Cuba's Sixth Communist Party Congress in April became “one of the more decisive” ever held when it agreed to allow the government to “adjust” Cuba's ailing economy by introducing a cautious experiment in capitalist economics, says Antoni Kapcia, a professor of Latin American studies at Nottingham University, in England.
The delegates approved a plan espoused by President Rául Castro to allow some tightly controlled growth in private, small-business start-ups and in the housing and automobile markets.
But experts disagree over how much the changes will affect daily life for most Cubans. Economist Emily Morris, a senior research fellow at the London-based International Institute for the Study of Cuba, says the projected reforms are “the beginning of a massive change in the way the Cuban economy works, and their society as well.” Likewise, Julia Sweig — a Cuban specialist at the Council on Foreign Relations, a New York-based think tank — says the changes could produce “a significant, perhaps even radical transformation” of the Cuban economy.
But Kapcia thinks the impact may be a bit less profound. “The reforms are ‘round the edge of the system and ‘round the edge of small business enterprises — and very small enterprises at that,” he pointed out.
Allowing Cubans to buy and sell houses is a key component of the plan. According to Morris, 85 percent of Cubans own their homes, having been given them outright by the state at the beginning of the revolution. Until now, however, Cubans weren't allowed to sell their houses. Loosening up the housing market could boost the construction trades and lead to the introduction of mortgage loans — not exactly a Marxist concept.
But Marx may not matter much to the communist regime in Cuba — which Morris calls “a relic of the Cold War” — in its struggle to cling to power, especially since the demise of the Soviet Union. Castro compared the 1989 collapse of the Soviet system to “the sun not rising.” It devastated the Cuban economy: Exports to the Soviet Union (notably, most of Cuba's sugar crop in return for Soviet oil) plummeted from 66 percent in 1990 to almost zero by 1993. Cuba's gross domestic product dropped from $5.2 billion to around $2 billion during the same period.
Eventually, trading partnerships with Canada, the Netherlands and, more significantly, Hugo Chávez's Venezuela filled the gap. Now, explained Rafael Hernandez — editor of the Cuban magazine Temas (“Themes”), which sometimes is quite critical of the government — Cuba is transitioning from what he calls “socialism A to socialism B. Socialism B is a less state-centered model of socialism. It is expanding the nonstate sector, which means not only private, but cooperative.”
A crucial element in the transition is the cheap oil supplied by Venezuela under the so-called “oil for doctors” arrangement. In return for the oil, Havana staffs and provides medicines at Chávez's medical clinics. But the Caracas-Havana axis may be facing an uncertain future. Recent revelations that Chávez has been treated for cancer in Cuba raise questions about whether his eventual successor would be as friendly toward the Cuban leadership.
“I think the Cubans, who, after all, rely on Venezuela for 100,000 barrels of oil a day, are very worried about any change in government,” said Michael Shifter, president of The Inter-American Dialogue, a Washington think tank. “There's no guarantee that whoever follows Chávez will continue to provide that to Cuba.”
Surprisingly, Castro also proposed a limit of two five-year terms for the top Cuban leadership, including himself, and Cuba watchers think he plans to stand for re-election in 2013. But his political future is linked to the economic experiment. “The real difficulty now is putting it into effect,” says Kapcia. Even after 66,000 meetings to discuss the changes, attended by 8.9 million people, 3 million of whom made statements and demanded modifications, there is still resistance to the proposals.
The Ladies in White — friends and relatives of jailed political dissidents — hold a silent vigil in Havana on, Feb. 27, as they have done every Sunday since a 2003 crackdown on activists. Cuba released 115 political prisoners earlier this year and flew them to Spain. But others remain in jail, indicating that even though Cuba has initiated some economic reforms, political freedoms remain curtailed. (AFP/Getty Images/Adalberto Roque)
Diehard communists oppose what they see as deviation from socialist orthodoxy, while bureaucrats worry about Rául's determination to reduce the bloated state employment ranks, which account for 90 percent of the Cuban workforce (at an average monthly salary is $20). Castro wants to shrink public employees’ ranks to 65 percent over five years and trim Cuba's cradle-to-grave social system — another unpopular strategy.
If Castro's plan falls apart, there probably won't be a foreign bailout — least of all from the United States, which lists Cuba as a repressive state. In July 2010, 52 activists jailed in a 2003 crackdown were released in a deal between the regime and the Catholic Church in Cuba. But critics say the regime's human rights situation remains patchy at best. Repressive campaigns come in sporadic waves, and dissidents with alleged contacts with U.S. diplomats are prime targets.
Because Cuban-U.S. relations are driven by American political considerations, el bloqueo — the 47-year U.S. trade and banking blockade — remains in place and is likely to remain so. But unofficially, the relationship is unobtrusively changing. For example, a State Department travel ban for Americans is still in force, yet Cuban-Americans can now travel to Cuba to visit relatives. And Abercrombie & Kent, a leading U.S. tour organizer, openly advertises trips to Cuba — for cultural and academic tourists only.
“The door is left open and nobody announces it,” says Morris.
— Roland Flamini