Cuba: The Revolution Lives On

The blockade has also significantly reduced Cuba’s ability to export, which in turns means its ability to import has also been reduced. 

                    The Golden Period 

F rom the 1960s to the late 1980s, almost all production in Cuba was owned and organized by the state. There was free healthcare, equal access to free education, and full employment. In the countryside, electrification, indoor plumbing, drinkable water, and basic housing was provided for almost all Cubans. Hunger and absolute poverty were overcome. 

However, there were limited and insufficient consumer goods, slow economic growth, with a very slow rising of the standard of living, and a paternalistic system where the government listened to the people and management listened to worker complaints, but the decisions were made at the top. There were important and major gains for women in accessing higher education and entering and advancing in significant numbers in many professions, but little change in the sexual division of labor at home, as women still did most of the housework. 

There were striking changes towards achieving racial equality as discrimination was outlawed and the proportion of black Cubans in secondary and higher education and in higher status jobs began to approach their numbers in the population, although the top leadership in Cuban society was still disproportionately white and male. The gains for families who were poor before the 1959 Cuban revolution, particularly in rural areas, were impressive—in education, income, health, housing, and in being treated with respect and dignity. This is an accomplishment whose significance cannot be overstated. In the early 1980s, an article in the Wall Street Journal grudgingly admitted that the standard of living for working people in Cuba was the highest in Latin America, with the possible exception of Puerto Rico.  

Cuba called itself socialist, meaning most production was nationalized and state-owned and production was not organized for profit, but rather was centrally planned to meet the economic needs of the population. However, the population had limited power in making major economic and political decisions, e.g., on whether to develop nuclear power. 

The input of the population then and now comes mainly through mass organizations, such as the community-based Committees to Defend the Revolution (CDR), the Federation of Cuban Women (FMC), and the Cuban Federation of Workers (CTC). It is through these mass organizations—as well as through the Communist Party, whose current membership numbers over a million and whose members are for the most part respected by the Cuban people and closely linked to the grassroots—that people can express their needs. To look at this system as totally top down where Fidel orders and the people follow misrepresents the reality of a government quite connected to popular sentiments. On the other hand, a viewpoint that claims that the Cuban people and their elected representatives have real power is also inaccurate. 

The Special Period 

W ith the collapse of the Soviet Union and various economic and trade arrangements that Cuba had with the Soviet bloc, Cuban production fell by more than one-third from 1989 to 1993 and imports and exports were reduced by more than two-thirds. In the early 1990s there was widespread blindness and other health problems, most likely from an insufficient diet and lack of vitamins. Cuba has managed to survive with slow, but significant economic growth over the last ten years. Nonetheless, most of the population as of 2004 has a lower standard of living—around 25 percent lower than they had in the mid-1980s. Most Cubans, unless they have some way of earning or receiving dollars or foreign exchange, live in poverty, although they are not hungry or homeless. The Cuban government has called this difficult time from 1989 to the present the Special Period. 

Most countries in the third world or global South have had to structurally adjust their economies since the early 1980s because of balance of payments problems, meaning they imported more than they exported and thus had to make deals with foreign lenders, such as the International Monetary Fund, in order to get loans to pay off their foreign debt. The resulting structural adjustment plans increased economic inequality and reduced social spending as countries were forced to reduce government spending and public employment and to open their country up to foreign investors. 

Cuba’s structural adjustment since 1989 has been different, although they, too, have major foreign debt and have struggled to reduce the imbalance between high imports and low exports. To its credit, the Cuban state has maintained basic social services—free and available medical and dental care, free education up to and including university level, and food rations for the population at low and affordable prices, although not the quantity or variety that Cubans need and desire. Housing and utility bills are affordable although housing is often very crowded and most people do not have phones. Infant mortality has continued to fall and life expectancy has continued to lengthen. In Cuba infant mortality is the lowest and life expectancy the highest in Latin America; both of these key health rates are almost equal to those of the much wealthier United States.

With the exception of agriculture, most production is still organized by the Cuban state. Although there no longer is full employment, jobs are easier to obtain and keep compared to other countries in the Americas. Most young people can find jobs, although wages for most jobs are very low. The unemployed as well as parents of children under a year old receive 60 to 70 percent of the earnings of their last employment and parents are guaranteed their job back when they return to work. Child care is available and affordable. 

              Changes in the Cuban Economy 

T he major changes Cuba has made since 1989 have led to some improvement in the standard of living, but has created a new set of social problems. The main changes are the following: 

1 . Legalization and widespread use of the dollar by Cubans. Since 1993, both the dollar and the Cuban peso have been used as money. Many goods in Cuba, mainly luxuries and imports, are priced in dollars—for Cubans paid in pesos, prices for these are very high because they are converted at the rate of 25 pesos to the dollar. For example, chicken sells at about $1 or 25 pesos per pound. Because of the high prices of goods and services in relation to salaries, many goods are inaccessible to Cubans who don’t receive dollars. The average salary in Cuba is 250 pesos a month. This is worth far more than $10 in terms of purchasing power, though, because health and education are free and prices are low for food purchased with ration cards. For other goods and services, a peso is roughly equal in value to a dollar, e.g., movies or bus transportation. Life is nevertheless very difficult on a peso salary. 

Both the Cuban economy and Cuban families are dependent on remittances, money sent by relatives to their families in Cuba. This provides foreign exchange to the Cuban government, as much of this money is spent on Cuban goods and services and the Cuban state and Cuban enterprises then use these dollars to buy needed imports. It also provides purchasing power for the 40 to 50 percent of Cuban families who directly or indirectly receive remittances. However, George W. Bush, in an increased effort to destroy the Cuban economy and cause an uprising against the Cuban government, announced, in May 2004, further restrictions on remittances and gifts to Cuban relatives. 

Some Cubans in government enterprises earn dollars. Since 1993, some highly skilled jobs considered essential pay an incentive in dollars besides the salary in pesos. For instance, an engineer might get $11 a month in addition to a monthly salary of 350 pesos. 

However, since April 2005, the dollar is no longer being used directly in the Cuban economy. This change was put into effect as a response to the tightening of the blockade in 2004 making it more difficult to use dollars in international economic transactions. There are now two currencies. Goods and services are bought and sold either for Cuban pesos (CUP)—still roughly 25 to the U.S. dollar—or traded for the convertible (CUC), which is roughly equivalent to the U.S. dollar. The prices of most imports, and goods and services in the tourist sector, are in convertibles. There is a 10 percent penalty for converting U.S. dollars to convertibles so increasingly tourists bring in euros or Canadian dollars. This is also true for an increasing proportion of remittances. The effect of this move away from the U.S. dollar on the Cuban economy thus far is small. 

2. Tourism. Two million tourists now visit Cuba annually, mainly from Western Europe, Canada, and Mexico. The U.S. government not only is putting further restrictions on U.S. tourism, but is trying to limit tourism to Cuba from other countries. Tourism is the main earner of foreign exchange and Cuba is increasingly producing more of what tourists consume. Two-thirds of each tourist dollar is now spent on Cuban-produced goods and services and thus creates foreign exchange that can be used for imports for the Cuban people. 

Tourism is a mixed blessing. It creates foreign exchange, but it also increases desire by the Cuban population for a first world standard of living. It reinforces sexism as Cuban women often sell themselves to foreigners. Tourism also furthers racial inequality as black Cubans are under-represented in the tourist sector, both in Cuban-owned enterprises and in mixed enterprises—joint Cuban and foreign ownership. The government and unions have acknowledged this problem, but it continues. 

Much of the income generated from tourism does trickle down to the general population as it ends up with the government and in government banks. It is then used to purchase necessary imports—medicines, buses, oil, machinery, even agricultural products from the United States. 

On the other hand, many Cubans working in the tourist sector get most of their income in dollars, mainly from tips, which distort incentives. Doctors, engineers, and foreign language specialists often do not use their education and training, but instead work as waiters, taxi drivers, cleaners, and hotel staff because they can earn much more in the tourist sector. 

The tourist industry and the aforementioned remittances also contribute to a growing inequality of income between those who get dollars or their equivalents such as euros, and those who don’t. Cuba, while far more equal than the rest of the Americas is much less equal than it was 20 years ago and this is a source of discontent. Most tourism in recent years has been of the “beaches and sun” variety. Other forms of tourism less destructive of socialist values are being promoted—ecological tourism; cultural tourism (tourists coming to learn about Cuba’s history, culture, and revolution); educational tourism; and medical or health tourism. In 2005 there has been a major increase of people from the Americas, primarily Venezuela, coming to Cuba for affordable medical care. This has been financed by the Venezuelan government and is the main reason for a recent improvement in Cuba’s balance of payments, contributing significantly to a high rate of economic growth in 2005.

3. Foreign investment . Cuba encourages up to 50 percent ownership by foreign companies in various industries, e.g., hotels, nickel mining, biotechnology. This is an attempt to bring in foreign capital and become more integrated into the global economy and to replace obsolete Soviet technology. The hope is that this can be done without being dominated by multinational corporations. Most contracts include technology-sharing and teaching of skills. Perhaps most important is ongoing off-shore oil exploration. Cuba currently imports one half of its oil. Finding low sulfur Cuban oil would substantially strengthen the Cuban economy; it would make it easier for Cuba to import other goods and reduce its continued imbalance in international trade. Nevertheless, Cuba has benefitted greatly by the below market price it pays for Venezuelan oil. 

4. Agriculture. In agriculture, Cuba has moved away from state farms and centrally planned agricultural production. There has been a steady growth of private ownership of farm and of cooperative ownership of the land. Organic farming techniques are increasingly used and there has been large growth in urban gardens. Privately-run farmers’ markets play an important role in supplying food. In them, farmers sell produce, above what they are required to sell to the state, at market prices. These reforms have significantly increased agricultural production over the last 12 years, particularly the organic production of fruits and vegetables. Food consumption has increased significantly, although meat, except for pork, is still scarce and expensive. Reforms have also created a group of high-income Cubans who sell produce in the farmers’ markets at prices that are too high for those Cubans who do not have access to dollars. Recently, the Cuban government has cracked down on middlepersons selling food at farmers’ markets, so that the sellers will be actual farmers. It is part of a major campaign to reduce economic inequality and restrict the earning of high incomes, particularly through trade. 

5. New industries . Cuba has an educated and skilled labor force. There are significant research and development resources invested in state industries, such as medical instruments, developing and producing medicines for AIDS, for curing cancer, hepatitis, malaria, meningitis, and other diseases. This is part of what the Cubans call biotechnology. There is also growth in the development and production of computer software, which Cuba hopes to sell globally. The continuing hope is that this industry could be globally competitive, pay a livable wage, and bring in substantial foreign exchange. Not surprisingly, the U.S. is trying to prevent these sales by pressuring other nations not to buy Cuban goods, but there is interest in developing and marketing these products even by U.S. firms. 

Overall Assessment 

C ubans’ survival in the face of the U.S. attempt to destroy the revolution is a great achievement, as is its continuing to provide for the basic needs of its population. For example, every single person in Cuba has free dental and eye care; every person in Cuba with AIDS gets free, high-quality retroviral drugs. 

Cuba deserves critical support from the people of the U.S. even though there are real problems. For instance, Cuba has not developed a workable strategy for achieving economic and social equality, people’s power, and an improving quality of life. The main efforts of the Cuban government have been aimed at surviving, maintaining basic services, and increasing economic production. They have accomplished the first two of these objectives, but have not so far developed a strategy for sustainable economic development. One bright sign has been significant economic growth in 2005, possibly 9 percent. Stimulated primarily by Cuba’s medical or health tourism, it has also substantially improved Cuba’s balance of payments. It has meant an increased availability of consumer goods, a significant rise in social security payments and pensions for retired people, and a 25 percent increase in the minimum wage. Whether a rapid growth of output and income will continue and be sustainable is too early to tell. 

Income inequality has been worsening from the early 1990s through 2004. This is a major concern to Castro. Income equality could be improved by increasing the types and quantity of goods available at subsidized prices and/or moving to one currency and price system and raising wages substantially for those getting paid in pesos. However, unless production is increased and higher incomes are taxed more heavily than now, these reforms would cause strong inflationary pressures as demand increases and further balance of payments problems as imports increase. Castro recently announced that the ration books for food at reduced prices will be ended shortly and Cuba will have one price for goods, determined primarily by costs of production. Unless purchasing power and incomes for the majority of the Cuban population and production increase, high rates of poverty will continue. 

Cuban society is not the dictatorship you hear about in the media here; people do speak up and criticize and there is no torture or disappearance of dissidents. There is some suppression of the organized opposition. This repression is because of the fear and the reality of the U.S. commitment to overthrow the Cuban revolution and return Cuba to neocolonial status. The U.S. government supports much of the opposition in Cuba—for example, the 75 dissidents who were arrested and imprisoned in 2003. If Cuba openly financed opposition to capitalism in the U.S., or intervened in the U.S. elections, think how people in the U.S. receiving money from the Cuban government would be treated. Also, the U.S. is a clear threat to Cuba; Cuba is not to the United States, meaning that Cuban fears and actions are more justifiable than comparable U.S. actions would be.

The Cuban government and many Cuban people fear a U.S. invasion. I think it is possible although not likely, though there is continued U.S. pressure and aggression against Cuba. U.S. provocations such as flying military planes with radio and TV transmitters, which Bush announced in May 2004, could lead to violations of Cuban airspace and U.S. military attacks on Cuba if Cuba defends itself against these violations. The position of the Democratic Party on Cuba is not as bad as the current Administration’s, but, for the most part, they do not accept Cuban self-determination and sovereignty as a basis for U.S. foreign policy. For example, Kerry, in his presidential campaign said, if elected, he would end the travel ban, but not the embargo/blockade, nor establish normal diplomatic relations with Cuba. Still there are a growing number of politicians— mainly, but not only, Democrats—who support normal relations with Cuba. If we are concerned about human rights and the right of all nations to choose their own systems, we should do what we can to stop the U.S. from waging war against Cuba whether it is an invasion or the continuing blockade. 

One hopeful change is Cuba’s improving economic and political relations with other governments and countries. I have already mentioned Venezuela, which has become Cuba’s main trading partner in a relationship beneficial to the people of both countries. Trade with China is growing rapidly. As countries in South America have become increasingly independent from the United States—e.g., Uruguay, Brazil, Argentina—their relations with Cuba have improved as have their criticisms of U.S. behavior towards Cuba. Cuban relations with Spain have also improved significantly since the 2004 election of Zapatero as prime minister there. The U.S. is failing badly in its attempt to isolate Cuba; the most recent evidence being the 182 to 4 vote in the UN General Assembly on November 8, 2005 in favor of ending the U.S. embargo/blockade against Cuba. 

The survival and maintenance of the Cuban revolution is incredibly important for the Cuban people and globally. It is an alternative to neoliberalism and a beacon of hope for oppressed people around the world. I am often asked what will happen after Fidel Castro retires or dies. I think there will be no big immediate changes nor will U.S. hostility end, as it is aimed at the Cuban system not just at Castro. My hope for the future of Cuba is, as we work to reduce U.S. aggression and as Cuba gains more economic and political allies in the world, such as Venezuela, that Cuba will experiment with more people’s democratic power and build a socialism that is participatory, egalitarian, and increasingly meets the needs of its people.