,
–
$’000, current
5
Avg. years
schooling,
10 adults*
Infant
15 mortality,
1989
95
2000
05
10
15
73.8
77.2
5.8
10.0
9.9
9.7
7.2
8.5
5.0
6.8
21.6
14.1
per 1,000 live births
Sources: Economist Intelligence Unit; UNDP; UNPD; World Bank
2
Dominican
Rep. Mexico
16.9
20.6
% of GDP*
10 Life
79.3 79.3
expectancy
5 at birth, years
+
GDP per
5.4 13.7
0 person*,
VILLA
CLARA
MATANZAS
PINAR DEL RÍO
Pinar
del Río
Source: Economist Intelligence Unit
*At purchasing-power parity
†Goods only
*Estimates †Or latest available
Santa Clara
SANCTI
SPÍRITUS
Sancti
Spíritus
CIEGO
D E ÁV I L A
Ciego
de Ávila
launched Œthe Battle of Ideas, sending
out armies of youths as ill-trained teachers
and social workers.
This time, Raúl has insisted, there will be no
turning back: the reforms will happen sin prisa, pero
sin pausa (slowly but steadily). But Raúl is no liberal. He
and Ernesto ŒChe Guevara, the Argentine adventurer who died
in Bolivia in 1967, were the orthodox Marxists among the leaders
of Fidel’s Rebel Army, the ragtag band of bearded guerrillas who
toppled the corrupt, American-backed dictatorship of Fulgencio
Batista. As defence minister from 1959 to 2008, Raúl set up and
led Cuba’s formidable armed forces.
When Raúl took over from Fidel, he moved slowly at †rst,
amid factional †ghting. To general surprise, the men who lost out
in 2009 were Carlos Lage, who had run the economy since the
Special Period and was seen as a reformer, and Felipe Pérez
Roque, the young foreign minister. They were denounced for
having criticised the Castros (Mr Lage was caught on tape describing the leadership as Œliving fossils) and for having been
corrupted by power. Instead, José Ramón Machado Ventura, an
81-year-old Stalinist, was named as Raúl’s deputy.
But Raúl also quietly discarded nearly all of Fidel’s ministers and key aides. Their replacements are mostly army oˆcers.
Rafael Hernández, an academic who edits Temas, a quarterly
journal attached to the culture ministry, points out that many of
them are engineers by profession.
Fidel ruled Cuba through the unbridled exercise of his massive ego. He centralised all power in his own hands, imposed
Utopian egalitarianism and performed frequent policy swerves.
By all accounts, Raúl is more modest, by nature a delegator and
team-builder, more interested in getting things done than making speeches. When he took over in 2006 he put an end to the
4am meetings his brother loved. He is the Sancho Panza to Fidel’s
Don Quijote (they even look the parts).
Raúl seems to be acutely conscious that Cuban communism is living on borrowed time. The economy is grossly unproductive. Venezuelan aid in 2008 was o…set by devastating hurricanes and the knock-on e…ects of the global †nancial crisis on
Cuba’s tourism and trade. The country is running down its capital, but living standards remain frugal. Its famed social services
are no longer a…ordable. The population is shrinking. Mr Chávez, its Venezuelan patron, is being treated for cancer and faces a
close election in October. And the Cuban leadership is gerontocratic: Fidel is 85, Raúl is 80 and the average age of the Politburo is
over 70. The históricos, as those who fought in the revolution are
known, are dying o…. With Mr Lage gone, they have no visible
successors. Raúl’s opportunity to institutionalise the system has
come very late in the day. ŒWe either rectify things, or we run out
of time to carry on skirting the abyss [and] we sink, he warned
in his December 2010 speech. 7
The Economist March 24th 2012
SPECIAL REPORT
UNITED STATES
A T L A N T I C
New
Orleans
B
FLORIDA
Miami
G u l f
o f
M e x i c o
AH
AM
O C E A N
AS
F l o ri d a S tr ai t s
PUERTO RICO
Havana
(to US)
CUBA
HAITI
MEXICO
DOMINICAN
REPUBLIC
JAMAICA
C a r i b b e a n
BELIZE
GUATEMALA HONDURAS
S e a
500 km
VENEZUELA
CAMAGÜEY
Camagüey
LAS TUNAS
Las
Tunas
Holguín
HOLGUÍN
Bayamo
GRANMA
r a
S i e r
SANT IAGO
DE CUBA
M a e s t r a
G UA N TÁ N A M O
Guantánamo
Santiago
de Cuba
Guantánamo Bay
(to US)
Inequality
The deal’s o…
Inequalities are growing as the paternalistic state is
becoming ever less a…ordable
JUST OUTSIDE SANTA CLARA, a city in central Cuba, in a
hotel that was once a Communist Party hospitality centre, a
trio of musicians entertains a large group of German tourists.
The trio belts out ŒHasta Siempre, Comandante, an anthem to
Che Guevara, whose capture of an armoured train at Santa Clara
prompted the collapse of the Batista dictatorship. ŒI wouldn’t
sing this song for an audience of young Cubans. But it has international resonance, explains one of the trio.
Then they strike up ŒChan Chan from the Buena Vista Social Club. That music is associated with the Batista years, consigning its elderly practitioners to neglect under communism until Ry Cooder, an American, turned them into international
superstars in the late 1990s. In a confusion the government has
happily exploited, they have become incongruous icons of the
Cuban revolutionary myth.
That myth has been extraordinarily potent and durable.
Along with Caribbean beaches and cheap rum, it draws tourists
to Cuba (2.7m last year, a record). It has led the Latin American
and European left to treat the Cuban dictatorship with indulgence. Soviet communism and its eastern European satellites
never held any romantic appeal. Cuba was di…erent. Two things
of substance have sustained the myth‹and the Castros’ rule.
First, even as he turned his country into a Soviet client, Fidel CasThe Economist March 24th 2012
C UBA
tro managed to embody Cuban nationalism, as the David defying the American Goliath and its economic embargo. In the three
decades from 1898 the United States all but ran Cuba, having
ousted Spain. By the 1950s American businesses owned large,
though diminishing, chunks of the island’s economy. That
brought resentment and economic distortions, but also investment and progress: in 1959 Cuba was one of the leading †ve Latin
American countries on a range of socio-economic indicators.
Life expectancy was close to that of the United States and it had
more doctors per person than Britain and France. But around a
third of the population lived in severe poverty.
The second substantial achievement was that even as he
expropriated almost all private property, Fidel poured resources
into social programmes that reached from cradle to grave, providing free world-class health care and education as well as free
pensions and funerals. Child malnutrition and adult illiteracy
were eliminated. Life expectancy and many other social indicators rose above those of the United States. Every Cuban household had (and still has) a ration book (or libreta) entitling it to a
monthly supply of food and other staples, provided at nominal
cost. Many other services were (and are) similarly subsidised.
Compared with the rest of Latin America, Cuba seemed to be
achieving greater racial and sexual equality.
Fidel’s de†ance of the United States and Cuba’s social
achievements under his rule found many admirers abroad.
They also secured the more or less enthusiastic support for the
regime of a majority of Cubans. The deal was that Fidel would
give them security and meet their basic needs, and in return they
would surrender their liberty. Many of those who rejected that
deal emigrated, often with oˆcial encouragement. Others were
jailed, often in appalling conditions, by Fidel’s police state.
The wages of poverty
That deal began to break down in the Special Period. When
Soviet subsidies suddenly dried up, Cuba’s †scal de†cit soared,
to a peak of 33% of GDP. The government covered the gap by
printing money, which stoked in‡ation. In real terms the average
wage has dropped to just 25% of its value in 1989. A survey in Havana in 2000 found that 20% of the population was poor (de†ned as Œat risk of being unable to satisfy their basic needs); the
national †gure now is almost certainly higher.
Social services have su…ered, too. According to a paper by
Carmelo Mesa Lago, a Cuban economist at the University of
Pittsburgh, and Pavel Vidal, an economist at Havana University’s
Centre for the Study of the Cuban Economy (CEEC), in 1989 Cuba
outranked every other Latin American country in all social indicators except housing. But between 1989 and 1993 social spending per head was slashed by 78% in real terms. It has since recovered somewhat, but the paternalistic state is fraying.
Hurricane damage in 2008 added to an already acute housing shortage. Contrary to the myth, Cuba now has some shanty
towns. Just o… the main avenue in Miramar, a plush part of Havana studded with foreign embassies and homes of senior party
oˆcials, stands El Romerio, an enclave of tightly packed huts of
corrugated iron and wood. On a Saturday afternoon its mainly
black residents play dominos in the narrow, rutted streets. Decades of migration to the capital from the poorer east have
turned the century-old houses of central Havana into overcrowded slums. In January four young people died after a house
collapsed. People still live in the crumbling house next door.
Transport has long been scarce. There are only 600,000
cars on the island, with an average age of 15 years, and half of
them belong to the state. A new ‡eet of Chinese buses helped,
but Cuba failed to include their maintenance in the contract and
some are already o… the road, according to a foreign diplomat. 1
3
SPECIAL REPORT
C UBA
2 The government also paid over the odds for the diesel generators
that have temporarily eased the chronic power cuts.
Cuba still stands out from its neighbours in two respects.
First, its extraordinarily e…ective civil-defence system has ensured that the frequent hurricanes rarely cause as much loss of
life as they do elsewhere in the Caribbean (or the United States).
Secondly, violent crime is rare: a visitor can walk through the
roughest parts of Havana with little fear. But both these achievements are those of authoritarian rule.
And now health services and education are becoming
harder to access and getting worse. Secondary-school enrolment
is below its 1989 peak. There is a surfeit of humanities graduates
and a shortage of agronomists and engineers. Although infant
mortality has continued to fall, maternal mortality has risen.
Many drugs are in short supply. Hospital patients sometimes
have to bring their own sheets. There are reports of doctors starting to demand payment. On a weekday morning in a village in
the inappropriately named municipality of La Salud (Œhealth),
south of the capital, this correspondent came across an elderly
woman who had hurt her arm and was whimpering with pain,
having found no doctors in attendance at two health clinics.
In 2010, 37,000 Cuban doctors and other health workers
were working in 77 countries around the world, mostly in Venezuela but also in Africa, the Caribbean and Central America. The
Cuban government also o…ers scholarships to 20,000 Latin
Americans to study medicine‹all part of its obsessive search for
international prestige. But the main reason for the shortage of
medical sta… is low salaries. A woman who gave her name as
Grisel says she worked as a family doctor for just $23 a month,
but now earns $40 a month in an improvised craft shop in Havana. She has two small children. A pair of children’s shoes costs
$13. As a doctor ŒI faced a choice of buying shoes or eating.
Raúl Castro has taken steps to rationalise health and education services and has raised teachers’ salaries. But the crucial reform required to make the welfare state sustainable is to switch
from subsidising products and services indiscriminately to subsidising those people who need it, and Raúl has shrunk from
that. His proposal to phase out the libreta was removed from the
guidelines at the party congress.
Inequality revisited
Cuba’s growing social inequalities are symbolised by the
dual currency system introduced in the Special Period. The Œconvertible peso, or CUC, is now †xed at par to the dollar. The ordinary Cuban peso is theoretically worth the same as the CUC,
but that is an accounting †ction. In fact the peso is pegged at 24 to
the CUC. The CUC is used for foreign trade and tourism. Wages
and the prices of basic goods in the domestic economy are set in
pesos. The average monthly wage is 454 pesos, or $19.
The shelves of state-owned shops selling merchandise in
pesos are sparsely stocked. Many things,
from white goods to processed foods, can
be bought only with CUCs, so many professionals are working in the tourist industry or in foreign-owned companies.
Remittances from family members
abroad have added another source of inThe population is shrinking, ageing‹and emigrating
equality. So has a large informal economy.
And now private business is doing its bit.
CUBA IS THE only Latin American country
sioners are among the poorest in Cuban
In all this Cuba is starting to resemwhose population is falling. It is also ageing
society. But by 2008 total pension costs had
ble the rest of Latin America, but without
faster than anywhere else in the region, for
risen to 7% of GDP.
political liberties. The Gini coeˆcient of
several reasons. First, Cuban women are
The government introduced a pension
income inequality (where 0 represents
having far fewer babies. The number of
reform in December 2008, raising contribucomplete equality and 1 complete inchildren per woman fell from †ve in 1963 to
tions (introduced in the 1990s) and the
equality) rose from 0.24 in the late 1980s to
1.9 in 1978 and to below 1.5 between 2004
retirement age (to 60 for women and 65 for
0.41 a decade later, according to research
and 2008. Second, thanks to good health
men). But that will not be enough to make
quoted in Espacio Laical, a magazine pubcare very few children die in infancy, and
pensions self-†nancing, nor eliminate
lished by Cuba’s Catholic church. A con†Cubans live to a ripe old age.
pensioner poverty. And those who want to
dential later study is said to have put the
Third, some 30,000 Cubans a year leave emigrate are just the people the island can
†gure at 0.5, similar to the Latin American
the island. Nowadays few of them risk their
least a…ord to lose. Fear of rising emigration
average of 0.53 in the mid-2000s.
lives in rafts or rubber tyres to cross the
is the main reason why Raúl Castro says
Cuba has no visible oligarchs as yet,
Florida straits. Instead, they queue up for a
abolishing controls on leaving the island
but it does have a number of increasingly
visa. Under an agreement reached in the
requires long and careful study.
wealthy people. They include farmers,
1990s to deter uncontrolled migration, the
owners of some tourist-linked businesses
United States gives out some 20,000 visas a
2
such as guest houses and restaurants, and
Into the sunset
year by lottery. Spain, which grants citiPopulation under 15 and over 60 years old
some oˆcials who pro†t from their conzenship to the children and grandchildren of
% of total
tacts. The Castro brothers themselves
those who ‡ed the country’s civil war and
0-14
60+
have always lived simply, but ŒHabana Lithe Franco dictatorship, has handed out
bre, a recently published book about the
40
63,000 passports. A steady trickle of Cubans
lifestyles of the city’s privileged caste of
posted to Venezuela or travelling abroad
30
artists and musicians, included photochoose not to return.
graphs of sons of Fidel and Che Guevara.
So Cuba is getting older (see chart 2).
20
Cubans are extraordinarily resilient,
ŒThe typical Cuban family consists of two
adaptable people, but their frustration is
grandparents, two parents and one child,
10
palpable. On being asked to take his passays Jorge Mario Sánchez of CEEC. On current
senger to a restaurant owned by Roberto
trends, by 2025 there will be almost as many
0
Robaina, a former foreign minister, a taxi
pensioners as workers. Pensions are low (an
1953 70
81
95 2002 06 09
driver exploded: ŒThese people spend
average of $10 a month in 2008), and penSource: Oficina Nacional de Estadísticas
their whole time stopping us from getting 1
Hasta la vista, baby
4
The Economist March 24th 2012
SPECIAL REPORT
C UBA
no wholesalers in Cuba, so all supplies come from state-owned
supermarkets or from trips abroad. Reservations are taken on Ms
Nicolas’s mobile phone. Advertising is banned, though classi†ed
ads in the phone book will soon be allowed.
Across Cuba small businesses are proliferating. Most are on
a more modest scale than La Galeria. Fernando and Orlandis
Suri, who are smallholders at El Cacahual, a hamlet south of Havana, can now legally sell their fat pineapples and papaya from a
roadside stall, along with other produce. Orlandis plans to rent
space on Havana’s seafront to sell fruit cocktails and juice. In
Santa Clara, Mr Pérez’s wife, Yolanda, sells ice-cream from their
home. Having paid 200 pesos for a licence and 87 pesos in socialsecurity contributions, she earns enough Œto buy salad. The
streets around Havana’s Parque Central heave with vendors
hawking snacks and tourist trinkets. Many of them are teachers,
accountants and doctors who have left their jobs for a more lucrative, if precarious, life in the private sector.
No reason to work
Remembrance of things past
2 ahead, and they are helping themselves. Resentment at the un-
fair advantages enjoyed by the party elite is echoed by Roberto
Pérez (not his real name), a 50-year-old sports instructor living in
Santa Clara: ŒThe problem is that people who work hard and
obey the law don’t get ahead. It’s those at the top who get ahead
by doing business with foreigners.
In much of Cuba it has become hard to †nd anyone under
40 with a good word to say for the system. Mr Pérez’s son, a
teacher, plans to leave Cuba as soon as he can. ŒThe young people here have nothing to do. They are desperate, says his father.
That is why the economic reforms have to succeed. 7
The economy
Edging towards
capitalism
Why reforms are slow and diˆcult
GISELA NICOLAS AND two of her friends wanted to set up
an events-catering company, but that is not one of the 181activities on the approved list for those who work por cuenta propia (Œon their own account), so in May 2011 they opened a restaurant called La Galeria. With 50 covers, it is a fairly ambitious
business by Havana standards. They have rented a large house in
Vedado and hired a top chef and 13 other sta… who are paid two
to three times the average wage, plus tips. The customers are
mainly foreign businesspeople and diplomats, Cuban artists
and musicians and visiting Cuban-Americans.
ŒThis opportunity means a lot to us, says Ms Nicolas, who
used to work for a Mexican marketing company. ŒBut they haven’t created the conditions for a pro†table business. There are
The Economist March 24th 2012
This cuentapropismo is only the most visible part of Raúl
Castro’s reform plan. ŒThe fundamental issue in Cuba is production, says Omar Everleny, a reformist economist. ŒPrices are
high and wages are low because we don’t produce enough.
Cuban statistics are incomplete, inconsistent and often
questionable. But in a lifetime’s detective work, Carmelo Mesa
Lago at the University of Pittsburgh has calculated that output
per head of 15 out of 22 main agricultural and industrial products
was dramatically lower in 2007 than it had been in 1958. The biggest growth has come in oil and gas and in nickel mining, largely
thanks to investment since the 1990s by Sherritt, a Canadian
†rm. But output per head of sugar, an iconic Cuban product, has
dropped to an eighth of its level in 1958 and 1989. Capital investment has collapsed. Raúl Castro has repeatedly lamented that
Cuba imported around 80% of the food it consumed between
2007 and 2009, at a cost of over $1.7 billion a year.
The American embargo is an irritant, but the economy’s
central failing is that Fidel’s paternalist state did away with any
incentive to work, or any sanction for not doing so. So most Cubans do not work very hard at their oˆcial jobs. People stand
around chatting or conduct long telephone conversations with
their mothers. They also routinely pilfer supplies from their
workplace: that is what keeps the informal economy going.
The global †nancial crisis in 2007-08 also took its toll. Tourists stayed away, the oil price plunged, and with it Venezuelan
aid. Hurricane damage meant more food imports, just when
world food prices were rising and those of nickel, now Cuba’s
main export, were plunging. All this coincided with the political
in†ghting in which Mr Lage was ousted, during which Œall †nancial and budgetary discipline was blown away, according to a
foreign businessman. Having repeatedly defaulted on its foreign
debt, Cuba has little access to credit. Instead of devaluing the
CUC, which would have pushed up in‡ation, in January 2009
the government seized about $1 billion in hard-currency balances held by state-owned enterprises (SOEs) and foreign joint
ventures. It did not †nish paying them back until December 2011.
The guidelines approved by the party congress contain
measures to raise production and exports, cut import demand
and make the state †nancially sustainable. This involves, †rst,
turning over idle state land to private farmers; second, making
the state more productive by transferring surplus workers to the
private sector or to co-ops; and third, lifting some of the many
prohibitions that restrict Cuban lives, and granting much more
autonomy to the 3,700 SOEs.
The grip of the state on Cuban farming has been disastrous.
State farms of various kinds hold 75% of Cuba’s 6.7m hectares of 1
5
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C UBA
2 agricultural land. In 2007 some 45% of this
was lying idle, much of it overrun by marabú, a tenacious weed. Cuba is the only
country in Latin America where killing a
cow is a crime (and eating beef a rare luxury). That has not stopped the cattle herd
declining from 7m in 1967 to 4m in 2011.
In 2008 Raúl allowed private farmers and co-ops to lease idle state land for
ten years. By December last year 1.4m
hectares had been handed out. The government has now agreed to extend the
lease-period to up to 25 years, allow farm
buildings to be put up and pay for any improvements if the leases are not renewed.
Credit and technical assistance also
remain scarce, says Armando Nova of
CEEC. Farmers su…er in the grip of Acopio,
the state marketing organisation. It is the
monopoly supplier of inputs such as
seeds, fertiliser and equipment and was Raúl sees
the sole purchaser of the farms’ output,
but its monopoly is being dented. Farmers corruption
can now sell surplus production of all but as
17 basic crops themselves. Under a pilot
programme in Artemisa and Mayabeque politically
provinces, near Havana, new co-ops will incendiary
take over many of Acopio’s functions.
The reformers want to see Acopio go. at a time of
More surprisingly, so does Joaquín Infante rising
Ugarte at the National Association of
Economists and Accountants (ANEC): ŒIt’s inequality
always been a disaster. We should put a
bomb under it. But in around 100 of Cuba’s 168 municipalities
the economy is based on farming, so Acopio is a big source of
power and perks for party hacks, and its future is the subject of
an intense political battle. That makes farmers nervous. A year
ago the 30 or so farmers in the Antonio Maceo co-op in Mayabeque leased extra land, got a loan and planted bananas, citrus
and beans. The administrator says output is up, but Œit will take
time to see a real di…erence. And with that he clammed up.
Oˆcial data suggest that output of many crops fell last year;
the price of food rose by 20%. That may be partly because farmers are bypassing the oˆcial channels. Granma, the oˆcial‹and
only‹daily newspaper, reported in January that a spontaneous,
self-organised and regulated wholesale market in farm products
has sprung up in Havana. That looks like the future.
Letting go is hard to do
Reducing the state’s share of the economy has been even
more contested. Raúl originally said the government would lay
o… 500,000 workers by March 2011 and a total of 1.1m by 2014.
That timetable has slipped by several years because the government has been reluctant to allow suˆciently attractive alternatives for workers to give up the security (and the pilfering opportunities) of a state job. But including voluntary lay-o…s and plans
to turn many state service jobs into co-ops (as has already happened with small barber’s shops, beauty parlours and a few taxi
drivers), some 35-40% of the workforce of 4.1m should end up in
the private sector by 2015, reckons Mr Everleny.
By October 2011, he says, some 338,000 people had requested a business licence, 60% of whom were not leaving state jobs,
suggesting that they were simply legalising a previous informal
activity. As happens to small businesses the world over, many
fail in the †rst year. Few of the cuentapropistas have Ms Nicolas’s
6
business experience. Many clearly †nd it hard to distinguish revenue from pro†t. ANEC is organising training courses. But the
government has stalled an attempt by the Catholic church to set
up an embryonic business school.
If cuentapropismo is not to be a recipe for poverty, the government will have to ease the rules. Mr Everleny wants to see
private professional-service †rms being established: architects,
engineers, even doctors. Already the taxes levied on the new
businesses have been cut, but they are still designed to produce
Œbonsai companies, in the words of Oscar Espinosa Chepe, a
dissident economist.
Lack of credit is another obstacle. Start-up capital for new
businesses comes mainly from remittances. In a pilot scheme the
government approved $3.6m in credits in January, nearly all for
house improvements. As for deregulation, Raúl has taken some
simple and popular steps, lifting bans on Cubans using tourist
hotels and owning mobile phones and computers, and last year
allowing them to buy and sell houses and cars.
But reforming SOEs is far more complicated. They have
been told to introduce performance-related pay. The boldest step
was last year’s abolition of the sugar ministry. In principle, SOEs
that lose money will be merged or turned over to their workers
as co-ops. But a planned bankruptcy law is still pending. So is the
elimination of subsidies and the introduction of market pricing.
Mr Ugarte of ANEC thinks much of this will happen this year,
along with a new law to introduce corporate income tax.
The pace of change has picked up since the party congress
set up a commission with 90 sta… under Marino Murillo, a Politburo member and former economy minister, to push through
the reforms, says Jorge Mario Sánchez at CEEC. ŒBy 2015 there
won’t be the socialist economy of the 1990s, nor the same society. But there are several gaps.
For one, the government seems undecided what to do
about foreign investment, a key element in the rapid growth in
Vietnam and China. It has cancelled some of the joint ventures it
had signed (often in haste) during the Special Period, and such
new agreements as it is entering are almost exclusively with
companies from Venezuela, China and Brazil. Odebrecht, a Brazilian conglomerate, has reached an agreement under which it
will run a large sugar mill in Cienfuegos for ten years. Many foreign companies are keen to invest in Cuba but are put o… by the
government’s insistence on keeping a majority stake and its history of arbitrary policy change.
Oˆcials worry that foreign investment brings corruption.
Raúl has launched an anti-corruption drive with the creation of 1
The Economist March 24th 2012
SPECIAL REPORT
C UBA
2 a powerful new auditor-general’s oˆce. Several hundred Cuban
oˆcials, some very senior, have been jailed, as have three foreigners. Raúl rightly sees corruption as politically incendiary at a
time of rising inequality. But he is tackling the symptoms rather
than the cause. ŒPeople who were making $20 a month were negotiating contracts worth $10m, says a foreign diplomat.
The guidelines involve only microeconomic reforms.
Raúl’s macroeconomic recipe has so far been limited to austerity:
he has managed to trim the †scal and current-account de†cits.
The trickiest reform of all will be unifying the two currencies, by
devaluing the CUC and revaluing the peso. It would help if Cuba
were a member of the IMF and the World Bank and had access to
international credit, but so far the government has shown no interest in joining. Mr Vidal of CEEC points out that for devaluation
to provide a stimulus, rather than just generating in‡ation, the
economy would have to be far more ‡exible. That will require a
political battle. 7
Politics
Grandmother’s
footsteps
With no sign of a Cuban spring, change will have to
come from within the party
(mainly abroad), and on SMS messages within Cuba.
Raúl’s decision to let Cubans buy mobile phones and computers has probably had more impact than he or anyone else expected. Unoˆcial estimates now put the number of mobile
phones on the island at 1.8m. Antonio José Ponte, a Cuban writer
who has lived in exile in Madrid since 2006, says they are used to
take video and photos of police beatings of opposition activists.
These images are transmitted to Miami television stations,
which broadcast them, and then sent back to the island on memory sticks, CDs and DVDs.
Communications are priced to discourage their use. In Santa Clara a young man queues to use his e-mail account at the post
oˆce for $1.50 an hour. There are private internet connections,
but they cost even more, he says. He has a memory stick in his
pocket. He and his friends trade †lms and music.
The authorities wage a constant campaign against clandestine satellite-television connections. In 2009 Alan Gross, an
American working for the American government, was arrested
for illegally handing out satellite phones and internet equipment; last year he was jailed for 15 years.
Information technology has opened a crack in the Cuban
monolith, but it is a small one. Within Cuba, Ms Sánchez is relatively unknown. No serious observer thinks a ŒCuban spring is
around the corner. A survey of 190 Cubans conducted for Freedom House, a Washington-based advocacy group, found that
over 90% of them had access only to government media.
The government has acted ruthlessly to crush dissent.
When in 2002 activists gathered the 10,000 signatures needed to
ask the National Assembly to debate their request for multiparty elections, the regime responded with a counter-referendum in which 8m citizens were persuaded to vote for a constitutional amendment to declare socialism Œirrevocable. A year later many of those activists were among 75 opposition members
given long sentences in show trials.
THE ONLY CUBAN apart from the Castro brothers whom
the rest of the world might have heard of is Yoani Sánchez
(pictured). In 2007 she began a blog, ŒGeneration Y, in which
she mixes political commentary with observations about daily
life. Now 36, a philologist and writer of maturing skill, she has a
fortnightly column in Spain’s El País and has won numerous
The small, still voices of dissent
journalism prizes abroad. She expresses a new kind of opposition in Cuba, one that the government †nds hard to handle.
The traditional dissident groups on the island are small, facThe regime has long sought to control access to the internet.
tion-ridden and heavily in†ltrated by state security. Some are opIn this, as in many things, it has been helped by the economic
portunists and have been easy for the regime to caricature as
embargo, which prevents American companies from hooking
agents of the United States. But some are very brave people who
the island up to the many undersea †bre-optic cables in the Cahave faced constant harassment. Mr Espinosa Chepe and his
ribbean. Instead, Cuba has an infuriatingly slow narrow-band
wife, Miriam Leiva, live in a small, dark Havana ‡at, piled high
connection from a Russian satellite. According to the national
with books. He says that state security occupies a ‡at on the next
statistics oˆce, at the end of 2010 there were 724,000 computers
‡oor as a listening post. He was one of those jailed in 2003. In
on the island, giving 1.8m users access to a state-run intranet. The
2010 Raúl released the 52 who remained in prison.
434,000 who could connect to the internet were mainly profesMr Ponte concludes that Œchange can’t come from the opsionals using it at their workplace.
position because of its isolation and division. In the short term
Ms Sánchez, who built her †rst comchange can come only from the Communist Party itself. What
puter herself, began posting her blog uschance is there of that?
ing the internet at tourist hotels. She and
On the last Thursday in January around 150 people are
her husband and fellow-blogger, Reinaldo
crowded into a community centre in El Cerro, a working-class
Escobar, insist that they are journalists,
district of Havana, for a discussion about Œcitizen participation
not political activists, and plan to launch
in local government. The audience is a mixture of academics
an online newspaper aimed at cuentaproand locals, many of them party members. The event is one of a
pistas. Nevertheless, the attention she gets
regular series of public debates organised by Temas, Rafael Herabroad irritates the government. She has
nández’s journal. The three speakers all complain that top-down
been denounced on television as a
centralism has crushed local initiative. Of the score of audience
Œcyber-terrorist, and has repeatedly been
members who intervene, most agree. ŒWill our political class be
denied an exit visa. She is insulted and
prepared to cede power to our districts and town halls? asks 1
threatened by pro-regime bloggers who
she says are state-security agents in disguise. ŒBut the international visibility of Raúl’s decision to let Cubans buy mobile phones and
social networks protects me a lot, she
computers has probably had more impact than he or
adds. She reports anything untoward on
Twitter, where she has 200,000 followers anyone else expected
The Economist March 24th 2012
7
SPECIAL REPORT
C UBA
2 one. Not once in two hours has Fidel Castro been mentioned.
Mr Hernández believes that the economic reforms have
far-reaching political implications. If they are to work, there will
have to be decentralisation, the rule of law and a reduction in the
power of the state. To achieve this, the party will have to change
its ways. At a closed party conference held on January 28th and
29th, Raúl Castro reiterated his calls for a separation between
party and government.
That will not be easy to achieve. Cuba’s 1976 constitution
de†nes the Communist Party as the Œdirecting force of society
and the state. It has 800,000 members, and another 700,000 in
its youth wing. The party bureaucracy has been accustomed to
exercising power at all levels in a top-down fashion. It is opaque,
secretive and illiberal.
Much of the resistance to change can be explained by bureaucratic inertia and the fear of loss of power and the perks that
go with it. Many who feel that they have devoted their lives to
the revolution are embittered by the idea that the reforms are
opening up a route to acquiring money‹and eventually power‹
outside the party. Ideology may also play a part. Mr Machado
Ventura and Ramiro Valdés, the next two in the hierarchy of the
14-member Politburo after Raúl, are both tough Stalinists.
At the 2011 congress Raúl admitted that the party had failed
to promote a new generation of leaders. He has started to work
on that. As well as Mr Murillo and Adal Yzquierdo, the economy
minister, who are both technocrats, the congress appointed two
younger political leaders to the Politburo: Miguel Díaz-Canel, the
minister of higher education, and Mercedes López Acea, the
party secretary for Havana. The council of state and the council
of ministers now include more women and more black Cubans
than ever before. The average age of the powerful provincial
party chiefs is 44.
There is no political opening in Cuba yet, but there are one
or two cultural chinks of light. Books are still being censored, but
a few more critical ones are being published, along with †lms
and art works. On the other hand La Rotilla, an annual alternative-music festival that attracted thousands of young people,
was cancelled last year after the government tried to take it over.
Church and state
The most intriguing political development is the growing
role of the Catholic church. Raúl has chosen to use it as an intermediary to engage with Cuban society. He holds regular talks
with the Catholic cardinal of Havana, Jaime Ortega, which are
mirrored at lower levels. The church is urging the government to
grant individuals more socio-economic freedoms, says Orlando
Márquez, the cardinal’s spokesman. It also argues for the recognition of freedoms of expression and organisation. But it is cautious‹its critics say timid‹in pushing these ideas.
Cuba is not Poland, where the church led the opposition to
communism in an overwhelmingly Catholic country. Although
around 60% of Cubans are baptised as Catholics, only 5% are
practising, says Mr Márquez. Santería, a syncretic Afro-Cuban religion, has more adherents. But the government has gradually relaxed curbs on church activities. Its growing educational e…orts
are unoˆcial but mostly tolerated. Last year, for the †rst time
since the revolution, the image of the Virgin of La Cobre was paraded around the island to vast crowds. On March 26th Pope
Benedict is due to visit Cuba, as his predecessor did in 1998.
Some Cuban exiles say that Raúl has cleverly co-opted the
church. That is too simplistic. What the church is providing is a
meeting place in which conversations between the party and
some of its opponents and critics can take place. But to †nd the
Castros’ strongest‹and most impotent‹opponents, you have to
cross the short straits that separate Havana from Miami. 7
8
Cuban-Americans
The Miami mirror
Cubans on the other side of the water are slowly
changing too
AS AFTERNOON TURNS to evening in Máximo Gómez
Park, named for a hero of the independence war against
Spain, some three dozen mainly elderly men and a scattering of
women play dominoes, banging the tiles down on the ceramic
table tops. This timeless scene could be anywhere in Cuba. In
fact it is on Calle Ocho, a stretch of SW8th Street in Miami, in the
heart of what is known as Little Havana. With its cigar stores, Cuban restaurants, and memorial to those killed in the failed attempt to invade the country at the Bay of Pigs in 1961, Calle Ocho
remains the spiritual home of exiled Cuba. But much of it has
come to look like any street in gritty urban America, with its payday loan shops and cheap supermarkets. Nowadays Little Havana is full of Central Americans; most Cubans have long since
moved up and out.
In the †rst 15 years after the revolution half a million Cubans arrived in Miami. A few were Batista’s henchmen ‡eeing
vengeance; the vast majority were business and professional
people whose property was threatened with seizure or who simply did not want to live under communism. Thanks to generous
federal assimilation aid and to their own entrepreneurial drive,
they turned Miami from a sleepy tourist resort into a dynamic
business hub. A small minority engaged in violence, notably the
terrorist bombing of a Cuban civilian aeroplane over Barbados
that killed 73 people in 1976.
More signi†cantly, they built one of the most powerful political machines in American history, dedicated to overthrowing
the Castros through the economic embargo imposed from 1960.
Three of the four congressional districts in Miami are held by Cu- 1
The Economist March 24th 2012
SPECIAL REPORT
C UBA
lowed any American to send up to $2,000 a year to Cuban citizens; and authorised more direct ‡ights and travel by religious
and educational groups.
The State Department also began regular talks with Cuban
oˆcials. Progress halted when Cuba arrested Mr Gross. The
Obama administration beat back an attempt in Congress in December to overturn its easing measures, but shows no sign of
wanting to open up further.
Neither does Cuba. In 2009 Raúl appointed Bruno Rodríguez, an inept hardliner, as his foreign minister. The economic
costs of the embargo to Cuba‹higher shipping charges, shortages of some medicines and components, tourist revenue forgone‹are far outweighed by its political bene†t to the regime. It
has allowed the Castros to maintain a siege mentality.
Even so, the United States and Cuba co-operate smoothly
on practical issues, such as hurricane monitoring, coastguard
matters, anti-drug work and patrolling the perimeter of the
Guantánamo naval base. And the embargo has sprung leaks: in
the past few years the United States has sold Cuba food worth up
to $960m a year (though it insists on settlement in cash).
Worms no more
2 ban-American Republicans, as is one of Florida’s Senate seats.
(Robert Menendez, a Democrat, sits in the Senate for New Jersey,
now home to some 85,000 Cuban-Americans.)
That political machine explains why America has not established normal relations with Cuba, as it has done with China
and, since 1995, with Vietnam (with which it was at war two decades earlier). ŒIt’s a policy based on revenge. It sells well, but it
has nothing to do with what’s going on in Cuba, says Joe Garcia,
a former hardliner who has twice run and lost as a Democratic
candidate for the House of Representatives in Miami.
The embargo gives the United States leverage, counters Lincoln Diaz Balart, who spent 18 years in the House before handing
his district over to his younger brother. He envisages bargaining
Œaccess to the US and its billions in mass tourism, investment
and credit for the legalising of political parties and the liberation of political prisoners. Mr Diaz Balart, who has been unable
to visit Cuba since 1959, insists that Raúl’s reforms are Œwindowdressing‹the only change is an increase in repression.
Over the decades there have been tactical shifts in American policy. Jimmy Carter re-established partial diplomatic ties.
Under Bill Clinton, America began to o…er aid to dissidents but
also liberalised some travel. After Cuba responded to a provocative campaign of over‡ights by exiles by shooting down two
light aircraft in international airspace, killing their four crew,
Congress in 1996 approved a law known as Helms-Burton,
which attempted to extend the embargo to foreign companies
and barred the administration from supporting Cuba’s return to
the IMF. Perhaps most importantly, it stripped the White House
of the power to end the Cuban embargo. Only Congress can now
lift it completely, and only when both Castros are out of oˆce
and free elections on the way.
George Bush junior tried to increase the pressure on the
Castros, curbing travel and remittances to the island by CubanAmericans and instructing the US Interests Section in Havana to
o…er more aid to dissidents. That merely gave Fidel cover to crack
down on them. Barack Obama has returned to some of the policies adopted by Messrs Carter and Clinton. He has removed all
restrictions on travel and remittances by Cuban-Americans; alThe Economist March 24th 2012
Mr Obama’s policies re‡ect the changing nature of the Cuban-American population in south Florida as much as developments on the island. Some 400,000 of that population, now totalling 1.2m, have arrived since 1980, often as economic migrants
rather than political exiles. They retain close ties with the island.
In the check-in queue at Miami airport for one of the eight daily
charter ‡ights to Havana, almost everybody is carting two or
three huge bags †lled with gifts or goods to sell. ŒThere’s been a
move to a border economy, says Carlos Saladrigas, a Miami
businessman. That has been welcomed by Raúl, who has said
that Cuban-Americans should no longer be despised as gusanos
(Œworms), Fidel’s term for them, but seen as part of the nation.
Mr Saladrigas believes the changes in American policy
should go much further. In 2001, together with other CubanAmerican businessmen, he set up the Cuba Study Group to challenge the embargo. ŒIn business we know that if a strategy hasn’t
worked for 53 years, you change it, he says.
Roots of Hope, a group set up by Cuban-American university students, has also taken advantage of Mr Obama’s measures. Its aim is Œto help Cuba’s youth to empower themselves,
says Tony Jimenez, one of its founders. Its members collect second-hand mobile phones to give to young people on the island.
Yet the evolution of the Cuban-American community has
not been matched by political change. That is mainly because
older Cuban-Americans vote in large numbers, and for the
cause. Their children, and more recent arrivals, are less likely to
vote and care more about their life in the United States.
Anyone who publicly questions the embargo has to be
brave. ŒFor years there’s been a genuine fear of speaking out in
Miami, says Mr Saladrigas. ŒI know people who’ve dissented
and lost their jobs or had to close their shops. But the pressure is
lessening. In 2007 Neli Santamaria began organising discussions
about Cuba policy at her café on Calle Ocho. ŒTen or 20 years ago
I would have been bombed, she says. Now she just gets slandered on the internet. Several prominent businessmen make it
clear they would invest in Cuba if the embargo was lifted.
There is an eerie similarity to the ranting insults that pass
for debate on each side of the Florida Straits. Perhaps that is not
surprising. As Mr Saladrigas notes wryly, Œone of the things I’ve
learned on my trips to Cuba is that they’re just like us: stubborn,
proud, even arrogant. To the outsider, observing political
change in the two Cubas resembles watching a tortoise race in
which neither reptile has strayed far from the starting line. 7
9
SPECIAL REPORT
C UBA
After the Castros
The biological factor
Who and what will follow Raúl?
CLIMB INTO ONE of those stately 1950s Plymouth sedans
at Havana’s Plaza de San Francisco and head west, and you
take a journey through Cuban history. The splendid stone
churches, palaces and town houses of Old Havana are testament
to four centuries in which Cuba was Spain’s Œever-faithful isle,
its most durable American colony. Drive along the wave-swept
Malecón, and you will glimpse the cupola of the now-shuttered
Capitolio, built in reverent imitation of the Capitol building in
Washington, DC. Carry on to Miramar and you come upon the
vast compound once occupied by the Soviet embassy.
Having been a Spanish possession, an American neo-colony and then a Soviet client, Œfor the †rst time in its history‹or at
least since 1510‹the island is really on its own, wrote Hugh
Thomas, a British historian, in 2001. That seemed true then. Cuban oˆcials would refute it now, pointing out that they have secured normal relations with the whole of Latin America and a
close alliance with four of its countries, as well as in‡uence in Africa and ties with rising China.
Havana has 181 foreign embassies, more than Madrid, even
if most are small posts whose diplomats down their mojitos and
struggle to build close relationships with Cuban oˆcials. Above
all Cuba now has Venezuela’s Mr Chávez. Yet he is a contingent
asset: his aid will last only as long as his grip on power.
Might o…shore oil bring relief? At the end of January the
Scarabeo 9, a deepwater rig built in Asia to get around the American embargo, appeared on the horizon o… Miramar. In the next
few weeks its operator, Spain’s Repsol, will announce whether
or not it has found oil in commercial quantities. But even if it has,
the oil will be costly and diˆcult to extract.
Carry on westward in that sturdy Plymouth, and in 45 minutes you come to the scru…y town of Mariel, overrun with bicycle-rickshaws and best known as the site of a boatlift in 1980
when 125,000 people left the island. Outside the town, Brazil’s
Odebrecht is building a deepwater port and a container terminal
for the giant ships that will soon traverse a widened Panama Canal. The new port complex, to be operated by Singapore Ports,
will be a Œspecial development zone with factories producing
Given his
age, Raúl
seems
unlikely to
stay in
charge for
more than
another †ve
years or so
10
for export. Much of the $975m
for the infrastructure comes
from Brazil’s National Development Bank.
Mariel is likely to be an important part of Cuba’s future as
a capitalist country. Brazil, like
China, Spain and Canada, is investing on market terms. When
Brazil’s president, Dilma Rousse…, visited Cuba in February
she refrained from public criticism of its human-rights record.
Oˆcials in Brasília insist that,
just like the United States, they
would like to see political freedom on the island, but they go
about it di…erently.
The imperative of change
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There is no obvious alternative to Raúl’s reforms. But the
Future special reports
paternalist state produced an inManufacturing April 21st
fantilised society, and as it reInternational banking May 19th
treats popular anger could easiChina’s economy May 26th
ly mount unless living stanThe Arctic June 16th
dards rise. The other clinching
Previous special reports and a list of
argument for change is what
forthcoming ones can be found online:
Cubans call Œthe biological faceconomist.com/specialreports
tor. Given his age, Raúl seems
unlikely to stay in charge for
more than another †ve years or so. Cubans were in awe of Fidel.
They are less so of Raúl, and may not be at all of his successor.
Who might that be? Mr Ponte, in Madrid, fears a dynastic
temptation. Although Fidel largely kept his children out of sight,
Raúl’s son, Alejandro, acts as his national security adviser; his
daughter, Mariela, is a prominent campaigner for gay rights; and
one of his sons-in-law, Colonel Luis Alberto Rodríguez, runs part
of the armed forces’ business empire. But none of the three is on
the Central Committee, let alone the Politburo. The chances are
that the next leader will come from among current or recent provincial party secretaries, like Ms López Acea or Mr Díaz-Canel.
What is the destination of change? The reformist economists think that Cuba should move towards market socialism as
practised in Vietnam or China, but others dismiss the parallel,
citing cultural and geographical di…erences. Cuba could look for
models closer to home. Fidel was determined to turn his island
into a world power. ŒWhile Fidel’s obsession was the world,
Raúl’s is Cuba, a foreign diplomat observes. Geographically,
Cuba is a declining part of a rising Latin America. It has several
big assets, including its highly educated workforce and, potentially, the capital of its diaspora. The high-tech industries of Costa
Rica, the tigerish dynamism of Panama and the social democracy of Brazil all o…er things that Cuba could emulate.
There are less attractive political models, near and far. For
example, it is not hard to imagine a Cuban Vladimir Putin emerging from the army or the security services. A somewhat less bad
scenario, envisaged nearly 20 years ago by Jorge Domínguez, a
Cuban-born political scientist at Harvard, would see Cuban politics start to resemble Mexico’s under the long rule of the Institutional Revolutionary Party. The Communist Party would establish a loyal opposition of quasi-autonomous parties, hold a fairly
free election which it would probably win, and use that to negotiate with the United States. But then again the Cuban people
might have other ideas. 7
The Economist March 24th 2012