Where is Cuba going?

Jordi Rosich, who recently took part in the Havana Book Fair, looks at the different pressures that Cuba is facing. He highlights the danger of capitalist restoration, particularly the so-called Chinese model, and what this would mean for the Cuban revolution. But the future of Cuba has not yet been decided. It also depends on the spread of the revolution internationally.

The announcement by Fidel Castro that he would not stand again as President of Cuba, because of health and age reasons, and the election of Raul Castro as the highest representative of the country, has put the debate about the future of the Cuban revolution once again in the agenda.

The importance of the question is self-evident. The restoration of capitalism in Cuba, which is a real possibility, although not the only one, would mean a massive collapse in living and social standards on the island, as well as a serious blow for the most advanced sections of the workers and the youth, not only in Latin America, but throughout the world. We will now see a renew wed ideological campaign on the part of the ruling class based on a further so-called "proof" that any society that is not based on capitalism is inevitably doomed to fail.

Since 1959, with the victory of the revolution, and above all from the moment in which all national and international capital was nationalised in 1962, Cuba has been a source of concern for US imperialism. The resistance of the Cuban revolution to the devastating economic and political effects of the collapse of the USSR and the other regimes in Eastern Europe in 1991, with whom Cuba had 80% of her foreign trade, transformed the island into an even more outstanding symbol of anti-capitalist and anti-imperialist struggle.

Heroic resistance during the "Special Period"

There are several factors that explain why the Cuban revolution has been able to resist capitalist restoration for so long: the social advances derived from the planning of the economy, the preservation of the revolutionary spirit amongst an important section of the population and amongst those who participated in leading positions in the revolutionary victory, the intense hostility of imperialism, etc.

To these objective factors we must add, without doubt, the individual role that Fidel Castro played in several crucial moments of the recent history of Cuba. Marxism does not rule out the ability of individuals to influence historical processes, obviously within certain limits. One of these key moments was when he firmly cut across the openly pro-capitalist tendencies which were developing in the economy as a result of measures taken during the Special Period, in the second half of the 1990s, such as the legalisation of hundreds of thousands of private businesses, greater room for manoeuvre given to certain state-owned enterprises to operate in dollars, deciding on investments and the possibility to import and export directly.

Those same measures, which were applied to get out of the economic catastrophe that hit the island after 1989, ended up becoming a threat to the revolution and its social conquests, and also a threat to the authority of the leadership of the revolution. In 2004 a high ranking executive of a foreign tourist company commented:

"Even the most loyal functionaries admit that the opening up of small spaces for private initiative and the decentralisation of businesses favoured a new ‘way of thinking', more interested in money than ideology and the authorities have understood that this, together with corruption, is a cancer, more dangerous for the revolution than US missiles". (El País, June 9, 2004).

It was in that context that Fidel Castro made a very significant speech at the University of Havana, on November 17, 2005, in which he warned that the revolution was not irreversible, and that the main threat came from within, mentioning corruption and bureaucracy as the main dangers. This correct idea is related to the transitional character of the society and the state in Cuba. The nationalised and planned economy is a massive advance in relation to capitalism, but as long as the revolution does not overcome its national limitations, inevitably tendencies will be generated from without and from within that will undermine the political and economic base of the revolution. As in its early stages the revolution is forced to go forward in order not to go back. Despite the fact that the worst of the Special Period is behind us, the collapse of the Eastern European countries broke once and for all the possibility for Cuban society to remain stable and maintain an indefinite status quo.

We must start with the most concrete and elementary fact that Cuba is a small country, with a relatively underdeveloped economy, whose integration in the world economy is severely undermined by the sudden disappearance of her trading partners and a ferocious economic embargo by the US. What is really impressive is the fact that, in these harsh conditions, the revolution has survived until now. This has been possible not only because of its social conquests, but also because of its enormous reserve of political support amongst the masses. The most striking example of this we saw during the Special Period, when the Cuban people, despite suffering hunger, the collapse of the transport system, power cuts and the lack of the most elementary resources for normal economic activity, resisted and kept the flame of revolution alive. In the context of enormous difficulties and scarcity and massive pressures, the moral authority of the leadership of the revolution, particularly of Fidel Castro himself, and the fact that a spirit of struggle had been kept alive amongst the masses, were decisive factors. One of the key factors that contributed to overcoming that harsh test was the predominance of the collective spirit over the tendency to look for an individual solution and the crystallisation of openly capitalist interests.

This is a very important point: if there was no capitalist restoration in Cuba in the 1990s, this was because of political and not economic factors. The masses became emboldened in the face of adverse conditions. The memory of the heroic period of the revolution resurfaced, the leadership had a strong moral and political authority and among them the decision to resist capitalism, instead of giving in to its pressures, prevailed. The merely economic factors were not very promising. The only short and medium term perspective was one of survival below the minimum levels. Despite everything, the revolution survived, revealing a massive reserve of energy.

The revolution can be reversed

As a matter of fact, the economy of any country which has broken with capitalism but that has not yet broken out of its isolation will inevitably remain in an unstable equilibrium in which the possibility of capitalist restoration will continue to exist. That is to say, the revolution can be "reversed". So long as the revolution does not find support beyond its borders, it is perfectly legitimate to engage in manoeuvres, make concessions on certain aspects, play for time, etc, so long as one does not lose sight of the central question: the consciousness of the masses, the need to maintain and develop their revolutionary perspective, their feeling of being part of a collective in the face of adversity, their "plebeian pride" as Trotsky described it, their internationalist outlook. If this is lacking, and above all if the will on the part of the leadership to keep alive the flame of the revolution starts to falter, then the revolution can be seriously compromised.

Of course, in this unstable equilibrium in which the revolution must resist, internal factors have an important impact, both positive or negative. The beginning of the Venezuelan revolution, as part of a general shift to the left in Latin America, put socialism back on the agenda as a viable perspective, and this also influenced those elements at the top that react empirically.

The measures of recentralisation taken at the beginning of this decade in Cuba (such as limits on private business and on the autonomy of state companies, the banning of the dollar and so on) are not unconnected to the profound changes that have taken place in Latin American politics.

In Cuba, before Fidel Castro's illness, a proposal was passed to inscribe the socialist character of the revolution in the Constitution. A serious campaign was launched against "capitalist contamination" and a number of corrupt high ranking officials involved in the economic administration of the State, who had become affected by gifts from foreign companies and by their dealings in foreign currency, were purged. All these were clear signals.

In spite of all these measures, and irrespective of this or that particular shift in policy, the mole of counter-revolution has continued to burrow away, in an almost imperceptible but steady and deep manner. Scarcity of basic products combined with the dual currency system (which means you get your wages in pesos and have to buy many products in CUCs which are worth 24 times more), has generalised the habit of "resolver", that is, to resort to the black or grey market to buy and sell goods and services.

In the past, there was a counterweight to these practices in the form of a section of the population which was more conscious and committed to the revolution. This was the case in the most difficult moments of the Special Period. Now this counterweight has almost disappeared, and everybody considers "resolver" as a legitimate form of solving problems.

This has simultaneously provoked a massive collapse in the productivity of labour, since the purchasing power of wages has been reduced to a minimum. The seeking of individual ways out has gained ground over a collective solution. The latter can only be sustained on the basis of an internationalist outlook constantly fostered by the leadership, and by the effective participation of the population in all spheres of social, political and economic life.

Even with a correct orientation in this direction, the masses cannot remain for an indefinite period of time in a state of revolutionary tension, sacrificing the present for the future. Eventually, if the expectations of profound social change do not materialise, then routine, scepticism, individualism and de-politicisation end up gaining ground.

What makes the situation in Cuba particularly dangerous from the point of view of the interests of the revolution is that the changes that are being promoted from above have a clear liberalising character and are taking place in a situation where the barriers against pro-capitalist tendencies have been seriously eroded, because of the reasons we have just explained.

What Raul Castro promises and what is expected of him

Since Raul Castro took on more political responsibility in the running of the country as a result of Fidel Castro's illness, he has portrayed an image of himself as being a "pragmatist", more concerned with economic efficiency than politics. This is the first thing that an average Cuban will tell you, particularly taxi drivers and people in a position to rent rooms to foreigners. They tell you that Fidel is more of an "idealist", that he is more concerned with "politics" and "international affairs", while Raul is more sensitive to the "everyday concrete problems of the people".

It is highly significant than in his first speech as President of the country, on February 24, he did not make one single reference to the Venezuelan revolution, whose fate is without a doubt decisive for the Cuban people and their revolution. In this same speech Raul highlighted a number of important political and economic measures. He linked "any changes related to the currency" to the aim that "everyone's living standard corresponds directly to their legally earned incomes, that is, with the importance and quantity of one's labour contribution to society."

This last sentence, in reality, contains two different ideas. It suggests that legal income would be enough such that you would not have to resort to businesses outside the legal channels (and maybe that some of these businesses may be legalised), but it also suggests legitimising wage differentials, according to "the importance and quantity of one's labour contribution to society".

In a transitional economy monetary incentives are certainly necessary. But the most effective way to increase the productivity of labour and to fight against widespread theft and corruption is that the workers themselves feel that they are the owners (as a class, not individually) of the means of production and therefore participate fully in taking decisions that affect them. This can only be achieved with genuine workers' control and participation of the workers in the management of the economy.

In his speech he also linked "any changes related to the currency" (and everybody understands that this is related to a revaluation of the peso in relation to the CUC, i.e. to an increase in the purchasing power of wages), with the future of

"the entitlements and the subsidies running in the millions presently required by numerous services and products distributed on an egalitarian basis, such as those provided by the ration card which under the present conditions of our economy become irrational and unsustainable."

He also announced the elimination of the "excessive number of prohibitions and regulations" starting with the "removal of the most simple" over the next few weeks. Everybody knows that what he is referring to are the limitations on foreign travel, ownership of a mobile phone, etc. Another measure already announced is the further liberalisation of private agricultural production, which is sold at market prices.

These measures fit in with the policy of "perfeccionamiento empresarial" (improving business efficiency) promoted by Raul Castro over the last few years, starting with those companies that are linked to the Army and then spreading throughout all the state-owned companies, the main aim of which is "efficiency".

It is clear that all these measures point in the direction of an "opening" up of the economy and the introduction of monetary incentives linked to efficiency and profitability. Of course, efficiency is fundamental in any economy, including a nationalised planned economy. The question is to determine at what critical point such criteria of efficiency, combined with other political factors and social interests, can finally lead to the derailment of the revolution along the road of the gradual restoration of capitalism, as has happened in China.

It is public knowledge that the Chinese model, which is not a "model of socialism" but a model of capitalism, exercises a powerful attraction on certain sections of the Cuban political leadership. In fact, the idea that "market measures" are necessary in order to "perfect socialism", has become widespread amongst Cuban economists, even amongst some who, in an honest way, abhor the possibility of a capitalist Cuba.

All these factors have created a generalised opinion, deeply rooted among the population, that the conquests of the revolution, such as free health care and education, almost free housing, gas, power and other basic needs, can be preserved in combination with liberalising measures which will bring the "good elements of capitalism". Thus we see that even though the Cuban revolution has maintained a massive reserve of support, and its conquests are justifiably appreciated by the population, there is also a large degree of naivety and one can see elements of an ideological disarming of the people face with the possibility of a dynamic that can be set in motion by these measures of liberalisation. This would mean a serious threat to the conquests of the revolution.

On the other hand, the growth of the Cuban economy, which has experienced important transformations over the last few years, in itself, is not a guarantee against the danger of restoration. Channelled through a given political and social context, economic growth can in fact accelerate the process of social differentiation which can later lead to a situation where that section that benefits most from it would demand that the political system be adapted to their particular needs.

Obviously we have to be cautious about data published in the bourgeois media about Cuba, but it is significant that the companies that are controlled by the Revolutionary Armed Forces are said to represent 89% of exports, 59% of income from tourism and 66% of sales in hard currency (La Vanguardia, February 26, 2008). According to Haroldo Dilla, a social researcher at the University of the Dominican Republic, who broke with the revolution a few years ago, the Cuban armed forces represent the best organised power group in Cuba, and the one that has the largest number of economic projects, and "will be a key sector in the transition, crucial to any negotiation". To Dilla, the military is "hard on politics and liberal on the economy" and would be prepared to look for a Chinese road for Cuba. (El País, December 6, 2003).

According to an article entitled "Current situation and perspectives", published in a Cuban magazine aimed at foreign investors,

"the tourist sector has, without a doubt, exercised a remarkable influence on the national economy in the last 17 years (1990-2007). Income generated by this activity grew eight times, while the number of visitors grew six times and the number of rooms tripled. The demand of national products in this sector went up from 18% in 1990 to more than 68% in 2007, which has had a noticeable impact on industry, construction, transport and other sectors of production and services."

The tertiary sector (services) represented 57% of the economy in 1989, and went up to 77.1% in 2006. In the same period, industry went down from 33% to 18.2% and agriculture from 10% to 4.7%. Today, more than 70% of foreign income, more than 60% of employment and more than 60% of investment are generated in the sphere of services. (Cuba Foreign Trade, March 2007).

The dynamism and weight acquired by certain branches of production - those which can more easily compete on the world market - do not necessarily meet the needs of the majority of the population, or strengthen the social basis of the revolution. For instance the very poor development of agriculture means that 80% of basic foodstuffs have to be imported, at a high cost.

Obviously a blockaded economy is forced to take measures in order to maximise its income in hard currency, but this must be linked to something which is central to the workings of a planned economy: the conscious participation of the working class in taking decisions. Without that it is not difficult to see how different and conflicting social interests can crystallise, above all with an economy so weak and subject to such pressures of the world market as is the Cuban.

According to the same magazine,

"until the decade of the 1980s, foreign trade operations were concentrated in 30 to 50 state owned companies. At the end of 2006, more than 360 companies were authorised to carry out operations and to create limited companies of Cuban or mixed capital".

Taking into account the importance of the monopoly of foreign trade in a planned economy, the following statement to be found in the same magazine is at least striking:

"Therefore in trading with Cuba the overriding principle is that of the autonomy of the companies with which one has to negotiate directly, without intervention of other administrative or ruling bodies".

Another factor that has to be taken into account is the attitude of imperialism. One sector has realised clearly that faced with the systematic failure of their attempts to overthrow the revolution directly, the best option would be to lift the embargo and allow for capitalist relations to develop and flourish on the island, thus creating the conditions for the restoration of capitalism. This is the preferred course of action of The Washington Post. Important representatives of the Spanish capitalist class such as Carlos Solchaga, also support this indirect road, with the hope that any economic opening will lead to measures such as the freedom to hire waged labour and the creation of private companies.

The future is yet to be written

However, the future of the revolution has not yet been written. We have pointed to the dangers that threaten the revolution because we believe that it is a revolutionary duty to do so and that it is the only way of finding a way to preserve and expand the conquests of the Cuban revolution. This is a revolution that has a large reserve of support, both real and potential, among the most conscious sections of the population. There is clearly political ferment on the island, and this can point in a number of different directions. The revolutionary awakening throughout the Latin American continent and the world wide economic crisis of capitalism are also having an impact on the thinking of many Cubans.

The bourgeois mass media are anxious to use any element of criticism or tension in Cuba in order to proclaim "the bankruptcy of the Castro dictatorship" and the beginning of the "transition to democracy". Their cynicism has no limits! The Cubans already have close to home an example of what "Western democracy" really means in the US base in Guantanamo.

In their desperation to detect "imminent signs" of the failure of socialism they are prepared to manipulated the meaning of the criticism of the students at the University of Information Sciences in Havana (UCI), recorded in a video which has generated a lot of interest in Cuba and abroad. Some of the media even "reported" that the students involved "had been arrested". This was a straight lie deliberately spread by the capitalist media. What is most interesting about this whole affair is that the UCI students asked those questions and made those criticisms, as they themselves stated, from the point of view of the defence of the revolution and socialism. Many of their proposals and concerns, deliberately hidden by the bourgeois mass media, went in the direction of establishing greater control, accountability and participation of the population in the economic plan and over their political representatives.

This shows that even after years of inertia and routine, there is a basis for the development of genuine socialist and revolutionary ideas amongst the youth, which would no doubt find a strong point of support among the veterans of the revolution, who have not yet said their last word. Another example of this is the extraordinary meeting to commemorate the October Revolution at the University of Havana, in which the 500 students present ended up singing the Internationale.

In the last analysis, the future of the Cuban revolution can only be based on a programme based on two key points: the direct participation of the masses in the political and economic life of the country, and the spreading of socialist revolution to other countries. There is no third way. There is no "market socialism", no "capitalism with a human face". The only alternative to workers' democracy, planned economy and internationalism is a rotten capitalism system. The restoration of capitalism in Cuba would mean a brutal step backwards for Cuban society, compared to which the difficulties of the Special Period would look like a paradise. You just have to look at what is happening in El Salvador, Honduras, Guatemala or Haiti, where crime, brutal repression and moral and economic decay dominate society. This is also the road that advanced capitalist countries are travelling towards.

The fate of the Cuban revolution has not yet been decided and will depend in the last analysis on the boldness, the political and theoretical clarity of all those who wish for a classless future, without privileges, where the majority of society rules in the interests of the majority of society. This future is possible and it is in our hands to make it real.

Long live the Cuban Revolution!
Long live socialism!
Long live the working class and internationalism!

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