A peso for your thoughts: U.S. to retain capitalism, Cuba to stick with socialism

The chairs of a government commission, after meeting in secret, release an economic reform document that some say cuts to the heart of the relationship of citizens and the state.  The head of the largest labor federation says its message to workers is “drop dead.”   Retirement, medical, even defense programs are targeted for cuts.   Government workers are to be laid off; government salaries cut.  Benefits are to be better targeted at the most vulnerable.  Should the program be adopted, even home ownership will be affected.

Such are the changes envisioned for the United States by a deficit reduction commission chaired by Erskine Bowles and Alan Simpson.  They have aroused great controversy here in the U.S., even emotional condemnations (“drop dead”?).  No one, so far, has called the plan a blueprint for abandoning capitalism.  The path for turning the secret plan into public policy is at best unclear.

Societies great and small are confronting the need to make significant adjustments in their approaches and obligations toward their citizens in order to regain fiscal balance and preserve and extend the essence of their systems.  The United States, with its 14 trillion dollar Gross Domestic Product (GDP), is starting a debate to address these challenges.  Cuba, and its 40-50 billion dollar GDP, has dramatically embarked on its own course to save its economy and system.

In recent years, the short-comings of Cuba’s system have been magnified by the roiling global economy, destructive seasonal storms, and the continuing burden of the U.S. embargo.  The Associated Press reports that Cuba lost $10 billion of its income due to fluctuations in sugar, tobacco, and nickel prices, hikes in the costs of imported oil and food.  Additionally, over the last four decades, 16 hurricanes have caused an additional $10 billion in damage, a figure which represents twenty percent of Cuba’s GDP.

For a generation, Cubans had the latitude to operate outside the system in order to make ends meet.  But economic conditions simply outran them.  In a process that many of our Cuban friends found agonizingly slow, Cuba’s government initiated a period of discussion and modest reforms aimed at easing the difficulties of everyday life.

Earlier this year, Cuba’s government announced that half a million workers would be dropped from state payrolls and that economic reform would occur with the goal of equipping the private economy to absorb them.  Some adjustments have already taken place, but there was no formal mechanism for transforming promises into policies.

Now, something bigger and much bolder is taking place.  For the price of a peso, about 3 cents, we’re told that Cubans can purchase on the street corner a thirty-two page economic modernization plan – Project for Guidance on the Economic and Social Policy – that encompasses a sharp critique of the system and significant reforms.  The plan will drive a national debate starting now through the beginning of next year, and culminate in the first Cuban Communist Party Congress in fourteen years.

The plan restates the call for layoffs of state workers.  It aims to pay off Cuba’s foreign debt.  It proposes ending the ration card that subsidizes the ability of households to buy food.  The plan eases restrictions on private enterprise and self-employment.  State-owned businesses will have more autonomy over decisions on who to hire, when to invest, and whether to import. Retail and agriculture will remain on the path of private sector reforms.  The document even proposes opening up the real estate market for Cubans’ privately owned homes.

Foreign direct investment will be further encouraged and targeted at special economic zones to promote development.  Cuba will remain a planned economy – it is not abandoning socialism – but one that relies less on micromanaging the system and more on regulating and taxing businesses.

President Raúl Castro, in an address earlier this week, announced that the plan would be debated from November 15-30 by Communist Party members, and by the population more broadly in meetings convened from December 1, 2010 to February 28, 2011.  He said revisions could take place before the Communist Party meets in April 2011.  Once that meeting occurs, Cuba’s new course will be set.

These are dramatic changes undertaken by Cuba at its pace, at its own discretion, following the beat of its own drum, not a wish list conjured by Washington or U.S. policy.

For those who’ve made the overthrow of the Cuban system a matter of theology, neither the sweep of the reforms nor their homegrown nature will be sufficient.  You can hear it already – “they haven’t abandoned socialism!”  True.  Or “they haven’t finished freeing all of their political prisoners.”  Also true.

But there is another truth.  No matter how much Cubans decide to change their system, for these critics, it won’t be enough, and the new changes will probably excite calls in the U.S. Congress to twist the screws of the embargo harder, or at least hold them fast, and the new conservative majority has the leverage to try and make it so.

President Obama – who has begun to engage in the debate over fixing the U.S. economic system – must decide for himself what to make of these sweeping reforms in Cuba.  Whether he acknowledges them or not, they are going to take place.  His own policy declarations committed our country to encouraging such changes by loosening the restrictions of our policy toward Cuba.  Whether reality or politics prevails, time will tell.  Meanwhile, adjustments in both countries are going to be made.

IN CUBA

Cuba to hold first Party Congress in 14 years

Raúl Castro announced this week that Cuba will hold its Sixth Congress of the Communist Party in April of next year, the first Party Congress since 1997, according to a report from the Guardian.  The Party Congress is meant to be held every four years, but has been put off due to economic difficulty on the island and the need to focus attention on preventing a full-blown economic crisis.  The economy will be the sole focus of the Congress, which will take place six months after Cuba began to implement one of its most fundamental economic reforms in decades. The government has begun laying off hundreds of thousands of state employees and hopes to expand the private sector.

Speaking Monday in Havana, Raúl Castro stated, “The Sixth Congress will concentrate on the solution for the problems of the economy and on the fundamental decisions of the updating of the Cuban economic model.  The economic battle constitutes the only topic of the Congress.”

This will likely be the last Party Congress for the generation of Cubans who fought in the 1959 revolution, reports Reuters.

Cuba releases new plans for economic overhaul ahead of Party Congress

The Cuban Communist Party has released a 32-page guideline document outlining areas in which the government proposes making economic adjustments. The document, titled “Project for Guidance on the Economic and Social Policy,” is being sold for one peso in Cuba.  It states, among other things, that in the future Cuba will promote foreign investment, diversify exports, expand the private sector, and pay off its external debt, according to Reuters.  In the new guideline document, Cuba also proposes the elimination of both its dual currency and the ration card (which has been in place in one form or another since 1962). However, Cuba will not abandon its socialist system – free healthcare and education, for example, will remain.

This guideline document will serve as a basis for debates leading up to the Party Congress next year.  To access a copy of these guidelines, click here.

The Cuban government’s announcement of economic reforms through this new document has produced strong reactions both in Cuba and outside the island, reports El Nuevo Herald.  In regard to the reforms, Sarah Stephens, of the Center for Democracy in the Americas, stated, “What the Cubans are doing by their own initiative is what the United States has been trying to get them to do for decades.  Now the United States’ main challenge is to react positively and creatively to these changes.”

Yoani Sánchez has made her own statement concerning the new guidelines.

Cuba to release remaining 13 political prisoners soon

Diosdado González, one of the thirteen Cuban political prisoners who have yet to be freed, says he was told this week by Cuban authorities that he would be released from jail in the next fifteen to thirty days, reports the Miami Herald.  The Cuban government was widely expected to release the remaining 13 prisoners, all of whom have rejected exile in Spain, by November 7th, but that deadline passed without any action by the Cuban government.

According to Reuters, Laura Pollán, head of the Ladies in White, believes that all the prisoners will be released, not just González, who is reportedly on hunger strike.  Pollán also announced that, based on this understanding, the Ladies in White will hold off on protest activities aimed at securing the release of the final 13 prisoners.  El Universal confirms Pollán’s belief, stating that the remaining prisoners will be released within the next month.

Another of the imprisoned dissidents has apparently agreed to leave for Spain if his relatives are given possession of his house, a condition which the Cuban government assured him would be met.

U.S.-CUBA RELATIONS

U.S. official gives moderate approval to Cuba’s new policies

Arturo Valenzuela, Assistant Secretary of State for Western Hemisphere Affairs, said that the United States looks favorably on Cuba’s new economic policy shifts, though he acknowledged that “greater liberalization” was needed.  According to the Jamaica Observer, Valenzuela stated that the reforms “could point to an important shift in Cuban economic policy.”  Valenzuela also expressed his hope that Cuba’s reforms would help pull Cuba’s struggling economy out of its current recession.  Valenzuela made these comments during a brief visit to Uruguay.

Jailed husband a pawn in U.S.-Cuba standoff

Judith Gross, spouse of Alan Gross, a U.S. contractor imprisoned in Cuba since December of last year, wrote in the Miami Herald this week calling for the release of her husband.  Ms. Gross reports that her husband has suffered severe physical and emotional pain since his incarceration, and his 26-year old daughter was recently diagnosed with breast cancer.  She makes a plea for the release of her husband on humanitarian grounds and also states “It is clear to me that Alan is being held as a political pawn by two governments that refuse to change course in the way they relate to each other.”

Ms. Gross made a direct appeal at the end of her letter to U.S. and Cuban heads of state:

This is my plea to Presidents Obama and Castro: Be different from your predecessors, change the tide of bilateral relations. I call on President Obama, in whom my husband believes so much, to not forget his pledge of a “new beginning” in relations with Cuba. And I call on President Castro to continue working on improving Cuba’s human rights record. To both, I beg: Do not make Alan’s case an excuse to fall further apart, but rather an example of a new era in U.S.-Cuba relations.

According to the blog Along the Malecón, a “knowledgeable source” in Cuba has said that Gross will be put on trial, though the date is still unknown.

Miami Archbishop Wenski becomes leader in U.S.-Cuba dialogue

Miami Archbishop Thomas Wenski’s role as a national Catholic leader is quickly growing, reports The Miami Herald.  He has become an international diplomat of sorts, representing U.S. Catholic leaders during a recent trip to Cuba.  Wenski could play a large role in Cuba-U.S. relations if the U.S. government decides to ease its stance on Cuba, the Herald reported.

During his visit to Cuba, Wenski met with Raúl Castro, who communicated his disapproval of remarks about socialism that Wenski made in a Florida newspaper, according to El Nuevo Herald.

Cuban church leaders visit the U.S.

Bishop Arturo González of Santa Clara has traveled to South Florida for a four-day visit aimed at promoting solidarity between the Cuban Catholic Church and Cubans living in South Florida, according to CBS4 News.  González’s speech to the press became political when he addressed efforts to encourage the Cuban government to release political prisoners.  However, the main purpose of the visit was to promote a sense of fraternity between Cuban-Americans and their island counterparts.

“The goal of this commission is precisely to discover and help discover the ties that unite Cubans anywhere in the world,” said González.

In a separate visit, representatives of the Cuban Council of Churches are scheduled to visit Washington, D.C. next week.  The group will discuss the changing role of the religious community in Cuba at various public and private events.

University of Florida study programs in Cuba prohibited by law

Last month, the 11th U.S. Circuit Court of Appeals upheld a 2006 state law that bans the University of Florida and other state universities from funding travel to Cuba.  This decision impedes UF’s attempts to establish a center for Cuban study and conduct research in the country, according to the Gainesville Sun.

“This will just put a damper on Florida ever being a center for learning on Cuba,” said Carmen Diana Deere, a professor of food and resource economics and Latin American studies at the University of Florida.  “Attracting students is difficult if they know they can’t get research grants funding work in Cuba,” said Deere.

William Messina Jr., an agricultural economist at UF who researches Cuba’s agricultural sector said his research would help Florida farmers prepare for opportunities in Cuban markets as well as new competition they would face.  “If we can’t do this kind of research, I think it puts Florida growers at a disadvantage down the road,” he said.

Los Aldeanos perform on U.S. television but avoid making political statements

Los Aldeanos, a Cuban hip-hop group whose songs are highly critical of Cuba’s communist government, performed for the first time ever on U.S. television this week, appearing on the show Esta Noche Tu Night, reported Cafe Fuerte.  Los Aldeanos are known for their songs which focus on the social problems in Cuba; after performing underground for years, they have recently been permitted to perform publicly in Cuba.  This is their first tour in the U.S.

Unlike  most of their public appearances, on Esta Noche Tu Night the group dodged political questions and insisted that they had arrived in the United States to perform, not to engage in political debate. “We came here to play music and to do nice things for the people who are here [Miami] and can’t go there [Cuba], and for those who are there [Cuba] and can’t come here [Miami]…things must change,” stated El B, half of Los Aldeanos.

Video coverage of Los Aldeanos on Esta Noche Tu Night can be found here.

Los Aldeanos will also perform with Silvito Liam Rodríguez, the son of renowned Cuban singer Silvio Rodríguez, on November 14th in the Dade County Auditorium.

Cuba denounces Castro “plot” in new Call of Duty video game

Cuba harshly criticized a new U.S. video game in which the objective is to kill Fidel Castro, arguing that the game glorifies assassination and will turn U.S. children into “sociopaths,” reports the AP.  Cuba also criticized the video game for its hostility toward Cuba’s former president.  The game is called “Call of Duty: Black Ops,” and it takes players to the Cold War enemies of the U.S.: Russia, Cuba, Vietnam, and Laos.  “What the United States couldn’t accomplish in more than 50 years, they are now trying to do virtually,” said an article posted on Cubadebate, a state-run news website.

Real-life assassination attempts and hostile U.S. policy have created a siege mentality in Cuba, which has consistently said that it is under attack from the United States.  Fidel Castro has survived more than 600 assassination attempts according to the Cuban government.

This way of thinking may not be a thing of the past, either.  Current U.S. Congresswoman Ileana Ros-Lehtinen is on video stating her support for any assassination attempt on the life of Fidel Castro.

U.S. foreign policy toward Latin America shifting with new Congress

The GOP’s victory in the midterm elections, which propelled Ileana Ros-Lehtinen to the head of the House Foreign Affairs Committee, could spell the end for any thaw in U.S.-Cuba relations, reports Josh Rogin in Foreign Policy.  Aides of the Republican Party have stated that the Cuba issue is “indicative” of the issues of human rights and democracy promotion that the United States may seek to press once the new Congress convenes.

Ros-Lehtinen has stated that she believes that the “majority of the committee” will be able to “help the president be tougher with countries,” reports Reuters.  Ros-Lehtinen is expected to take a hard-line stance against what she terms “rogue states” – namely Cuba, Iran, North Korea, and Venezuela.

Regarding Cuba and Venezuela, Ros-Lehtinen said that despite a strong personal connection to Latin America, the region would not necessarily dominate the committee’s work.  “I bring my passions and my thoughts and my ideas to the position of chair, but that does not mean that what I believe and what I feel passionate about, everyone else should be dwelling on,” she said.

According to the Havana Times, some people feel that despite the fact that Cuba hard-liner Lincoln Díaz-Balart did not run for re-election in November’s congressional election, the rise of fellow hard-liner Ileana Ros-Lehtinen to the leadership of the House Foreign Affairs Committee represents “one step forward, two steps back” with regards to Cuba policy.

In the words of Sarah Stephens, director of the Center for Democracy in the Americas, this change “makes a big difference,” as Ros-Lehtinen is expected to thwart any attempts at normalizing U.S.-Cuba relations.  However, given the fact that Cuba ranks low on the list of priorities for the incoming House Foreign Affairs Committee, it is not certain that the U.S. will adapt a tougher stance on Cuba.

“Pedro Pans” to tour Miami-Dade camps

Former Pedro Pans – Cuban children who were sent by their parents to the United States in the early 1960s – will descend upon Miami this week to mark the fiftieth anniversary of the start of their exodus.  The Miami Herald reported that the Pedro Pans will tour three camps where they were all taken upon arrival in the United States.  There will also be a reunion dinner this weekend.

“For some of us this is the first time we will revisit the camps since we were children,” said Carmen Romanach, a Pedro Pan and one of the organizers of the event.

British banks eager to open relations with Cuba

Some British banks are showing signs of shifting away from refusing to handle financial transactions involving British trade with Cuba, following complaints from small businesses, reports The Telegraph.  Several business owners have said that they have had “more constructive discussions” with their bankers following protests about their treatment when they were informed that their accounts would be closed unless they halted the transfer of payments from long-standing customers and banks in Cuba.

However, banks are still wary of incurring penalties imposed by the United States for doing business with Cuba.  Lloyds and Barclays paid heavy fines for allegedly breaching the provisions of U.S. legislation aimed at stifling capital flow into Cuba from third party countries.  Additionally, British bankers found to have breached U.S. sanctions can face extradition from the United States, and the British government is unable to offer its citizens any protection from this penalty.  Banks throughout the British Isles have been vocal in objecting to U.S. restrictions on financial transactions involving Cuba.

CUBA’S FOREIGN RELATIONS

Brazil to help Cuba in economic reforms

A Brazilian delegation will travel to Havana next week to sign agreements that will allow Brazil to help Cuba implement economic reforms aimed at increasing self-employment on the island, reports EFE.  Brazilian Foreign Minister Celso Amorim said that his country has offered to help Cubans develop small- and medium-sized businesses in a bid to improve Cuba’s struggling economy.

Amorim explained that he believed that Cuba could learn from Brazilian successes in the development of entrepreneurship, including small- and medium-sized businesses.  Brazil’s steps to reduce its once-large informal economy could serve as a model for Cuban attempts to curb its own informal economy, suggested Amorim.

The agreements will allow Brazil to cooperate with Cuba in the areas of information technology, support for the self-employed, digital television, and nanobiotechnology, among others.

Ecuador receives help from Cuba in energy sector

Reports of Cuba’s latest energy revolution project come from the Cuba Standard.  Fuel-oil generators worth several hundred million dollars are being installed in Ecuador.  The total cost of the program is undisclosed, but it is known that the Ecuadorean government is funding the project.

Cuba first began developing fuel-oil generators when faced with an energy crisis in 2006, and has incorporated these generators into Cuba’s “energy revolution.”  Ecuador and Cuba signed a memorandum of understanding on energy cooperation in 2009.  Under this agreement, Cuba will provide Ecuador with biogas and biomass technology, while Ecuador provides Cuba with hydroelectric know-how.

Venezuela’s Chávez in Cuba for talks with Fidel and Raúl

Cuba and Venezuela have renewed a bilateral agreement that makes Venezuela Cuba’s principal economic partner for the next ten years, reports AP.  Venezuela’s president, Hugo Chávez, was in Cuba this week to attend evaluator meetings for the Agreement of Collaboration between the two states.  EFE reports that Chávez met with Fidel Castro during his visit to Cuba.  Chávez also defended the need for solidarity between Cuba and Venezuela to continue to thwart the “dangers and threats” that the United States poses to Latin America, reports Noticias 24.

Photos of the visit between Fidel Castro and Hugo Chávez can be found here.

Chávez also affirmed this week that Venezuela is beginning to make preparations to commence oil extraction in Cuba, reports El Universal.  “We know that Cuba has a lot of oil and soon we will start constructing our own well,” stated Chávez.  PDVSA, Venezuela’s state-run oil company, is set to begin operations soon.

Cuba and China set bilateral trade strategies for next year

According to the Cuban News Agency, China and Cuba have established the guidelines for the development of joint trade projects in 2011.  The business meeting was held within the framework of the 28th International Trade Fair of Havana.  Projects in the areas of tourism, telecommunications, agriculture and other areas have already been consolidated, yet Chinese and Cuban officials hope to develop more projects in the years to come.

Around the Region:

Colombia, Venezuela open trade talks, Colombia Reports

Colombia’s Trade, Industry and Tourism Minister Sergio Díaz Granados traveled to Venezuela Monday to negotiate a free trade agreement with its neighboring country, which blocked Colombian imports in 2009.  “We have said that we want a trade which is as broad as possible, with stable rules.  And they [Venezuela] have said that want a trade which is managed, equitable and fair,” the minister said.  As a concrete step, both governments agreed on creating a bilateral commission to deal with the new round of talks about trade.

Interview with Venezuelan General produces international polemic

According to La Jornada and MercoPress, the Commander-in-Chief of the Venezuelan Armed Forces (FANB), General Henry Rangel Silva, stated in an interview this week that the military will not accept an opposition government in 2012. Those accusations prompted a comment from OAS Secretary General José Miguel Insulza: “The fact that an army commander threatens with an a priori insubordination is unacceptable. Venezuela’s ruling civilian authority should correct that,” he said.

The Venezuelan government, however, claimed that the General actually said: “The attacks are part of the opposition agenda. The ‘Armed Forces’ element has been used historically to somehow overthrow governments. (…) They act supported by third countries and that affects nationalism. The hypothesis [of an opposition government] is difficult; that would mean selling the country. That is not going to be accepted by the citizens, by the Armed Forces, and by the people.”  The bracketed statement was inserted by the article’s author.  For his part, President Chávez denounced what he considered to be a manipulation of Rangel Silva’s quotes and accused Insulza of delivering opinions without checking the facts.

After General Rangel Silva’s interview was published on November 8th, Chávez promoted General Rangel to Commander-in-Chief.

Michelle Bachelet: Bringing women out of the shadows, Miami Herald

Former president of Chile, Michelle Bachelet, was recently nominated to lead U.N. Women. The United Nations has created this new entity to promote gender equality and empowerment of women and fight against discrimination throughout the world. In a recent article, Bachelet says, “I don’t look at women as victims, I look at them as agents of change, people who can make important contributions to their countries.”

El Salvador prison fire leaves 16 young gang inmates dead, 22 injured, AP

A fire tore through a prison north of El Salvador’s capital killing at least 16 young inmates and injuring 22. Ten of the injured are listed in serious condition with burns. Initial reports indicate the fire was accidental and may have been caused by an electrical short circuit. In September, a law took effect in El Salvador making membership in a street gang punishable by four to six years in prison. Gang leaders face up to ten years. Gang members arrested for specific crimes also fill El Salvador’s jails.

Recommended Reading:

Not your father’s Cuba, Arturo Lopez-Levy at Foreign Policy

Cuban-American politicians have adopted a hard-line stance on Cuba for the past few decades, rendering nearly impossible all U.S. efforts to improve relations with the Caribbean island.  However, over time, the Cuban-American population in Miami is growing apart from the politicians that represent the region.  This generational gap could have serious repercussions for future U.S. policy toward Cuba.

Certified right-wing extremists set to take control of House Foreign Affairs Panels, Alexander Main of CEPR

Alexander Main explores the potential consequences that the midterm elections may have on the House Foreign Affairs panels.  The new faces in leadership, such as Reps. Ileana Ros-Lehtinen and Connie Mack, are known for their hard-line stance toward Chávez’s Venezuela and the Castros’ Cuba.  Ros-Lehtinen will become the new Chair of the Foreign Affairs Committee in January, while Mack will be the new Chair of the Subcommittee on the Western Hemisphere.

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