[Marxism] Paolo Spadoni: "Truth about Cuba's economy lies in middle"

Walter Lippmann walterlx at earthlink.net
Mon Aug 29 07:05:13 MDT 2005

Every time I read commentaries by this author, I know that we're
getting serious analysis by someone who knows what he's talking
about. Here he provides an excellent overall summary of what's
going on in Cuba and the challenges before it. He doesn't take into
consideration the role of remittances and tourist income, and thus
he doesn't provide a completely rounded picture of the situation.

The Cuban government does not provide detailed figures on some
of its critical economic indicators. This is because it doesn't wish to
provide Washington with any information it could use to attempt 
furthur steps to attempt to strangle the island's economy. Take a
moment to imagine, if you will, how Cuba could do if it weren't
blockaded? Look at China and Vietnam, which have been free to
grow their economies at extremely rapid rates in the past decade.

And though China and Vietnam have, of course, paid a social price
for the concessions they've chosen to make to foreign investment,
their ability to buy and sell in the world market, and particularly
in the US market, have provided them with the financial where-
withal to grow their economies at record rates. If Cuba were free
to access the US market in two-way trade, it would be enabled to
address the long-standing and very frustrating issues of food,
housing and transportation appropriately highlighted here. Cuba
is blessed and cursed by its size and proximity: "so far from God,
so near to the United States" as Mexican President Porfirio Diaz
[1877-1911] so famously lamented. Cuba's closeness to the US,
geographically and culturally - as a Spanish-speaking country - 
and its example standing up to Uncle Sam and daring to be an
independent state are why Washington so strongly resists the
idea that Cuba has a right to be a fully independent country.

There's much more to this discussion, but here's an article which
is filled with facts and not burdened down with heavy-handed
Cuba-bashing ideological blinkers.  I rather wish I knew about
the author's political opinions, but his work is very helpful.

Walter Lippmann, CubaNews




Truth about Cuba's economy lies in middle
Paolo Spadoni
Special to the Sentinel

August 29, 2005

Last February, Fidel Castro proudly stated that Cuba is recovering
from the ashes of its post-Soviet economic recession and "rising
again like the phoenix." Conversely, U.S. Interests Section Chief
James Cason recently said that the island is facing severe economic
problems and that Castro's government "is on its last legs."

What is the truth about the current status of Cuba's economy?

The economic situation in Cuba is not as bad as U.S. officials would
have us believe. The country's economy grew 3 percent in 2004, mainly
thanks to a substantial increase in revenues from tourism and nickel
exports, rose by approximately 6 percent in the first half of 2005,
and is expected to end the year with a 5 percent growth.

Apart from an aging Fidel Castro, who just turned 79, there is little
reason to assume that the present government in Havana is on the
verge of collapse, especially after its recent and extremely
beneficial agreements with Venezuela and China.

Since October 2000, Cuba has been paying for vital imports of
cut-rate Venezuelan oil (supply has now reached 80,000 to 90,000
barrels of crude per day) with medical and educational services.
Between 2001 and 2004, according to official figures, the Castro
government received almost $130 million in revenues from various
treatments to little more than 7,500 Venezuelan patients in Cuba's
hospitals and medical centers (around $17,000, on average, for each
patient treated). And these revenues do not include services provided
by some 20,000 Cuban doctors stationed in Venezuela and those offered
by teachers and sports trainers. Last December, Cuba and its South
American ally signed new agreements aimed to promote investment as
well as technical and educational cooperation between the two

During the 1990s, China had been the only foreign country that
granted a considerable amount of financing to Cuba at highly
concessional terms. Between 1990 and 2004, the Asian giant provided
soft credit and donations of more than $160 million, mostly in the
areas of education, tourism and agriculture. In the past few months,
China has announced new credits and aid to Havana and major
investments in Cuba's nickel and oil sectors. The Chinese capital
involved in new projects on the island could represent more than
one-fourth of the total amount of foreign direct investment ($6
billion) committed by overseas firms over the past 15 years.

But Cuba's economy is not even as good as Havana's authorities
proclaimed. Leaving aside the frequent blackouts that have plagued
the entire island in recent months, the reality is that the latest
progress at the macroeconomic level has not yet translated into
tangible benefits for the Cuban population. While the Castro
government is trying to address some major deficiencies of its
economic system, three chronic problems remain unresolved in Cuba:
the availability of food and other basic products, the construction
of new houses and the reparation of existing ones, and the very
precarious condition of the public transportation sector.

The majority of Cubans have great difficulty in acquiring food and
other items they need because of the limited purchasing power of
their salary in regular pesos and insufficient domestic production.
As several goods must be purchased in state-run stores that accept
only the convertible peso or CUC, a local currency worth 24 regular
pesos, most prices remain prohibitive for the average Cuban. This
holds true even after the recent 7 percent revaluation of the regular
peso against the CUC and substantial increases of salaries and
pensions for many Cuban citizens.

Between 2000 and 2004, the number of new houses built annually by the
Cuban government dropped about 65 percent. Last year's number was the
lowest since 1990, even lower than the annual average of new homes
completed between 1991 and 1993, during the worst time of the
economic recession in Cuba. Regarding public transportation, the
total number of passengers transported each year by bus and taxi
plummeted by about 80 percent between 1990 and 1998, with a small
improvement since then. In 2003, however, the volume of passengers
was the same as in 1963, when the Cuban population stood at just 7.4
million, almost 4 million less than its current size.

In short, the truth about the current economic situation in Cuba lies
somewhere in the middle between the overly optimistic assessment
coming from Havana and the nearly catastrophic one made by

Cuba's economy is neither a phoenix rising from the ashes nor a
system on its last legs. It looks like a bird with strong legs that
keeps walking but has not learned how to fly, at least not yet.

Paolo Spadoni is a Ph.D. candidate in the Department of Political
Science at the University of Florida. He wrote this commentary for
the Orlando Sentinel.

Copyright © 2005, Orlando Sentinel |

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