Learn from Cuba, World Bank says

Charles Brown CharlesB at SPAMCNCL.ci.detroit.mi.us
Wed May 2 17:15:30 MDT 2001

Inter Press Service
Finance: Learn from Cuba, says World Bank
by Jim Lobe
Washington, 30 Apr  -- World Bank President James Wolfensohn Monday extolled the
Communist government of President Fidel Castro for doing "a great job" in providing
for the social welfare of the Cuban people.

His remarks followed Sunday's publication of the Bank's 2001 edition of 'World
Development Indicators' (WDI), which showed Cuba as topping virtually all other poor
countries in health and education statistics.

It also showed that Havana has actually improved its performance in both areas despite
the continuation of the US trade embargo against it, and the end of Soviet aid and
subsidies for the Caribbean island more than ten years ago.

"I think Cuba has done -- and everybody would acknowledge -- a great job on education
and health," Wolfensohn told reporters at the conclusion of the annual spring meetings
of the Bank and the International Monetary Fund (IMF). "I have no hesitation in
acknowledging that they've done a good job, and it doesn't embarrass me to do it.
...We just have nothing to do with them in the present sense, and they should be
congratulated on what they've done."

His remarks reflect a growing appreciation in the Bank for Cuba's social record,
despite recognition that Havana's economic policies are virtually the antithesis of
the "Washington Consensus", the neo-liberal orthodoxy that has dominated the Bank's
policy advice and its controversial structural adjustment programmes (SAPs) for most
of the last 20 years.

Some senior Bank officers, however, go so far as to suggest that other developing
countries should take a very close look at Cuba's performance.

"It is in some sense almost an anti-model," according to Eric Swanson, the programme
manager for the Bank's Development Data Group, which compiled the WDI, a tome of
almost 400 pages covering scores of economic, social, and environmental indicators.

Indeed, Cuba is living proof in many ways that the Bank's dictum that economic growth
is a pre-condition for improving the lives of the poor is over-stated, if not
downright wrong. The Bank has insisted for the past decade that improving the lives of
the poor was its core mission.

Besides North Korea, Cuba is the one developing country which, since 1960, has never
received the slightest assistance, either in advice or in aid, from the Bank. It is
not even a member, which means that Bank officers cannot travel to the island on
official business.

The island's economy, which suffered devastating losses in production after the Soviet
Union withdrew its aid, especially its oil supplies, a decade ago, has yet to fully
recover. Annual economic growth, fuelled in part by a growing tourism industry and
limited foreign investment, has been halting and, for the most part, anaemic.

Moreover, its economic policies are generally anathema to the Bank. The government
controls virtually the entire economy, permitting private entrepreneurs the tiniest of
spaces. It heavily subsidises virtually all staples and commodities; and its currency
is not convertible to anything. It retains tight control over all foreign investment,
and often changes the rules abruptly and for political reasons.

At the same time, however, its record of social achievement has not only been
sustained; it's been enhanced, according to the WDI.

It has reduced its infant mortality rate from 11 per 1,000 births in 1990 to seven in
1999, which places it firmly in the ranks of the western industrialised nations. It
now stands at six, according to Jo Ritzen, the Bank's Vice President for Development
Policy, who visited Cuba privately several months ago to see for himself.

By comparison, the infant mortality rate for Argentina stood at 18 in 1999; Chile's
was down to ten; and Costa Rica, at 12. For the entire Latin American and Caribbean
region as a whole, the average was 30 in 1999.

Similarly, the mortality rate for children under the age of five in Cuba has fallen
from 13 to eight per thousand over the decade. That figure is 50% lower than the rate
in Chile, the Latin American country closest to Cuba's achievement. For the region as
a whole, the average was 38 in 1999.

"Six for every 1,000 in infant mortality - the same level as Spain - is just
unbelievable," according to Ritzen, a former education minister in the Netherlands.
"You observe it, and so you see that Cuba has done exceedingly well in the human
development area."

Indeed, in Ritzen's own field, the figures tell much the same story. Net primary
enrolment for both girls and boys reached 100% in 1997, up from 92% in 1990. That was
as high as most developed nations - higher even than the US rate and well above 80-90%
rates achieved by the most advanced Latin American countries.

"Even in education performance, Cuba's is very much in tune with the developed world,
and much higher than schools in, say, Argentina, Brazil, or Chile."

It is no wonder, in some ways. Public spending on education in Cuba amounts to about
6.7% of gross national income, twice the proportion in other Latin American and
Caribbean countries and even Singapore.

There were 12 primary school pupils for every Cuban teacher in 1997, a ratio that
ranked with Sweden, rather than any other developing country. The Latin American and
East Asian average was twice as high at 25 to one.

The average youth (age 15-24) illiteracy rate in Latin America and the Caribbean
stands at 7%. In Cuba, the rate is zero. In Latin America, where the average is 7%,
only Uruguay approaches that achievement, with one percent youth illiteracy.

"Cuba managed to reduce illiteracy from 40% to zero within ten years," said Ritzen.
"If Cuba shows that it is possible, it shifts the burden of proof to those who say
it's not possible."

Similarly, Cuba devoted 9.1% of its gross domestic product (GDP) during the 1990s to
health care, roughly equivalent to Canada's rate. Its ratio of 5.3 doctors per 1,000
people was the highest in the world.

The question that these statistics pose, of course, is whether the Cuban experience
can be replicated. The answer given here is probably not.

"What does it, is the incredible dedication," according to Wayne Smith, who was head
of the US Interests Section in Havana in the late 1970s and early 1980s and has
travelled to the island many times since. "Doctors in Cuba can make more driving cabs
and working in hotels, but they don't. They're just very dedicated," he said.

Ritzen agreed that the Cuban experience probably couldn't be applied wholesale to
another poor country, but insisted that developing countries can learn a great deal by
going to the island.

"Is the experience of Cuba useful in other countries? The answer is clearly yes, and
one is hopeful that political barriers would not prevent the use of the Cuban
experience in other countries. Here, I am pretty hopeful, in that I see many
developing countries taking the Cuban experience well into account."

But the Cuban experience may not be replicable, he went on, because its ability to
provide so much social support "may not be easy to sustain in the long run".

"It's not so much that the economy may collapse and be unable to support such a
system, as it is that any transition after Castro passes from the scene would permit
more freedom for people to pursue their desires for a higher standard of living." The
trade-off, according to Ritzen, may work against the welfare system that exists now.

"It is a system, which on the one hand, is extremely productive in social areas and
which, on the other, does not give people opportunities for more prosperity."

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