Obama and the New Cuba

By Philip Peters

“I’m dying to get that piece of land over there,” said a sweat-drenched 20-year-old farmworker in Artemisa, Cuba, pointing to a hectare of land where he wants to plant plantains and vegetables next spring.

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If his application is approved, his wage-earning days will end and he will join more than 200,000 private farmers in Cuba who work on their own, sell a production quota to the state, and then sell their surplus for profit.

“Now it all depends on God,” he said.

It also depends on a small bureaucracy. Local offices of the agriculture ministry, the small farmers union and the communist party will all participate in the decision. A local official told me that since October, 241 people applied for land grants in Artemisa, and the first 33 were approved in late November.

Across Cuba, 80,000 have applied for new farmlands for a simple reason: Raul Castro urged them to do so, knowing that Cuba’s private farmers are the island’s most productive. Cuba will spend $2.6 billion on food imports this year, 53 percent more than in 2007, a waste of hard currency in a country that has the land, climate, know-how and workforce to grow more food.

Hence Raul Castro, who formally assumed Cuba’s presidency last February after temporarily replacing his ill brother in July 2006, is making his first major reform on the farm.

Beyond land grants, Castro sharply increased prices paid to farmers (beef prices up tenfold, milk threefold), and promises to give 172 new municipal agriculture ministry offices the power to make decisions previously made in Havana or provincial capitals. He hints that the libreta, the ration book that allocates heavily subsidized staples to every Cuban household, may disappear. That step would open the way for cuts in the food distribution bureaucracy, and economists say it would allow the state to subsidize only those Cubans who need it.

If these ideas are implemented completely, they won’t spell capitalism and they may not end all of Cuba’s farm woes. But rural Cuba would have more incentives, production and prosperity as a result.

The rest of Cuba’s economy is a different story.

When Raul Castro took office, he started raising expectations for change. He called for “structural changes” and removal of “excessive prohibitions” in his first major policy speech on Cuba’s national holiday, July 26, 2007.

He encouraged a debate in workplaces and neighborhood meetings, and a parallel debate emerged online among Cubans with e-mail access. It was a national gripe session about official restrictions in all areas of daily life.

Cuba’s official media, as ever, laud economic achievements in communist triumphalist style. The all-news Radio Reloj tells of potato producers exceeding their quota in one province, construction workers in another.

But a change has occurred. In October 2006, the communist youth newspaper documented how cafeterias, repair shops and other state retail outlets are dysfunctional and often corrupt. The next month, it reported that official unemployment figures, “never a reflection of reality,” understate actual joblessness in one province by a factor of 18. Another report criticized dental care. A columnist cited the fable “The Emperor’s New Clothes” to criticize dull, unanimous debates in Cuba’s legislature.

Raul Castro has discussed Cuba’s demographic woes – low birth rates, a shrinking workforce and an aging population – that point to a dire future with more retirees depending on fewer workers. He acknowledges that education suffers from a “problem with wages” for teachers. “Theoretical explanations” are not enough to satisfy a worker, he says – it is “very important that his income correspond to his personal contribution.” He pulls no punches about efficiency: “Sometimes in socialism two plus two equals three.” And he may have hinted at an opening to new models of cooperatives or enterprises when he professed admiration for “the great socialist state enterprise,” but averred that other “forms of property and production…can coexist harmoniously because none are antagonistic to socialism.”

What actions have come from this candor?

Not all Cubans can afford them, but they are now allowed to buy computers, DVD players and cell phones. They may now stay in hotels previously reserved for tourists. A rule was changed to allow consumers to try to fill prescriptions in the pharmacy of their choice, instead of being limited to the one in their neighborhood.

Enforcement of regulations that affect private taxis has been eased, and new licenses are being granted to some. To address the demographic problem, Cuba is planning to raise its retirement age and allow people to hold more than one job. Slowly, pay schemes that link pay to productivity are being extended to all workplaces.

Other changes are under consideration, but with no timetable.

Officials have long talked about ending Cuba’s two-currency economy, which engenders deep inequalities. But Raul Castro said last September that a five-year deadline “might be audacious.” Last spring, there was talk of ending the requirement that Cubans obtain exit permits to travel abroad. But there is no sign when this idea will emerge from the committee that is studying it, or in what form.

These changes, and the debate that fed expectations of deeper change, took place between July 2007 and the spring of 2008.

Then it seemed as if a curtain came down, and reform momentum stopped. Last July, Raul Castro’s second major address gave no indication of big reforms to come. Apart from the promising start on agriculture reform – with a possible boost from Venezuelan and other investment projects – current measures will not deliver the broad-based growth that Cuba needs. Raul Castro’s policies are not in proportion to the problems he himself has identified.

Why did the curtain come down? Cubans have no explanation except to speculate about “the presence of his brother.” It seems that Fidel Castro’s health and his more orthodox vision have experienced a revival. Fidel still heads the communist party, which Cuba’s constitution calls the “highest leading force of society and of the state.”

So as the 50th anniversary of Cuba’s revolution approaches, the country is stable but Cubans are uncertain about major issues at a turning point in its history.

Who makes the big decisions, President Raul Castro or his brother the ex-president? When will the men who fought and triumphed over Batista in 1959 pass top leadership positions to the next generation? Will economic reform extend beyond agriculture? Will there be a political opening? How long will it take to recover from 2008’s three hurricanes, which left more than half a million homes damaged or destroyed? Why did Raul Castro call for a communist party congress in late 2009, and what does he plan to say?

And what about the new American President?

Barack Obama will be the first American president born after the triumph of the Cuban revolution, the eleventh to deal with a socialist government in Havana, and the fourth of the post-Cold War era.

When the Soviet bloc collapsed and its economic support for Cuba ended, many thought that the U.S. embargo would exert such punishing pressure as to force Cuba to change. Cuba’s economy nearly collapsed, but political change didn’t come, so Congress started adding more sanctions.

In 1992, Congress tried to deal the final blow with the Cuba Democracy Act, a law that tightened sanctions by blocking overseas subsidiaries of American companies from trading with Cuba. President George H.W. Bush signed it, but it didn’t work.

In 1996, thinking that foreign investment was propping up the Cuban government, Congress placed U.S. sanctions on foreign companies that do business in Cuba. President Clinton signed that law, but it didn’t work either.

President George W. Bush proceeded to tighten sanctions even further.

Among his many measures, he ended people-to-people travel and curbed religious, humanitarian, educational and cultural exchanges. He limited Cuban Americans to one family visit every three years. He issued Soviet-style rules governing the content of family gift parcels: clothes, personal hygiene items, seeds, fishing equipment, soap-making equipment and veterinary supplies were no longer allowed, and only food, medicine, medical supplies, radios, batteries and cell phones may be sent. In the Federal Register, the Administration explained that excessive gift packages “decrease the burden on the Cuban regime to provide for the basic needs of its people.”

In theory, it might be possible for American sanctions to put such a “burden on the regime” that it forces diehard communists to change their policies or abandon power. But only in theory – they’re not called “diehard” for nothing. Politically, this approach has a long history of backfiring by causing Cubans, even those independent of the government, to think U.S. pressure is aimed at them. If U.S. sanctions intend “to destabilize the government by using hunger and want to pressure civic society to revolt, then the strategy is also cruel,” Cuba’s Catholic bishops wrote in 1992. Economically, the Bush sanctions amount to petty harassment at a time when Cuba’s hard currency woes are being eased by massive subsidies from Venezuela, and by aid and credits from China, Vietnam, Brazil, Russia, Europe, Canada and others.

But the Bush Administration went further. It never used the words “regime change” regarding Cuba, but its signal was clear enough when it issued two reports designed, in Secretary of State Condoleezza Rice’s words, to “accelerate the demise of Castro’s tyranny,” and when it named a “Cuba Transition Coordinator” in the State Department. Two years before Fidel Castro fell ill, an Administration official told reporters that “there will not be a succession” in Cuba, and that “the United States, for one, will not accept a succession scenario.” Cuba, for better or worse, took Fidel’s departure in stride and pulled off a constitutional succession without a hitch. There was no transition to coordinate.

As a new Administration prepares to take office, it is worth noting that virtually every Bush Administration assumption about Cuba has been dubious or just plain wrong: that its government is “on its last legs;” that Fidel Castro’s absence would prompt systemic change; that U.S. economic sanctions can change Cuba; that it is against American interests for Cuba to be prosperous; that change in Cuba is more likely if Cuba is poor; that U.S. government funding is the best way to make Cuban civil society grow; that American policy somehow isolates Cuba, even as our closest allies and the rest of the world have normal relations with Havana.

President-elect Obama has promised to steer a different course. He will “immediately allow unlimited family travel and remittances to the island” for Cuban Americans, and he promises to “pursue direct diplomacy” with Cuba – but without defining timing, conditions or agenda.

Those are positive steps. Visits and cash will sustain Cuban families and may help them earn independent livelihoods. Diplomacy can generate cooperation in drug and migration enforcement and environmental protection, and will provide a forum to press human rights concerns.

But if President Obama stops there, he would only have a modified Bush policy. By default, he would be sticking with the fallacy that America can somehow have influence in Cuba while blocking broad contact between our societies. That is the antithesis of American policy toward the Soviet bloc during the Cold War. It makes no sense in the information age, especially not in a country like Cuba where Americans are welcomed and cultural and historical ties are deep.

The most consequential step the Obama Administration could take would be to allow all Americans to travel freely to Cuba. Unrestricted travel will bring a surge in contacts, ideas and debate between American citizens and private institutions and their Cuban counterparts. The flow of information will increase, as will understanding, in both directions. A more prosperous Cuban economy will buy more U.S. farm exports. Latin America will welcome a sign of a new American diplomacy. And America will gain what it lacks now in Cuba: real influence.

Philip Peters is vice president of the Lexington Institute in Arlington, Virginia and authors the blog The Cuban Triangle.

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