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State Resistance to
Globalisation in Cuba
Antonio Carmona Bez
Pluto
Press
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Contents
Preface
1. Introduction
Cuba as an Exception
Neo-liberal Globalisation, Socialism and Anti-Imperialist
State Resistance
Implications for the State
Social Consequences of the Global Trends
Socialism in a Sea of Capitalism
Marxist Socialism
State Capitalism
Implications for Studying Cuba
The Party/State Apparatus
2. Conceptualising Cuban Socialism: The Pillars of the
Revolution
The Causes of a Tardy Independence
Roots of Nation-state Formation
US Intervention and Neo-colonialism
The First Labour Movement
A Workers Revolutionary Attempt
An Alternative to the Workers Movement
Cuba Socialista
Economic Integration into the Soviet Bloc
Unity, Continuity, State Supremacy and Popular
Participation
3. The Causes and Impact of Cubas Crisis in the 1990s
The Background to the Crisis
The Effects of Integration
The Campaign to Rectify Errors and Negative Tendencies
The Demise of the CMEA
Cuba and the Fall of the Soviet Union
The US Economic Embargo
The States Response and the Impact upon Cubas
Political System
Foreign Direct Investment
Signs of Slow Recovery
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Bibliography
Index
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Preface
This book examines Cubas unique position in the current global
political economy, the alternatives that this country stands for against
the backdrop of capitalism and the possibilities and limitations of
state resistance to neo-liberal globalisation. It is essentially the product
of my critical academic preparation in international relations during
the first decade of the post-Cold War era, when the world appeared
to be moving into a singular neo-liberal trajectory. My encounters
with scholars in the field of international political economy, both in
Europe and Cuba as well as back home in Puerto Rico, heightened
my curiosity in exceptions and counter-norm tendencies at the nationstate level. Those who most inspired me to investigate the case of
Cuba during the process of political and economic restructuring in
the 1990s, were the friends I met on the island while conducting
postgraduate research. Mostly workers and artists, but also students
and scholars of the social sciences, their post-Cold War experience
shaped my thinking about the search for alternative strategies in
resistance to global changes. Although these compaeros were busy
surviving the hardships that the so-called Special Period (199198)
brought into their daily lives, they somehow found the time to share
with me their Weltanschauung.
More recently, during the past couple of years, a number of events
have brought international attention to the Republic of Cuba. First
was the appearance of President Fidel Castro at the United Nations
First World Conference Against Racism in Durban, South Africa. In
the midst of diplomats and representatives from non-governmental
organisations, Fidel Castro was one of the few state leaders who
bothered attending. He made a strong intervention in support of the
initiative to bring all nations together in the effort of recognising the
need for a declaration against racism and all forms of discrimination
rooted in slavery and colonialism. At the same time, he identified
the process of neo-liberal globalisation as the perpetuator of modernday poverty and inequality. Second, on 11 September 2001, when
two hijacked planes crashed into the World Trade Center and one
into the Pentagon, Cuba offered humanitarian aid and medical
expertise to the victims of New York. Despite this kind gesture,
President George Bush, in launching his new war against terrorism,
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placed Cuba on the list of states that possibly harbour terrorists. Last,
in October 2001, Hurricane Michelle passed through Havana with
floods that resulted in major damage to crops and the wreckage of
many homes. After the tropical storms had passed, the United States
offered humanitarian aid to their enemy state on the condition that
none of the aid would be used or dispersed by the Cuban government.
The Cuban Parliament responded to the US Congress, stating that
the country did not need the aid or medical assistance. Instead, Cuba
demanded the right to purchase medicines and food products that
are sold by US monopolies and an end to the 42-year-old economic
embargo. On Friday 14 November 2001, a ship containing US$30
million in corn and frozen chicken left Louisiana for the ports of
Havana, Cuba for purchase. This was the first direct shipment of US
merchandise to the island in over 40 years.
The Cuban governments responses to all four of these international events reveal some of its most essential characteristics: its
opposition to neo-liberal globalisation and therefore its steadfast
belief in alternatives, national independence and a sense of dignity
in the face of isolation. It is often the case that the Cuban government
stands alone in opposition to current global structures and
uncontested financial, political and economic policies.
Throughout the world today, millions of individuals and thousands
of groups also concerned with bringing down neo-liberal globalisation have been mobilised to challenge the same structures, the Empire
that burdens the people of Cuba. This global justice movement is
growing, as a new generation of activists wearing Che Guevara
T-shirts is taking to the streets from Seattle to Genoa, from Jakarta
to Porto Alegre. But the question is: What options do revolutionaries and anti-capitalists have when they are in government? The
following chapters do not pretend to use Cuba as a model for a postneo-liberal order. Rather, this book intends to discover the possibilities
and limitations of state resistance to neo-liberal globalisation and
emphasise the continuing need for alternatives.
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Introduction
Throughout the past decade, the idea of establishing or maintaining
what was understood as revolutionary or state socialism has been
somewhat lost to historical discourse. The collapse of the socialist
bloc in Eastern Europe, the demise of its international trading system
(the Council of Mutual Economic Assistance) and the disintegration
of the central state socialist stronghold (the USSR), all played an
essential role in reducing communist and socialist movements to
ghostly levels of existence. The economic, political and ideological
breakdown that occurred towards the end of the 1980s and the start
of the 1990s affected not only those living in Eastern Europe during
the popular uprisings against state leadership. The fall of political
and economic structures dominated by communist parties also created
a crisis of theory; left-wing radicals and broader movements searching
for alternatives to Western capitalism became paralysed throughout
the entire globe. Guerrilla movements, communist and socialist
parties of the West and non-industrialised, post-colonial countries
of the Southern Hemisphere all formerly aligned on a real, international alternative force in the face of capitalist expansion were
thrown into disarray. In Western Europe, political parties of the social
democratic tradition abandoned their allegiance to the interests of
the working class and clearly began a process of recanting their
demands for increasing social spending. Meanwhile, those forces
historically antagonistic towards socialism and national liberation
movements and in favour of free-market capitalism, stepped up their
efforts to consolidate a global system based on free trade favourable
only to a small minority of transnational entrepreneurs and political
leaders that protected their expansionist interests. Out of this
condition arose what would become known as the process of neoliberal globalisation.
In this era, governments in most countries experience a shift of
power in their traditional spheres of influence. The essential result
is a move from public, national dominance of the means of production
and social activity towards the hegemony of multinational
corporations supported by an elite community of technologically
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Introduction
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Introduction
funded by taxes to being a private business that will profit from the
consumers of the provided service. In a democratic setting, a political
party, usually funded by leading entrepreneurs, would encourage
voters and legislative bodies to support the project of privatisation
in return for a number of advantages. Often these have included the
reduction of income tax for common workers. Other neo-liberal
politicians might argue that a service or public industry would become
more efficient if it were free from governmental bureaucracy. These
myths have been widely contested by people who have actually
experienced the privatisation of industry or services, as efficiency
issues after privatisation are often neglected. But the essential problem
with privatisation is that, in most cases, decisions to privatise
companies are not made democratically; in most cases they are made
from above without a public-based consensus. In this sense, the
opponents of neo-liberalism argue, privatisation equals thievery from
the wealth of society in order to subsidise private capitalists in their
mission to expand (Petras and Veltmeyer, 2001). This is not to say
that all public ownership of production and services is necessarily
democratic. However, the privatisation of publicly owned enterprises
does exclude the chance of democratic governance.
Privatisation might be attractive to politicians who are in the
position of solving state indebtedness or government bankruptcy.
By selling off national industries or public services, governmental
bodies are believed to be relieved from debt and responsibility over
social concerns. Those politicians interested in making governmental
bodies smaller will use privatisation as a means of doing so in addition
to fundraising for the government. The problem comes to the fore
when non-governmental groups lobby for state monitoring over the
transition to privatisation, either in defence of the environment, in
the interests of workers or to deter corruption. Furthermore,
fundraising arguments fall by the wayside when one realises that
privatisation is not a sustainable means of government income;
companies can only be privatised once. The practice of privatisation
becomes even more anti-democratic and much more controversial
when international governing bodies and institutions pressurise
poorer countries to privatise production domestically.
From the business point of view, neo-liberal practice entails freeing
the market from rules that hinder economic growth and profit. For
instance, politicians that represent the interests of private capital
might campaign against a hike in the minimum wage for workers,
in order to keep profits rising. Another example can be found when
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private companies are given the right to ignore the demands of labour
unions, hire and fire as they want, and move from one region where
legal wages are high to places that offer a surplus of workers willing
to produce for a lower and less secure income. But privatisation is
but one of the many practices. Neo-liberalists might also pressure
local or national governments to relax environmental laws in order
to allow private companies to produce more cheaply rather than
under eco-friendly frameworks, which often require businesses to
employ costly production methods that crunch profits. Like-minded
politicians argue that unemployment rates will automatically drop
when these policies are adopted, because the private company, after
profit rates increase and wages decrease, will be able to employ more
workers. The result of these ideas when they are put into practice is
that more workers are employed either on a part-time or temporary
basis, and with less job security. When it comes to environmental
quality, the risks of air and water pollution become more pronounced.
The examples mentioned above are best demonstrated in real
national case studies. However, neo-liberalism, an international
project, goes beyond state structures and specific instances and is
applied globally. That is, not only are neo-liberal practices
implemented by domestic politicians but also by international
financial institutions that often pretend to aid countries in need of
development. After the demise of the so-called socialist regimes in
Eastern Europe and the fall of authoritarian political structures in
Latin America during the late 1980s, neo-liberal policies were followed
by new governments in reaction to years of state dominance in the
economy. Critical political economists have noted that international
financial institutions, in the hands of neo-liberal thinkers, actually
forced many of the state-dominated economies to be dismantled
(Bello et al., 1994). This was done by denying international bank
loans and credits to countries that refused to privatise or to cut state
subsidies in domestic agricultural, industrial or service sectors.
Evidently, the purpose was to allow large transnational corporations
(TNCs) to compete successfully against or buy up small domestic
businesses whether private or public. The result has been the selling
out or disintegration of national economies and, in their place,
allowing the TNCs to dominate almost every aspect of life. This is
seen more clearly when state companies and public services from
telecommunications to water and energy sectors in small underdeveloped countries are sold to large corporations, usually based in the
technologically advanced North. The international institutions that
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call the production and financial structures. These are the ones
which have most impact on peoples daily lives. I argue that
one of the major shifts resulting from structural change has been
the increased power and influence of the multinationals more
properly called Transnational Corporations (TNCs) and the
networks they set up and operate. (Strange, 1996:40)
Strange makes the argument not that the state is disappearing, rather,
that due to the integration of the global economy through international production the balance of power has shifted away from
states and towards the market. Additionally, this shift is seen as causing
a transfer of power from territorial states to non-territorial TNCs and
the creation of gaps of power where authority of any kind is seemingly
absent, i.e., the informal economy and underground markets like
drugs, prostitution and the Mafia. TNCs are seen as political actors,
having political relations in civil society, determining the role of
employers, and the employed, they are producers as well as sellers,
and they are also consumers of goods and services. The technical
innovations and where research funding is allocated are often
determined by the TNCs. Strange comes to the conclusion that power
was handed over to the TNCs on a plate, and that it was not
accidental. This coincides with the idea that, as Susan George has
revealed, conservative forces were preparing for this change some
time ago.
SOCIAL CONSEQUENCES OF THE GLOBAL TRENDS
For the past decade, many critical social scientists have dedicated a
large portion of their work to analysing the social implications of the
current global trends. While some have been apologetic to certain
aspects of neo-liberal globalisation and the opening of markets, most
have concluded that neo-liberal practice is destructive and not
sustainable. The same can be said of the neo-liberal experience in
Latin America:
Companies which find it difficult to compete in the new and
vulnerable international market, have started laying off workers
more easily and there has been little resistance on behalf of the
weakened labour movements; the term, introduced from the
US corporate world, is downsizing. Additionally, the
government, in trying to reduce spending, has also done a
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the new democratic laws that were given to the general population
and saw their historical mission as being completed after the dictatorships were abolished. The exceptions to this would be left-wing
factions of the Workers Party (PT) in Brazil and the Zapatista liberation
movement in southern Mexico. These movements, linked to other
progressive forces, like those concerned with human rights and the
environment, started to challenge many of the myths surrounding
the new global trends. The resistance to neo-liberalism was primarily
based on the unfavourable social consequences that resulted from
its practice.
During the second half of the 1990s it became more and more
evident that these neo-liberal policies were not wholly acceptable.
In Venezuela, popular resistance and disenchantment with corruption
and a deteriorating infrastructure led to a political slide to the left to
control or reduce neo-liberal policies; this resulted in the election of
nationalist leader Hugo Chavez in 1999, who vowed to reduce liberalisation and resist external pressures to privatise. Throughout Latin
America as a whole, between 2000 and 2001, there have been at least
ten demonstrations or general strikes with more than 10,000
participants. These actions were centred on challenging the trends
of neo-liberal globalisation, especially privatisation, but also unfair
trade and currency devaluation (Charlton and Bircham, 2001:341).
More and more intellectuals and social activists have been arguing
for alternative forms of globalisation. Inspired by the works of
historical authors like Polanyi, social scientists of the left reject marketcentred or corporate-led globalisation and instead consider the
globalisation of participatory democracy, human rights and fair trade
(George, 1997; MacEwan, 1999; Coates, 2001). Again, these ideas
have often been generated by new social movements or intellectuals, but not by state leaders. As exceptions, Fidel Castro and the PCC
have been arguing for alternative forms of globalisation ever since
the term took off in popular discourse during the early 1990s (Castro,
1999a; 1999b). But what does resistance to neo-liberal globalisation
in the state form entail?
SOCIALISM IN A SEA OF CAPITALISM
The existence of socialist states in a world of capitalism continues
to pose a dilemma of interpretation for the study of the global political
economy as well as for the many contributors to the broad and rich
Marxist tradition. By the end of the Cold War, the theme of revolu-
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STATE CAPITALISM
State capitalism is a concept that for many years was conceived as
the highest form of capitalist development. The term is not new and
has been used and discussed in various schools of thought, both
academic and political, in relation to the state management of the
market. State capitalism theory has been used both by the writers of
the Frankfurt Institute of Social Research (Frankfurt School), as well
as by revolutionary socialists who opposed the Soviet model during
its existence; among these, the Trotskyites and the International
Socialist Tendency founded by Tony Cliff (Cliff, 1948; Arato and
Gebhart, 1997).
Friedrich Pollock declared that: terms like state organised privateproperty, monopoly capitalism, managerial society, administrative capitalism, bureaucratic collectivism, totalitarian state
economy, status capitalism, neo-mercantilism, economy of
force, and state socialism are a very incomplete set of labels used
to identify the same phenomenon (1941:71). He concluded that
state capitalism is the successor of private and then monopoly
capitalism and that it was a mode of production in which profit
interests still played an important role. In state capitalism there is
no longer self-managing or the private control of production and
distribution. The system would have become controlled by planning
and direct, conscientious command by the state, whatever the nature
or origins of the state; where enterprise and labour as two separate
entities are fused under governmental control, where there is a partial
negation of free economic laws. Full employment of all resources,
including labour, is claimed to be the main achievement or goal in
the economic field, where pseudo-markets can be created in order to
expand production and increase profits.
State capitalism in the Frankfurt School was conceived as a result
of the decline of the market system, which had become inadequate
for using all available resources. The decline of free-market private
capitalism could be attributed to a crisis in the liberal era where private
monopoly succeeded competitive capitalism and where government
had to interfere in the economic crisis due to monopolistic structures
and the destructive consequences and disruptive conflicts which
emanated from them. This was especially true for the most developed
countries of Western Europe and then the United States. The
symptoms of declining market economies, says Pollock, was what
became characteristic of all industrial countries after the First World
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War, as exemplified in the New Deal, and continued after the Second
World War (Pollock, 1941:72). There was concentration of businesses
into gigantic enterprises, which thereby created a system of rigid
prices, self-financing and concentration, government control of the
banking systems, the monopolistic character of trade unions, largescale unemployment and enormous governmental spending on the
poor. State capitalism gives direction for production, consumption,
savings and reinvestment. As a planned economy, what is produced,
how and how much is not left to the crazy, indeed anarchical and
wasteful, dictates of the economy; rather, is controlled directly and
intentionally by the government. This was the transformation that
Polanyi described.
Not much was changed, says Pollock:
Prices and goods are paid for in money, single prices may rise and
fall. But the relation between supply and demand on one side and
prices and the cost of production on the other becomes somewhat
disconnected in those where they tend to interfere with general
societal planning. (Pollock, 1941)
The market becomes a closely controlled tool in material development
and the state is considered to be the repository of the means of
production. However, Pollock envisioned only two forms of state
capitalism: authoritarian and democratic. According to this train of
thought, he observed state capitalist history in the most important
historical examples: Nazi Germany and Stalins Russia.
In totalitarian state capitalism or monopoly state capitalism the
state under the control of an alliance among the most powerful
vested interest groups in industry and technology, the higher
classes of society including ruling elites and especially the military,
the party bureaucracy and everyone who is not included in this
group is then dominated by the prior. Under democratic state
capitalism, the state has the same function but is thence controlled
by the masses. It is based on institutions which prevent
bureaucracy from transforming administration into a mere
instrument of power whereby leaving room for trans-shaping
democracy into totalitarianism. (Pollock, 1941: 84)
Pollock saw democratic state capitalism, therefore, not as a form
of socialism but as a transition period whereby workers, or the majority
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prior to 1991. Among these ideas and policies are: the legalisation of
citizens use of hard currency for the purchase of import products;
the building of a tourism industry as the countrys main source of
income; the opening up to foreign direct investment and up to 100
per cent foreign ownership in new fields of economic exploitation,
and the formalisation of a self-employment system (cuentapropismo)
that in many ways relieved the states responsibility for a percentage
of Cuban workers. Nevertheless, all of these measures were taken in
the name of safeguarding what is often referred to as the triumphs
of the Revolution. As will be demonstrated, the reforms were not
inspired by global financial institutions like the World Bank or the
International Monetary Fund. Rather, the economic restructuring
that took place in Cuba during the 1990s proved to be the collective
work of Cuban political economists and the implementation of ideas
that are autochthonous to the island. However, none of the changes
happened in an international vacuum. The Cuban leadership foresaw
the global opportunities that were open to the party/state apparatus.
Foreign investors were willing to contribute to Cubas alternative
model and create partnerships with state enterprises in ventures such
as petroleum explorations. Other countries and corporations avoided
the twice-enhanced economic embargo. All of these factors will be
given brief consideration.
Chapter 4 will deal with the period 19962000, when social and
economic indicators revealed that Cuba was on its way to a slow,
stable economic recovery. The aim of this chapter is not only to
emphasise the Revolutions success in resisting global pressures to
fall to neo-liberal practices and the will of counter-revolutionaries in
the United States. Rather, the purpose is to discover how global
pressures, together with domestic policies, shaped Cubas current
political economy. At this point the similarities between new policies
in production and capital accumulation and some of the trends most
typical of neo-liberal globalisation will be revealed. Attention will be
given to the self-employed sector (cuentapropismo), the number of
participants, which has steadily decreased throughout the last five
years, and the restructuring process of state enterprises called el
sistema de perfeccionamiento empresarial endorsed by documents
produced in the fifth PCC Congress (1997). Lastly, the implications
of these recent changes for Cuban society will be highlighted, whereby
internal economic structures and shifts in productive power will be
clearly explained. Throughout Chapter 4 I will argue that specific
social forces have been repositioned in order to accommodate Cuba
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2
Conceptualising Cuban
Socialism: The Pillars of the
Revolution
Socialist Cubas present-day existence rests upon a combination of
elements that I have chosen to call pillars. In this sense, party/state
governance can be seen more as a consolidation of social and economic
conditioning that reflects the combination of global trends and local
forces. Among them: a popular rebellion, in the name of social justice,
against a dictatorship that was defunct as a legitimate regime; and a
social revolution that was framed by the Cold War, which pushed
the leadership to opt for Cubas anti-imperialist stance against US
hegemony in the region and her move into the socialist bloc. Later
in this book the mass organisations and electoral system linked to
the PCC will be depicted as those that ensured that Cuban society
was highly politicised and that the PCC maintains legitimacy.
Towards the end of this chapter and throughout the remainder of
this book, I will defend my argument that the party/state apparatus
at hand rests upon four main pillars, which define the character of
Cuban socialism. These pillars are: continuity, in the tradition of revolutionary leadership against colonialism and later imperialism for
the purpose of perfecting society; unity in a singular political party
of the masses, which would seize state power and conduct change;
state supremacy over all social forces including the market mechanisms;
finally, popular participation or the convergence of domestic social
forces that respond in electoral and informal processes to global
trends and pressures. The pillars of the Revolution can be defined as
the tendencies upon which the 1959 Revolution came to the fore
and the ideas that are promoted by the vanguard and currently
demanded by the general population. This is the formation of a
nationally unified, counter-hegemonic bloc upon which the state
was built, often contradicting the interests of US hegemony and
global trends.
In order to depict the pillars, by which we can identify the present
regime in Cuba, it is necessary to discover first the historical
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(those who preferred to join the United States) and the Spanish loyalists.
Their ideological state of confusion left the independence movement
in the hands of grassroots and modest leaders such as Jos Mart.
Jos Mart
Just as today, when history is written focusing upon one man in the
leadership of the Cuban revolution that man being Fidel Castro
the history of Cubas anti-colonial movement during the late
nineteenth century was written by highlighting the importance of
Jos Mart. Though I discard many psychological approaches that
interpret movements by the charisma of their leadership, it is necessary
to point out the significance of a leader like Jos Mart, who was
capable of expressing a clear idea of the type of society he envisioned.
Because of Marts writing abilities, he was able to capture the attention
of his generation and also that of many which followed up to the
present day (Mart, 1931). However, it is appropriate to place more
emphasis upon the material conditions of his time than on his view
of society, which did not rest upon mythical ideas of a fatherland.
Jos Mart was the son of modest Spanish immigrants who settled
in Havana. As a journalist and a man who spent all his money on
travelling, he was capable of taking a world view on the situation
that had flared up in Cuba. Mart envisioned a new war of
independence, waged by the vast majority of the people against the
colonial masters and against the exploiting Creole elite who were
labelled as traitors to the Cuban movement. The only way Cuba could
be free, according to Mart, was through an organised collective
rebellion against the social, political and economic structures
governing the island. Mart spent a number of years in exile in the
United States (Thomas, 1971:292309). Initially, he was impressed
by the workings of democracy in that country. However, the situation
he was living in moved Mart to consider the faultiness of AngloSaxon democracy, i.e., the division of society into classes consisting
of capitalists and the vast majority of the people, with political parties
representing the same reality. During his expatriate residency, he
came to know other exiled Cubans, many of whom were involved
in struggles of their own, while looking for the betterment of material
living. He also came to know Puerto Ricans in exile in New York who
like him were interested in initiating a united front against Spanish
colonialism. During this time, Mart became clear in his vision of a
future society. Democracy, in his view should not have resembled
the bipartisan system found in the United States, where both parties
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Baires being a town where the rebellion began; a call to armed struggle
for independence and democracy. For the first time in modern history,
an entire nation, consisting mostly of working-class people from all
kinds of ethnic backgrounds, enjoyed unity in a single political party
that belonged to them and whose purpose was the establishment of
a new social order, with total emancipation as the prime objective.
Jos Mart died in battle shortly after the outbreak of the second War.
But in September 1895, a Constituent Assembly gathered in the
central province of Camaguey in order to create a new constitution.
The constitution in this case would be in stark contrast to the first,
composed by common people who only had the interests of the
masses in mind (August, 1999:70).
What needs to be emphasised though, and still remains clear in
Cuban history, is that the struggle for independence from colonialism
and later imperialism was organically linked to the formation of
national identity, or what is called cubana. The leaders and writers
of the Cuban wars for independence were genuinely interested in
building a new society. This view reappeared in the ideas Mart had
on the concept of a single political party representing the most
progressive ideas for the masses and presented by the experience of
the masses. Certainly, one should not romanticise the idea of
interracial unity. Jos Mart, like many other whites of his time,
possibly including Marx, saw anti-racism not as a moral idea but as
a political necessity. But this material need, to remain unified in order
to attain progress, affected the populations conscientiousness and
defined the broad limits present in social change in Cuba.
The consequences of a late independence
During the time of the Cuban, Spanish and American War (1898),
Cuba was already integrated into the ever-expanding world market
system, which was dominated by England and the United States.
Prior to this, the British Empire was already declining and as the US
economy grew, so did the expansionist tendencies induced by market
need. It was the Cuban, Spanish and American War that consolidated
US hegemony over the Americas. Simply put, the United States saved
Cuba from Spanish domination. But the struggle for independence
started long before the United States intervened and the ideas of anticolonialism blossomed into the ideas of anti-imperialism and the cry
for social justice. However, as stated before, the United States, as a
political structure of vested interests in trade and commerce, always
had its eye on the jewels of the Caribbean, especially Cuba. If Cuba
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The URC policy was that of backing the new president and creating
a coalition government with the nationalists. But Grau San Martns
cabinet lasted only a few months, as the United States would not
tolerate a nationalised sugar industry in Cuba. Batista was summoned
by the US Ambassador and told that Roosevelt would never recognise
Graus presence (Philips, 1935:95). So when Batista toppled Grau San
Martns government, the new generation of revolutionaries splintered
and the workers movement fell apart. If there ever was a presence
of a revolutionary vanguard in neo-colonial Cuba, it certainly was
absent during this period of history.
Batista and the communist movement
The world usually remembers Fulgencio Batista as the cruel dictator
who capitulated to Fidel and Ches revolutionary movement in 1959.
He was known as an irresponsible despot, a corrupt delegate of US
interests on the island, and the violator of the 1940 constitution. But
few remember or want to remember Batista as the first democratically elected Cuban president, who actually installed the first
democratic constitution. It was the same Batista who was endorsed
by the Communist Party URC, the friend of labour and the president
who, as a friend of President Roosevelt, sparked the New Deal era in
Latin America.
As throughout most of Latin America, Cubas Communist Party
followed the line of compromise with the liberal order; it was
malleable, it was gullible, it was corrupt and it was bourgeois. The
orders came from the Soviet Union and posed no real alternative for
the Cuban working class. Under Secretary General Blas Roca, the
Communist Party never sought to rule Cuba, it only supported the
liberal regime in its move towards progressive social conditioning.
During the Second World War, the Communist Party in following
Stalinist policy of alliance with liberal democracies against fascism
maintained a stance of unconditional support for the United States,
the United Kingdom and the Soviet Union. This meant communist
unconditional support for Batistas government, especially when the
US President declared war on the Axis powers. Joining the allied forces
and actually participating in the war fortified Batistas popularity; it
consolidated and legitimised communist participation under the
Batista regime.
In pursuance of creating a new legitimate government, Batista
invited the few remaining Communist Party members (who had all
initially opposed the pursuance of national strikes) to join his cabinet
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dominated the economy and sugar dominated agriculture. Eightythree percent of available land was under sugar and it made up at
least 80 per cent of exports, another 10 per cent being tobacco. Sugar
constituted 36 per cent of the GNP. The rest of the economy was little
developed and utilities remained in foreign hands. Hansen states that
services, including a large sector of the economy devoted to catering
for US tourism, [...] employed 20.1% of the entire workforce. A vast
state machine, riddled by graft and gangsterism, took an estimated
25% of the GNP (Draper, 1962:510).
AN ALTERNATIVE TO THE WORKERS MOVEMENT
So long as the entire economy remained dependent on the United
States, the less powerful sectors of the urban middle class could not
develop. Not only was there no talk of social mobility but their
children were also forced into the working class (Ibarra Cuesta,
1995b:197). They, together with middle farmers, small peasants and
university students, formed the backbone of the opposition to Batistas
dictatorship. With the support of the most radical remains of the
organised working class, only the wealthy and well-educated militant
students formed a viable alternative. The surviving members of the
Partido Ortodoxo, in the tradition of Eddy Chibs, brought together
various dissidents in 1953 to organise a violent attack against Batistas
military police. Their leader was a young lawyer named Fidel Castro.
Their ideology was focused around independent national
development, the betterment of living conditions for the poor and
fair politics. The leaders were also influenced by the ideas of Mart,
who had preached against dependency on colonial or imperialist
powers. Their demands: the re-instalment of the 1940 constitution,
the return of political freedom, nationalisation of the countrys largest
industries and a radical redistribution of land to the peasantry (Castro,
1961b). It was the members of this movement who realised that the
Cuban government was too heavily influenced by US economic
interests and those of the domestic capitalist class who served their
imperial masters. Compromise was not a possibility. Because of the
sad history of the workers movement in Cuba, socialism was almost
entirely discredited. The potential mass base for revolutionary
organisation the working class was effectively insulated from
political action, because their leaders had been killed off. The only
way to bring Batista down, it was thought, was through the same
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Batista and as a call to the nation for revolution, then it can be seen
as the birth of a movement that years later would seize state power
and become the biggest thorn in the side of US hegemony.
History will absolve me: a platform
Fidel Castro, at the age of 28, was brought to trial. Proud of being a
well-read man, he was capable of conducting his own defence. He
produced a five-hour-long speech, which is popularly called History
Will Absolve Me. In this speech Fidel articulates the most popular
demands against the Batista dictatorship. The occasion provided the
platform for the Revolution, legally, politically and socially. The
primary concern was that the dictatorship had violated by its own
existence the constitution of the Republic. Castro demanded that
the constitution be reinstated and that the democratic rights won
under former presidents be safeguarded. The constitution itself gave
the Cuban people the right to rebel against any government that
violated democracy, even if this was the government that had created
the document. As leader of the 26 July Movement, Fidel stated that
it was his duty to act upon constitutional order in the name of the
people of Cuba. In addition to supporting the constitution, Fidel
Castro outlined Cubas principal problems. In a nutshell, Cubas main
problems were described as: the distribution of land and the condition
of the peasantry; the lack of industrial capital; education; rural as
well as urban unemployment; and health. A serious problem that
existed at the time was the large number of people who were seasonally
employed and spent half the year languishing in rural or urban hell.
Finally, there was the petit-bourgeoisie, small business owners who
found themselves unable to grow economically. The speech was
essentially in the interests of the nation as a whole. It expressed the
thirst for development, which was common among the countries of
the periphery and semi-periphery (Wallerstein et al., 1996).
Fidel Castros eloquent words did not suffice to keep him out of
prison. He was, however, released two years later on a pardon arranged
by relatives and friends. Fidels popularity had grown during those
two years and his name had become known all over the cities and
throughout the countryside. Fidels intentions were to build a
movement that was even stronger and incorporate a broader support
base. Most of all, he wanted to drive the armed struggle movement
towards rural Cuba, where the most desperate of Cubas workers were
to be found. But upon his release, Fidel Castro took to exile in Mexico,
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the university graduates who could not find employment. Few professionals were practising. Lawyers had no courts, physicians had no
hospitals, and journalists had no newspapers. Some of these conditions
could be found in other countries of Latin America and the Caribbean,
but what made Cuba the land of revolution was the movements
willingness to confront the country with these problems. In turn,
this eagerness stemmed from student solidarity with the peasantry,
the tradition of popular rebellion, which was fresh in the minds of
the revolutionary leaders, and the arrogant presence of large foreign
corporations. Furthermore, and possibly a cornerstone to popular
rebellion, there was Cubas proximity to the United States, both geographically and technologically. During the 1950s, Cuba enjoyed one
of the highest levels of income and standard of living in Latin America.
In terms of consumer goods, Cuba ranked first in Latin America in
the number of televisions, radios, telephones, and automobiles per
capita. The figures surpassed even those of Spain and most of southern
Europe (Thomas, 1971:1093107). These advances were due to
consumer habits originating from the United States. The desire to
revolt was only exasperated by the inequalities between those who
had access to the consumer goods and those who had not.
The shaping of the Revolution
The Revolution did not happen within one day. The social forces and
organisations that would come to the fore during the first years of
Castros rule were already formed while the rebels hid in the Sierra
Maestra. Among them were the Institute of Agrarian Reform (INRA),
which later became the ANAP (National Small Peasants Association),
and the Workers Front for National Unity (FONU), which organised
the strikes and demonstrations against Batista. Many communists
who abandoned party politics took part in these organisations.
Meanwhile, some of the leaders of the PSP, the Autenticos and the
Ortodoxos were rejected when attempting to partake in the
realignment of the social forces. This was primarily due to the mistrust
between the leaders of the 26 July Movement and the aforementioned groups. Additionally, on the university campuses there was
the Directorio Universitario, which adhered to the 26 July Movement
from the time that the Granma landed.
Radical transformations
After Fidels appearance in Havana, the Revolution started to permeate
all sectors of society. Batistas police authorities were brought to public
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trial and the homes of the bourgeoisie were looted. Moralistic revolutionaries closed down gambling halls, and brothels were converted
into trade union halls. Certain freedoms were immediately enacted.
Hoy, the communist newspaper, was permitted publishing rights once
again. Although rule by decree put a bar on all political party activity,
revolutionary movements were allowed to associate freely. Within a
number of days, the Rebel Army installed an acting president and a
prime minister as a mask for international observers. Their duty was
to support all the actions of the revolutionary forces. Additionally,
they were to oversee the replacement of high-ranking officials by
those who were loyal to the revolutionary movement. All personnel
during Batistas rule were welcomed in reorganising the military. But
these gentlemen only lasted a month before the 26 July Movement
named Fidel Castro prime minister without a president and Raul
(Fidels brother) commander of the armed forces. One of Fidels first
decree-statements was: The Platt Amendment is finished (Castro,
in Revolucion, 10 January 1959). Later, Fidel continued to encourage
labour strikes and the occupation of factories. The contradictions
between the US and its private corporations on the one hand and
the interests of the masses on the other were manifested immediately.
The idea of reinstalling the 1940 constitution had been lost, as a
period of state transformation was in the making.
Seizing the state
Immediately following the overthrow of Batista, Fidel and his cronies
had to come to terms with Cubas unique position in the world market
under US regional hegemony. The country, principally dependent
on sugar as the main source of income, now had to use this typical
monoculture in order to survive. In other words, in order for the
Revolution to be successful and in order to carry out proposed projects,
it had to seize the culture of sugar and utilise the available economic
apparatus in order to benefit the Revolution. Originally, Fidel set out
to accomplish this. But the dream to industrialise never coalesced.
Taking over the government in 1959, neither Castro nor the 26
July Movement had a blueprint for economic development. However,
the social forces on the island took on an autonomous, dynamic
strategy influenced by pre-revolutionary, domestic and international
political and economic structures. Castros primary concern was to
diversify the islands sugar-dependent economy. He promoted import
substitution, a fashionable experiment throughout Latin America,
as the leadership recognised that underdevelopment was due to the
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recognise the attempts of nationalisation. So the only counterhegemonic bloc that was available to the Cuban condition was that
which the Soviet Union represented. In their attempt to build the
state, the young leaders also sought trade deals that were beneficial
to the Cuban economy. Some of the revolutionary leadership visited
Peking and Moscow; they were warmly welcomed and returned with
outstanding trade deals. In 1961, China bought 1 million tons of
sugar at 4 cents per pound and granted $60 million in credit for
equipment and technical aid. For the same price during the same
year, Russia purchased 2.7 million tons of sugar, but additionally
offered military assistance and arms to prevent a counter-revolutionary
attack (New China News Agency, 18 November 1960). It was the
latter to which Castro cuddled up, as Soviet internationalists like
Khrushchev were convinced that a communist Cuba would serve as
a military leverage against the United States. But Castro, Che and
the economic planners of the Revolution did not restrict themselves
to the East only. Canada not a member of the Organisation of
American States, which had already condemned the Revolution
refused to impose any kind of embargo. In turn, the leadership decided
to compensate Canadian banks after the process of nationalisation
had occurred. It opened trade deals with Egypt (rice for sugar) and
also Japan (Thomas, 1971:1317). Cuba dropped out of the World
Bank but remained a member of the International Sugar Council
and, of course, the United Nations.
Eventually, the United States began to disapprove of the economic
measures that were being taken in order to meet the requirements of
the Revolution. What Eisenhower and Kennedy did not understand
was that the Revolution was taking a shape of its own. Meanwhile,
during 1961, more mass organisations, especially the trade union
organisation which re-adopted its original name (CTC) started to
call themselves socialists or communists. The youth movement of the
26 July Movement merged with the Communist Youth (UJC). Without
declaring the Revolution to be a communist regime, Castro instigated
or approved this social consolidation. Hughes astutely pointed out
that Castros intentions, at first sight, were to use the communists in
order to control labour, as did Batista during his presidency (Thomas,
1971:148394). But Castro was not merely interested in bringing in
labour to the revolutionary process. He was also keen on creating a
scenario in which the Revolution would be permanent and considered
the ultimate stage of Cubas historical class struggle. In propaganda,
Castros Revolution was to be the final fulfilment of Cubas pursuit
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era. Hence, it is not clear to which party Fidel was referring. His words
reflected his future vision of a new political party; a party composed
of the most progressive Cuban forces; whether their tendencies derived
from nationalism, Stalinism or Trotskyist tendencies seemed to be
irrelevant. The emphasis was on MarxianMartiano principles that
led to unity.
As a self-proclaimed Marxist, Fidel Castro saw communism as the
highest stage of human development, following feudalism, capitalism
and socialism. In his mind, Cuba, being born of fifteenth-century
European colonial expansion, had passed through all these stages.
Drawing on Leninist principles, Castro declared that a Marxist political
party should be the sole vanguard of the people, which would facilitate
the transition from struggling socialism to communism. A unified
party formula also fitted within the programme Mart put forth during
the Second War of Independence and the anti-imperialist movement.
Moving leftwards, the revolutionary forces under Fidels direction
consolidated into what became the United Party of Socialist
Revolution (PURS).
Radical and utopian ideas
After 1965, the PURS changed its name to the Cuban Communist
Party (PCC). The visionary transition set forth by the party included
state ownership of the means of production and nationalisation of
all industries, agriculture, and retail trade in addition to a radical
change of societal relations.
The egalitarian emphasis was accented by Ernesto Che Guevaras
vision of the New Man (Guevara, 1968). Workers were to labour for
the new society instead of individual material gain. Over time, work
was geared towards collective benefit. Competition was transformed
into a push for non-material reward. The government extended free
social services and programmes in education, health care and social
security, day care for children, and housing. Today these are considered
to be the triumphs of the Revolution. In his speeches, Castro drew
on Marx as well as Mart to break down the barriers between manual
and non-manual labour, and urban workers were exhorted to
volunteer for occasional agricultural activity. These initiatives resulted
in making Cuba the most egalitarian society in Latin America. This
is what is known as the Revolutionary Offensive, which was
accompanied by literacy campaigns, the building of schools, the
organisation of neighbourhood watch committees and the consolidation of the labour movement into a united CTC.
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1963 a land reform placed more than three-quarters of all land into
the hands of the state; this offered material as well as ideological
incentives. Those peasants who received their parcels of land became
very comfortable in producing what was lucrative for the independent
producer, a profitable domestic-oriented agricultural sale as opposed
to a less profitable sale to the state for export. There existed the danger
of the peasantry, now small landowners, becoming a class independent
of the government and the rest of Cuban society. More importantly,
maximising state monopoly over agricultural production benefited
the state, which then was in dire need of accumulating for its own
reproduction in order for it to carry out the social projects it set out
to accomplish. The two interests clashed, but state supremacy became
the triumphant priority.
The push to communism was also particularly against the petitbourgeoisie. The small shop owners in the cities, and those with their
offices in Havana, charged very high prices for their services and
output. The idea was to dismantle this parasitical class. By closing
down excess shops and nationalising the service of food distribution,
the government indirectly made these once-distanced city dwellers
available for sugar/agricultural production on government plots.
Eckstein notes that approximately one-fourth of the persons in
Havana province, whose businesses were appropriated in conjunction
with the Revolutionary Offensive, went into agriculture (Eckstein,
1994:37).
Sugar production rose indeed, from 1963 when 4 million metric
tons were produced until 1970 when 8.5 million tons made the alltime high. By this time, 4057 per cent of the labour force worked
part-time cutting sugar cane (Silverman, 1973:21). This resulted in
an increasing export contribution to the national product, from 16
per cent in 1963 to 25 per cent in 1970 (Roca, 1976). However, the
policies set forth by Castro and the PCC were meant to reach the
goal of 10 million tons of sugar. The rest of the agricultural sector
suffered. In 1970, national productivity dropped to the level of 1965.
In the end, the country benefited socially from this stage of
development but economically Fidels predictions and expectations
were never completed. Additionally, the hopes of becoming
independent from the monoculture economy were never realised.
A step back from radical revolution
During the 1960s the Soviet Union purchased only 56 per cent of
Cubas sugar (Leo Grande, in Estudios cubanos, July, 1979:128). Cuba
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had to search for other markets that would supplement its export
capacity. In 1968, the world market price for sugar fell drastically to
fewer than 2 cents per pound. Because the Revolution raised and
guaranteed workers salaries, the cost of production superseded the
world price. Once again, Cuba became the victim of its own
dependency on its primary export product. However, this time the
Cuban government was responsible for the welfare of the population
it represented.
Shortages in goods and supplies in connection with a tightening
ration system discouraged large segments of the population. Workers
responded to the economic crisis by foot-dragging and absenteeism
at the factories and sugar mills. The rate for absenteeism got as high
as 52 per cent in some regions of the country (Domnguez, 1982:
272). The result was a major slowdown in production. Foot-dragging
became a popular form of resistance to government policies (Eckstein,
1994:10). Additionally, black-market activity began, as a means to
meet the material needs of the population, usually in food. This hurt
government profits and prevented any plan for redistribution from
being completed. Legitimacy started to be questioned.
Eckstein notes that in his annual speech commemorating the 26
July attack on Moncada, in 1970, Fidel recognised the failures of the
push to communism (Eckstein, 1994: 41). He stated that since the
Revolution belonged to the people, it was the people who failed
but he more than anyone else. He offered to resign but the crowds
yelled No! Fidel and the PCC decided that the biggest mistake had
been the irresponsible push for communism without ever having
passed through socialism. What this meant in the minds of the
leadership remains unclear. But in policy action, it meant the decentralisation of state-owned enterprises, a search for more access to
Western markets and a closer move into the Soviet economic sphere.
It was in 1975 that the first PCC Congress took place on a
national/official scale. At this congress, the System of Economic
Management and Planning (SDPE) was outlined; it was implemented
by 1976. This system closely followed the economic framework of
Soviet reforms of 1965. Local authorities of this innovative system
allowed for the usage of small plots of land for private agricultural
development; it also encouraged collective subsistence farming and
rendered the right of management to hire and fire labour. Hence
began a process of decentralisation. The government continued its
responsibility to the poorer sectors of society by maintaining a rationbook system (la libreta) that guaranteed basic household needs and
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staple food products. But the most interesting aspect of this period
was the implementation of incentives for workers. Jeffries (1993:181)
explains that this sovietised SDPE acknowledged the importance of
real economic levers like interest rates and prices, and management
powers on manpower and investment; that profitability became more
important as an indicator; and that portions of surplus could be put
to personal bonuses, investments and social projects. According to
Zimbalist and Brundenius (1989:77), prior to the SDPE material reward
did not exist. Later however, the implementation of bonuses and
material incentives caused problems that will be discussed in Chapter
3, in the section concerning the Campaign to Rectify Errors and
Negative Tendencies.
Labour steps up
In terms of the organisation of labour and participation, some
concessions needed to be made in order to appease the masses. Local
CTC elections were reinstated in 1970 by the Ministry of Labour.
Seventy-three per cent of the worker representatives were replaced
in the elections (Domnguez, 1982:126). The people demanded more
consistency in the democratic procedures of the country. As a result,
local elections and workers assemblies were to be conducted on a
regular basis. But the reforms did not stop here.
In 1973, the CTC came out with a new programme that was thought
to improve workers material conditions. If salaries immediately after
the Revolution were based on utopian models of equal pay for all
citizens (a system that had failed), the answer was to collectively link
worker salary to national productivity, although still on an equal
basis. Additionally, there were individual material rewards for those
who worked overtime. At work centres, household appliances, such
as televisions and refrigerators, were distributed, linked to the
economic contributions that work units produced (Zimbalist and
Brundenius, 1989:219). Cane-cutters who were replaced by the
combine were sent off as mini-brigades to build housing. These
volunteers in turn were rewarded with property rights over flats in
the newly built districts. This labour model could be thought of as
Soviet-inspired, but all these changes originated in the ideas of the
workers that were expressed in the workplace assemblies. The result
was that government expenditure would increase according to the
level of productivity the workers achieved.
However, offering welfare goodies to workers and their families
was not enough to solve the problems of state economic management
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into the new party/state apparatus and created new mass organisations that group and represent the specific interests of the population.
This was done to complement progressive forces in Cubas civil society
that already existed prior to the Revolution. These forces in civil
society include workers interests, peasant interests, womens interests,
nationalist tendencies and intellectual forces. Membership in these
civil society groups, in contrast to the PCC, is not selective, with the
exception of the Union of Young Communists (UJC). Every Cuban
citizen belongs to one or more of these organisations, even though
membership overlaps. The purpose of these mass organisations is to
extend a participatory outlet for the entire population, where the
interests and concerns of the masses can be expressed and outlined.
Leadership in the mass organisations was previously elected by the
PCC and sometimes appointed directly by Fidel Castro. This ensured
that the mass organisations and the population as a whole would
adhere to the precepts of PCC ideology. Today, many leaders are still
PCC members, but they are elected directly by the organisations
members. The revolutionary leadership was interested in forming a
new type of democracy that allowed for popular participation while
maintaining national unity.
The Committees for Defence of the Revolution (CDR) was instituted
initially to suppress counter-revolutionary activities in local areas,
including the 1961 Bay of Pigs invasion. Those who criticised the
Revolution portrayed this grouping as a spy organisation, because
on the local level the community elected leaders who would be
responsible for reporting any anti-state activity, including theft, the
dissemination of counter-revolutionary propaganda, and anti-social
behaviour. Most Cuban citizens residing on the island are members
of this mass organisation. Today, the CDR is responsible for
community safety, enrolling children into schools, immunisation
and vaccination, the deliverance of municipal information, organising
community events, recycling refuse, insect fumigation and keeping
track of housing and utility maintenance. Almost every city block
and every couple of adjacent streets in towns and villages have regular
meetings where elections are held for representation on the municipal,
provincial and national levels. These meetings are held in the streets
and parks of neighbourhoods. In 1961, there were only 798,703 CDR
members; by 1972, membership reached over 4,236,000, or approximately 70 per cent of the adult population.
The Federation of Cuban Women (FMC) was initially established
to provide women with the opportunity to participate in the trans-
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state). It is through these means that a sense of popular participation is reproduced in Cuba.
ECONOMIC INTEGRATION INTO THE SOVIET BLOC
In 1972 the Cuban leadership inserted itself into the Council for
Mutual Economic Assistance, the COMECON or the CMEA. The
CMEA was a Soviet-inspired, parallel international market providing
a fair deal to the countries of the socialist bloc in Europe, Cuba and
later Vietnam. Set up as a political response to the 1947 Marshall
Plan in the West, the CMEA, created in 1949, was also an economic
counterpart to the Organisation for European Economic Co-operation
(today known as the OECD). The aim of the CMEA was to develop
economic collaboration among the Socialist countries and to coordinate their economic progress on the basis of equality of rights of
all member states (Jeffries, 1993:27). The CMEA system worked on
five-year plans.
The Soviets would purchase Cuban sugar at fixed prices superior
to those found on the world market. In turn Cuba would receive
credits in petroleum and in industrial, medical and agricultural goods,
not to mention construction materials for infrastructure. Additionally,
the Soviet Union would provide more aid to fortify the Cuban military
as it was always under the pressure of possible US invasion. For the
following two decades, Cuba based more than half of its trade on
this alternative market. With excess Soviet petroleum, Cuba would
re-export refined oil to other countries in order to gain hard currency.
This last item became Cubas primary hard currency income. This
economic integration into the Soviet bloc would not have been
possible if Cuban economic structures had not been compatible with
those of other socialist economies in Europe. This explains the
similarity between Cubas model of production and redistribution
and that of the Soviet Union.
In short, throughout a period of 19 years (between 1972 and 1991)
the CMEA raised the standard of living in Cuba to that of Eastern
Europe, and permitted the Cuban population to purchase goods and
services found in industrialised countries. Due to the access to
advanced materials in medicine and academia, social indicators such
as life expectancy, literacy and popular levels of education were
equivalent to that of most Western European countries (Stubbs,
1989:28).
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rendered control over economic forces to the state, but also created
a sense of empowerment to producers and consumers in Cuban
society. In Cuba, the market is a force to be manipulated by the
elected, unified, and revolutionary leadership in order for it to benefit
the progress of social and material development among the masses.
Therefore, Cuba is understandably alienated from most international
financial institutions such as the World Bank and the IMF.
The pillars
In the end, the Cuban Revolution can only be understood through
the historical context under which it was born. Likewise, Cuba as an
anti-imperialist state in search of social justice can only be understood
by the historical social forces that moulded its very existence. In order
for the social forces to realise their maximum potential in a world
capitalist system, the movements which came to the fore converged
to create and later preserve the required pillars upon which the state
was built. In order to clarify this idea, a summary of each pillar is
provided below.
Continuity
The theme of continuity is based upon the tradition of revolution
against the existing world order that began in Cuba towards the end
of the nineteenth century. Most political parties and groupings claimed
to be the proper heirs of Marts ideas. But only a few individuals
remained faithful to his tenets. During the neo-colonial experience,
the ideas of a united party, absolute sovereignty and social equality
were lost, even in political discourse. The success of the 26 July
Movement meant the preservation of Marts revolutionary ideas.
They were well read, well thought out and applicable to Cubas peculiar
condition. Overall, the line of a non-compromising independence
in the face of hegemonic structures was not only an idea that was
bought by the masses, but a characteristic that revolutionaries had
to come to grips with. History taught the communists to be consistent
and not to put their faith in neo-colonial structures. Fidel and the
other young revolutionaries maintained that current. Even to this
day, Fidel invokes the words of Mart to muster ideological strength
in this post-Soviet era.
Unity
Unity in Cuban ideology stands for a united social front of as many
sectors of society possible under one umbrella, the Revolution or
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But these institutions could not be strong and last as long as they
have if they were not seen as legitimate forms of expressions in the
eyes of the vast majority of citizens. In every election, over 90 per
cent of the population take part (August, 1999). This is another
important key to maintaining Fidels popularity. The mass organisations have a character of their own, even if high-ranking communist
officials participate in them. The CTC, the UJC and the FMC have
leaders who are elected by the masses they represent. Their founders
have a historical revolutionary link and the institutions themselves
are bedded in revolutionary history. In the next chapter, I will
demonstrate how the idea of popular participation was used in order
to test the legitimacy of the revolutionary leadership.
Finally, these four pillars of the Cuban Revolution are what together
keep Cuba socialist. It surpassed the test of counter-revolutionary
attack in 1962 and it has surpassed the turmoil of the post-Soviet era.
The country suffered throughout much of the 1990s, but these four
pillars remain in principle the same. If they were needed during the
Cold War to maintain stability, much more are they needed now. In
the next two chapters, I will demonstrate how these pillars have
adapted to the new international context.
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3
The Causes and Impact of
Cubas Crisis in the 1990s
Throughout the first three decades of post-revolutionary society,
Cubas orientation in domestic policies as well as external relations
seemed to be clearly defined and structured around bipolar, Cold
War conditions. Within that context, the Cuban party/state apparatus
proved to be an exceptional model in post-colonial development and
Cuba achieved the status of being a Third World superpower in the
anti-imperialist movement (Zimbalist, 1987; Stubbs, 1989). The basis
upon which these assumptions are made can be found in the
continuous rising standard of living and material progress documented
between 1960 and 1989; the achievements in education, medicine
and scientific research; and the countrys intervention in other postcolonial affairs. For example, Cubas repeated election as head of the
Non-Aligned Movement, her military intervention in Angola and
southern Africa, and the humanitarian and technical aid offered to
countries like Jamaica, Nicaragua, Ethiopia and Grenada (Domnguez
and Hernndez, 1989c). Regardless of the undeniable contradictions
and problems that Cuban society encountered during that period, it
is commonly agreed that the country was consolidated under a
politically unified communist party that implemented programmes
of stable economic growth and relatively egalitarian social growth.
These same characteristics, developed under a state-led economy, can
be considered as the basis of party/state legitimacy in the eyes of the
countrys vast majority.
However, the state leadership and the countrys general population
entered the 1990s under harsh circumstances, where all the previously
mentioned developments, including and especially party/state
legitimacy, were put to the test of political, military and economic
isolation. The crisis that Cuba faced can never be exaggerated. Due
to the break-up of the socialist bloc and the consequential fall of the
Soviet Union, Cuba lost between 80 and 85 per cent of its external
trade and more than 50 per cent of its purchasing power (Domnguez,
1995:23; Mesa-Lago, 1992:4). Within one year, 198990, imports
from Eastern Europe, a third of which originated in the Soviet Union,
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in the idea that we live in one world economic system and that points
of comparison are only possible through a global perspective, it is
nevertheless important to look at the internal dynamics of Cubas
economy just prior to the fall of the Berlin Wall (the early to mid1980s) and possibly even further back than that (the 1970s) for
historical references. It is equally important to understand what the
situation was that Cuba was in and how the government and people
reacted to the crisis. After all, what makes one country different from
another is the manner in which autochthonous reaction to the world
system takes place. The economic problems that Cuba encountered
during the 1990s were not strictly due to the fall of the Berlin Wall
and the demise of the Soviet empire.
In Cuba, the analysis of change or adjustment is publicly promoted
through the declarations of the PCC congresses, which had been held
every five years ever since 1975, when the institutionalisation of the
Revolution (meaning the creation of normative structures) and the
edification of its political system took place. At each of these congresses
the national agenda for economic development was discussed at all
levels of society, where certain current global trends like neo-liberal
capitalism and antagonistic factors like the US embargo are criticised.
At the same time, problem solving geared towards making domestic
productivity more efficient has played an important role in dealing
with the economic crisis. Terms like efficiency, rectification and
reforms are not new to Cuba. There has always been the need, not
only to adjust to global trends, but also to perfect socialism from
within and raise the level of productivity.
The documents produced by the PCC have been useful in the search
for factors that help explain the economic crisis and the adjustments
made throughout the 1990s. They tend to offer a critical view of the
global political economy and also point out where efficiency in
production and distribution need fixing. However, because economic
research is controlled by the state apparatus and the documents must
by law represent the intentions of the state leadership, many
internal factors that have contributed to the crisis have been
overlooked. Rarely does the PCC point to the drastic social
consequences of the economic policies it puts forth. In this manner,
it becomes difficult for the research centres in Cuba to reflect upon
the domestic conditions the country faced during or prior to the time
of global structural changes. So it is imperative to relate internal as
well as external factors to the economic crisis; if not internal factors,
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then at least the internal conditions that were present at the time of
mounting economic crisis.
THE BACKGROUND TO THE CRISIS
Though the seizure of state power by the revolutionary leadership
was fulfilled in 1959, the state institutions that defined Cubas socialist
character and command economy were only established during the
1970s (Domnguez, 1978a). It was this decade which set the parameters
of state-led development and the interaction between the domestic
and international socio-economic forces. Additionally, this can be
considered as the time when the Revolution was institutionalised;
whereby Cubas government took form and created a strong party/state
apparatus. As mentioned in Chapter 2, the congealing of political
structures and mass organisations under the constitution is what has
ensured PCC legitimacy, in the eyes of both the state and the people,
over the last two decades. But in order to participate in the global
economy, the Cuban leadership had to shape the political economy
according to the options that were available during the time of institutionalising the Revolution.
Eckstein calls this era (the 1970s) the retreat to socialism, after
the mistaken attempt of jumping into radical communism during
the 1960s (Eckstein, 1994). She points out that this retreat was not
so much an ideologically inspired move, but rather a dawning of the
realisation that the country needed to insert itself into the global
economy. Bringing Cuba into economic reality included the need
for Cuba to open up to the West for trade and commerce, as was
common with all CMEA countries. For instance, in 1974 Cuba took
advantage of the sugar price which was at the time US$0.68 (68 cents)
per pound in the West (Eckstein, 1994:50). In this sense, trade with
non-socialist countries was dependent on what terms of trade were
most favourable to Cubas national project. In total, the Western bloc
accounted for 41 per cent of the islands trade by 1980 (Eckstein,
1994:2638). This signifies that Cuba was never completely dependent
on Soviet subsidies. It also means that the Cuban drive for normalising
economic relations with the West is not recent. Even US-based
corporations increased their trade with Cuba as the embargo was
being softened in Washington under the Carter administration. In
1982, the Cuban legislature passed a law/decree regarding the Foreign
Investment Code, which made formal the state leaderships intentions
to attract foreign hard currency into the country. The 1982 reform
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to 7 cents per pound. This was the lowest price for sugar in real terms
since the 1930s. Hard-currency earnings from sugar dropped by nearly
80 per cent between 1981 and 1985 (Granma Weekly Review, 16
September 1990:3). Cuba had come to confront the reality that its
primary and historical product (sugar) was replaced indefinitely at an
industrial level. Nickel, or the use thereof, during the late 1970s and
early 1980s, was widely replaced by the production of plastic substitutions (Alonso, 1992:41). In the absence of the much-needed hard
currency, Cubas import consumption from the West dropped. Even
more importantly, the countrys trade debt to non-socialist countries
mounted from 3.6 billion pesos in 1985 to nearly 6 billion pesos the
following year. At the time the peso was roughly equivalent to the US
dollar (Eckstein: 1994:72). With the exception of one debt rescheduling
in the Paris Club in 1986, the country was unable to achieve success
in obtaining more credits from the West. To exacerbate the problem
even further, the value of the US dollar fell on a global scale; since
Cuba had to contract many of its loans in other Western currencies
thanks to the US embargo repayment became difficult. These
factors pushed Cuba to depend more heavily on the socialist bloc.
Finally, and in connection with the economic and social growth
experienced in the 1970s and first half of the 1980s, the children of
the Revolution (born in the 1960s) were inducted into the labour
market in the 1980s with high levels of education and training. These
young workers held high expectations and looked forward to working
in offices, research centres, city hospitals or abroad in the diplomatic
corps. Few were willing to go back to the small towns and the
countryside to participate in agricultural production and manual
labour. As a result, there was a fall in the productivity of physical
labour. This fall rolled on until 1989, when productivity reached
only half of what was planned and expected by national planners
(Dilla, 1993).
At the third PCC Congress in 1986, Fidel Castro addressed the
problems of delays in Soviet oil deliveries, the lack of hard currency
to finance trade with the West and the upcoming effects upon the
national economy. Hints of austerity and seeking alternatives
decorated his speeches (Prez Lpez, 1991). In addition to recognising
the pressures of the global market upon the island, the state leadership
pointed to domestic social and economic problems; among them,
inefficiency, corruption and the straying away from revolutionary
principles. Public resources and plots of land were used for domestic
demands for goods, rather than for government export for the
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scafflers would cut through selling the same products for slightly
higher prices to people waiting in the long queues. In the Cubalse
SA stores, reserved for diplomats and those allowed to purchase in
hard currency (US dollars), employees with access to the dollars would
illegally purchase products not available to the rest of the population.
Despite the contradictions between morality and the pressing need
for more market strategies, the rectification campaign brought about
some economical benefits to the Cuban state retail sector. Since many
of the private farms in this period fell into the hands of state cooperatives, the state was capable of conducting wholesale directly.
Nevertheless, while personal expenditure of consumers (goods and
services acquired directly by the people at official stores) increased
by 6 per cent between 1985 and 1989, the recorded social expenditure
of the state (in goods and services consumed collectively by the
people) fell by 5 per cent (CEE, 1989:2401). Internationally, this
time was marked by the countrys need to adjust to global trends in
world prices. Loyalty to the CMEA agreements became a stumbling
block to the type of structural adjustments necessary to operate with
the global changes. As prices in the West dropped for Cubas main
export products, the island became much more dependent on the
socialist bloc, especially the CMEA market system and more specifically
the Soviet Union. Under these conditions, Cuba embarked upon her
stormy voyage towards the 1990s.
THE DEMISE OF THE CMEA
As briefly stated in Chapter 2, the CMEA was an alternative market
system which was thought to be based on fair, basically equal, trading
terms among so-called socialist economies. The terms were concretely
made through five-year plans and guaranteed the sale and purchase
of Cuban products at prearranged prices. Between 1972 and 1991,
Cuba had based more than half of its international trade on this
alternative market system. During this period, Cuba linked its
economy to the five-year plans implemented by the member states
and became progressively more dependent on the socialist bloc
especially after a global fall in prices of Cubas main hard-currencyearning export products. In this relationship, Cubas income was
dependent on the commercialisation of its sugar, tobacco and nickel.
From Eastern Europe (including the USSR), Cuba imported 40 per
cent of the medicine consumed on the island, 16 per cent of
agricultural fertilisers and 90 per cent of its public buses (BIC, 1997:21).
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socialist bloc and the most industrialised countries like East Germany
and Czechoslovakia. Since the chances seemed quite bleak for the
continuing existence of the CMEA, Cuba had to rescue all the possible
bi- and multilateral trade agreements made between the island and
the industrialised part of the socialist bloc. At the same time, these
same countries, with the exception of Cuba, were experiencing a
social, economic and political transition to neo-liberal models. Garca
Reyes and Lpez de Llerga found that Ernesto Melndez, president
of the CECE (State Committee of Economic Collaboration) advocated
a restructuring of the organisation. Because of the debilitating effects
of the reforms in Eastern Europe on socialist states, the creation of a
new multilateral post-CMEA trade organisation was deemed necessary
by the Cuban leadership. At this same meeting, at which the vice
president of the Council of Ministers Carlos Rafael Rodrguez
participated, Cuba led the movement to maintain preferential trade
agreements between the most industrialised socialist countries and
those less developed countries like Mongolia and Vietnam (Garca
Reyes and Lpez de Llerga, 1997:202).
The end result was that, due to Eastern Europes political crisis in
1990, there was no five-year plan for 199095. After Russia, one of
Cubas biggest trade partners was the Democratic Republic of Germany.
This entity ceased to exist when East and West Germany were unified
on 1 July 1990. From this point on, the new Germany suspended all
sugar trade deals with Cuba. It is also worth noting here that prior
to the unification process between West and East Germany, Cuba
had approximately 10,000 workers in the Democratic Republic, which
produced for the island an extra income of US$3 million per annum.
This additional income came to an end (Garca Reyes and Lpez de
Llerga, 1997:25).
With the disintegration of the Soviet Union in 1991, the CMEA
was dissolved on 28 June of that same year. Yeltsins ascension to
power in Russia resulted in economic changes regarding former CMEA
relationships, including Cuba. Yeltsin made sure that all contracts
signed between Russia and Cuba were invalidated, certainly under
pressure from the United States (Garca Reyes and Lpez de Llerga,
1997:198). In the end, Cuba lost approximately 50 per cent of its
purchasing power. China had become Cubas only powerful friend.
Still all trading had to be made in hard currency, nothing of which
resembles the preferential agreements made under the relationship
with Eastern Europe. The demise of the CMEA together with the fall
of the entire Soviet Union forced Cuba to look for alternatives and
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Cuban case was significantly different from those of all other countries
of the South. Cubas political apparatus and policy decision-making
sources were never dependent on nor centrally managed by Moscow.
Cuba was more of an economically dependent ally than a political
subordinate, as were perhaps the nations of Eastern Europe, especially
the Democratic Republic of Germany, Hungary, Romania, Bulgaria,
and Czechoslovakia. Soviet armed forces did not arrive upon the
island by force and confrontation. Rather, they were invited to stay,
as the Cuban leadership never had any intentions of surrendering
Cubas close ties with the United States, especially considering the
islands close proximity to the latter. In this sense, it was more difficult
for the Soviet Union to leave a country that had invited its armed
forces and technical help, rather than being expelled by the
governments and peoples of states who rejected its presence, as was
the case in Eastern Europe.
Soviet collapse
With very little resistance, the Soviet Union collapsed in 1991, as did
the Communist Party that ruled it. Only on one occasion did the
military, which included many loyalists to the CPSU, and the top
ministers of the Soviet Council of State, attempt a coup for the purpose
of maintaining Soviet political structures and reversing some
perestroika policies. With a quick call to post-Soviet solidarity and
in the name of democracy, the military bowed to the will of the disillusioned masses. Soviet communism came to an end when the failed
coup resulted in the new states renunciation of communist ideology.
On the following 12 September, US Secretary of State James Baker
arrived in Moscow to discuss security measures in the post-Soviet era.
One of the most impressive moments of the meeting was when
Gorbachev announced that 12,000 Soviet soldiers would retreat from
Cuban territory (Garca Reyes and Lpez de Llerga, 1997:130) The
Cuban leadership protested, as this decision was made unilaterally
without taking Cubas security into consideration. The most pressing
issue for Cubas state security interests was the fact that the United
States had no intentions of retreating from Guantanamo Bay.
The dismantling of the Soviet Union did not only mean a break
of relations between Cuba and Russia. Rather, it meant that Cuba
had to deal with the new political set-up that would provide a
framework for possible future economic relations with Eurasia. The
15 republics comprising the former USSR were set free to create their
new alliances. Not much had changed. Most of the new state leaders
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consumption did save many workers from being on the streets, but
it certainly was not enough for the government to conceal one of
the PCCs best-kept secrets; that is, unemployment.
For the first time in post-revolutionary history, the Cuban
government announced publicly in May 1992 that unemployment
in Cuba actually existed (Hockstader, 1992). This is understandable
in a regime where one of the most basic human rights articulated in
the constitution was that of every citizen to contribute to society by
working where he or she is capable and willing. Full employment
was the motto of the PCC between the 1960s and 1980s. Official
figures estimated that the islands unemployed represented only 6
per cent of the work force (Garca Reyes and Lpez de Llerga, 1997:76).
In terms of sugar production, Cuba never had a worse time. Because
of the lack of fuel to drive large-scale production, the country did
not even produce 6 million tons of sugar in 1992. This is a considerable
drop in comparison to the 8 million tons produced in 1990 (Journal
of Commerce, 16 April 1992). The lack of fuel pushed sugar production
back nearly 40 years, as horses, cows and humans replaced tractors
and ground turners This situation escalated to the point where by
1992, 10,000 tractors stood still due to the lack of gas and oil; these
tractors, a third of the nations total, were replaced by undernourished oxen (Garca Reyes and Lpez de Llerga, 1997:121). Petrol for
private cars, which was already rationed by 50 per cent in 1991, was
taken off both the official and black markets (Analco, 1992:28). The
city avenues and the Central Highway were silent. Over a hundred
bus routes were discontinued and 700 taxis in Havana were to be
without fuel. At this point Fidel Castro ordered 700,000 bicycles from
China (Granma Weekly Review, 2 January 1992:2); this was to be the
new and dominant mode of transportation for the citizens in this
economy, which was similar to that of wartime.
Food consumption fell harshly as well. Due to the lack of fuel for
transportation, and the materials to reap agriculture and handle
livestock, the Cuban governments ability to deliver the guaranteed
food rationing for each Cuban citizen began to crumble. In 1991 and
1992, the government guaranteed each citizen the right to a monthly
ration of only 2.3 kg of rice, 0.23 kg of cooking oil, 1.84 kg of sugar,
0.46 kg of fish, and only 0.46 kg of meat, chicken or soya substitute
per month. Milk rations were restricted to children under the age
of seven (interviews, 1999). The rest of the populations food
consumption depended on the black market or later on what was
available for those possessing US dollars. By 1993, construction had
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dropped to less than 20 per cent of what it had been in 1989, the
bulk of it in public housing (CEE, 1994:5).
According to the Cuban government, the difference between official
state expenditure and inflows produced a budget deficit in 1992 of
over 5 billion pesos. These numbers alone are alarming in comparison
to the state budget deficit in 1989, which was less than 2 billion pesos
(IF, 1993:4). Additionally, this crisis involved serious inflationary
problems, which are often measured by monetary liquidity. By 1994,
liquidity among the general population reached 11.9 billion pesos,
most of which was in savings accounts. Although real salaries
decreased by 5 per cent between 1989 and 1993, the purchase of
goods and services fell by 40 per cent (CEE, 1994).
Who is to blame?
The analysis of the severance of SovietCuban economic ties confirms
the theory that the so-called socialist economies are not and were
never unlinked from the global market. This study has shown that
Cubas economic crisis during the 1990s was in part due to a certain
dependency on the state-led economies of Eastern Europe and in
particular Russia and the USSR. As the countries of Eastern Europe
gradually exposed their national products to the rise and fall of world
prices, and neo-liberal tendencies started creeping into the party/state
apparatus of the Soviet Union, Cuba started to become more isolated
in the global political economy. With hindsight, dependency on the
only state-led alternative to development in the global market, the
CMEA, can be thought of as a big mistake. Of course, the PCC is the
first to admit that we, the people, made errors in building our
country, that all is a dialectical process and that we can learn from
our mistakes, and that we can overcome our problems and continue
to (re-)build socialism. But the problems that cause crises, the inherent
contradictions of the political economy, are yet to be unmasked by
the revolutionary leadership. The PCC has yet to admit that as long
as the Cuban party/state apparatus continues to operate in a capitalist
world system, the country will always be exposed to the causes of
economic crisis inherent in capitalist production. Instead, the PCC
continues to blame the problems of dependency on the will of traitors
to the so-called socialist project.
In the following sections of this chapter, this study will take a look
at the biggest external problem that the PCC put forth in the analysis
of Cubas economic crisis during the 1990s. It is the most frequently
mentioned cause of many problems in Cuba, the one problem which
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captures media attention in the United States today and the problem
that unites all progressive, left-wing movements in solidarity with
the people of Cuba. It is the one problem that is usually labelled an
external factor, a problem created from the outside the US economic
embargo. Later on, after reviewing this final factor in Cubas economic
crisis, I will delve into explaining how this crisis resulted in the restructuring of the countrys political economy and, just as importantly,
what effects the reforms have had on the general population. All
together, this will answer the question of why and how the
Communist Party/state apparatus continues to exist in a neo-liberal
world.
THE US ECONOMIC EMBARGO
The US economic embargo, which has existed since 1962, has had a
tremendous effect upon the islands revolutionary development. The
embargo, which eliminated Cubas sugar trade with the United States,
can be seen as a reaction to the nationalisation of US companies that
took place almost immediately after the Revolution. Moreover, it was
a direct reaction to Fidel Castros announcement that he was a
MarxistLeninist and that Cuba would align itself with the socialist
bloc (Thomas, 1971:201). Under the embargo, US companies were
banned from exporting to Cuba directly. Additionally, the influence
that the US had over the whole of Latin America politically was so
immense that the entire continent, except for Mexico and Canada
(and for a short period Jamaica and Grenada), joined in on severing
economic and diplomatic ties with Havana. Andrs Escobar estimates
that during the first 26 years (that is, between 1962 and 1988), the
economic embargo cost the Cuban economy US$450 million annually.
That would be a total of approximately $15 billion for the time period
(Escobar, 7 July 1991; CEE, 1991:27). Vice-President of the Council
of State Carlos Lage estimates that from 1962 until 1996 the embargo
cost Cuba more than US$41 billion. He stated that without the
embargo, with the same level of production and prices, the country
would have averaged 40 per cent more in hard-currency earnings
(Granma, 12 November 1996). Though these estimates are always
questionable, the numbers seem quite reasonable when taking into
consideration US trade capacity.
Fortunately for Cuba, aid coming from the USSR and favourable
trade agreements during the existence of the CMEA compensated for
the lack of trading with the geographically natural and historical
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trading partner, the United States. Thus, for 28 years, Cuba was able
to survive the trade embargo and actually grow economically and
socially. However, when the towers of communism in Eastern Europe
came tumbling down, Cuba became exposed to the fierce intentions
of anti-Castro forces residing in the United States.
The reinforced embargo
Both wealthy, conservative anti-Castro Cubans and those US politicians
who throughout the Cold War pursued the imperialist intention of
toppling Cubas party/state apparatus automatically assumed that
because of the fall of communism in Europe, Fidel Castro and the
PCC had no chance of lasting more than a couple of years
(Oppenheimer, 1992). Some pressed for a military invasion, others
for a hardening of the US embargo. Yet others, the bulk of academia
and many economists, took it as a given that the Cuban government
would not be able to handle the economic crisis caused by the severance
of economic ties with the former Soviet Union. This last group of
thinkers concluded that, just as the transition economy in Eastern
Europe produced a political change within government circles as well
as a dissatisfied attitude among the popular opposition movements,
thereby resulting in the decomposition of the social and ideological
base of the state, Cuba too was doomed to yield to the same reforms
and experience a radical breakdown of the socialist project.
In Washington, DC, research centres dedicated to the study of the
Cuban economy sponsored various projects and eventually documents
emphasising the discourse of a post-Castro Cuba; one of these is the
Association for the Study of the Cuban Economy, which sponsored
the semi-annual Cuba in Transition volumes. This collection of
essays, reports and talks given at Florida International University was
set up in contemplation of the eventual demise of Cuban socialism.
The titles of the articles alone give away the mindset of the mostly
US-based researchers: Reconstructing Cuba: From Marxism to
Democracy, 199?200?; Elements of Political Restructuring in PostCastro Transition (Rivera, 1991; 1992); The End is Near: Why Cuban
Socialism Failed (Roca, 1993). In an academic fashion, Sergio Roca
wrote this last-mentioned article with a theoretical framework based
on Janos Kornais work, which was dedicated to explaining the causes
of the fall of Soviet communism. All these mistaken assumptions will
be tackled in Chapter 4. I mention them briefly now in order to
provide a background on the attitudes and intentions of the antiCastro movement and the push for a hardening of the US embargo.
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and their lobby groups only support the embargo with capital and
intellectual back up.
The embargos illegality
For the United Nations General Assembly, the embargo is illegal
according to international law in that it coercively violates Cubas
right to self-determination. Additionally and especially in its latest
phase, i.e. the Helms-Burton Law, the embargo was viewed as an
impediment to the self-determination of all nations; this attitude is
manifested in the progressive loss of support the US has received in
upholding the embargo. In 1992, only 59 countries voted in favour
of ending the US embargo against Cuba, with 70 countries voting
against; this was shortly after the passing of the Torricelli Bill. Every
year thereafter, the number of countries opposed to the embargo
against Cuba has increased. In 1993 the resolution calling for the
embargos end passed 88 to 57, with four abstentions. In 1994 the
score was 101 to 48, with two abstentions; in 1995 it was 117 to 38,
with three abstentions; in 1996, 139 countries voted in favour of
ending the embargo against 25, with three abstentions; and in 1997,
143 countries called upon the United States to end the embargo and
scrap the Helms-Burton Law. In a word, there is currently no international backing for the embargo; the world sees it as unjustified.
Looking at the embargo critically
There are fundamentally two problems when looking at the embargo.
The first is the way the embargo is used in Cuba as an excuse for all
the shortcomings of the present system. In 1996, one Cuban worker
told me: Cuba is nice, you just have to understand it; if anything
goes wrong, all you have to do is blame the US blockade (interviews,
1998). In all my research I have not found a single document
pertaining to the Cuban political economy, or even a single issue of
the Granma newspaper, that does not contain some assessment on
the effects of the embargo. There has not been a single speech by
Fidel Castro that does not, even if it is only briefly, rebuke the US for
its sanctions. All the food shortages, lack of equipment, materials,
schoolbooks and medicine, diseases, malnutrition in the countryside,
even the weather; all the blame goes to the US embargo. Secondly
and ironically, when one arrives at any of Cubas recently remodelled
airports, one cannot help but notice the stacks of Coca-Cola cans
standing as proudly as the native Varadero Rum on the bars. But this
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situation where Cuba was found to be more and more isolated within
the global economy. This predicament forced the revolutionary
leadership to deal with its own economic problems realistically and
begin a new search for alternatives within the framework of the pillars
and foundations of the party/state apparatus. As a result, the 1960s
debate on how to maintain sovereignty and promote development
was rehashed, and so was the idea of national development on terms
favourable to equitable domestic redistribution.
Here I will outline the impact that the economic crisis has had
upon Cubas political and economic structures. Many of the changes
explain how the revolutionary leadership was able to maintain stability
and overcome the dire straits of economic chaos. After delineating
the changes that accompanied or that were a direct reaction to
the economic crisis, this study will have come to answer the first half
of its central research question: Why and how does the one-party
communist political apparatus continue to exist?
First, it would be appropriate to review what has been stated so
far. I have already identified the four broad groups of causes to the
economic crisis that is often called El Periodo Especial, those being:
internal economic dynamics and logistics of Cuban revolutionary
social development; the evolutionary demise of the CMEA parallel
market system; the complete dissolution of the Soviet Union as a
global superpower and political structure; and lastly, the hardening
of the US economic embargo against the islands economy. These
factors caused a problem of shortages in fuel and energy, a lowering
in the consumption of food and a problem with its distribution, a
fall in general production, a setback in the national health-care system,
and the deterioration in the populations standard of living.
In contrast to the literature provided by official PCC research and
other independent cubanologos, I found the Periodo Especial to be a
useful term, not so much in describing the economic crisis as in
describing the governments immediate response to that crisis.
Ultimately, this period resulted in the inevitable restructuring of
Cubas domestic political economy and the implementation of what
is traditionally called market-orientated policies. In Spanish, this
would be called apertura, or opening, to the global market forces.
Actively forming a new model
The Special Period in the Time of Peace involved making political
reforms, seizing the economy, and pushing the population to make
various sacrifices in order to save the revolutionary social order. Using
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the economic crisis that hit Cuba in 1991 caused the PCC to depend
more on the general population, as former socialist allies shunned
the Castro regime.
The fourth PCC Congress
In May 1991, with the USSR on the verge of collapse, Fidel Castro
made his llamamiento, or call to the general population to participate
in the changes that needed to be made in order to accommodate the
islandnation to the new global political economy (Granma
Internacional, 21 May 1991:8). Industrial sites provided for mass
meetings of workers where, for instance, during the days prior to the
1991 fourth PCC Congress, over a million people voiced their
complaints, suggestions, and ideas regarding more than 50 issues
that dealt with peoplegovernment relations. This occurred also in
the workplace of factories, schools, sugar-cane fields and hotels. Some
call this popular participation the hallmark of Cuban democracy. I
would say that this was really a sampling of opinions and popular
ideas from which the PCC could measure the extent to which it could
please the population without jeopardising state coherency or the
pillar of unity. It also offered a sense of accountability to the masses.
Eckstein criticised the llamamiento as a one-shot affair; there were
no follow-up sessions where people could, en masse, articulate
grievances without fear of reprisal (Eckstein, 1994:115). In my
experience in Cuba between 1996 and 2000, I could not say that I
witnessed any fear on behalf of the general population of reprisals
or penalties for complaining and articulating grievances. Furthermore,
another llamamiento for discussion was made later on in 1997 in
preparation for the fifth PCC Congress. In any case, the important
changes were the actual political reforms that took place and how
they came to pass. For instance, although the reformed constitution
of 1992 was filled with articles that seemingly enhanced democratic
rights in Cuba, it is important to note that the constitution was
never opened up to popular debate or criticism. Hence, the
constitution, or the base law of the land, continues to be a tool used
by the PCC in order to lead the domestic political economy. However,
it was the democratically elected legislative body (ANPP) that
approved the constitution.
In 1991, the fourth PCC Congress agreed to allow for the following:
the making of constitutional reforms, the incorporation of religious
leaders and laymen into the PCC, the listing of all guaranteed freedoms
and property rights under the reformed constitution, and secret and
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technically allowed to run for office, but, since Cuba has no multiparty tradition, no dissident was willing to run as an individual.
On the local provincial and municipal levels, new managerial
structures were created for the purpose of organising industry,
agricultural production and other economic activity. The constitutional reform of 1992 allowed for the creation of Consejos Populares,
or (local) Popular Councils, as a new strategy for economic and
planning governance. These councils are comprised of delegates from
the electoral college for municipal government and representatives
from mass organisations such as the FMC, the UJC, the CDR and the
trade unions (CTC). Elected local officials with a strong background
in economics, accounting or engineering head the Councils. In this
instance, the municipal government was relieved of its function in
the management of production. In turn, the Municipal Assemblies
could concentrate their efforts on infrastructure and public services.
The councils would oversee production in industrial and agricultural
bases and determine the action to be taken in the name of efficiency.
This would include the number of those employed, the amount of
subsidies requested and the planning of further economic growth
(Valds Paz, 1996:30). Prior to this, regional or local economic
planning was always headed by the Executive Committees of the
Municipal Assemblies, which was usually chaired by a member of
the Communist Party. Though at least one PCC member is always
present in the Popular Councils, the management is actually
conducted by a new managerial cadre who specialise in the areas of
economic planning at specific industrial and agricultural sites.
Adjusting state supremacy
In the economic realm, the reformed constitution redefined the idea
of socialist property and how it can be used. Article 15 of the
constitution was rewritten so that the state would appear as the
possessor of the fundamental means of production in contrast to
the previously mentioned owner of the total means of production.
Additionally, the constitutional reform allowed for legislation
concerning foreign investment. Article 23 now allows for the transfer
of state property to private property when deemed necessary by the
people (i.e., the National Assembly and the Council of State). While
affirming the state as the supreme manager of natural resources and
redistributor, the new constitution recognises that there are various
economic means of exploiting resources to create profit, which would
benefit the state and its socialist project. This includes the idea of
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The internal dollar market produces 100 per cent profit gain for the
state in comparison to the 30 per cent found in joint venture tourism
(Marquetti Nodarse, 1998:58). Finally, de-legalisation not only allowed
Cuban nationals to participate in and have access to this market but
also increased the states national reserve.
Decentralisation
Since the reforms, the government has decentralised the management
of business and rendered economic authority to the newly established,
local economic organs. Although most native businesses remained
state owned, they are not controlled from Havana. Rather, the fourth
PCC Congress anointed the practice of autogestin (self-management),
where the managers of each business would really manage their
particular businesses, make payments, receive payments, organise
employee benefits and deal with the demands of local unions; this
was conducted in order to cut government costs (PCC, 1998b). Local
businesses were made accountable to the Consejos Populares, which,
as mentioned earlier, would oversee industrial and agricultural
production. Socialist competition was implemented, whereby those
businesses that were not successful in the discipline of selfmanagement were inevitably closed down due to the lack of subsidies.
This experiment started off with sugar mills and factories, food stores
and also dollar businesses.
Decentralisation was also geared towards those companies that
deal with export production. Hence, an increased number of sociedades
anonimas (SAs) were created as the export services were loosened from
central government in order to run more efficiently. SAs, as mentioned
previously, are semi-autonomous state agencies that are set up to deal
with foreign capital and production for export. Day-to-day
management of finance for these agencies is run independently from
state budget restraints. In simple terms, their main purpose was to
make money for the country while working with hard currency. Again,
these agencies geared towards foreign enterprise relations are nothing
new. Many SAs in the 1980s, such as Cubanacan, dealing with tourism
and the hotel business, Contex, the fashion industry and sponsor of
Surchel beauty aids, and Artex, the company specialising in promoting
artists, musicians and dance abroad, are all now agencies that are
responsible for pouring millions of dollars into the Cuban economy.
Other SAs, such as Gaviota created a reputation with health tourists
and high-income visitors. All of the SAs were responsible for attracting
foreign investors to the island. Cubanacan, again, the tourism
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company and hotel constructor, has since the 1980s attracted foreign
investors from Mexico, Venezuela, Spain, and Italy (FI, 1989:8).
Cubalse, the countrys largest SA, was able to grow physically and in
profits due to the process of decentralisation; as a result, new SAs were
created under the Cubalse umbrella.
Similarly, production in agricultural businesses, to meet the
nutritional needs of the population, has also changed. During the
Special Period, the government instituted a mechanism thought to
be more efficient in the production of common agricultural products,
mainly sugar and its distribution. By 1992, 83 per cent of all arable
land was held within the hands of the party/state apparatus, which
due to the crisis was no longer capable of providing fuel, transportation and materials to carry out its exploitation (FI, 1998:40). As
a result, in September 1993 the ANPP approved the laws establishing
the UBPCs or Basic Units of Co-operative Production. These open up
private farms and unused but fertile agricultural sites, with workers
living on the plots; they resemble small farm businesses that work
independently of the state. Each UBPC consists of two committees,
one concerned with management and marketing, and a second
dealing with the technical and labour aspects. Most of these units
consist of already existing state farms, but they also include small
family farms and properties. Additionally, the workers on these fields
were given permission to use parts of the lands for growing food
products for their own consumption. At first, most of the production
was geared towards the sugar industry, which was still state-run. But
by 1994, the task of the UBPCs was opened to the production of basic
food and livestock goods. These self-managing entities were allowed
to sell their products in city and town markets (Echeverra Len and
Prez Rojas, 1997:69). According to documents prepared by the PCC,
in 1992 75.2 per cent of all agricultural land was held within state
hands. By 1995, the state possessed and conducted production on
only 27 per cent of arable land. The UBPCs now control 48 per cent
of the agricultural land in Cuba, whereas the private sectors and the
Credit and Services Co-operatives (CSC), which work similarly to
UBPCs, use the rest (FI, 1998:5).
Cuentapropismo
The concept of self-employment never ceased to exist in Cuba after
the 1959 Revolution. But because during the early years of radicalisation the country experienced big transformations towards
essentially collective modes of production, self-employment became
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and the profit ratio for remaining stateprivate joint ventures. Private
foreign companies are now welcome to install capital and production
sites for the exploitation of natural resources and production labour.
The law allows for investment in any and all sectors, excluding the
national health-care system and hospitals, education and the military,
although investments may be made in enterprises controlled by these
essential state institutions. According to the law, and in accordance
with the constitution, which abolishes the exploitation of man by
man, all Cuban workers remain employees of the state and will
receive state payment and securities in the national monetary unit.
Of course, the governments share of profit or sale of property is paid
for in hard currency. These dollars in return are to be used for the
improvement of public health and educational facilities, as well as
for the repayment of foreign debt.
Due to its highly skilled and educated labour force, Cuba has always
been an attractive site for foreign investors. In tourism, the country
offers a wealth of natural resources and sites that invite hotel
construction and tourist services. In this sense, the New Law on
Foreign Investment opened the door to potential earnings that the
country already possessed. Every year, Havana holds its International
Fair to welcome new businesses to the island.
The Cuban government planned this move carefully; it was studied
by the PCC and CTC research centres since the reforming of the
constitution in 1991. Hence, it took approximately five years before
this law was actually implemented. During that time, the government
set up consulting agencies for the long line of prospective foreign
investors. By 1993 approximately 280 companies from 36 countries
had representatives in Cuba for joint venture agreements (Granma
Internacional, 7 July 1993:13). By the close of 1995, over 200 agreements
had been signed involving FDI of 100 per cent ownership by transnational corporations, from a total of 40 different countries. This provided
the state with an income of US$2.1 billion for that year (CEA, 1996:8).
The countries with the largest investors in Cuba were Spain, Canada,
Venezuela, Mexico, France and Italy. Foreign companies have invested
into the exploitation of natural resources such as nickel mining and
petroleum explorations, in addition to fishing. But the sale of technological services to other foreign businesses has also been a big area
of investment. Because of the legalisation of the possession of the US
dollar and other hard currencies, a market has now opened to investors
to sell products and services directly to the population. However, the
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for tourism. Even during the most difficult of economic times for
Cuba during the 1990s, those who worked in tourism were seen as
having the best jobs and positions in Cuban society. For some, working
for tourism presents an image of a new class of materially well-off
individuals, who within months acquired access to cars and new
homes; workers in this sector see such material benefits as estimulo
(incentives). Workers in tourism are often presented with jabitas
(plastic bags of goods available only in dollars) and the opportunity
to buy products normally sold in dollars in the numerical equivalent
in pesos: shoes, clothing and household products from abroad. Tourist
industry workers are seen as the motor of the domestic economy
because they are responsible for the management of the bulk of dollars
that enters the country. Some Cubans think that those who work in
the tourist sector live like tourists, that they are always receiving tips
and that they live like kings with access to satellite television in the
hotel lobbies, although this is not always true. However, already there
exists a perception of class difference; a job in the tourism industry
is an envied opportunity.
Tourism brings on other social problems like prostitution, access
to drugs from abroad and violent theft. So far, party/state control of
these problems has manifested itself in the form of police-sponsored
repression and the attempt to keep young native spectators away
from the tourists. The country does not know quite how to deal with
the problems that a tourist-led economy can bring. Traditionally,
the PCC is called the (ideological) motor for the revolutionary state;
but it is not uncommon to hear managers and economists halfjokingly say that now tourism is the motor of the Revolution. It
would be more than fair to say that to enter the tourist sector of the
national economy is the dream of a large portion of Cuban youth
and recent university graduates. Direct access to dollars, optimal
working conditions, ample space for professional mobility and a
diversity of available positions are what the sector offers. Even
sociology and philosophy students are entering the sector, taking on
positions in teaching aesthetics at FORMATUR, the school for tourism
sector training.
There are 75,000 employees in the tourist sector, more than 30,000
of whom are young adults less than 30 years of age; many of them
are members of the UJC (CEA, 1998). The members of the UJC are
said to have a better political preparation; they are thought of as
those strong enough to enter a world surrounded by opulence while
maintaining their commitment to the principles of the Revolution.
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Tourism is called the face of Cuba, because tourists gets their general
impression from contact with tourism workers. That might mean
quality services at the bars and the beaches; that might also mean
prostitution. Accordingly, Juan Jos Vega, President of Cubanacan
Group SA says, the first trenches of ideological struggle is in the
tourist sector (Granma Internacional, 7 September 1997:3).
State welfare has benefited from these young workers. At many
sites the employees, under the direction of the UJC, have organised
tip campaigns, calling for a voluntary surrender of tips for the benefit
of the Revolution. For example, between 1993 and 1998, El Aljibe
restaurant in La Habana gathered US$360,000, all of it going to the
Ministry of Public Health (JR, 15 November 1998:2). These and many
other such projects are what make the tourism industry a dynamic
contribution to the economy of Cuba. But the contribution itself
automatically implies contradictions in Cuban society, between those
chosen to work in tourism, with access to nice commodities, and
those who cannot find their way into the sector. Each economic space
becomes an area for ideological struggle and critical analysis; the
Cuban leaderships job is to find out how to control the contradictions and minimise the social costs.
Bank system reform
Due to the already mentioned organisational transformations of state
institutions and norms of economic legislation, Cuba was forced into
restructuring its monetary policy and banking system. Prior to the
reforms, the only existing bank in Cuba was the Banco Nacional. It
was initially the legalisation of the possession of hard currency that
created the need for these reforms. The first scheme in decentralising the bank system was the creation of the Banco Popular de Ahorros,
a savings bank, in 1993 (FI, 1998). This bank relieved the national
banks responsibility of holding personal savings in the national
monetary unit. A separate bank was created for the savings of hard
currency earnings: the Banco International de Comercio (BCI), which
opened up in 1994. But because of the increasing number of foreign
investors, expatriate residents on the island and the new self-employed
businesses that were created, this small reform did not suffice. Hence,
also in 1994, the government passed Decree-Law No. 84. Under this
legislative measure, Cubas Banco Nacional ceased to hold the banking
monopoly, which governed all monetary and business transactions
on the island. Previously, all savings and personal bank accounts,
hard currency conversion, foreign investment and money transfers
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in late 1994 14.1 per cent of the total accounts contained 77.8
per cent of the total amount of savings. A year later, 13.1 per cent
of the accounts contained 83.7 per cent of the total and by 1996
the concentration had reached the point where 12.8 per cent of
the total number of accounts (some 600,000 accounts) represented
84.7 per cent of the total savings accumulated, some 6.6 billion
Pesos. More significant perhaps is the fact that in the same year
2.7 per cent of accounts contained 43.8 per cent of all savings.
These figures indicate personal savings at the National Bank alone.
They do not take into account the savings accounts in the new and
private banks, which hold savings in the national monetary unit as
well as in dollars. Though no figures were provided, as they would
be difficult to gather during the current time of bank system restructuring, I would venture to say that figures from all the dollar savings
accounts on the island most probably indicate an even larger concentration of capital into even fewer hands. This gross reality provides
proof of a growing disparity among Cuban nationals, a big contradiction due to the reforms. The growing unequal distribution of
wealth to which Dilla alludes is, in my opinion, due to the creation
of a dual monetary system and the opening of self-employment as
a new mode of production.
As mentioned earlier, prior to 1993, Cubans possessing US dollars
would be severely punished. One of the first economic reforms that
were made during the Special Period was the legalisation of the
possession of hard currencies by Cuban nationals. This process
which I identify more realistically as the dollarisation of the economy
can be studied by looking at the effects it had upon the general
population and the instant differences that it created among certain
social groups. The first divisive effect is the rift that is created between
those with FE (literally faith, but short for Familia en el Exterior, or
those with family abroad) and those without. Those with relatives
in North America or Western Europe are the first to benefit from the
dollarisation process. They experienced a different Special Period,
possibly a glorious Special Period. These are the individuals who
immediately went to the stores, traditionally reserved for diplomats
and directors of corporations, to buy cement and paint for their home
repair, stylish clothing from Benetton, Sony televisions and sound
systems, Fiat cars and mopeds, fresh meats and fine wines from
Europe. These small material differences should not be underestimated. They create deep scars among neighbours and relatives,
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between blacks and whites (recognising the fact the more well-to-do
Cuban population outside Cuba are white), and especially between
employees and managers or PCC members.
Again, this legalisation created a dual economy, in which many
products from abroad and many services produced domestically are
sold in US dollars. The only products and services which continue
to be sold in pesos are monthly rations, daily bread rations, supplementary foods from the UBPC markets, transportation, refreshments
and beverages provided by cuentapropistas, secondhand books, cultural
activities (theatre, ballet, concerts) and local entertainment (bars,
cinema and sports halls). The so-called dollar shoppings or
diplotiendas, which were initially opened for the tourist, became
providers of Cubas occasional consumer goods paid for in dollars.
Some medicines that are considered to be non-essential by the
government, cough medicines, anti-diarrhoea medicines and aspirins,
for example, have to be paid for in US dollars.
In terms of nutrition, only the minimal food basket is guaranteed
for Cuban families. A typical food basket per person comes to $2.25
per month, but that food basket does not have all the nutritional value
that it had during the 1980s. Fresh fruit is not usually included, neither
are meats, cooking oil, or dairy products. The monthly rationed food
basket consists of basic staple products (rice and beans) and includes
a guaranteed round piece of bread per day. Hence, most Cubans
continue to turn to the black market to supplement their needs.
The drive towards tourism
Meanwhile, in the tourism industry workers are comforted by new
forms of work incentives. Jabitas, plastic bags of cosmetic and clothing
goodies, which can only be bought in dollars but are specially given
or on occasion sold to workers in tourism at subsidised prices, provide
the prime example. This is a sort of stimulus for tourist industry
workers, who can also receive tips in dollars directly from the tourists.
Previously it was illegal for Cuban workers to accept the dollars; today
it is not only commonplace and legal, but it is encouraged. Out of
100 Cuban workers that I interviewed at random, 94 stated that there
is a big difference in the standard of living between those who work
in tourism and those in other sectors (interviews, 1998). Many of
those interviewed used the word abysmal in describing the standard
of living of those who do not work in tourism. The remaining six,
who included professional athletes, a physician, and accounting
specialists in the new financial sectors, were opposed to the idea that
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ing of world affairs and the world market system. At the same time
it brings with it materialism, prostitution and frustration. The
governments intention when it first promoted tourism during the
1980s, and then during the Special Period, was to keep the tourists
in their hotels and on the beaches, visiting Cuba only through guided
tours. The tourist industry was set up as an industry apart from the
population. But this changed, as more and more workers were drawn
into the tourist industry, the fastest growing and most profitable
business in Cuba. But one cannot have two spheres (domestic and
foreign) kept separate from each other. Tourists want to meet Cubans
and vice versa; to hinder that is to play with nature. Furthermore,
realising the importance of the dollar, Cubans make an effort to get
into contact with tourists.
Even though the numbers of black and white Cubans working in
the tourist industry are about the same, tourism also means more
racism. Blacks tend to witness their passports and identity cards being
checked more often when entering a hotel. If the passport is Cuban
and one is black, entrance is often denied unless, of course, dollars
accompany him or her. Of course one can argue that this is a prejudice
based upon the attempt to separate the tourist community from the
natives, for the purpose of ensuring that tourists are comfortable and
are not bothered by needy Cubans. But the fact remains that these
prejudices are manifested in segregating blacks from whites. Why
cant a black man be a tourist? The ideas of racism reminiscent of
the 1950s are only reinforced.
The increasing number of joint ventures and the legalisation of
the dollar are two other important outcomes of the Special Period,
contributing to increasing class differences and stronger lines of
racism. The head of the Anthropology Department at the University
of Havana reaffirmed the notion that racism has grown as foreign
influence increased. She stated, for example, that the firmas mixtas
(joint ventures) prefer to employ white Cubans. Even though the
Cuban state organises all workers to apply, foreign firms choose white
males, which surprised her as she is used to working, in the same
type of company, with many women and blacks. Not only the joint
ventures, but also the legalisation of the dollar had consequences
that played along racist lines (Bazuin, 1997).
Curiously enough, prostitution was not outlawed immediately in
1959. Pimping became prohibited only in 1961, but the traditional
posadas (government-run hotels) were to remain open to satisfy a
social need. Prostitution thereby became state-controlled (Matthews
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4
Structural Adjustments
and Social Forces in Cuba:
How Cubas Economic Model
was Shaped by Global Trends
In Chapter 3, I explained the causes and consequences of Cubas
economic crisis during the first half of the 1990s, the necessary process
of political and economic restructuring that the country endured
after the disintegration of the socialist bloc in Eastern Europe and
the reinforcement of the US economic embargo. The survey conducted
on the domestic response called the Special Period answered the
questions as to why and how Cubas party/state apparatus survived
the crisis and continues to exist. This chapter is dedicated to
identifying newly established social structures that have emanated
from the measures and reforms executed during the Special Period.
Parallel to this task, I will identify the similarities and discrepancies
between Cubas new economic model and those global trends
identified in Chapter 1 as the central characteristics of neo-liberal
globalisation and transition economies. My principal argument here
is that while the policies of economic and political reform
implemented by the party/state apparatus were portrayed as a
temporary or emergency reaction to global pressures, some new
structures have been instituted and have proved to be stable and
quasi-permanent. These new structures, which were shaped by global
trends, create new social forces and reposition old ones in order to
maintain the pillars and foundations of the Revolutions existence.
By identifying the new structures, both organisational/institutional
and normative, it will be possible to estimate the extent to which
global pressures determine or shape the current Cuban model. In
short, what has been demonstrated up till now is that the Cuban
party/state apparatus has utilised the world market as a substitute for
the benefits it used to receive from the former Soviet bloc; in this
chapter, I will demonstrate the effects this replacement has had upon
Cubas political and economic structure and the consequences for
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while in the rest of the Caribbean it was between 3 and 4 per cent
(Comellas, 2001a).
The second area of improvement that contributed to Cubas
economic growth was the reduction in wasteful energy usage, achieved
through efficiency plans rather than austerity measures. The PCC
pointed out that in agriculture for example, a more efficient use of
energy has been demonstrated. In 1989, the harvesting of one ton
of tropical vegetables and tubers used up 95 kg of diesel and 19 kg
of gasoline. In 2000, 37 kg of diesel and 3 kg of gasoline were used
to produce the same amount. A similar tendency was demonstrated
in the production of nickel. In the most important and productive
nickel mining and refinery plant, Ernesto Che Guevara, located in
Moa, half the amount of combustibles used to produce a ton of the
mineral in 1989 was used in the year 2000. During this last year,
72,000 tons of nickel were produced. This reflects a giant step in
nickel production, as the total amount of nickel produced in 1989
was only 45,591 tons (Granma Internacional, 21 April 2001).
The third causal attribute to Cubas new economy has been the
increase in the extraction of local petroleum and its input at the
service of electricity and the production of cement and nickel. This
has led the country to a greater self-sufficiency in combustible energy.
The prospects for more exploitation of local oil seem hopeful. In
2000, 2.8 million tons of crude oil was discovered on national territory.
With the recent news of other large untapped petroleum pools lying
in Cuban territorial waters in the Gulf of Mexico, the government
estimates that by the year 2005 production might reach as much as
5 million tons per year (Granma, 15 January 2001). The increase in
petroleum production saved the state US$400 million in 2000.
Currently, 70 per cent of the countrys electricity is generated by the
burning of petroleum produced by the countrys own oil reserves.
Additionally, and thanks to foreign investors, most central generators
have been updated or reconstructed using Japanese technology in
electricity production this has replaced the outdated and inefficient
Eastern European generators. This same method will be introduced
into nickel ventures and the production of cement. Half of Havanas
population depend on natural gas for their household purposes,
including cooking and water heating. This natural gas accompanies
the extraction of crude oil in Cubas north coast by the CojimarVaradero Company (Granma Internacional, 27 April 2001). But none
of this petroleum extraction would have been possible without the
participation of foreign capital in the form of joint ventures. The
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costs and deductible profits which will most likely revert to the home
countries have not yet been estimated. Therefore, PCC prospects can
be considered a little too optimistic.
Finally, foreign investment is revered as the most important
contributor to Cubas economic growth. Without it, the sectors of
tourism, petroleum extraction and tobacco export would not have
succeeded in experiencing growth. As was mentioned in Chapter 3,
FDI was recognised officially in 1995. Prior to that, the Cuban
government allowed foreign entities to invest only up to 49 per cent
in joint ventures. Although most investors are still participating
through partial ownership contracts with the Cuban government,
direct investment of up to 100 per cent has increased since the law
on FDI was passed. Between 1995 and 2000, approximately US$4
billion has been invested in the country by foreign enterprises. In
total, there are currently 394 associations operating with foreign
capital (MEP, 2001:34).
In terms of joint venture or private investments in the country, in
2000 there was an increase of 11 per cent in comparison to the
previous year. Out of the US$5 billion that were poured into the
Cuban economy, US$1.5 billion was invested in construction and
the modernisation or renovation of thermoelectric plants, the
transport of crude oil, gas and nickel, the construction of hotels, and
in telecommunications. By the close of 2000, 31 new joint venture
companies had been created (MEP, 2001:34).
Brascuba, a cigarette company founded in 1996 with private
Brazilian and Cuban national capital, can be considered an example
of successful joint venturing. With two co-presidents, Adolfo Daz
Surez (Cuba) and Fernando Teixeira of the Souza Cruz Tobacco group
(Brazil), the company earned US$20 million in 2000. Due to the
investment-income policy, Cuba receives half of this amount. To
demonstrate a real entrepreneurial growth, in 1996 Brascuba produced
and distributed 571 million cigarettes under three brand names; in
the first half of 2001, the company produced 2 billion cigarettes in
six varieties. This joint venture depends on local as well as foreign
markets (within the region as well as in Europe) by selling under the
brand names Hollywood, Continental, Popular, Romeo y Julieta,
Monterey and Vargas. Though the number of employees was not
revealed by corporate or government sources, Brascuba boasts that
the average age of their workers is 32, mostly women, with 40 per
cent being university educated (engineers and executive office
managers) and 58 per cent having a middle degree in vocational and
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care; this is equivalent to Canadas rate for the same time period. In
2000, Cuba achieved the highest doctor-per-population ratio in the
world; the rate was 5.3 doctors per 1,000 people. It is therefore no
wonder that Cuba has no problem sending off medical experts to
disaster areas in neighbouring Latin American countries, free of charge
(Granma Internacional, 15 March 2001). World Bank officials went so
far as to say that other developing countries have a lot to learn from
Cuba, that it is a model (Lobe, 2001). These statistics reflect a growing
appreciation in the World Bank for Cubas social record despite the
fact that Cubas economic policies are virtually the antithesis of the
Washington Consensus on neo-liberal economic orthodoxy with
its Structural Adjustment Programmes (SAPs), described in Chapter 1.
It is ironic that the same institutions that have prescribed privatisation and state reductionism praise Cubas anti-model. For the past
decade, the World Bank has insisted that its core mission has been
to improve the lives of the poor. But it did so by promoting policies
that were geared towards concentrating all efforts on orthodox
economic growth. Productivity and increasing GNP rates were
considered to be the prerequisites for social development. The
experience of Cuba, even during the worst years of the Special Period,
has proved this assumption wrong.
CUBAS MOST RADICAL CHANGE
SISTEMA DE PERFECCIONAMIENTO EMPRESARIAL
Up to this point, I have described the miraculous success in economic
growth and social development that the Cuban people have
experienced since the reforms that were implemented during and
after the crisis of the 1990s. The party/state apparatus and its leadership
initiated a series of reforms that were characterised in Chapter 3 as
basically an apertura or state-controlled opening to the hegemony of
the world market. The opening to the market reflects the adjustments
that the Cuban government was forced to make after the fall of the
Soviet bloc. In short, the results of this event had consequences that
were favourable to production and to the stability of the revolutionary regime. However, economic indicators of growth alone cannot
explain the impact that the series of reforms had upon Cuban society.
Nor can the reforms that were implemented during the first half of
the 1990s solely explain the new structures governing Cubas political
economy. In order to understand the impact of global pressures upon
the country, it is necessary to look at structural changes that emanated
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All of CIMEXs workers are paid their salaries in pesos, but those who
provide direct services to foreigners may receive tips in hard currency.
However, according to Executive Manager Elizabeth Prez, the
tradition of rendering (volunteer) tips to the state continues, and
CIMEX workers inside and out of the country contributed US$180
million to help finance a childrens cancer hospital (Granma
Internacional, 10 January 2001).
The relevance and implications of CIMEX and Cubalse
The revolutionary leadership was keen to have Cubalse and CIMEX
expand their services and businesses years before the opening up of
foreign direct investment. This gave a head start for the state to invest
in monopoly services and production without being in competition
with foreign enterprises. If it were not for Cubalse or CIMEX being
given the opportunity to operate autonomously from the central
government, foreign enterprises would surely have stepped in to
provide the expatriate community with all the products and services
the state itself had and could offer. Now Cubalse has the opportunity
to conduct business not only with individual expatriates, diplomatic
missions and foreign government agencies, but also with a bigger
tourist pool in addition to foreign investors and their corporations
in the free economic zones (FEZs). Due to the legalisation of the use
of hard currency, Cuban nationals who possess US dollars are now
important consumers of Cubalses and CIMEXs products and services.
From Cubalse and CIMEX a number of things can be discovered.
First, the Cuban party/state apparatus never abandoned its ties with
the world market system. It was impossible for the party/state
apparatus to function as a legitimate state recognised by foreign
entities while operating solely in socialist currencies like the peso or
even the Russian rouble. Secondly, the state corporations experienced
a boom only when they were exposed to the world market. This
implies not only an already existing or potential entrepreneurial spirit
within the revolutionary leadership, but also the viability of a future
managerialentrepreneurial social bloc. Thirdly, in order for these
state corporations to increase profits, they had to have a controlled
number of employees selected by top management and not by the
PCC or the Ministry of Labour and Social Security (MTSS). The
numbers were small, and though there is no exact government or
official statistic concerning the downsizing of employees during the
recent economic boom, I was able to interview a number of exemployees who testified to their displacement from their positions.
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only real, visible and material incentives drive the producers of state
corporations to increase profits and efficiency. Logically, this has
meant linking income (wages) to productivity; now wages are linked
to what productivity is worth on a global level. Even in Cubalses
and CIMEXs experience, this was never seen before.
During Pollocks and Horkheimers time, state capitalism was a
global trend among industrialised countries. The writers never
contemplated the economic development of post-colonial states.
Nevertheless, the analysis of state capitalism in Stalinist Russia does
offer some clues as to how a backward agricultural society can jump
into a modern economy. The state of siege and wartime economy
that Russia experienced was the motor in acquiring new
technologies. The Soviets depended on a militaryindustrial complex
that drove the economy to high-tech development and then, after
a number of crises, to its grave. What has been experienced in Cuba
is the acquisition of new technologies and modes of production
that have been dependent on foreign investment and the adjustment
of labour relations to the world market. Hence, through Cuba,
Pollocks vision of an efficient state-controlled economy is now
being extended into the anti-imperialist context during the era of
neo-liberal globalisation.
The SPE is a working model that entails greater acquisition of power
by the military. Just as in the wartime economies of the 1930s, when
bureaucratic and authoritarian state capitalist regimes depended on
the military to direct the economy, Cubas FAR leads the SPE or Cuban
model of state enterprises. There are, nonetheless, real differences
between the models that were studied by the Frankfurt School and
the SPE. Most notable is the existence of the Directorship Committee,
which includes workers, PCC members and CTC representatives in
planning. Once again, the Directorship Committee required by the
SPE can be seen as the socialist or democratic face of Cubas new
economy. During the spring of 2001, Executive Secretary of the
Council of Ministers Carlos Lage stated that the socialist (Cuban)
model of entrepreneurial production is much more efficient than
private enterprises, because the norms keep in line with social conscientiousness towards the workers. The social conscientiousness is
manifested in worker participation in planning, regular CTC branch
meetings and the compromise that PCC leadership at the workplace
installs with regard to social justice and a collective contribution to
the national economy (Granma Internacional, 16 March 2001). It is
the manifestation of one of the pillars of the Revolution described in
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200,000
150,000
100,000
Registered
Self-employed
50,000
0
1995:
2.5%
1996:
7.8%
1997:
2.5%
1998:
1.2%
1999:
6.2%
2000:
5.6%
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month and those state employees who earned the average and
miserable US$10 per month (223 pesos) (see also, Granma Internacional,
1 June 2001:1). The difference is not only reflected in comparing
cuentapropistas with state workers, but also by distinguishing those
self-employed individuals earning in pesos from those earning in
dollars. As mentioned in Chapter 3, there is a vast difference between
the average income of those who conduct their business in the
national monetary unit and those who use the US dollar for the
production and sale of their services. While cuentapropistas dealing
in dollars can make over $500 per month after taxes, a peso-earning
pizza maker can earn as little as 150 pesos (US$6.25) per month.
According to state sources, the government is prepared to acknowledge
and tax self-employed dollar earners making over US$60,000 a year
(MFP, 1995a). Most of the dollar-earning self-employed whom I have
interviewed had family residing outside Cuba.
Income disparity has been somewhat curbed by the implementation of the tax system in 1996. Prior to this (between 1993 and 1995)
the difference in income levels must have been astronomical. But
according to one PCC representative, today there are millionaires in
Cuba, who have worked both legally and illegally in order to
accumulate wealth and property. Indeed, while state workers are
receiving their miserable salaries, some cuentapropistas are making
tens of thousands of US dollars.
The majority of those cuentapropistas interviewed stated that they
did not consider themselves to compose a social or economic class
different from state workers. The reason is that most of their earnings
fall into the hands of the state in the form of taxes. Additionally, the
cuentapropistas are forced to purchase all their input from state
businesses wholesale. So even if some self-employed individuals and
small business owners may have ideas about themselves that represent
a certain divergence from the reality of most Cuban workers, their
position in production and providing services remains subordinate
to the state. Nevertheless, income disparity provides Cuban society
with a class-like structure that distinguishes between those with
greater economic opportunities and comfort, and those without.
Essentially, cuentapropismo and the income disparity that follows
undermine the Revolutions mission to implement economic equality
among Cuban citizens.
The sixth problem is that of representation of self-employed
interests in the party/state apparatus. The cuentapropistas have no
collective voice in the national trade union (CTC). In other words,
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and health to the prospects for the usage of renewable energy sources
(Castro, 1999b:21). There was even an International Hearings Court
on Neo-liberalism in 2000, where professionals and activists, mostly
from countries in the South, congregated to denounce the injustices
that have been committed to the most economically vulnerable
sections of the worlds population (Granma Internacional, 21 January
2000). Another example of Castros work can be found in his extraordinary invitation to Pope John Paul II to visit Cuba, as a result of
which the pope joined the PCC in denouncing the injustices against
humanity for which neo-liberal capitalism can be blamed (Granma,
December 1997; December 1998; Alarcn de Quesada, 1999).
Nevertheless, by taking into consideration the pillars upon which
the Cuban Revolution was built, it suffices to say that the leaderships
real and central concern is the withering away of the state, or at least
the reduction of state intervention in society and the national
economy. This state-reductionism is what Susan George, Susan Strange
and William Graf have in numerous works described as the essential
and global character of neo-liberalism (Strange, 1996:366). William
Graf calls it re-commodification, under which the state in the Third
World has been forced to employ policies of non-intervention in
the economy in order to receive loans and grants from the international financial institutions; namely the World Bank and the
International Monetary Fund (Graf, 1995). In the works of these
critics, the growth in poverty, the lack of programmes dedicated to
disease prevention and the drop in investment dedicated to the infrastructure for education, transportation and other social institutions
are all to be blamed on the rolling back of state activities in Third
World society. In contrast, the revolutionary leadership in Cuba has
resisted any measure to make the states role in society smaller. As
was mentioned earlier in this chapter, in the section entitled Social
Growth, the Cuban party/state apparatus has demonstrated a strong
commitment to continuing growth and investment into the vital
sectors of society, such as education, medicine and housing. For this
reason and by the same logic, Cubans can boast that on their island,
homelessness, illiteracy and starvation do not exist, because the state
has not been reduced. The party/state apparatus in Cuba remains
supreme.
The PCCs arguments against the concept of transition are similar
to those against neo-liberalism. They are also based on the idea that
post-socialist states must go from one sort of political economy to
another in which the state loses much of its power. In critiquing the
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so-called transition states, Fidel Castro and the PCC highlight the
tragedies that have occurred in the former Soviet bloc, especially in
Russia. The fall in value of the Russian rouble in 1997 and 1998, and
the reports of Mafia control, organised crime and the lack of funds
to pay state workers their salaries were all features that were not
replicated in Cuba (Castro, 1999b:40).
As mentioned in Chapter 1, the term transition has been used with
reference to ongoing sociopolitical and economic shifts in various
regions of the world. During the 1980s and the first part of the 1990s,
transition tactics with neo-liberal prescriptions have been applied to
the process of sociopolitical change not only in the former socialist
bloc but in neighbouring Latin American countries as well. Moving
from state-led to market-led economies that allow an optimal amount
of foreign direct investment to buy up national industries and services
is what has identified the concept of transition in Latin America
(Jeffries, 1993). These economic structural changes went hand-inhand with the opening up to democratic rights and practices that
allowed for new political parties to dominate the state. This
phenomenon is what Graf called democratisation or re-commodification (Graf, 1995). From documented cases, we know that transition
has had varying effects on developing countries. In Africa, transition
has even resulted in state collapse (Hughes, 1992). Many of the
negative effects are blatant, and in Eastern Europe transition has
caused perpetual instability and social unrest.
Case studies of economic transition on a national scale often
conclude that economic reforms are the outcome of sociopolitical
and ideological change, when, in fact, economic development
historically often preceded political transformation (Carranza Valds,
1994:7). Examples of these were mentioned in Chapter 1. Though
there is a lot written on transition, its theoretical implications and
processes are still not well understood. But what has occurred in
countries that were supposedly in transition has been the application
of a package of economic reforms. All economic reforms, in practice,
end up in consolidations or replacements of political power. This
notion is supported by the fact that, on occasion, economic reforms
in transition economies end up diminishing the base of political
power of the social forces that promote the very reforms (as was the
case with Gorbachevs Russia). The case of Eastern Europe after 1989
is the clearest example of politically inspired economic reforms leading
into transition. In this instance, the demise of the socialist bloc ended
up in a radical sociopolitical breakdown. On the other hand, the
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ary leadership says that the reforms were not enforced, nor inspired,
by global trends following the neo-liberal path chosen by other
countries. Power, productivity and economic growth remain in the
hands of the state, which receives legitimacy by maintaining the
foundations and the pillars of the Revolution. Even today, the main
objectives in PCC discourse continue to be self-determination for the
country and socio-economic progress (PCC, 1997). When in 1993
the object of self-determination remained constant, progress did not.
And so during this crisis, the participants in the fourth and fifth PCC
Congresses had to find solutions that would not rock social stability.
Evidently, the main solution was freeing up the market. The issue
became how much of the market. In Cuba, the forces of the world
market were seen as not irresponsibly unleashed, rather, they were
applied to sectors of society which were prepared for a managerial
revolution, decentralisation and opening up to foreign capital. Behind
the banner of perfecting socialism, and the need for high productivity
in order to reach the goals of socio-economic progress, Cubas
party/state apparatus underwent institutional transformation. This
was the experience that came out of the Special Period and that which
was institutionalised with the SPE.
The Cuban argument, so to speak, against neo-liberalism and
transition from a state-led economy to free-market capitalism has
been well defended. No other contemporary statesman has been able
to dedicate most of his/her discourse and political thought to
criticising the global political economy in the way that Fidel Castro
has. Nevertheless there remain some similarities between Cubas state
institutional transformation and current trends in the global political
economy. In other words, rarely does the leadership point to the
qualities of neo-liberalism that are replicated on the local terrain and
implicated through institutional transformation. The similarities will
eventually undermine the notion that reforms in Cuba were not
inspired or moulded by global trends.
Furthermore, I take issue with the idea that modes of production
are defined according to who or what controls the production
processes. As mentioned in the theoretical framework, whether an
economic model is run by the state or private entities has little bearing
on how labour and production are actually organised. In order for
the Cuban state apparatus to compete on the global level and increase
productivity, it has had to employ hierarchical structures that resemble
those found in capitalist economies. Cuba, hence, followed the global
trends. And though the revolutionary leadership continues to claim
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nationals. Additionally, the capital outflow from host states to multinational corporate home states is far greater than the inflow. In Cuba,
the party/state apparatus still controls the value of the national
monetary unit, as it controls the rules of play in financing. It does
so with the help of companies that wish to invest in Cuba and without
the World Bank or the IMF, which propose radical changes in order
to access foreign credit. The Cuban market is an attractive market
for foreign investors for reasons mentioned in Chapter 3, in that
Cuba is politically stable and the population is healthy and well
educated (Lage Dvila, 1996). Ironically though, PCC propaganda
depends on blaming the US economic embargo for the lack of access
to foreign financial markets and credit. This implies, therefore, that
once the US embargo has been lifted, the leadership will search for
more foreign financial markets and access provided by international
financial institutions.
At this point, it is evident that the economic restructuring that
Cuba has endured throughout the 1990s and the post-Cold War era,
what Monreal and others called state institutional transformation,
has replicated some global trends on domestic terrain. The reforms
cannot be considered neo-liberal, primarily because the party/state
apparatus did not follow through with privatisation. Nevertheless,
the future prospects for employing the other global trends in Cuba
seem quite bright. This is especially evident when it comes to labour
flexibility and the opening to foreign financial institutions in a postembargo era. But even now, certain trends have already shaped Cubas
political economy. In turn these global trends, which already appear
to exist in Cuban society, have created structures that help define
the domestic political economy and the countrys insertion in or
adjustment to the global political economy.
NEW STRUCTURES AND SOCIAL BLOC FORMATIONS
In the study of both economics and politics, structures cannot by
any means be considered permanent, as both global and local trends
often change with time and are met with resistance. But I have come
to identify real global trends and hard domestic structures that seem
to characterise the new Cuban model. The new structures that have
been imposed upon Cuban society will be defined in this section.
Again, it was during the fourth and fifth PCC Congresses that
Cubas leadership publicly recognised the need for decentralising the
entrepreneurial sectors of the planned economy, improving economic
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directors are the sons and daughters of the members of the Executive
Commission is irrelevant. The point is that the Executive Commission
exists as an entity that represents a real power over the national
economy and intends on trying to bring all forces of production
under its direction. The most influential group in the Executive
Commission is in fact the top echelon of Cubas armed forces (FAR);
i.e. General Raul Castro and Colonel Armando Betancourt Prez.
Ultimately, the FAR controls production and has been made
responsible for reinserting Cuba into the global political economy
of the twenty-first century.
Hence, in addition to my modification of Dillas technocratic
entrepreneurial social bloc, I have revealed another social bloc that
supersedes the layer of directors, local businessmen and dollar-earners.
It is an overriding social force that Dilla failed to identify. The social
force is composed of the top leaders of the party/state apparatus, who
include old-time revolutionaries like Fidel Castro, his brother Raul
and Armando Betancourt Prez, those who are loyal to them (the
Political Bureau and Central Committee) and other members of
society, mostly those who fought against Batista (and over 70 years
of age). I call this the old guard of the Revolution or the established
militarycivil bureaucracy, those who are responsible for having unified
the party/state apparatus, as mentioned in Chapter 2. As long as this
top layer continues to exist, the members of the Executive
Commission, and thus the directors of Cubas new state corporations,
will remain loyal to this entity. It was no coincidence that in June
2001, Fidel Castro proclaimed his brother General Raul Castro as his
successor to the title Defender of the Revolution (Granma Internacional,
21 June 2001). In this sense, the constitution of the SPE and the
recognition of the Executive Commission implied a re-organising of
Cuban social forces, here placing the armed forces at the top of power
and production. This is in contrast to previous experiences of keeping
local management in the hands of party cadre who in turn were
accountable to central planning only a system that proved to be
inefficient and became defunct in the post-Cold War context. It is
noteworthy to mention here Raul Castros power over the PCC. He
is second-in-command of the PCC and chair of the Partys Camaguey
provincial committee.
The ascension of the FAR to power and control over production
has become the most essential characteristic of Cubas state institutional transformation. Accordingly, it has become the party/state
apparatus response to global pressures. The revolutionary leadership,
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this is not because the state did not surrender its productive forces
to private entrepreneurs and multinational corporations. In the
Introduction I mentioned my reasoning for believing that the modes
of production in private capitalist society, state capitalism and the
Cuban model are all one and the same. The latter may or may not
have more (participatory) democratic involvement in the productive
process. Regardless of the scenarios, the task, in addition to explaining
how global trends influenced or shaped the national political
economy, was to explain how the party/state apparatus has kept
Cubas domestic economy under its control. What has been revealed,
thus far, is the repositioning of certain social forces within the
party/state apparatus and the institutionalisation of new structures:
specifically the militarys hegemony over an important part of the
production process.
The task of this last section is to explain how the new structures
in Cubas political economy conform to the Revolutions identity.
Following the framework provided for conceptualising the Cuban
Revolution, it is necessary to offer brief attention to each of the four
pillars and the two foundations upon which the party/state apparatus
rests: unity, continuity, state supremacy and popular participation, on
the foundations of anti-imperialism and social justice, which were used
when describing the make-up of revolutionary Cubas existence in
Chapter 2. While I have not yet postulated that the pillars of the
Revolution are shaking, I do think that the social contradictions in
Cubas new model need to be reconciled with what those pillars and
foundations meant.
With regard to unity, this seems to be the single factor holding
Cuban society together despite the social contradictions that have
occurred throughout the last decade. It has been expressed in the
maintenance of the unified forces that uphold the idea of a single
party/state apparatus. The PCC, together with other revealed social
forces (namely, the military and the mass organisations), are
recognised as having hegemony over the entire society. The
experience of the SPE, in which the top military leaders were
repositioned to control industrial production and lucrative services,
demonstrates that it is possible for a Communist Party-controlled
economy to unleash certain global market features within the country,
without losing or compromising social or political control. This is
possible only because the military is so tightly connected to the PCC
and is still under the auspices of the original revolutionary leadership.
By allowing for open discussion of state plans prior to each PCC
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contribute financially via the revenues that are paid on monthly and
yearly bases. The party/state apparatus has had to share some space
with foreign investors, this is true. Nevertheless, the state has allowed
foreign investment into very controlled areas, spheres in which the
Cuban party/state apparatus could not afford to invest. However,
these foreign investments, whether they be direct and full or partial
through joint ventures, have always benefited the state. This has
been demonstrated especially in the fields of petroleum exploration
and tourism.
The revolutionary leaderships resistance to state reductionism has
been an essential aspect of keeping the Revolution intact. In discourse
and in deed, the PCC has proved that it is not necessary to roll back
the states intervention in society in order to continue economic and
social growth. The leadership has gone even further than that, by
pointing out the failures of transition and neo-liberal projects in
neighbouring countries trying to achieve even half of what the
Revolution has been able to provide for Cuban citizens. Cubas social
record is still unmatched anywhere among the developing countries
and is comparable in certain aspects to those of the highly industrialised world. Any attempt to loosen state control beyond the sphere
of decentralisation could prove to be an asinine experiment that
would threaten collective progress and the foundation of social justice.
In the final chapter, I will explore some limits and possibilities for
state supremacy in Cuba. But what can be gathered from this chapter
is that the new structures that have been formed throughout the last
decade can, if not tended to properly, prepare the stage for alternatives
to a state-dominated economy. All this depends on how much
autonomy will be allowed to the new social blocs in the future.
As demonstrated in Chapter 3, popular participation, which was
enhanced during the fourth and fifth PCC Congresses, continues to
grow, though the general population is still not directly involved in
actual economic planning. Even when the Popular Councils (Consejos
Populares) mentioned in Chapter 3 were instituted, their role was
primarily the monitoring of local projects already set in place. For
this reason, I emphasised in Chapter 1 the theory that the modes of
production in so-called socialist economies and private capitalism
are just the same. The party/state apparatus was keen on creating
new microstructures in the SPE. More specifically, the inclusion of
Directorship Committees to serve both as a board and as a monitoring
system within the line of production, alongside company directors,
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5
Conclusions and Considerations
This study has concentrated on the particular form of state resistance
to global structures and processes, more specifically, the Cuban
experience of resistance to trends which are currently found in the
process of neo-liberal globalisation. These final pages will reiterate and
extract key findings from the previous chapters and assess the attempt
to answer the twofold question proposed in the Introduction of this
book: Why does the Cuban Communist Party/state apparatus continue to
exist? To what extent is the process of social, political and productive restructuring in Cuba shaped by global trend and pressures? Towards the end,
theoretical consequences and implications from the Cuban experience
and some possible future scenarios will be considered.
In Chapter 1, some basic theoretical frameworks and historical
themes were laid out in order to provide a basis for comprehending
Cuban socialism. This was done, firstly, by assessing the international
context that was identified as the world capitalist system undergoing
the process of neo-liberal globalisation and, secondly, by reviewing
the history of state resistance to expanding capital and imperialism.
The review of state resistance to world capitalism and imperialism
in the twentieth century explained the historical experience and the
failing attempt to break away totally from capitalist modes of
production and development. As the Soviet and Cuban experiences
have shown, nation-states, which do not live in an international
vacuum, cannot break away from capitalist modes of production
entirely. Up until now, the only successful form of state resistance to
capitalism and now to neo-liberal globalisation is a state-dominated
economy, which has been called state capitalism by members of the
Frankfurt School and some present day left-wing radicals. Instead of
having workers exploited by private capitalist enterprises, workers in
a so-called socialist economy are thought to be exploited by the
party/state apparatus in order to promote national development.
The previous chapters of this book tested the basic theories
concerning the party/state apparatus and demonstrated the results
of state resistance to the process of neo-liberal globalisation. The story
really began with the demise of the socialist bloc in Eastern Europe.
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reforms and new structures that have emanated from the Special
Period. Certainly, Haraldo Dilla, a long-time academic socialist, has
expressed his concerns about the social contradictions that were born
out of the structural reforms. His and others objections to gross
income disparities among Cuban citizens reveal the first cracks in
the pillar of unity and in the foundation of social justice. The cracks
in this foundation have already been described in Chapter 4. Certain
pre-revolutionary aspects have returned to haunt the Cuban people.
Above, these were identified as racist attitudes, income disparity, lost
youth, just to name a few. I believe that these social phenomena
now have a great chance to shake all four pillars and corrode the
traditional values of socialist society. In government discourse of
late, the Cuban leadership has been aware of the dangers that are
thought to be by-products of the opening towards the market. But
it takes more than just official recognition in national newspapers
to combat social ills such as racism and income equalities. In order
to minimise these experiences the PCC and the mass organisations
need to be forced into conducting intense social training programmes
to regenerate the ideas of social equality, solidarity and community
among the masses. This can only be done if the Cuban people take
seriously their role in the mass organisations and voice their opinions
and concerns out loud. In many ways, the future of the Cuban
Revolution lies in the hands of the Cuban people. However, the more
individuals are divided according to income disparity, the more likely
it is that there will be a growth in divergent opinions about what
social justice really means. This leads any observer to question the
other pillars and the one other foundation of the Cuban Revolution,
anti-imperialism.
The second pillar that is at risk is that of continuity. Principally, the
theme of continuity was related to ideas: the emancipation of peoples,
national sovereignty, a single political party to gear the masses against
capitalism; in short, the ideas that were heralded by the Rebel Army
and those sectors of society that supported the Revolution of 1959.
There are certainly many other important ideas that have not been
dealt with in this study, but these were the main ideas that are
continuous in Cuban political discourse. However, external and
internal changes have redefined this particular pillar. Antiquated
ideas of emancipation, in other words, ideas that were developed at
a certain historical moment, do not necessarily follow through with
the times. For example, during the first radical years of the Revolution,
work through moral incentives was an important feature of the
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are the limits to foreign direct investment? So far, it has been clear
that all the sectors of society, excluding the health system, education
and the military, are open to foreign/private investment. Investments
have been made in tourism, petroleum exploration, nickel production
and tobacco. These examples are viewed as beneficial to Cuba, in
that foreign investment brings in new technologies and hard currency.
The question is, what happens when foreign enterprises want to
invest in or appropriate services that are provided to the general
population, like the energy sector or water? Will that top echelon of
revolutionary leadership be willing to sell these services off? What
then will happen to state supremacy and the concept of public
ownership of most of the countrys resources?
Beyond this concern is that of private company leverage on the
party/state apparatus in joint ventures and labour flexibility. In the
race to cut costs, especially during times of global economic crisis,
foreign corporations will always want to find the cheapest source of
labour. Here, the state proves to be not so supreme. Continuing a
pattern of dependency on and further integration into the global
market, Cubas party/state apparatus is finding itself engaging with
foreign enterprises at the bargaining table. Meanwhile, labours
presence within the party/state apparatus is becoming less relevant.
Not only does this go for workers found in joint ventures and foreign
direct investment initiatives, but within the completely statecontrolled enterprise itself. This was demonstrated in the experience
of the SPE.
Popular participation proves to be another shaky pillar. This is already
evident in labour flexibility and the new hierarchy imposed through
the SPE. Although workers are given between two and four seats on
Directorship Committees of state enterprises, profit and efficiency
become the primary goals. The vulnerability of working peoples
collective interests becomes immense when a few workers are
separated from their colleagues in order to engage in profit considerations together with management. This is especially true when the
concerned corporation is inserted into the competitive global market.
If the participation of worker representatives in the SPE is sold to the
people of Cuba as a satisfactory and reassuring means of maintaining
popular input into the political economy, then it is the
technocraticentrepreneurial bloc that has consolidated the
Revolution under its firm hand. The same has become true on the
local level with the creation of Consejos Populares, which guide and
implement municipal economic projects. After these changes, the
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Indeed, no one can question the power that these global structures
have upon the poorer countries of the South and the negative effects
that have come out of the neo-liberal triumph. However, it would
also seem logical to tackle the very same corporations that sponsor
neo-liberal ideology and practice through government lobbying.
When it comes to criticising multinational corporations, the PCC
becomes shy. To be sure, the revolutionary leadership has denounced
monopoly structures and financial speculation, but never the
corporations that practise them. The fact is that the party/state
apparatus is in no position to make enemies out of the multinational
or transnational corporations, because Cuba depends on many of
these for foreign investment and the acquisition of new technologies.
One case in point is the joint venture Brascuba mentioned in Chapter
4. The Brazilian partner, Souza Cruz Tobacco, is not only a private
company, but also a subsidiary of the British American Tobacco
Corporation (BAT Group), one of the largest tobacco enterprises in
the world. Hence, the tendency of anti-imperialism has been modified.
Previously, it was a necessary stance in the fight against global
capitalism. Today, in Cuba, it is a movement to strengthen popular
influence upon nation-states of all countries to control markets and
make room for a fairer trading system. For the PCC leadership, this
is not a contradiction, but, again, a modification in the discourse.
The enemy is not private capitalism or large corporations, but the
governments that allow large corporations to behave as they will.
POSSIBLE FUTURE SCENARIOS
Cubas experience during most of the 1990s and the start of the new
millennium has demonstrated new possibilities in state-led economies.
The government has proved to be flexible and economic efficiency
has overridden traditional PCC ideology, or at least adjusted it to
accommodate income disparity and the disposal of workers at
managements command. Disturbing as it may sound, in a state-run
economy labour can also become flexible, it can even allow for private
enterprise to exist in the form of self-employment or as state partners
in the form of foreign investment. Decentralisation plans that allow
business leaders to become more autonomous in directing their lines
of production can also exist without threatening the base of political
power in central government. This was demonstrated through the
militarys influence over the new state corporations. The information
provided in this book on the new Cuban economic model might be
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Caribbean states. Also, it will seek a stronger alliance with the industrialised countries of the South (South Africa, Brazil, India) in
international trade structures like the WTO. To conclude this future
scenario of maintaining the party/state apparatus with the economic
embargo, it should not go unremarked that things cannot really get
worse. As I mentioned in Chapter 1, the US government is already
making concessions to Cuba, when US farmers and agricultural
producers are demanding the right to sell to neighbouring countries.
A one-party/state future for Cuba without the US economic embargo
is a more complicated scenario. Perhaps this scenario should have
been placed in the section concerning the possibilities of a disintegrated Cuban socialism, because the chances of maintaining the
pillars and foundations in a word, the raison dtre of the Cuban
anti-imperialist state, would be quite slim. If the US economic embargo
against Cuba ever falls, this would mean that the party/state apparatus
would have to maximise its control over imports so as not to allow
Cuba to be flooded by US products. This would be the most difficult
task ever required of the revolutionary leadership, much more difficult
than legalising the possession of hard currency or US dollars. Imagine
an anti-imperialist, so-called socialist state only 90 miles away from
the largest economy on the face of the Earth with its door open to
US investment. However would the central government try to handle
such economic pressure? This study has already looked at the cracks,
splits and shakes in the Revolutions pillars and foundations after
moderate apertura towards the global market. But it is almost
unimaginable to conceive of a one-party/state-led economy surviving
the flood of big multinational corporations such as McDonalds.
There is no way Cubas state corporations could compete with them,
regardless of the efficiency that state-owned companies pretend to
have developed. The foreign private enterprises would outnumber
the state companies, especially in services. Additionally, with the
New Law on Foreign Investment, which by the way contains a nondiscriminatory clause with regard to the country of origin of private
enterprises, the party/state apparatus would be forced into making
concessions to the principal enemy, the United States. Cuban business
leaders in the technocraticentrepreneurial bloc would be pushed
further away from the Cuban working class and the pillar of unity
would see its last days. The only way to avoid such disaster would
be for the governmental leadership to maintain strict controls over
every single financial transaction and reproduce a discourse against
global capitalism. This would result in the governments turning its
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back on some of the reforms that came out of the Special Period. This
leaves this concluding chapter to yet another future scenario.
A third scenario would be global in nature. This would be a
rediscovery of the state as the most essential and irreplaceable player
in the global political economy, where power is taken back by the
state and where people demand that the state intervenes in society.
In many respects, after the terrorist attacks against the United States
on 11 September 2001, states have come to play a more important
role in domestic and transnational security matters. It would only
take an economic crisis of the same calibre to push states into
becoming more dominant players in financial markets. Some would
even have us believe that the current war against terrorism is really
a solution to the economic downturn experienced in the United
States. In any case, I would venture to say that there is always time
and room for the state to come back. If this were to happen, Cubas
efforts of maintaining state supremacy over market and other social
forces would be applauded as the example to follow. Unless, of course,
the superpower dealing with its own economic problems finds an
excuse to destroy Cuba the way it did Afghanistan.
This third scenario would also include the possibility of state
corporate development, where state corporations would develop into
globally competitive entities offering products or services unmatched
by private multinationals. A future scenario might entail health
management organisations of the North, including health insurance
companies, offering their clients the right to fly to Cuba for medical
attention because Cuban health care is high quality and costs less.
At that point, the Cuban government would have to consider creating
a separate health-tourism corporation that deals with foreign patients
or even expanding its services to the point of becoming a publicly
owned multinational corporation. In a friendly international
environment, this could very well happen.
There is a fourth scenario that might seem far-fetched for most
observers but only requires a little imagination. That is the total
collapse of the international capitalist system or a worldwide revolt
against it. During the past couple of years, the world has witnessed
mounting forms of resistance to the process of neo-liberal globalisation in a variety of ways. As I mentioned in Chapter 1 of this book,
these struggles have been found among popular and intellectual
groups in domestic settings as well as on a global level. While neoliberal ideas have nestled into the structures that comprise national
economies and governments in most countries, the progressive forces
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Index
Compiled by Auriol Griffith-Jones
Agricultural and Industrial Bank 138
agriculture 73, 130, 140, 154, see also
sugar
ANAP (National Small Peasants
Association) 65, 77
anarchists 501
Andropov, Yuri 98
Angola 80, 100
ANPP (legislative body) 120, 121, 130
anti-colonialism 435
anti-imperialism 28, 32, 236; as
foundation of Revolution 42, 82,
21819; risk to 227, 2301
Argentina 197, 239
Army 64, 100, 1678, see also FAR
Artex (SA) 129
Assemblies of Popular Power 121
Association of Caribbean States 2367
Authenticos (Partido Revolucionario
Cubano Autentico) 53, 56, 578
257
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Index
diplotiendas see dollar markets
Directorio Universitario 65, 67
dissidents, as election candidates
1212
dollar markets (diplotiendas) 1289,
1456, 169
dollar-earners, as social bloc 210
downsizing 179, 204
drug trafficking 100, 148
Eastern Europe: collapse 1, 5, 10, 86,
103; and failure of socialism 17,
356; trade imports from 945;
transition 96, 196, 199200
Eastern Liberation Army 43
Economic Council on Latin America
(ECLA) 30
economic crisis (1990s) 20, 37, 869,
13940, 2067; background to
8990; effect of collapse of USSR
1056, 108; effect of US embargo
on 10917; effects of integration
902; energy shortages 1067;
social strategies 142; state budget
deficit (1992) 108; zero option
period 1048, see also Campaign to
Rectify Errors; Special Period
economic development 2930, 31;
Leninist model 19, 24; in Special
Period 1235; Stalinist 19, 20
economic growth 2, 1538, 224; 1970s
8990
economic planning 73, 74, 75, 121;
five-year plans 94, 96, 115, 1234
economic transition 199201
economy: availability of US goods
11415; and dollar markets 1289,
1456; inherent weaknesses 140;
integration into Soviet Bloc 7981,
82; liquidity rates 1412;
productivity 912, 105, 1412;
recovery (1996-2000) 38, 1279,
1389, 1402; state management of
314, 735, 823, 86; state
subsidies 165, 2034, see also living
standards; sugar
education 134, 158, 15960, 214;
public expenditure on 143, 163
egalitarianism 70, 142, 151; and new
social structures 196, 20813
Egypt 68, 81
Eisenhower, Dwight, US President 68
El Salvador 80, 98
elections 121; 1952 (annulled) 61;
(1944) 578; (1992-93) 1212;
popular participation in 85, 121
259
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Index
Machado, President Gerardo 52, 53
Mandela, Nelson 135
Maradona, Diego 135
Marinello, Juan 56
market economy, domestic 1289
Mart, Jos 32, 42, 456, 47; influence
of 51, 61, 6970; and US influence
48
Marx, Karl 18
Marxism 502
Marxism-Leninism, and antiimperialism 28
Marxist socialism 1720
mass organisation see OPP
Matanzas province 71
medical schools 81, 116, 143
Melndez, Ernesto 96
Mexico 16, 634, 134, 205
middle class, lacking in Cuba 423, 60
military-industrial complex 1667
Ministry of Basic Industry 181
Ministry of Economy and Planning
121
Ministry of Finance and Prices 121,
180, 191
Ministry of Foreign Investment and
Economic Co-operation 121, 139
Ministry of Labour and Social Security
121, 173; registration of selfemployed 187, 191; and SPE
process 174
MINTUR (Ministry of Tourism) 121,
135
Moa Nickel Company 1401, 156
modernisation theory 30
modes of production: military 167; in
state and private capitalism 201,
26, 181, 216
Moncada military barracks, attack on
(26 July 1953) 612
Monroe Doctrine 42
Municipal Assemblies 121, 122
National Bank of Cuba 125, 137,
1445
National Confederation of Cuban
Workers 523
national development theory 267, 33
nationalisation 60, 712
nationalism, and communism 534
nationality, development of Cuban
445
natural gas 156, 158
NEC (Nueva Empresa Cubana) 168,
176, 216
neo-liberal globalisation 1, 5, 223;
compared with new Cuban
261
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262
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Index
social indicators 1424, 220, 235; and
commitment to social growth
15862
social justice 42, 159, 227
social welfare: continuing
commitment to 144, 158, 235;
unemployment benefits 179
socialism: and state capitalism 234;
as transitional phase 17
socialism in one country 18, 20
Sofia, Bulgaria, CMEA meeting (1990)
956
Sol Mela Group 158
South Africa 236, 237
South Korea 31
Spain 43, 48, 501, 134, 158
SPE (sistema de perfeccionamiento
empresarial) 1668, 216;
applications to join scheme 1801;
company management 1769, 204,
20910; conformity to pillars of
revolution 1814, 202; Directorship
Committee 175, 176, 178, 182,
209, 2201; Executive Committee
for 174, 175, 183, 21112; process
of 1745
Special Period (1991-96) 378, 87,
106; political reforms 11820,
1645, 2013, 207; response to new
world order 119, 152, 225, see also
economic crisis
Stalin, Josef 18, 19, 20
Stalinism 51
standard of living: 1950s 65; during
CMEA years 80, 86; recent
improvements 1612
state 34; and neo-liberal globalisation
1314, 198, 2389; shift of power
from 12, 8, 12, 1989, 238
state business leaders 208, 209
state capitalism 20, 214, 31, 182,
223; bureaucratic 234; decentralised bureaucratic (Cuba) 256;
democratic 223; totalitarian 22
state institutions 89; reformed 1212,
1234, 1645, 201
state service workers 21316, 221
state socialism 1, 1617
state supremacy: and means of
production 122; and new structures
21920, 225; as pillar of Revolution
41, 84, 183; risk to 2289, see also
party/state structure
state-owned corporations 38, 16874,
see also SPE
Strange, Susan 1314
strikes 523, 61
263
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