Thursday, July 26, 2018

ASCE 2018: Summary of Opening Plenary "Cuban Economic and Political Situation" / Resumen del Plenario de Apertura "Situación Económica y Política de Cuba"

The Association for the Study of the Cuba Economy began its 2018 Conference this morning with an opening Plenary Session the objective of which was to give a picture of the current state of Cuban politics, economics, society and law.
OPENING PLENARY Cuban Economic and Political Situation
Chair: Helena Soto-Gabriele, University of Miami and ASCE President
Omar Everleny Pérez Villanueva, Centro Cristiano de Reflexión y Diálogo, Cárdenas, Cuba
Mario González-Corzo, Lehman College, City University of New York
Dagoberto Valdés, Centro de Estudios Convivencia, Pinar del Río, Cuba
This post includes a summary of the remarks of the speakers at this plenary session. Much food for thought. The Opening Plenary was recorded, and may be accessed HERE.

ACSE 2018 coverage: 

Conference Program HERE.

OPENING PLENARY: Cuban Economic and Political Situation

Chair: Helena Soto-Gabriele, University of Miami and ASCE President
The ASCE President opened the session with greetings to all attendees, especially those able to join from Cuba.  She spoke to ASCE's history and mission, and the relevance of both to advancing knowledge production and positive analysis of Cuba and Cuban policy from all perspectives. She noted the revised and expanded ASCE web site with its rich resources on Cuba related research, including  more than 1,200 that make up the Proceedings of ASCE since its start. These are indexed in RePEc and available globally. 
Omar Everleny Pérez Villanueva, Centro Cristiano de Reflexión y Diálogo, Cárdenas, Cuba.

His presentation was entitled, Retos Económicos del nuevo gobierno en Cuba.  These challenges will doom reform.  The first is slow economic growth, this year no more than 1.1%. Growth is not development, and hardly a substitute but it is a way forward that is now unavailable. What makes this  of concern is that the slow growth was the product of a substantial effort of the government to increase growth, unsuccessfully.  This challenge is compounded by a growing fiscal deficit. The deficit is in turn augmented by the failure to substantially increase exports. Sugar production has become virtually irrelevant and other sectors have not filled the void. He suggested that there is a dissonance between official discussion and the realities of Cuban economics. This is especially the case with respect to the management and role of the private sector. But the scope of the private sector remains quite narrow, licenses stifle innovation, and the efforts amount to little more than to memorialize the realities on the ground today--if only to constrain new development. He suggested examples--the bureaucratization of private enterprise which is choked by the need for official approval or for conformity to plans that have to be negotiated an approved in advance, even int he face of changing economic conditions, or where new opportunities arise. There is a connection between these constraints on the private sector and the rates of emigration, especially of the most innovative sector of working age people. And, indeed, there is a suggestion that the cooperative sector, once viewed as a way forward through private sector activity, will itself be further constrained.  The focus on control of "wealth accumulation" will effectively strangle much growth in that respect. The dissonance is intensified in the face of a constant stream of conference with Chinese and Vietnamese officials who extol the virtues of markets Marxism in Cuba, with official sanction, but with no effect on the ground. Thus, it seems, that the official sector is best at calling for development, but also in doing little about it.  The same pattern applies to the shrinking agricultural sector and an industrial sector that appears to be stagnating, even in the face of what appears to be some investment in infrastructure from abroad. The project of economic reform is made more difficult by a demographic pattern that suggests a shrinking and aging of the Cuban population. But is immigration an option? Perhaps the alternative is Japanese style mechanization and automation. And yet another source of challenge is education.  Here there are similarities to the U.S. where primary school teachers occupy a low social status, earn very little and are the foundation of the education of the population, but one that does not attract the best and brightest.  These best and brightest, especially necessary for targeted sectors identified for development, are the key sectors of emigration. Foreign investment might be an answer, but the same bureaucratic and a managerial approach to the private sector bedevils the process of review and application of foreign investment. In addition, there is a great challenge with respect to the remittances received form abroad, an increasing amount of which is now exported to other places, for example the special zones in Panama (Colón). Will Vietnam, China and Russia come to the rescue? Perhaps.  Vietnam is now the largest investor in the Mariel Special Trade Zone with a large concession.  But will it be enough? The new president brings a different working style. Appears more involved.  But will this translate into economic reforms that matter, that is the open question.

Mario González-Corzo, Lehman College, City University of New York

His paper is entitled Cuban Agriculture After a Decade of Reforms.  He started with the presumption that Cuba is essentially an agricultural nation, rather than one suitable for heavy industrialization. He first put agriculture in perspective within the Cuban economy.  Sixty.nine percent is already held by the non state sector.  Private farmers and agricultural cooperatives control almost 40% of the  cultivated lands. Yet much of the cultivable land remains unused. Cuban agriculture is dominated by cooperatives. Employment and wages in the agricultural sector is large, representing about 18% of employment, 4% of GDP. In the cooperative sector only 4% of total employment. Above national average of wages, about 1000 pesos versus 740 pesos national average. Agricultural reforms starting in 2007 were to meet three objectives: increasing amount of cultivated land, increasing efficiency, and reducing dependence on foreign agriculture. Success has been limited. Though the amount of land cultivated has declined over time, productivity has increased. Yet much of the decline actually has been made up by imports (almost 80% of food products).  Part of the problem has been that there is reduced interest in agriculture among younger people.  That augments trends toward reduction in employment.  He related government efforts to increase the allure of country life, including novelas about young people giving up the city for agricultural life.  But these have seemed to have little current effect. They do, however, suggest the importance of the issue to the state. These factors have contributed to the current situation. Different crops in the non sugar-sector show differences in growth depending on whether it is dominated by the non state sector. Tobacco production remains flat and the sugar production continues to decrease. Both sugar production and the number of mills have declined. In 1990 Cuba was a significant player in global sugar markets. Today is is much less so.  Part of the problem is mills.  In 1916 Cuba has 186 operating mills, now it maintains only 54 mills not all of which are fully operational.  Common element is weather--climatic conditions. Cuba now has one of the lowest yields in the world, 24-40 per hectare, well below global average of 65-76. This suggests a combination of reduction of mills not made up for more efficient substitutes.  Now Cuban sugar makes up 0.6% of global output; in 1970 it was 11% of total production. Supplanted by Brazil, Guatemala, India, the Dominican Republic and others. Many African states have substantially better yields even int he face of climatic challenges. What this suggests is that Cuban economic planning that focuses on the sugar sector appears to be detached from the realities of the trends in Cuban agriculture, and does little to tackle the export substitution problem for Cuban food--substituted for what where sugar, tobacco etc. do not fill the void? This food dependency (food insecurity) issue will affect Cuban planning for economic development, especially where food insecurity binds Cuba to U.S. agriculture even int he face of the Embargo.  Those complexities remain unresolved--even in the face of new friendships with Vietnam and China. Prospects for the future: (1) open agricultural land to foreign investment; (2) loosen administrative control of decision making for planting and production; (3) open more to markets.

Dagoberto Valdés, Centro de Estudios Convivencia, Pinar del Río, Cuba.

His presentation was entitled Cuba 2018: Oportunidad o continuidad?. No one knows the answer, of course, but he hoped that by asking these central questions he might approach the issues that currently face Cuban leaders. Challenges that make this a critical juncture for the Cuban leadership: (1) economic stagnation; (2) central planning failures; (3) a constricted private sector which grows as its success becomes more evident; (4) a party-state system that penalizes direct participation by the masses; (5) judicial arbitrariness, (6) diminution or loss of values; (7) the loss of authority and the inefficiency of the bureaucracy; (8) violation of human rights even by the standards of the current system; (9) the end of the revolutionary era as the original generation dies; (10) a stagnating ideological style that stifles press freedom, artists, and others producers of culture. Beyond these internal challenges are the global challenges affecting Cuba; (1) the crisis in Nicaragua and Venezuela; (2) the frozen relations with the U.S.; (3) changes in Latin America that suggest changes in support for Cuba by other LA states including Brazil, Columbia, etc,. (4) relations with China which are quite different and more strict than those with the USSR int he old days; (5) the rise of the EU as the most important trading partner which may serve as a source of pressure on the state; (6)  the expectations of international actors; (8) synergies among these affect the internal calculations of the state organs in a way that cannot be avoided.  The government's response can take one of three forms: (1) resistance and a refusal to change; (2) adopting Asian Markets Marxism models, currently modeled on that of Vietnam, with sustained PCC control and no political reform; (3) an opening up and reform that leads to a new political model and along with that economic reform on a Western model. Diaspora Cubans take three positions in the face of these trends: (1) we have to wait; (2) nothing will change; (3) there is a spectrum between continuity and reform and that creates a space for engagement. Continuity and gradual reform appears to be popular for all sides because, perhaps, it suits their ultimate objectives in a way that continues to permit engagement. For the Cuban state that means dialogue to reduce the pressure to change; for others it means the opposite.  Who will win? He ended with ten vital signs for critical analysis of the trajectory of reform in Cuba (from his Convivencia Center): (1) reduction of repression and a wider tolerance of dissent; (2) reform of the Council of Ministers (in terms of membership and powers); (3) greater opening to the private sector in terms of scope and decisionmaking; (4) monetary unification; (5) the forms adopted to overcome the economic crisis (foreign investment and greater role for private sector); (6) a different form of civic and political education that opens the possibilities of popular democracy so that political education can lead to economic (markets) reform; (7) establishing mechanisms to protect citizens against state violence (recalling the problems in that respect in Nicaragua and Venezuela); (8) change in the position of the economic community towards Cuba, with a greater pressure on human rights; (9) opening the education sector to better contribute to the policy debate; and (10) constitutional reform and greater public participation (in contradistinction to the managed process of that current constitutional reform initiative).

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