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U.S. experts debate impact of economic reforms approved at VI Party Congress
CubaNews / June 2011

By Larry Luxner

While the Cuban government eases limits on private businesses, moves to cut tax-es for mom-and-pop restaurants and gradually opens the door further to foreign investment in beachfront golf resorts, Cuba experts in Washington and elsewhere are equally busy debating what all of this really means.

The current flurry of activity began in mid-April, when delegates to the VI Party Congress meeting in Havana approved a long list of lineamientos or guidelines for economic reforms.

Proposals to legalize the sale of real-estate and private cars got plenty of media coverage worldwide, though they haven’t been passed into law yet. Nor has a plan to grant small-business loans to individual entrepreneurs or create a wholesale market on the island.

On the other hand, on May 27, the government announced it would allow private restaurants to serve up to 50 diners at a time, up from the previous limit of 20, though many paladares had been ignoring the restriction.

Some 310,000 Cubans are now licensed to work in the private sector, according to an article in the Communist Party daily Granma. That includes 50,000 people in food production and sales, 39,000 working for private businesses and 14,000 taxi drivers and other transport workers.

At a recent Inter-American Dialogue breakfast in Washington, three Cuba experts offered their opinions on the island’s latest reforms.

“One view is that this really amounts to very little, if anything at all. Cuba has embarked on reforms at different moments in time, and has always dismantled them when the economy improved. And this time is no different,” said American University scholar Robert Pastor.

“The second view is that this represents a sea change and will lead to a very different Cuba. I tend to be both an optimist and a skeptic, especially of government promises and dictatorships.”

Pastor, who accompanied former President Jimmy Carter on his recent trip to Cuba, says such reforms would be relatively meaningless in any other country in Latin America, but that “for Cuba, it’s very significant.”

Among other things, the Castro regime has leased one million hectares of land to 120,000 farmers, opened up 178 categories of jobs to the private sector and announced that it would lay off more than a million state workers and eliminate subsidies.”

“More important than these reforms was the rationale for the reforms,” he said. “The Cuban economy is inefficient and deficient. Therefore, what’s needed is an incentives system, a reduction of the security net to encourage people to produce.”

Pastor suggests that the biggest obstacle to implementation of the reforms may come from the Cuban people themselves — not to mention the United States.

“They’ll be losing their jobs, without ration cards, without a safety net. There’ll be a lot of pushback at the popular level, and the government will be worried about that,” he said.

Regarding U.S. policy, Pastor says: “I personally don’t think the world plays a large role in Raúl’s mindset; he’s not as concerned about the U.S. as Fidel is. The problem in the U.S. is that we’re also facing a debate between those who say nothing will change until the Castro brothers are gone, and we ought to use everything we can to put pressure on Cuba — and those who say America’s greatest strength is our openness.

“Let’s take advantage of that, not by trying to manipulate through ‘democracy programs’ but rather by opening up the United States to Cuba. At this moment of transition in Cuba, this could encourage the forces of economic and political pluralism.”

Pastor added that “this so-called democracy program is absurd. It’s completely ineffectual except that it helps the hardliners in Cuba. It serves no other purpose.” Florida International University’s Juan Antonio Blanco, speaking of the Sixth Party Congress, said it represents a “milestone” in Cuban history — the last one to be presided over by the generation that has held power on the island for half a century.

“But if the policies now adopted prove to be inadequate, the consequences will be very significant in the short, medium and long term for almost everyone involved,” Blanco warned his Washington audience.

The FIU scholar cited a recent interview with Pavel Vidal Alejandro, a researcher at the University of Havana’s Centro de Estudios Sobre la Economía Cuba, whom he called “one of the best minds in Cuba.”

“He says that he has a lot of doubts about the institutional capacity of Cuba to implement the lineamientos, if they are really going to be adopted,” Blanco noted. “Being able to stay in a hotel room in your own country and getting a cellphone are all positive things, but the big question is, where is the country going?”

“If we concentrate on short-term questions like how many more military officers are in the political bureau, or how many measures have been adopted, we lose perspective of what’s happening in the medium or long term,” he said.

Furthermore, said Blanco, the Castro regime “has a long tradition of shelving and forgetting previous decisions.”

“Vertical mobility in Cuban society has been mostly granted on the basis of personal and ideological loyalties, while creativity and excellence were secondary considerations,” he said.

“Fifty years after the revolution, it seems no one below 60 can be trusted to take over key positions of influence. From a long-term perspective, the presence of military officers among the leadership isn’t as disturbing as the complete absence of scientists, artists and intellectuals.”

Blanco said he’s also disturbed by the fact that “while much time was spent discussing the breakdown of electrical appliances,” no officials are talking publicly about the role of the Cuban diaspora.

“Such an omission is particularly remarkable, if you consider that they inject about $2 billion a year in remittances, postal packages, fees and money spent while visiting the island,” he said. “The exclusion of this group from economic discussions is quite odd.”

Arturo López Levy, a former political analyst for the Cuban government who now teaches Latin American politics at Denver University, said there’s been a dramatic shift in Cuba from promoting a “battle of ideas” to a focus on making the economy work.

“The Party Congress opened the door to substantial economic reform, but paradoxically elected a very conservative Politburo for its implementation,” he said. “If there’s a message to the United States, it’s that the U.S. needs to learn to live with this ambiguity. We will see a move towards important economic changes, but at the same time, an iron will to keep the one-party system in place.”

Asked about the potential real-estate boom that could result from the end to prohibitions on the buying and selling of houses and apartments, López said that “most reformists in Cuba would like to open as much as they can, using houses and cars as collateral for loans to develop private business. But others want to go slower. They are trying to prevent direct sales of cars to people.”

The bottom line, said the academic — who has often been criticized for defending the Cuban government — is that “no matter how much some of them want to liberalize the economy, the leadership is the result of a convergence of the military high command and party bureaucrats.

“Both groups agree on the convenience of preserving the one-party system and the monopoly on government bureaucracy. And it’s wrong to assume they’re improvising. They have a plan for at least the next 5 years: to go on the economic reform track as much as they can while keeping political control.”

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