Yaffe

Cuba debates new Constitution

On 22 July, over 600 delegates in Cuba’s National Assembly of People’s Power, the country’s highest decision-making body, approved the draft of a new Constitution after two days of debate in which more than 100 delegates made interventions. Now the Constitution will be distributed throughout the island and between mid-August and mid-November the population will debate it in grassroots meetings, in communities and centres of work and study. A second version of the Constitution will then incorporate opinions expressed in the popular consultation. Following approval of this second version by the National Assembly, the new Constitution will be put to a nationwide referendum based on a secret ballot, probably early in 2019. HELEN YAFFE reports.

The socialist character of the Cuban system and the role of the Cuban Communist Party (CCP), as the country’s ideological leadership, remain ‘principles set in stone’. However, a clause in the 1976 Constitution about the ultimate aim of building a communist society is omited from the draft. ‘This does not mean we are renouncing our ideas,’ said President of the National Assembly, Esteban Lazo. At the time of the earlier Constitution, one-third of the world’s population lived under socialist regimes. Today Cuba is almost isolated as a country building socialism. Under such circumstances, the idea of a transition from socialism to communism is abstract and remote. ‘We believe in a socialist, sovereign, independent, prosperous and sustainable country’, explained Lazo. State enterprises will remain the mainstay of the economy. There will be limits to the concentration of private ownership. Access to healthcare and education will remain free and universal. New in the Constitution is a defence of the environment, and the need to mitigate climate change. Other articles are rights which the Cuban state will work to make viable, and some require subsequent legislation.

The recognition in the new Constitution of private enterprise and the need for foreign investment became the focus of the international media. This change is consistent with the process of economic restructuring underway in Cuba since 2011, and with the development challenges the island faces as a small, trade-dependent, developing country, hounded by a punitive and relentless US blockade, attempting to construct socialism in a capitalist globalised world. Cuba needs capital to invest in its productive infrastructure, and it cannot get it internally. Therefore, capital must come from outside; through foreign direct investment or remittances to individuals. Hence the need to codify acceptance of foreign investment and private businesses in the Constitution.

Work on a new constitution has been underway since 2013, just two years after adoption of the ‘Guidelines for updating the economic and social model’. Nearly 9 million Cubans (out of a population of 11.2 million) participated in debates about these Guidelines before they were approved by the 6th Congress of the CCP in April 2011. Cuba has since introduced new forms of ownership and management, changed the employment structure (extending self-employment, enabling small businesses, and creating non-agricultural cooperatives), removed some restrictions on market exchanges and sought to increase foreign investment. Renewing the Guidelines at the 7th Congress of the CCP in April 2016, Raul Castro stated: ‘Everything we have been doing must be reflected in the Constitution’.

Today 600,000 Cubans work in the private sector, some 13% of the workforce. In April 2016, Raul Castro recognised both the concerns this provoked and its unplanned consequences: ‘The recognition of the existence of private property has generated more than a few honest concerns from participants in the discussions prior to the [7th] Congress, who expressed concerns that in doing so we would be taking the first steps towards the restoration of capitalism in Cuba … I have the duty to assert that this is not, in the least, the purpose of this conceptual idea. The increase in self-employment and the authorisation to contract a workforce has led in practice to the existence of medium, small and micro private enterprises which today operate without proper legal status and are regulated under the law by a regulatory framework designed for individuals engaged in small businesses conducted by the worker and his/her family.’ The new Constitution will recognise private enterprise, enabling legislation to be introduced to control its expansion.

Contrary to sensationalist media headlines neither private property nor foreign investment are new in socialist Cuba. The revolutionary government’s first Constitution of 1976 established that all land belongs to the state, except the holdings of small private farmers or agricultural cooperatives; some 20% of arable land. In 1982, foreign investment was first approved for joint ventures with the Cuban state. Following the collapse of the socialist bloc, in 1992, the Constitution was amended to say that mandatory state-ownership applied only to the ‘fundamental means of production’. In 2014 a new Foreign Investment Law was implemented. Since 1993, 67% of agricultural production has been carried out in the non-state sector. Meanwhile, 85% of Cubans are homeowners, rising to 96% in Havana.

The private sector will be tightly controlled and reined in whenever it undermines the interests of national development. Evidence of this was seen in August 2017, when the issuing of licences for self-employment was frozen. Authorities analysing the impact of self-employment worked to create an adequate legislative framework to enforce taxation, prevent exploitative practices and the concentration of wealth, and strengthen mechanisms to ensure that private profits have social benefits. From 8 October 2018, the process of issuing licences will resume, but with greater restrictions on existing and new private businesses; for example, only one licence will be granted to each Cuban for private work. Tax concessions previously granted for those who hire more than five workers will be removed. Financial transactions must pass through a bank account. Other measures will clamp down on tax avoidance.

The new Constitution also introduces political and institutional changes to give greater autonomy and authority to the municipalities, strengthening the relationship between the people and the representatives they directly elect. The Provincial Assemblies will be abolished, replaced by Provincial Governors and Councils made up of municipal presidents and leaders of the municipal administrative councils. The aim is to decentralise and streamline authority, to improve administrative efficiency.

Power and responsibility will be more balanced at the top of government. New roles of President and Vice President of the Republic will be created. Until now, there has been a president of the Council of State. The President of the Republic will preside over the Council of State while the Prime Minister (designated by the President and approved by the National Assembly) will preside over the Council of Ministers. There will also be a new National Electoral Council. These posts will be elected by the National Assembly, delegates representing the entire population. There will be age restrictions, term limits (presidential post) and voting majorities required. The other powerful role will remain the General Secretary of the CCP, a post Raul Castro will likely hold until 2021.

The new Constitution has more detail on the rights and responsibilities of Cuban citizens. It codifies the right to equality, without discrimination on the basis of gender, sexual orientation, disability or any other form ‘harmful to human dignity’. Religious freedom, and the right to change religion, will be protected. Marriage will be recognised as ‘between two individuals’, rather than ‘a man and a woman’, endorsing same-sex marriage. Mariela Castro, Director of the Cuban National Centre for Sex Education, and an activist for LGBTQ+ rights in Cuba celebrated this, saying it reflects ‘the maturity achieved by the revolutionary process’.

Despite the distortions appearing in the mostly hostile foreign media, this process demonstrates both the Cuban Revolution’s enduring commitment to building socialism and the degree of democratic participation that entails.

Fight Racism! Fight Imperialism! 265 August/September 2018

This article was amended slightly following some clarifications from Peter Roman.  

Conceptualising Cuban Socialism

On 1 June 2017, an extraordinary session of Cuba’s National Assembly of Peoples’ Power approved important documents which define the character, objectives and strategy of Cuban socialism into the post-Castro era. Since 2011, a programme of ‘updating’ the Cuban economic and social system has been underway, and these documents aim to establish the parameters within which those developments will take place. Helen Yaffe reports.

Such measures are imperative given the greater space being opened up for market relations: private ownership and business, self-employment and foreign investment. Establishing social welfare and national development priorities will be essential to prevent market forces asserting a capitalist logic over Cuban development. Raul Castro will step down as President of the Council of State in February 2018,¹ and the Cuban leadership is working to strengthen the institutional basis of socialism to help safeguard its future when Cuba is no longer led by the ‘historic generation’ who carried out the Revolution.

The National Assembly is the highest decision-making body in Cuba, with half of its 614 delegates voted up from Municipal and Provincial Assemblies, and the other half representing the mass, grassroots organisations. The documents approved are: Conceptualisation of the Economic and Social Model of Cuban Socialist Development (Conceptualisation) and the Guidelines of the Social and Economic Policy of the Party and the Revolution (the Guidelines). There was also discussion about a third key document, Basis for the Plan of Economic and Social Development up till 2030: Vision of the Nation, Axes and Strategic Sectors (Plan 2030).

All three documents have been through a collective process of writing, analysis, modification and approval: consensus building practices which strengthen unity and commitment to socialist development. President Raul Castro described them as ‘the most studied, discussed and rediscussed documents in the history of the Revolution’. That is indicative of their importance.

The Guidelines

In 2007 the Cuban government created forums for everyone in the country to contribute to a ‘Great Debate’ about Cuba’s socio-economic problems and to suggest concrete solutions. Subsequently, the draft Guidelines were compiled, with proposals to address the issues raised. These were circulated for six months of public consultation prior to the 6th Congress of the Cuban Communist Party (CCP) in April 2011. After nearly nine million Cubans, out of a population of 11.2 million, debated the draft, 68% of the Guidelines were modified. The redrafted document returned to the National Assembly for further discussion, modification and approval. This formidable democratic process legitimised the Guidelines, which serve as the template for ‘updating the Cuban model’ to improve economic efficiency and productive capacity within a socialist framework. Numerous measures have been introduced since 2011 which implement the decisions they endorse. The Guidelines were updated again following the 7th Congress of the CCP in April 2016 for the 2016-2021 period.

Following the April 2016 CCP Congress, the Conceptualisation and the Plan 2030 documents have been through a similar, though more selective, process of debate involving 1,600,000 Cubans in 47,000 meetings. These include members of the CCP and its youth wing, the Union of Young Communists (UJC), and representatives of the organisations of the masses and other sectors. On 19 May 2017, the three documents were approved by the Central Committee of the CCP. Further discussions took place in work commissions prior to the Assembly. A total of 208,161 changes were proposed. Consequently, 92% of the original Conceptualisation document was modified.

Essentially these documents define the character of Cuban socialism: where it is going and how it will get there.² The three essential pillars of the ‘updated’ economic model are:

1) Consolidation of the socialist state in its economic (enterprise), political (organs of peoples’ power and workers’ representation) and social (socialist welfare and cohesion) aspects.

2) The introduction of a diversity of non-state forms of management and ownership.

3) The primacy of planning which ‘takes into account’ the functioning of the market.

Conceptualisation – where is it going?

Cuban academics and government specialists worked on the Conceptualisation document for four years before it was presented to the CCP Congress in 2016. It is the first document to formally attempt to ‘conceptualise’ Cuba’s socialist system. It combines the theoretical base and essential characteristics of the economic and social model ‘to which we aspire’ as a result of the process of updating the system.

It is not concerned with how Cuba’s economic and social model is updated, that is, the concrete measures to be taken and policies introduced to achieve the objectives. It presents the main changes necessary in order to ‘consolidate and advance the principles of our socialism and construct a sovereign, independent, socialist, democratic, prosperous and sustainable socialism’. The order in which these descriptors appear does not change throughout the document. Sovereignty and independence are the only viable frameworks within which the other principles are deemed feasible. As Fidel asserted in 1998 during the Special Period: ‘Right now, we are basically defending the sovereignty and independence of our country and the achievements of socialism. If we can build a little bit of socialism we do it, but mainly we want to improve what we have done, to achieve excellence.’ Real ‘sovereignty’ means control over national resources and that denotes resistance to multinational corporations, finance capital and allied political interests which have stripped independence from underdeveloped nations.

In the introduction, the Conceptualisation document highlights the Cuban feat of surviving the collapse of the Soviet bloc in the early 1990s, the gradual recuperation under the difficult conditions imposed by the US blockade,³ international uncertainty and internal problems that have prevented social and economic development taking place at the required pace. It recognises Cuba’s structural problems, the result of economic underdevelopment. The principal problems outlined are: the imbalance between the availability and need for hard currency; the offer and supply of products and services; technological obsolescence; under-use and inefficiency of the productive base, infrastructure and the investment process. It flags up economic and social differences between Cubans which are not based on their work – arising from differential access to hard currency and inherited advantages – and the erosion of values, manifestations of corruption, crime, indiscipline and other forms of social marginalisation. It also lists the strengths perceived to facilitate the updating process, such as: unity and youth, majority support, universal social provision, strength of values, diverse and active civil society, potential economic capacity, and international prestige.

The strategic objective is to promote and consolidate a prosperous and sustainable socialist society. The first chapter concerns ‘the principles of our socialism that sustain the Model’. These are: dignity, equality, and full human freedoms; the leading role of the CCP (a vanguard party, Martiana,⁴ Marxist); socialist democracy based on the sovereign power of the people; the socialist state as the guarantor of freedom, independence, sovereignty, people’s participation and control, rights, and laws, and the people’s socialist ownership of the fundamental means of production, as the main form of national economic and socio-economic system based on the real power of the workers and communal ownership via the state.

Chapter two on ‘ownership of the means of production’, notes that: ‘Property relations are determinants of any socio-economic system, given that the dominant form of ownership conditions the relations of production, distribution, exchange and consumption, that includes the appropriation of wealth.’ This is an essential point; property ownership is not a merely ‘economic’ fact, but has an impact on the reproduction of social relations, consciousness, class and ideology.

Chapter three discusses ‘planned management of the economy’, asserting that: ‘The planning (management) system takes into account the presence of market relations, regulating the action of those laws and limiting the space for their operation, such that the laws of the market do not exert a leading role in the Model.’ It explains that: ‘The objective existence of the market is determined by the level of development of the productive forces, the heterogeneity of forms of ownership and management, the social division of labour in the national sphere and of our foreign trade.’ In revolutionary Cuba, there has always been recognition of the survival of market relations, expressions of the operation of the law of value. Indeed this was the principal theme addressed in the Great Debate, initiated by Che Guevara in the early 1960s.⁵ These documents formally confirm the existence of small and medium private businesses in Cuba. This is a precondition for the introduction of urgently needed legislation to regulate and control them.

Chapter four on ‘social policy’ states that the increased wealth created will be fairly distributed, listing economic and social rights but also referring to the importance of work as the source of welfare and prosperity. The ‘final considerations’ stress the importance of debate, the exchange of ideas, communication strategies, and ‘other actions that contribute to modifying obsolete conceptions and practices that constitute the main obstacle to updating the Model’. It asserts the role of the CCP in driving and controlling the updating process.

Plan 2030 – how will it get there?

Framed as the principal tool to achieve the objectives set out in the Conceptualisation document, the Plan 2030 document aims to ‘consolidate socialist planning as governing and defining in the national economic management system’. The document deals with 23 ‘guiding principles and central themes for elaborating the national plan of social and economic development’. The Plan, it states, needs to confront difficulties in every sphere and must be an exercise in participative construction that guarantees consensus to achieve the ‘vision of the nation 2030’: a ‘sovereign, independent, socialist, democratic, prosperous and sustainable’ Cuba.

The six ‘strategic areas’ outlined are:

• effective, socialist government and social integration;
• productive transformation and international insertion;
• infrastructure;
• human potential – science, technology and innovation;
• natural resources and the environment;
• human development, justice and equity.

Each of these is divided into lists of general and specific objectives. However, like the Conceptualisation document there are no details about what policies will be formulated to achieve these objectives and how they may be implemented.

The final section defines the ‘strategic economic sectors’ as those which:

• represent a significant proportion of economic activity;
• produce and export value added;
• positively affect the balance of payments;
• allow development of the productive sector and productive chains;
• promote the internal market;
• generate productive employment;
• connect with new international technology paradigms;
• remove logistical and infrastructural restraints;
• contribute to sovereignty and national security;
• promote environmental sustainability.

The actual sectors proposed as strategic are: construction; electro energy; telecommunications; transport, storage and trade logistics; logistics for network and hydraulic installations; tourism, including marine and nautical tourism; professional services, especially medical; non-sugar agro-industry and foodstuffs; pharmaceuticals, biotechnology and biomedical production; sugar-related agro-industry and derivatives; and light industry.

The participative process behind the compilation of these documents serves to forge consensus and commitment to the collective process of building socialism in Cuba. The real test, however, will emerge in the practice of formulating, implementing and enforcing the policies required to achieve their aims. In practice, how can market forces be both encouraged, as a means of increasing employment and enterprise, and constrained, which is imperative to maintain the dominance of non-exploitative social-relations? These are the difficult challenges facing Cuban socialism.

---

1. He is expected to remain First Secretary of the CCP, possibly until 2021.

2. This summary is based on the first publicly circulated drafts, as the updated version had not been issued at the time of writing.

3. The US blockade is only mentioned a handful of times; a clear refutation of those who accuse the Cuban government of using the blockade as an ‘excuse’ for mismanagement and economic failure.

4. Following the ideas, actions and legacy of Cuban national independence hero José Martí.

5. See Helen Yaffe, Che Guevara and the Great Debate, Past and Present

 

Helen Yaffe is author of Che Guevara: The Economics of Revolution published by Palgrave Macmillan, 2009 and a Fellow in the Economic History Department at the London School of Economics.

Socialist Cuba: old obstacles and new challenges

National Cuba Conference at Fordham Law School, New York, opening plenary, 25 March 2017

On 25 and 26 March the first National Cuba Conference to be held in the United States since 1979 took place at Fordham Law School in New York. The conference demanded the full normalisation of US-Cuba relations; the elimination of the US blockade, the return of US-occupied territory in Guantanamo and an end to US regime change programmes. These are essential demands for the international movement in solidarity with socialist Cuba at this complex juncture; with the possibility of renewed aggression from the new Trump administration, and with the challenges faced both in its process of economic restructuring and the pending transition to a post-Castro era. Helen Yaffe reports.

Cuba and the United States re-established diplomatic relations in the summer of 2015, 54 years after they were broken off, and six months after Presidents Raul Castro and Barack Obama astonished the world with their announcements on 17 December 2014. Rapprochement was possible because Obama became the first US president since 1959 to abandon conditionality and talk to Cuba. In his first term, he had demanded concessions or preconditions from Cuba as a prerequisite to talks. Cuba never submitted to conditions being imposed on it. Likewise, Cuba dropped its historical precondition of refusing to restore diplomatic relations while the US blockade remains.

With the restoration of diplomatic relations, embassies were opened; the US removed Cuba from its list of states supporting terrorism; the Havana Club rum label was registered in the US, resolving a 20-year-long ownership dispute; coastguard cooperation issues were resolved; regular flights and postal services were restored after decades. High profile prisoner releases took place on both sides. Obama eased restrictions on US citizens’ travel to the island, although this still requires a licence. In 2016, over half a million US citizens travelled to Cuba from the US – half of them Cuban-Americans. In his final days as President, Obama eliminated the ‘wet foot, dry foot’ policy which encouraged illegal and dangerous emigration by Cubans, by granting them automatic residency in the US and citizenship within one year.

However, in the commercial and economic area, progress has been minimal. Since the Helms-Burton Act of 1996 codified the blockade in US law, a vote in the US Congress is necessary to eliminate it, but by using his executive powers decisively Obama could have virtually dismantled it. In September 2015 and 2016, he signed annual extensions on the Trading With the Enemy Act against Cuba, one of the laws which sustains the blockade. Obama took only small, strategic steps to ‘engage’ Cuba by signing executive orders (which can be rescinded) to bypass Congress. His administration introduced five packets of measures and granted licences for a handful of US companies to trade with and/or operate in Cuba: six telecoms firms; four cruise companies; one hotel; eight airlines; two small banks. In mid-December 2016, Google signed a deal with the Cuban government to install servers on the island to speed up internet access.

Regulations issued under Obama state that financial institutions can provide Cuba with finance and credit for its authorised operations. However, no US bank has been willing to do this. Banks are terrified of fines being imposed by the Treasury Department’s Office of Foreign Asset Controls (OFAC) while Cuba remains on the list of countries under US sanctions. And for good reason: Obama fined a record-breaking 49 entities for dealing with Cuba; more than President Bush. Effectively, Cuba still cannot use the dollar in the international economy, nor make deposits in international banks. Cuban goods still cannot be exported to the US; the one exception in more than 50 years being 40 tons of artisanal charcoal produced by Cuban cooperative farms and imported in January 2017 by Scott Gilbert, the attorney who represented US government contractor Alan Gross, released from prison in Cuba in 2014.

Illegality of the US blockade

The US blockade of Cuba is illegal under international law, EU law, UK law, and the national legal systems of many countries. It causes suffering and rights violations. Beyond legal retaliation for Cuban expropriations of US properties in the early 1960s, the blockade was always conceived as part of a set of measures to achieve regime change. A 1960 US government memorandum formulated it as such: ‘The majority of Cubans support Castro … There is no effective political opposition … The only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship … every possible means should be undertaken promptly to weaken the economic life of Cuba’ (Lester Mallory, Deputy Assistant Secretary of State). Obama denounced the US ‘embargo’ as ineffective, not as illegal.

It is illegal under UK and EU law to comply with the extraterritorial legislation of the 1996 Helms-Burton Act. On paper, complying companies can be fined. However, UK and EU laws are not enforced, while US law is avidly enforced by OFAC. The UN calls on all countries to legislate against the US blockade’s extraterritorial reach, but no action has been taken so international trade with Cuba continues to be severely limited.

Trump and Cuba

‘Businessman’ Trump sent corporate representatives to Cuba in 1998, and again in the 2000s to probe for openings, in violation of the US blockade. In September 2015 he said ‘the concept of opening with Cuba is fine’. However, once he became a serious presidential candidate, addressing the Cuban-American power-brokers in Miami in September 2016, he threatened to reverse Obama’s executive orders and demand ‘freedom’ in Cuba.* Trump’s transition team included three hard-line right-wing Cuban-Americans advocating the continuation of the US blockade and an end to rapprochement. But he also included businessmen who do want to end the blockade.

So far, President Trump has made no move on Cuba. The US business sector is keen to trade with and invest in Cuba, and the political costs of initiating this process have already been paid by Obama. Reversing the deals made under Obama would have new political and economic costs. Those companies involved would demand indemnification and US capital would continue to lose out as Cuba expands its international economic relations – bolstered by the Mariel Special Development Zone and 2014 Investment Law.

Mariel Port

 

Cuban debt and foreign investment

‘We must rid ourselves of unfounded fears of foreign capital; We are not heading toward, nor will we head toward capitalism, this is totally ruled out, as is established in our Constitution’ (Raul Castro, December 2016).

Cuban economists estimate that a minimum annual growth rate of 5% is required to see significant socio-economic improvements and the kind of infrastructural developments necessary to raise the standard of living for all. However, between 2011 and 2015, GDP growth averaged 2.7%. To double that, an investment rate of 20% of GDP is required, but the government cannot find the capital it needs for investment internally. It needs foreign direct investment (FDI) and is striving for $2bn to $2.5bn investments annually. This explains the current opening to world markets. While international interest exists, a cautious approach and lack of experience on the Cuban side has slowed the process of approving investments. Only $1.3bn worth of investment projects were approved within two years of the 2014 Investment Law – well below what Cuba needs.

Settling its old debts is key to attaining future FDI for Cuba. After the Helms-Burton Act stated that information about Cuba’s economy would be used against it, the Cuban government stopped publishing information about its debt and financial reserves. Recent debt resettlement deals made between 2013 and 2016, on extremely favourable terms, reveal the historic burden of Cuban debt. However, major advances have been made in settling these: Russia – 90% of USSR-era debt ($35bn) cancelled with ten years to pay the rest on favourable terms; Mexico – 70% of 1980s-era debt ($487m) cancelled, the rest to be paid over ten years; and the Paris Club – 70% (of $11.1bn) cancelled, the rest to be paid over 18 years. Similar negotiations are underway with the London Club. Cuba has also restructured its $6bn debt with China. Raul Castro is committed to clearing these debts.

In January 2017, Rodrigo Malmierca, Cuban Minister of Foreign Trade and Foreign Investment, announced that Cuba’s 2016 investment portfolio included 395 projects, ranging from tourist resorts to peanut production, amounting to $9.5bn of investments, up from $8.2bn in 2015. January’s annual trade fair in Havana had a record-breaking 3,500 exhibitors from 73 countries. Securing FDI, which is necessary in order for Cuba to upgrade its productive infrastructure, would be significantly easier and less costly with the elimination of the US blockade.

The state of the Cuban economy

The significant debt repayments being made exacerbate the financial constraints and economic problems which saw the Cuban economy contract in 2016 for the first time in 23 years. Cuba was bracing itself for a difficult economic year, partly because of the deteriorating situation in Venezuela. In December 2016, Raul explained: ‘limitations in the supply of fuel and financial tensions worsened during the second half of the year, leading to a decrease in the Gross Domestic Product of 0.9%. Despite this, our free social services, such as education and public health for the entire population, were preserved. Our economy did not collapse, nor did the black-outs we experienced in the most difficult moments of the Special Period return, as more than a few international media outlets predicted.’ There was, however, a return to problems with paying for imports, he said. Economic problems were exacerbated by the extensive damage wrought in easternmost Cuba by Hurricane Matthew in October 2016.

The announced deadline for monetary unification, to remove the dual currency system, has come and gone without success and the process is now unlikely to happen within the next five years. Sheltering the entire Cuban population from the detrimental impact of the process requires a huge financial reserve which is beyond Cuban capacity for now. ‘In regards to the 2017 plan and budget’, Raul announced, ‘I must warn that financial tensions and challenges persist, that may even worsen in some circumstances’ (December 2016). Nevertheless, he said, GDP growth was expected to be positive at 2%.

Now close to one in three Cuban workers are in the non-state sector (doubled since 2010). This includes agricultural and urban cooperatives, usufruct farms, self-employment and small and medium private businesses. There has been a substantial relocation of workers from the state to the non-state sector, but also significant has been the integration of thousands of Cubans from the informal sector to the formal sector. These workers are now registered, receive protection and pay taxes. In a country where taxation all but disappeared for half a century, the construction of a progressive, redistributive taxation apparatus has been an important task. Nearly 500 non-agricultural/urban cooperatives have been set up.

The self-employed and small private sector is mostly occupied in catering services: restaurants, cafes and bars. Some of these enterprises have dozens of employees (so-called ‘contracted workers’), introducing new relations of production which bring complex challenges for socialist Cuba. At the 7th Congress of the Cuban Communist Party (CCP) in April 2016, Raul highlighted the need for new regulation for the private businesses, as existing regulation is applicable to self-employed and family businesses only. This has still not been introduced. It is urgently needed, but cannot be rushed, linked as it is to the larger task of redefining the character of Cuban socialism.

Following the April 2016 Congress, two documents were circulated for national debate at every level: Conceptualisation of the Cuban Economic and Social Model of Socialist Development and Basic Premises for the Social and Economic Development Plan through to 2030. Raul announced that the revised documents would be approved in the first half of 2017 by the CCP Central Committee Plenum.

New challenges face Cuba, with the economic reforms underway and restoration of diplomatic relations with the United States. Whatever action or inaction we see from Trump, Cuba is prepared: the Conceptualisation and Plan 2030 documents make no assumptions about changes in US policy toward Cuba. Raul Castro has asserted the need for ‘civilised co-existence’ with the US, but not at the cost of sovereignty, independence and socialism.

• This echoed his 1999 speech to the Cuban American National Foundation during his previous presidential bid for the Reform Party.

Helen Yaffe is the author of Che Guevara: the Economics of Revolution (Palgrave Macmillan, 2009).

Interviews and articles following Fidel Castro's death, plus concerning other recent Cuba (& US)-related events

Op-Ed by Helen Yaffe: Top diplomatic negotiator in Cuba warns Trump: 'aggression doesn't work'

 

Op-Ed  by Helen Yaffe: "Cuba is poor, but who is to blame – Castro or 50 years of US blockade?"

 

Video interview: Helen Yaffe: “What is underway in Cuba is a process of change”

 

Video interview: Helen Yaffe: “Our inability to understand Cuba rests in a failure to make the immanent critique”

 

Video interview: Helen Yaffe: “Under Trump, the drivers of Obama’s rapprochement remain” 

 

Video interview: Helen Yaffe: “New flights to Cuba create challenges for tourism infrastructure” 

 

Video interview: Helen Yaffe: “American business fears being left behind by Cuba’s economic reforms” 

Cuban socialism not up for negotiation in the post-Fidel, Trump era

Interview with Kenia Serrano, President of the Cuban Institute of Friendship with the Peoples (ICAP), by Helen Yaffe, Havana, 4 January 2017

Kenia Serrano, photo Virgilio Ponce

 

Helen Yaffe: Why has the United States changed its strategic focus towards Cuba?

Kenia Serrano: The United States came under international pressure from different states, including Latin American and Caribbean countries. Fundamentally those countries recognised Cuba’s contribution to the development of their people; training human resources in different sectors; medical education; engineers; teachers; or developing literacy campaigns. Cuba does this without seeking anything in exchange, based on principles, our commitment to internationalism. This has made an important contribution in those countries, which don’t have political, economic or social systems similar to Cuba’s socialist system. From within those countries a strong consensus has grown in favour of Cuba’s reincorporation into the structure of the Americas.

The United States was isolated from the world, not only from Latin America and the Caribbean which it has always considered its ‘back yard’, but also in its policy of the blockade, its policy of terrorism, its policy of pressure which, as well as the blockade, was expressed by the precondition that Cuba should change its political system before the United States would re-establish relations. This is something that characterised the US approach for more than 50 years. As a country suffering directly the impact of the global crisis of the economic system, the United States needed to renew its influence in Latin America and the Caribbean. It had lost space and influence with the victory of different progressive processes in the region. This was after a stage of savage neoliberalism that favoured the United States but then created the conditions for important progressive changes that occurred in Venezuela, in Brazil, in the ALBA countries – Ecuador, Bolivia, Nicaragua, also in Argentina.

The United States could not show that Cuba was a threat to its national security; that it was bad for US citizens to travel to Cuba. In fact, despite all the changes, US citizens are still prohibited from coming to Cuba freely, they have to apply for a licence.

They are also calculating on this being an historic moment; looking at the clock, betting on the disappearance of the historical leadership of the Cuban Revolution to bring profound changes. Not the logical changes you expect with a generational shift, as happens in all countries, but anticipating the abandonment of socialist ideas, abandoning revolutionary ideas. Evidently this a very important error in their calculation. I have a deep conviction that here in Cuba there is a strengthening of our ideas, our patriotism, the ideas of Fidel, of Martí.

What new factors could come into play with the new Trump administration?

The new administration is still a rather unpredictable variable… Regardless of the administration, Cuba will continue to demand that any government in the United States change the policy towards Cuba; that the blockade is eliminated, land illegally occupied in Guantanamo is returned; regime change programmes and illegal TV and radio transmissions in Cuba are ended; there is compensation for the economic and human damage caused by the blockade against Cuba.

The signs from President Trump are that his administration will be totally different from previous administrations. President Trump was very rude about Fidel Castro, historic leader of the Revolution. This is unforgivable, because if there is something which distinguished Fidel in his impeccable conduct throughout his life, it is the respect he showed towards adversaries. Fidel objected to them ideologically, he always used ideas as his main arsenal in his ideological struggle against imperialism, capitalism, Zionism, xenophobia, racism, the great enemies of the people. President Trump showed a resounding lack of emotional intelligence, a resounding lack of political education.

How is the United States rapprochement towards Cuba interacting with the endogenous restructuring process?

There is no direct effect. The relations between Cuba and the United States are part of a process in which Cuba is very clear about its principles; what we want, why we are doing everything we have done. The process of updating the economic model began much earlier than the important talks which were established, first secretly, and then made public on 17 December 2014, when the Cuban Five were released and our president Raul Castro announced the restoration of diplomatic relations, and the subsequent reopening of embassies, and what could be a future process of normalisation. It is very clear that Cuba’s internal politics is not on the table for negotiation… Historically, practically everything that the United States does is calculated to benefit its own interests as an empire – for profit. We are very aware of this because we struggled with that empire for a long time.

In terms of the process of updating the economy, an improvement in relations where Cubans and people and institutions in the US, civil society and governmental, could co-exist peacefully in a civilised and respectful manner would be positive. Of course, that would enable the US population itself to improve its wellbeing. Because Cuba has scientific developments that people in the US do not know about… With improved relations between Cuba and the United States, the process of updating the socialist model could proceed at a faster pace, which we Cubans want. [In 2016] the economy did not grow as expected,1 exports did not reach the levels anticipated, hard currency revenues were below expectations, because of the complex international scenario: the right-wing conservative restoration in Latin America, crisis conditions for migrants, the impact of the oil price, all of this looms over Cuba.

If Cuba could acquire [from the US] products to maintain the Revolution’s extensive public sector – the pencils we buy in China, if we could buy them in the United States, our Cuban schools would have greater efficiency. We would have already achieved internet access in every home in Cuba, and would not have to wait until 2018 for internet access in every Cuban classroom. We would have achieved this already if there had been better relations with the United States.

In terms of international solidarity, what has been the impact of the 17 December 2014 announcement?

First was the impact of the victory attained with the freedom for the Cuban Five…after 16 years of intensive struggle without respite to free those men, to demonstrate the injustice of their incarceration. There has been a misunderstanding about the significance of the 17 December announcement, and the United States has made quite intentional use of it in the media. There are those who see some kind of honeymoon between Cuba and the United States; if there are diplomatic relations, then the blockade will be lifted…

The solidarity movement with Cuba understands that the essence of our struggle is not even against the blockade, the essence of our struggle is in defence of the social, political and economic system that Cuba has built, which is a socialist system that puts human beings at the centre. The terrible economic damage that the blockade has caused, which has mobilised solidarity, obviously has to be combatted. But beyond that, this is a strategic struggle for the respect of Cuba’s sovereignty and for the sovereignty of all countries… The solidarity movement understands that there is a new scenario in which to develop solidarity work; that it is not sufficient to defend Cuba with political declarations and good slogans alone. While these are important, it is necessary to appropriate the arguments, to understand Cuba’s history, why Cuba took the path it did, the rupture Cuba had to make with its previous dependent economic model and how Cuba, despite thousands of obstacles, has preserved its economy without falling for the neoliberal recipes that have been suggested to us. Not just by countries with models antagonistic to Cuba’s, but also by countries with a similar humanist vocation, but that supposedly found in neoliberalism a solution, a way to escape their problems of lacking external financing, of low development of the productive forces; but who paid a high social cost. Cuba has been able to preserve the human focus, preserve its people, without paying the social cost of choosing the neoliberal recipe… We don’t want a system that has great economic indicators at a cost – that people don’t have healthcare, education, welfare. This is not the model that we have chosen.

ICAP’s role is to keep the solidarity movement connected with the updating of the economic model, with our reality – not to present Cuba as perfect, which we are not, but also not to accept the slander and distortions that have been presented. This is why ICAP was founded 56 years ago…

The solidarity movement is a safeguard of the Revolution; an element of our peoples’ national security. And it is not something we built. This movement has emerged inspired by Cuba, it has its own voice and head, walks on its own feet. It is not led by anyone in Cuba. The solidarity movement is autonomous, genuine and authentic and it will exist as long as there are Cubans in the street defending their Revolution.

How resilient will Cuba’s political and economic structures prove to the forces unleashed in the process of opening up both the economy and to the United States?

The resistance of the organisations of Cuba’s political system will guarantee it, as they have until today. In the Constitution, we have declared the irreversible character of socialism and the socialist character of the Revolution. We have just ratified the concept of Revolution that Fidel bequeathed to us… There is the concept of the role of the [Cuban Communist] Party, recognised in Article 5 of the Constitution as the leading force of society and the state. It is not a mass party, but a vanguard Party. It is an example in society and every member of the Party emanates that example for ordinary Cubans. This will be an element of resistance to attempts to impose a multiparty system, to get Cuba to make concessions, to the avalanche of economic and political models that proliferate within the United States and the rest of the world.

Elpidio Valdés: Cuban cartoon character, a mambí colonel in the struggle for independence from Spain.

 

As long as Cuba does not forget its history, this will be a key element in our resistance to the influence that the United States has always tried and will try to exercise over Cuba. But against every Superman an Elpidio Valdés2 will be created … Fidel’s optimism is an element of resistance to the egoistic and profit seeking interests of the United States. They cannot defeat our inspiring example; that we can do more than our budget. They can’t resist our ability to get around the blockade and get medicines we need in the United States and bring them to Cuba. Or that there are friends of Cuba throughout the world who get those medicines, that someone here might be dying without, and they take them to a third country, a fourth or fifth country, and they bring them here. We don’t pay anything for that, people just do it because Cuba takes risks every day for the rest of the world and the world is grateful and reciprocates, and risks for Cuba. The United States cannot counter that.

This is the war in which they have been unable to defeat us; that of intelligence, of guerrilla warfare, which we are trained in every day. We have demonstrated that, without any superiority in military or economic terms, or in natural resources. The superiority of our model has always been based on national unity, on strong political leadership that is born from the masses and an educated people. As long as Cuba maintains these distinctive features, an educated people who participate in politics and decision making, this will be a giant block against the desire to transform the political organisations which have deep roots here.

FRFI, 255 February/March 2017 

1. The Cuban economy retracted by 0.9% in 2016 for the first time in 23 years.
2. A Cuban cartoon character, a mambí colonel in the struggle for independence from Spain.

Why did Colombians reject Farc peace deal?

I was interviewed today by Radio France International about the 'no' result in the referendum on the peace accords in Colombia, October 2016.

why-did-colombians-reject-historic-peace-deal-farc?

Cuba's green revolution — achieving sustainability

This is an article I wrote in 2010 for Resurgence Magazine (http://www.resurgence.org/) about Cuba's sustainable development model. I just found it reprinted on the website of Green Left Weekly:

Cuba's green revolution — achieving sustainability

Cuba's successful models of sustainable development — in areas of food, housing and health — are now being widely replicated throughout Latin America.

Cuba marked the 50th anniversary of its revolution in 2009. The Cuban people have withstood five decades of hostility from the United States and its international allies.

However, Cuba's best form of resistance has been not just the assertion of national sovereignty, but the creation of an alternative model of development that places ecology and humanity at its core.

Applying the yardsticks of conventional economics to assess Cuban society (for example focusing on disposable income, gross domestic product or levels of consumption) commentators often conclude that the revolution has failed to pull the Cuban people out of poverty.

But such criticism omits the facts that: the Cuban state guarantees every citizen a basic food supply; most incomes are not taxed; most people own their own homes or pay very little rent; utility bills, transport and medicine costs are symbolic; and the opera, cinema and ballet are cheap for all.

High-quality education and healthcare are free.

These provisions are part of the material wealth of Cuba and cannot be dismissed — as if individual consumption of DVDs and digital cameras were the only measure of economic growth.

Against great odds, Cuba has transformed itself from an underdeveloped "neo-colony" into an independent state, boasting world-leading human development indicators, internationalist education, healthcare programs and sustainable development.

It is no mere coincidence that Cuba is the only country in the world, according to the World Wildlife Fund's 2006 Living Planet report, to have achieved sustainable development (measured as the improvement of the quality of human life while living within the carrying capacity of its ecosystem).

The collapse of the former Soviet bloc between 1989 and 1991 led to a collapse in Cuba's foreign trade in a context of the crippling economic blockade maintained on Cuba by the US since 1960.

GDP plummeted 35% by 1993 and there were critical scarcities of hydrocarbon energy resources, fertilisers, food imports, medicines, cement, equipment and resources in every sector.

Cuba was forced to search for domestic solutions.

In agriculture, organic fertilisers and pesticides, crop-rotation techniques and organic urban gardens were developed. Tractors were replaced with human and animal labour.

Bikes were imported from China and car-pooling was established. As the economy improved, Cuba extended environmentally sustainable measures, introducing ecotourism and solar energy.

Economic reforms were introduced, including concessions to the "free market". But free universal welfare provision, state planning and the predominance of state property were maintained.

Incredibly, given the severity of the crisis, between 1990 and 2003, the number of Cuban doctors increased by 76%, dentists by 46% and nurses by 16%. The number of maternity homes rose by 86%, day-care centres for older people by 107% and homes for people with disabilities by 47%.

Infant mortality fell and life expectancy rose. Internationalist links also increased, as thousands of Cuban specialists, including healthcare professionals and educators, volunteered to work in poor communities around the world. By November 2008, Cuba had nearly 30,000 doctors and other health professionals working in 75 countries, providing healthcare and training locals.

Its literacy programme has taught more than 3,600,000 people from 23 countries to read and write.

2006 dawned as the Year of the Energy Revolution in Cuba, a major state initiative to save and rationalise the use of energy resources: install efficient new power generators, experiment with renewable energy and replace old durable goods (refrigerators, televisions and cookers) with new energy-saving equipment.

Ten million energy-saving light bulbs and over six million electric rice cookers and pressure cookers were distributed free of charge. The aim was to raise the island's capacity for electricity generation and save the government millions of pesos formerly spent on subsidised fuel.

State subsidies mean energy consumption is not rationed through the market, so energy efficiency, not price hikes, is the principal means of reducing consumption.

Building on the campaign for energy efficiency, in 2008 Cuba launched a campaign to increase food production. Following the closure of many sugar mills, in 2007 up to 50% of Cuba's arable land lay fallow, while over 80% of the food ration was imported. The international rise in food and fuel prices meant the cost of Cuba's imports rose by $1 billion from 2007 to 2008.

Now, idle land is being distributed in through rent-free loans to those who want to produce organic food.

Already organic urban farms in Havana supply 100% of the city's consumption needs in fruit and vegetables. They are supplemented by urban patios, of which there are over 60,000 in Havana alone.

Sinan Koont of the Department of Latin American Studies at Dickinson College, Pennsylvania, said in a January 2009 Monthly Review article: "It is not just about economics, producing food and creating employment. It is also about community development and preserving and improving the environment, bringing a healthier way of life to the cities."

Central to understanding these achievements is the role of the state in Cuba.

State ownership and central planning allow a rational allocation of resources, balancing environmental concerns and human welfare alongside economic objectives.

Critics who point to the absence of multi-party elections and "civil society" in Cuba fail to appreciate how the island's alternative grassroots system of participative democracy ensures the state is representative of its population and acts in their collective interests.

Under capitalism, private businesses regard the Earth's natural resources as a "free gift" to capital. The need for sustainable development creates an irreconcilable contradiction under capitalism because it implies obstruction of the profit motive that drives capitalist production.

In December 2004, Cuba and Venezuela formalised their alliance with the formation of the Bolivarian Alliance for the Americas (ALBA). Between 2006 and 2009, Bolivia, Nicaragua, Dominica, Honduras (under Zelaya), Ecuador, St Vincent and the Grenadines, and Antigua and Barbuda joined ALBA, turning it into a political and trading bloc of significance.

Members are engaged in projects of humanitarian, economic and social cooperation through non-market, non-profit-based exchanges.

The Bank of ALBA was launched in December 2008 with US$2 billion capital, operating without loan conditions and functioning on the basis of members' consensus. It contributes to freeing countries from the dictates of the World Bank and the International Monetary Fund.

In January 2010, a new currency for exchanges within ALBA (the "sucre") will be introduced, undermining the leverage of the US dollar.

ALBA is the fruit of Cuba's internationalist, welfare-based development model. It is also the expression of pan-Latin American integrationist movements and the ascendancy of social movements representing the interests of the indigenous and poor communities.

These sectors demand rational development strategies that respect their traditions and environment.

The April 2009 ALBA declaration "Capitalism Threatens Life on the Planet" said: "The global economic crisis, climate change, the food crisis and the energy crisis are the result of the decay of capitalism, which threatens to end life and the planet.

"To avert this outcome, it is necessary to develop and model an alternative to the capitalist system. A system based on solidarity not competition; a system in harmony with Mother Earth and not plundering of human resources."

The Cuban Revolution is a living example, with increasing relevance, showing it is possible to live with dignity and sustainably outside of the capitalist profit motive, with human welfare and the environment at the centre of development.

It is a lesson we must learn urgently because, in the words of former Cuban president Fidel Castro at his speech at the 1992 Earth Summit, "Tomorrow will be too late".

[Helen Yaffe is the author of Che Guevara: The Economics of Revolution, published by Palgrave Macmillan in 2009, and is a Latin American history teaching fellow at University College London and the London School of Economics. This article is reprinted from the British Resurgence Magazine.]

Havana's dirty truths: rubbish-strewn streets spark anger at city's failings

I was interviewed for this Guardian article and endeavoured to introduce a bit of context/balance to a piece which I suspected would caricature Cuban ‘socialism’ by focusing on this real but specific weakness – public services in Havana. I am pleased it included my points about the US blockade and about the government planning investments to improve Cubans’ living environments. Street waste is a big problem in urban settlements – but in Cuba I have never seen the heart-breaking sight of children living in a hut on a mountain of rubbish, surviving off its putrid pickings, as I have seen in Latin America. Perhaps Guardian journalists have written about that – perhaps it’s just too normal to be news.

https://www.theguardian.com/cities/2016/sep/05/havana-cuba-rubbish-strewn-streets-spark-anger-failing-city

 

Helen Yaffe talks to CTV about US flights to Cuba

Dr Helen Yaffe is a specialist in Cuban economic history. She spoke to Canadian Television (CTV) News Channel to discuss the significance of commercial flights from the US to Cuba which began on 1 September 2016.

 

 

 

 

Cuban Communists in Congress: Change within a socialist framework - by Helen Yaffe

Since diplomatic relations were re-established with the United States, Havana has become the place to be for pop stars, politicians, film makers and the fashion industry. President Obama visited Cuba, followed swiftly by British Foreign Minister Philip Hammond, and French President François Hollande. The US blockade is being chipped away, with the first licence granted for a US company – a small tractor manufacturer – to set up in Cuba. Major developments are underway: the Mariel Special Development Zone and the new Investment Law are channelling foreign capital into Cuba; tens of thousands of workers have transferred from state to private or co-operative sector employment; Cubans are permitted to sell their homes and cars on an open market; and the economic and social Guidelines approved in 2011 and updated in 2016 have reduced state control of the economy. In this dynamic context, in April 2016, the Cuban Communist Party (CCP) held its 7th Congress. Its focus was to consolidate the process of changes formalised by the ‘Guidelines for Economic and Social Policy’ approved in the CCP’s 6th Party Congress in 2011. Helen Yaffe reports.

Guidelines for ‘updating the economy’

In the months preceding the 6th Party Congress, nearly nine million Cubans participated in grassroots debates about the draft Guidelines. This formidable democratic process legitimised the Guidelines, which serve as the template for ‘updating the Cuban model’; to improve economic efficiency and productive capacity within a socialist framework. Numerous measures have been introduced in the last five years. These include: 2012 New Labour Code (debated in 7,000 workplace meetings by two million workers); establishing non-agricultural co-operatives (now around 400 with 20,000 workers); permitting market exchanges of privately-owned houses and cars (for Cuban citizens only); permitting direct commercial relations between the non-state sector and state sector entities; opening the Mariel ‘super port’ and Special Development Zone (FRFI 238); 2014 New Investment Law to attract Foreign Direct Investment (FDI) (FRFI 240).

Policy changes and economic results 2011-2015

Of 313 Guidelines agreed in 2011, 21% have been fully applied, and 77% are in the implementation phase. 130 new policies and 344 new legal regulations have been approved. The Guidelines have now been updated for the 2016-2021 period.

Despite (restricted) openings to market forces, these reforms do not represent a rupture with the socialist revolution and Fidel Castro. They are necessary to deal with economic and financial crises rooted, first, in the Special Period of the 1990s when the disintegration of the Soviet bloc saw Cuban GDP plummet by 35%, and second, in the impact of the global capitalist crisis of 2007/8. The crisis affected Cuba through a 200-300% rise in food and fuel prices; it disrupted access to external financing, income from tourism and export earnings. Oil prices increased substantially. Also in 2008, two hurricanes caused $10bn worth of damage and led to emergency imports and expenditure on repairs. This was followed by a severe drought. The results were unsustainable fiscal and trade deficits. In 2008 Cuban banks froze the accounts of foreign suppliers and investors. Debt repayments were not met. All this was compounded by the US blockade, which by 2015 was estimated to have cost the Cuban economy $1.2 trillion.

Following the introduction of the Guidelines in 2011, Cuba’s macroeconomic situation has improved, rebalancing external finances, particularly through the renegotiation of foreign debt, as well as boosting FDI, reducing imports and cutting government spending without damaging health, education or social welfare. Cubans estimate that a minimum annual growth rate of 5% is required to see significant socio-economic improvements and the kind of infrastructural developments necessary to raise the standard of living for the entire population. However, in the 2011-2015 period, GDP growth averaged half that, at 2.7%. To achieve the 5% goal, an investment rate of 20% of GDP is required. But given that the Cuban rate of savings is half that, the government cannot find the capital it needs for investment internally. It needs FDI and is striving for $2 to $2.5 billion investments annually.

However, Cuba is unlikely to increase FDI flows without first settling old debts. Between 2013 and 2015, major advances were made in deals with: Russia – 90% of USSR-era debt ($35 billion) cancelled with 10 years to pay the rest on favourable terms; Mexico – 70% of 1980s-era debt ($487 million) cancelled, the rest to be paid over ten years; and the Paris Club – 70% (of $11.1 billion) cancelled, the rest to be paid over 18 years. Similar negotiations are underway with France, Spain and the London Club.

Other economic results from the 2011-2015 period include: Cuba’s international reserves increased 65.7%; success in reducing imports and increasing and diversifying exports; the average salary increased 43% (although this was not evenly spread and pensions lag behind). In 2015 GDP growth reached 4%, but it is predicted to be half that in 2016, partly reflecting the political turmoil in Venezuela. In 2010, before changes to the employment structure were announced (see FRFI 217), 16% of Cuban workers were in the non-state sector; that is, agricultural co-operatives, family farms or self-employment. Today 29% of Cuba’s workforce is in the non-state sector, which now also includes small businesses and non-agricultural co-operatives. Their contribution to GDP is 12%, so they can be considered as a solution to employment and incomes for those involved, but not as drivers of economic growth. They are in non-strategic, labour intensive areas, particularly catering, while strategic industries and social welfare remain firmly in state hands. Efficiency improvements are being made in the state sector. Of 3,900 state enterprises, only 70 did not produce a surplus in 2015 (in some cases this was planned), down from 900 in 2013. There has also been success in transferring revenue from the private to the state sector through the collection of taxes. For example, three billion pesos collected through private construction sales was used to subsidise home construction for poor families.

Cuban communists in Congress

The 7th Congress of the Cuban Com munist Party (CCP) took place on 16-18 April 2016. It was attended by 1,000 delegates representing over 670,000 Party members. In the run-up to the Congress, four documents were discussed by these delegates and some 3,500 invited guests representing different sectors of Cuban society. These documents were: 1) An evaluation of the national economy 2011 to 2015 and the updated Guidelines for 2016-2021; 2) The ‘fundamental elements’ for a national economic and social development plan through to 2030; 3) The ‘conceptualisation’ of Cuba’s socialist socio-economic model of development; and 4) a report on progress made towards objectives agreed on by the First CCP Conference.

The documents were discussed in work commissions during the Congress and the ‘conceptualisation’ document will now be circulated more broadly: ‘to continue discussion in municipalities, and with the democratic participation of the entire Party, youth, representatives of mass organisations, etc, in order to complete its elaboration…it will be presented to the National Assembly, the supreme organ of state power, responsible for providing it with it legal validity’ (Raul Castro).

The Congress also agreed that key positions in the state and political organisations would be subject to term limits (two terms of five years) and age restrictions. No-one aged over 60 can join the CCP’s Central Committee. No-one over 70 can assume a leadership position in the Party. The newly-elected Central Committee (142 members) now has an average age of 54. 44% are women and 36% are black and mixed-race Cubans. Raul reflected: ‘Higher than those of the previous Congress, but we are not satisfied’. Three of the five new members on the 17-member Political Bureau are women. All are ‘from humble backgrounds, [who] worked in the grassroots’. Raul insisted: ‘there can be no preconceived leaders, everyone who graduates must work five years at least at the basic level in the specialty which they studied at university’. The Cuban Constitution will be changed to reflect these new rules, and ‘the important transformations associated with the updating of our economic and social model, and its conceptualisation.’ Raul stated ‘Everything we have been doing must be reflected in the Constitution… [once the modifications] have been discussed by the population.’ Raul will step down in 2018, and he is clearly focused on strengthening the institutional basis of the socialist revolution to help safeguard its future when Cuba is no longer led by the ‘historic generation’ who carried out the Revolution.

The limited openings to the market in Cuba, along with rapprochement with the US, leads some commentators to assert that the Cuban government is re-introducing capitalism. But the question is whether these measures fundamentally change social relations in Cuba. In 1995, during the Special Period, when similar reforms were introduced, Fidel Castro stated: ‘The key to everything is the matter of power. Who has power [in Cuba]? The large landowners, the bourgeoisie, the rich?...Is power in the hands of the capitalists, for the capitalists and on their behalf? No! The key issue is who has power’. The power structure remains unchanged today.

In 2016, under circumstances complicated by rapprochement with the US, Raul addressed this concern in his Central Report to the Congress:

‘One of the novel aspects that has attracted the most attention and even some controversy, is the question of property relations, and logically so, as depending on the predominance of one form of ownership over another, a country’s social system is determined. In socialist and sovereign Cuba, the ownership of the basic means of production by all the people is and will continue to be the main form of the national economy and the socio-economic system and therefore constitutes the basis of the actual power of workers. The recognition of the existence of private property has generated more than a few honest concerns from participants in the discussions prior to the Congress, who expressed concerns that on doing so we would be taking the first steps towards the restoration of capitalism in Cuba…I have the duty to assert that this is not, in the least, the purpose of this conceptual idea.

‘The increase in self-employment and the authorisation to contract a workforce has led in practice to the existence of medium, small and micro private enterprises which today operate without proper legal status and are regulated under the law by a regulatory framework designed for individuals engaged in small business conducted by the worker and his/her family.

‘Guideline number 3 approved by the 6th Congress and which we intend to maintain and strengthen in the updated draft categorically specifies that “In the forms of non-state management, the concentration of property shall not be allowed” and it is added “nor of wealth”; therefore, the private company will operate within well-defined limits and will constitute a complementary element in the economic framework of the country, all of which should be regulated by law. We are not naive nor do we ignore the aspirations of powerful external forces that are committed to what they call the “empowerment” of non-state forms of management, in order to create agents of change in the hope of putting an end to the Revolution and socialism in Cuba by other means.

‘Co-operatives, self-employment and medium, small and micro private enterprise are not in their essence anti-socialist or counter-revolutionary and the en ormous majority of those who work in them are revolutionaries and patriots who defend the principles and benefit from the achievements of this Revolution.’

Challenges ahead

The US blockade remains the principal obstacle to development, but there are many internal challenges: the inadequacy of Cuba’s productive infrastructure and low efficiency in economic management; increasing labour productivity through technology; preventing speculation by private producers to hike prices; halving Cuba’s food imports which cost $2 billion a year; compensating poorer sections of society as income inequality grows; and the complex issue of unifying the national and convertible pesos.

It is clear that Raul and the CCP are acutely aware of these challenges and have set out to tackle them ‘without haste, but without pause’ and within the framework of the socialist system.