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| Pix Credit HERE |
The state of the economic stability in Cuba has been very much in the news since the effects of the COVID pandemic, combined with geopolitical challenges, have pushed the Cuban economy to a crisis that comes close to matching that when its subsidies disappeared with the collapse of the Soviet Union. Both times, foreigners, and especially the chattering class of people on both the left and right who harbor (quite different) grievances against the current government, have predicted that economic collapse would inevitably produce political collapse and transformation into a form more desired by those prognosticating, Since (1) the San Isidro Movement's challenge to the political establishment (from the liberal democratic left) and (2) the rioting in the summer of 2021 (consistent with the foreign position of the liberal democratic right), the likelihood of political collapse to match economic collapse appeared more certain. With no great revolutionary charismatic figure (or his brother) to mute dissent, it might be assumed that some reaction will eventually succeed in toppling the current government.
But of course, that sort of wishful thinking has plagued many both inside and outside Cuba for a generation or more. Three factors make that sort of revolutionary scenario less likely. The first is migration (though here the grandees of the Biden Administration appear ready to strategically weaponize migration generally and more specifically in the Cuban context to enhance the likelihood of fatal instability). The second is the naturalization of a politics of hope and marginal gestures of reform, just sufficient enough to take the edge off revolutionary anger and action (certainly since 2008 and well exhibited after 2021. This is a policy of stability built around the management of misery. The state responds to eruptions or crises with grand promises and immediate small reforms that appear to be responsive but do not change anything in a fundamental way). The third is the security apparatus superstructure, which remains intact and committed and against which resistance would require a substantial effort to destabilize. As it has been the case in Cuba since 1959, it is the military that is the key to maintaining or undermining stability in ways that have real effect.
It is in this context that Domingo Amuchastegui offers us his essay "Mirando a Cuba en el 2023" "A Look at Cuba in 2023] which takes a look at the factors that may affect the fine tuning (and the risks) of Cuba's current approach of reform marginalization that leaves the core of the current system intact. in the process he nicely describes the key factors that drive decision making grounded on keeping the population griping but home (or in line for food and services and transport). It is important, though, to keep in mind that those policy choices that produce long lines, scarcity, and infrastructure inefficiencies may be as important to the stability of the current government as it contributes to the protection of its theoretical and operational core (and thus the position and prerogatives of those with a hand in managing the state).
The key constituent parts of the internal economic sector include (a) agriculture; (b) mining nickel; (c) non-sugar agricultural production; (d) livestock and fishing; (e) energy; and (6) the non-state sector.Each is facing substantial challenges (when measured against the ideal) but may be operating far enough away from collapse to sustain the desired stability of economic misery. Of great interest here and the greatest threats to the state: (1) the failure to replace sugar with an equally useful export commodity; (2) the inability to successfully manage mining though here mining deferred may have positive longer term benefits; (3) the inability to sustain adequate levels of meat production is having cumulative effects, offset by an important piece of marginal reform--the bureaucratic opening up of fishing for local consumption; (4) the crisis of the energy sector and the incapacity of the state to maintain its stability (though here Cuba and South Africa share something in common); and (5) the unbalanced development of the retail private sector which following Cuban traditional practices is concentrated in the large urban areas leaving the rest of the country yo deal with greater scarcity.
Internal economic challenges are augmented by external challenges that will not change much in 2023. These include Cuban debt. Here again a sort of stability: Cuba's debt crisis is itself a positive element of stability in the sense that neither Cuba nor its lenders appear eager to move away from the stability of the current practice of lending Cuba to a precipice and then renegotiating. The idea here appears to be that such lending is useful in the politics of foreign lenders and the international community, but from the internal perspective it provides just enough money to ensure survival. Cuba's outward debt, then, might be understood as necessary, and profitable for all sides. Financial crisis is, itself the apex point of stability. It is in that sense that one might discount crisis as a key element contributing to crisis. That just enough policy is reflected in the stability of cash exports (rum and tobacco) but with the future banking on a well subsidized pharma sector, the collapse of which would indeed be ruinous. Remittances, Amuchastegui points out are impossible to accurately count. But that suits all sides. The Cubans and the US prefer the optics of remittances as a strategic weapon--the Americans to show from time to time their resolve against Cuban human rights abuses and their generosity to help the Cuban people; the Cubans because it is possible to mask the extent of the tax on these remittances and their laundering within the internal economy. The tourist industry is, though, one that requires some care. Its recovery is important and despite the usual US-Cuba tensions, appears to be in the interests of all sides to allow to return to something like a useful "normal." Along the same ines the sale of medical services abroad--an excellent means of intelligence and political work, and an important source of funds. Its human rights effects may threaten this source in the coming years.
Tied to the politics of debt relief is that of charity. Cuba subsists, to some extent, on the success of its self promotion as a value added recipient of public and private charity from states and foundations. That has been successful enough in the past It is likely to be more so in the future. The key, though, is the ability to maintaon at least the optics of suffering through the policy of economic misery (all donors like to see suffering sufficient to add value to their offerings). In a sense, then, state charity creates incentives to ensuring that the economic crisis is unresolved. . . at least entirely. And lastly foreign investment remains unchanged. Cuban stability is still (in the opinion of those who run the state) essentially a function of preventing dfoect contact with foreigners that is not carefully supervised. The boundaries of the national territory are a barrier (natural and artificial) through which the state can control the quality and quantity of interactions with foreigners and their footprint within the national territory. Though it is expensive in terms of foregone investment, the price appears to be cheap enough to prevent change. Again the optics and discourse of foreign investment and its reality are quite different things.
lastly, tensions and conflicts remain unchanged. The policy of strategic misery is risky and more risky now that the state is permitting a greater degree of misery than perhaps the population can tolerate. But it is also permitting a greater degree of open protest. The balancing is risky but now appears to ne stabilizing in some respects. In October 2022, for example, limited protests were tolerated (though of course post protest arrests and other disciplinary measures tend to be under reported.
“The police are supporting them, not assaulting them,” he says. “They blocked the four corners because they’ve been without electricity for four days, and all the food is spoiled.” “Everyone is amazed,” says this newspaper’s contact, “because none of the agents has been aggressive. The police let them protest, waiting for them to get power.” (Protests Are Spreading in Cuba, with Barricades in the Streets of Havana and Other Cities)
This perhaps temporary strategy is then aligned with the offsetting policy on migration; a strategic use of population successfuly deployed by the Cuban state since the 1970s and Mariel. But that provides a weapon to the great enemy of the Cuban state--the Americans. It is hard for the state to be held hostage to the Americans by operation of the consequences of the policies that now are deemed essential to stability. And it produces a diaspora that itself is far more difficult (though not impossible) to manage. The essay does a very nice job of analyzing this situation and the threat it poses to the Cuban state, a threat it may not be able to control. To manage this correctly in 2023 will require a careful orchestration of just the right amount of corruption (that adds to stability tot he extent it creates incentives against reform by those with authority), the development of human capital (the universities remain, as they have been since the start of the Republic) an important source of human capital and the generative space for revolutionary activity. In the end the good management of misery.
In this context all behaviors and choices are risky and there will be no recourse to history. Amuchastegui's ending reference to Fidel Castro's famous "History Will Absolve Me" provides the proper level of irony to the 2023 assessment. An way one looks at it, the situation in Cuba produces far more cynicism than it does either hope or re¡course to some saving ideology. That may come later--the the time being the essay suggests that very little will change and 2023 will be a year of continuing but strategically useful crisis.
The essay is reproduced below in the original Spanish and in my English translation.
MIRANDO A CUBA EN EL 2023
Por Domingo Amuchastegui (1//12/2023)
¿Qué puede esperarse para el nuevo año que se inicia cuando examinamos la situación en Cuba? Al abordar este tema, los dirigentes cubanos echan mano, una y otra vez, del término “compleja situación.” Ni remotamente alcanza dicho término para abordar y calificar correctamente las características y proporciones de la monumental crisis por la que Cuba viene atravesando desde hace ya décadas resultado de un modelo económico probadamente inoperante, agudizado éste por más de 60 años de guerra económica de parte de EEUU, el derrumbe de su principal sustento externo,la Unión Soviética y de sus aliados europeos, asi como -más recientemente- por las deastrosas consecuencias de la pandemia conocida como COVID-19 el devastador impacto del huracán Ian asi como por episodios menores pero muy costosos como la nueva epidemia de dengue, la explosión en el Hotel Saratoga, en el corazón de La Habana, y el enorme incendio de los enormes tanques de petróleo en la base de supertanqueros en la bahía de Matanzas.
Pasemos revista a los diferentes componentes de semejante “compleja situación.”
Sector Interno
1. La agricultura, ganadería e industria azucarera (en otros tiempos Cuba era conocida como “la azucarera del mundo”) ha tocado fondo, alcanzando los niveles más bajos de su historia, comprometiendo no sólo el consumo interno, sino también sus compromisos internacionales, en especial el mercado chino. Frase gráfica de un analista cubano: “Nos tomó 400 años en crear la industria azucarera y sólo dos años en destruirla.” La agricultura y la ganaderís son componente decisivos para la alimentación de las población y sus bajísimos niveles actuales tienen un triple efecto: a. Deteriora los niveles de salud de la población; b. Da mayor impulso a la inflación desbocada con sus consecuecias directas sobre los salarios y pensiones; c. Anula los potenciales de exportación que en este orden pudieran desempeñar un papel crucial en aumentar las exportaciones productivas actuales. El gobierno actual se obstina en mantener el control, la injerencia burocrática, frenos de todo tipo, sobre campesinos, arrendatarios (grupo de importante de productores que el gobierno viene frenando hace años) y cooperativistas de todo tipo.
2. La industria del níquel (más su componente de cobalto) continúa estancada en sus niveles más bajos, sin que las prometidas inversiones de Sherritt se hayan materializado e impulsado una modernización y ampliación capaces de incrementar sus niveles de producción y exportación.
3. La agricultura no azucarera. La poducción de tubérculos, granos y vegetales, desde arroz hasta papas y boniatos, ajos y cebollas y otros, siguen navegando en sus niveles más bajos con sus consiguientes repercusiones desastrosas en los niveles actuales de escaseces, inflación asi como en los niveles de nutricionales de la población. Frase de un conocido economista cubano: “Mi reino por un boniato.”
4. Ganadería y pesca. Se propone ahora un proyecto de ley para el fomento de la ganadería (no es ocioso recordar las inversiones multimillonarias que en este secor se hicieron en los años 60 sesenta del siglo pasado) cuando se admite que hoy no hay carne que ofrecerle al consumidor, ni roja ni blanca. La carne de cerdo -elemento indispensable en la dieta de otros tiempos- alcanza sus niveles más bajos y sus precios llegan a niveles exhorbitantes (de 45 pesos la libra años atrás a 450-500 pesos en la actualiddad, cuando aparece). ¿Y el pescado en la mayor de Las Antillas, rodeada de agua por todas partes? Desde hace 40 años desaparece de la dieta del cubano y se convierte casi en un súper lujo, cuando 50 años atrás la pesca representaba la segunda fuente de ingresos del país y se contaba con una importante flota pesquera que abastecía una red de pescaderías en toda La Habana. Ahora se aprueba una ley que anuncia el fomento de la pesca y la supresión de las mil restricciones que pesan sobre la pesca de particulares y cooperativas. Frase popular: “Es como descubrir el agua tibia.”
5. El sector energético. Dependiente casi aboslutamente de tecnologías que datan de las primeras décadas de la colaboración con la Unión Soviética hace más de medio siglo y sin haber podido lograr ninguna modernización o renovación capital de las tecnologías in situ hasta ahora, su vulnerabilidad se materializa en los dias del huracán Ian cuando la totalidad del sistema electronergético nacional (SEN) colapsa casi completamente. Rusia sigue sin responder favorablemente a los muchos requerimientos cubanos en este esfera, en tanto que -inexplicablemente- las autoridades cubanas desestiman ofertas de importantes firmas occidentales como Siemens y TOTAL. La producción petrolera cubana continúa disminuyendo -cubre menos del 50% de las necesidades del país- y los proyectos de prospección por parte de empresas extranjeras siguen brillando por su ausencia, mayormente debido a los altos costos y complejidades de la prospección en las aguas profundas de Cuba. Mientras, las fuentes renovables -en particular la solar- que fueron siempre desestimadas por el gobierno cubano, sólo ahora comienzan a aportar algunas soluciones alternativas, pero todavía sin representar siquiera el 10% de las necesidades del país y siendo todavía muy lento su desarrollo actual. Frase popular de otros tiempos: “Que prendan el mechón…” indicaba una solución remedial, pero hoy no hay apenas luz brillante para alimentar el mechón.
6. El sector privado (oficialmente llamdo “no-estatal”)
Ha tenido un discreto crecimiento desde la aprobación oficial hace poco más de dos años -aunque venía estableciendo con múltiples altibajos desde la década de los 90 bajo la fórmula de cuentapropistas- y hoy suman ya unas seis mil actividades como micro, pequeñas y medianas (MPYMES) abarcando un grupo muy diverso de actividades productivas y de servicios, generando miles de empleos. Navegan todavía en medio de restricciones y limitaciones burocráticas -sobre todo relacionadas con el acceso y facilidades en materia de financiamientos estatales y de comercio exterior-y no pocas continúan prohíbidas como el ejercicio de profesiones y servicios médicos, de asistencia jurídica y otros, pero siendo la actividad financiera la más notable, aunque en la práctica ésta se fortalece y se hace visible en compras de viviendas y otros medios básicos, en empredimientos como paladares (restoranes), B&Bs y préstamos diversos. Los flujos de capital hacia estas actividades se originan mayormente en remesas canalizadas por medio de mecanismos informales pues suponen volúmenes considerable de efectivo.
Este sector, hasta hoy, tiene un crecimiento muy limitado en provincias, concentrándose mayormente en la La Habana, Santiago y Holguín.
Sector Externo
1. Las obligaciones de Cuba hacia su pesada deuda externa con los países del Club de París se ha aplzado una vez más, pero fines de este año deberá renegociarse un nuevo acuerdo, a lo que Cuba ha prometido iniciar el pago de sus diversas obligaciones. Con China y Rusia están presentes voluminosas deudas. En el caso de China se han producido soluciones benignas de parte del gobierno chino luego de la visita del presidente Díaz-Canel en noviembre del pasado año. Con Rusia se desconoce que se hayan logrado arreglos similares (Ver análisis previo de la gira internacional de Díaz-Canel). Entretanto, las autoridades cubanas insisten de manera obtusa en negarse a incorporarse, si no totalmente al menos parcialmente al Banco Mundial y, eventualmente al FMI. Cuba no puede ni debe continuar siendo un paria en el mundo de las finanzas internacionales, tratar de sobrevivir a espaldas de los mismos, por mucho que no les guste. Articular una relación de trabajo con el Banco Mundial -sin ser miembro del FMI- es perfectamente posible como un primer paso. Luego se valorarían los pros y los cons de una membresía al FMI. Este primer paso -asociación con el Banco Mundial- la aportaría a Cuba, una mayor credibilidad -que hoy no tiene- que hoy no posee, siendo un importante incentivo para el potencial flujo de IE al mercado cubano.
2. Los volúmenes de importación (con un elevado porciento en productos alimenticios, dado el agudo déficit en la producción de alimentos en el sector interno) y de exportación -principalmente de azúcar y níquel+cobalto- se encuentran en sus niveles más bajos. Producciones que se mantienen estables como el tabaco y el ron, continúan siendo una fuente de ingresos en moneda fuerte provenientes de mercados estables que bordean casi un millar de millones de dólares. Un componente cada vez más importante que se viene sumando ha sido el de la exportación de biofarmacéticos a mercados tercermundistas.
3. En materia de remesas de familiares en el extranjero -principalmente de EEUU- cualquier aproximación a las posibles cifras son pura especulación dado los canales informales por los cuales fluyen buena parte de las mismas. Las especulaciones en fuentes extranjeras manejan una cifra que ronda por los 3 mil millones.
4. La industria turística. Los efectos de la pandemia redujeron a cero los ingresos por esta vía -caracterizada por el gobierno como su principal fuente de moneda fuerte y que llegó a bordear los cinco millones de visitantes hacia el 2018, colocándose en segundo lugar de los países del Caribe- y recién ha comenzado una muy lenta recuperación. El plan para el 2022 era de 2.5 millones, pero quedó muy por debajo (alrededor del millón 600 mil), influyendo en esto de manera muy pronunciada la reducción casi a cero de cruceros, las restricciones que por parte de EEUU pesan sobre esta importante actividad y las que frenan un potencial flujo masivo de turistas norteamericanos (que según estimados académicos pudiera llegar en una fase inicial a más de tres millones). La guerra en la que Rusia está comprometida ha restado un 20% del potencial turístico de este país para el pasado año. En el pasado año esta industria realizó importantes inversiones en el sector hotelero, culminando la terminación de varios hoteles en La Habana y otros centros turísticos importantes. Por otro lado, decenas de aerolíneas (incluídas varias importantes de EEUU) han restablecido o iniciado regulares vuelos a Cuba. Seguimos sin estudios realistas sobre la correlación costo/beneficio en un sector que es sumamente dependiente de una pesada logística para sus operaciones, dado las escasas ofertas que los mercados locales tienen que ofrecer.
5. Exportación de servicios médicos y productos biofarmacéuticos. Continúa siendo un pilar importante del sector externo (imposible aportar cifras confiables pues el gobierno no las hace públicas) a países tercermundistas, en particular a países del Medio Oriente, Africa y América Latina. Si -como ha anunciado el presidente brasileño Lula- Brasil reanuda su popular programa de “Mais Doctores” y retomara los niveles de cooperación en este campo con Cuba, ello introduciría un incremento significativo en esta área. El hecho de que México por primera vez contratara dichos servicios el pasado año asi como la adquisición de cuatro millones de vacunas (Soberana 2), ha creado un importante y valioso precedente.
6. Un discreto componente de alivio son las muchas donaciones y proyectos gratuítos de colaboración provenientes de algunos países europeos (Alemania, Italia y España entre los más destacados), del Mundo Arabe, principalmente de parte de algunas de las monarquías mejor posicionadas en los mercados internacionales como Qatar, Emiratos Arabes Unidos y Arabia Saudita y cuyos aportes en mejorar la situación de hospitales y alcantarrillados ha sido notable. Japón también ha contiuado hacienda algunos aportes útiles como son el transporte y la sanidad pública.
7. Inversión Extranjera. Este renglón del sector externo sigue siendo el “Talón de Aquiles” de cualquier reordenamiento económico efectivo. Por años, las llamadas “carteras de oportunidades” que ofrece el gobierno cubano a potenciales inversionistas pasan, sin pena ni gloria, a las gavetas y mejores deseos del Gobierno cubano de atraer significativos proyectos de IE. Las autoridades cubanas siguen resistiéndose a remodelar el marco legal, financiero y operacional y sus insuficientes variaciones posteriores para atraer grandes inversiones, limitándose éstas a algunos proyectos menores de medianas industrias de escaso impacto financiero y/o tecnológico, como sí fueron en su tiempo los proyectos con Sherritt, Pernod y otros. Lo que en su momento apareció como potenciales acuerdos con Siemens y Total quedaron en el camino sin una explicación satisfactoria de parte de las autoridades cubanas. Mientras, la ZEDM languidece con un perfil muy por debajo de las expectativas que animaron su fundación. Nada relevante aparece en el horizonte de la IE en Cuba para este año. Los grandes proyectos con los cuales China y Rusia se comprometieron en su momento -desde la minería del níquel en San Felipe (provincial de Camaguey), el ferrocarril central y la prospección petrolera- siguen engavetados, mientras ambos países realizan ambiciosos proyectos en países del Caribe y América Latina, lo que genera no poco resentimientos y recelos entre autoridades cubanas.
No puede olvidarse nunca el razonamiento debidamente fundamentado del economista cubano Juan Triana hace años ante altos oficiales del Ministerio del Interior (MININT). Permitáseme parafrasear su enfoque: Si Cuba se propone un crecimiento anual del 5% de su PIB, resulta indispensable atraer una IE no menor de 2.5 a 3 mil millones
por año. Semejante razonamiento no ha perdido un ápice de vigencia.
Tensiones y conflictos.
1. Cuba alcanza sus más bajos niveles de pobreza, carencias extremas y una inflacióndescontrolada y galopante que convierte salarios y pensiones en casi nada. Es hoy una sociead de sobrevivencia miserable carente de alternativas tangibles, donde una de las joyas de su corona del pasado, el sistema de salud, se desmorona estrepitosamente.
2. Uno de los pilares fundamentales de cualquier sociedad, su capital humano, sucumbe en medio de una mediocridad no menos extrema (con muy pocas excepciones) y una carencia total de alicientes. Resultado: en poco menos de un año más de 240 000 cubanos -jóvenes en su mayoría- han abandonado el país rumbo a los EEUU. Dígase lo que se diga, es un indicador inequívoco de la bancarrota definitiva de un modelo y un “nuevo rumbo” (el Ordenamiento), cuyas secuelas son poco menos que inimaginables.
3. Los niveles de tensiones sociales actuales alcanzan su más peligroso punto y el fantasma del 11 de Julio del 2021 persiste en gravitar en muchos estudios y propuestas. Los apagones que siguieron a Ian presagiaban algo parecido. Y un panorama así no es el más atractivo para la IE.
4. Corrupción y privilegios desbordan hoy los patrones de conducta de los más altos niveles de la dirigencia del país, desde la gasolina, la comida, la electricidad, automóviles y otros que se hacen efectivos a familiares y amigotes. Incluye además acceso a divisas, cuentas bancarias en el extranjero y vacaciones en el extranjero. Frase popular de hoy: Fidel cuando viajaba nunca se hizo acompañar de su esposa; tampoco lo hicieron Osvaldo Dorticós y Raúl Roa García, presidente y canciller respectivamente. Hoy Díaz-Canel se hace acompañar de su esposa en su extensa gira del pasado año, lo que supone un gasto adicional que no puede justificarse de manera alguna. Estas tendecias de privilegios exagerados y corrupción ya se habían informado por la alta dirección de la Seguridad del Estado a comienzos de los años 90 del siglo. ¿Se hizo algo para frenar dichas tendencias? Nada absolutamente.
5. Semejante nivel de crisis plantea además otro escenario. Las muy contadas acciones de la política exterior de la administración Biden con respecto a una posible aminoración de la enorme carga de acciones hostiles que pesan contra Cuba ha servido a no pocos especialistas a considerar una vez más varios escenarios de una posible normalización de relaciones con EEUU. Se equivocan. Los tiempos de Kennedy (justo antes de su asesinato), Carter u Obama han quedado atrás definitivamente. Hoy lo que parece prevalecer en los círculos de poder en Washington, tanto demócratas como republicanos, es que COMO NUNCA ANTES VISUALIZAN LA HIPOTESIS DEL COLAPSO DEL GOBIERNO CUBANO A CORTO PLAZO: Nada debe hacerse que pueda representar un alivio a las tensiones y desafíos que enfrenta la dirigencia cubana de hoy a fin de precipitar, finalmente, su tan deseado colapso de Cuba por más por 63 años. Anótese esto: detrás de la nueva política migratoria anunciada por el presidente Biden hay otro objetivo no declarado: Producido el cierre definitivo del fácil acceso de los cubanos por México o por balsa, la intención manifiesta de Biden y sus asesores es transformar el escapismo (“la pira” como opción más deseada) de muchos cubanos en una fuerza que se agregue al potencial explosivo de esa población ansiosa por emigrar y que ya no podrá hacerlo (muy pocos pueden contar con patrocinadores).
6. A la dirigencia cubana actual toca enfrentar estos conflictos y tensiones. Podrán o no tomar o desestimar la gran lección de chinos y vietnamitas: Llegado a un punto de crisis imposible de sortear con los viejos modelos, asumieron la noción del viraje total, integral, que hoy representan con todo éxito (más allá de las particularidades de cada cual). No hacerlo, acerca, como nunca antes, la experiencia cubana a su total bancarrota, a su suicidio político, a perderlo todo. Es esta la principal responsabilidad hoy del gobierno cubano, dejando a un lado curitas de mercucromo o chapisteos puntuales. Si no lo hacen, la historia no los absolverá…
* * *
A LOOK AT CUBA IN 2023
By Domingo Amuchastegui (1//12/2023)
(Larry Catá Backer trans)
What can be expected for the new year that is beginning when we examine the situation in Cuba? When addressing this issue, Cuban leaders resort, over and over again, to the term "complex situation." This term is not even remotely enough to address and correctly qualify the characteristics and proportions of the monumental crisis that Cuba has been going through for decades as a result of a proven inoperative economic model, exacerbated by more than 60 years of economic war on the part of the United States. , the collapse of its main external support, the Soviet Union and its European allies, as well as -more recently- due to the disastrous consequences of the pandemic known as COVID-19, the devastating impact of Hurricane Ian as well as minor but very costly episodes. like the new dengue epidemic, the explosion at the Hotel Saratoga, in the heart of Havana, and the huge fire in the huge oil tanks at the supertanker base in Matanzas Bay.
Let us review the different components of such a “complex situation.”
Internal Sector
1. Agriculture, livestock and the sugar industry (in other times Cuba was known as "the sugar industry of the world") has hit bottom, reaching the lowest levels in its history, compromising not only domestic consumption, but also its international commitments, especially the Chinese market. Graphic phrase from a Cuban analyst: "It took us 400 years to create the sugar industry and only two years to destroy it." Agriculture and livestock are decisive components for the population's nutrition and their very low current levels have a triple effect: a. It deteriorates the health levels of the population; b. Gives greater impetus to runaway inflation with its direct consequences on wages and pensions; c. It nullifies the export potentials that in this order could play a crucial role in increasing current productive exports. The current government persists in maintaining control, bureaucratic interference, brakes of all kinds, on peasants, tenants (an important group of producers that the government has been stopping for years) and cooperative members of all kinds.
2. The nickel industry (plus its cobalt component) continues to stagnate at its lowest levels, without the promised investments by Sherritt having materialized and promoting a modernization and expansion capable of increasing its production and export levels.
3. Non-sugar agriculture. The production of tubers, grains and vegetables, from rice to potatoes and sweet potatoes, garlic and onions and others, continue to navigate at their lowest levels with their consequent disastrous repercussions on the current levels of shortages, inflation as well as nutritional levels of the population. Phrase from a well-known Cuban economist: “My kingdom for a sweet potato.”
4. Livestock and fishing. A bill for the promotion of livestock is now proposed (it is not idle to remember the multimillion-dollar investments that were made in this area in the 1960s and 1960s) when it is admitted that today there is no meat to offer the consumer, nor red nor white. Pork meat -an indispensable element in the diet of other times- reaches its lowest levels and its prices reach exorbitant levels (from 45 pesos per pound years ago to 450-500 pesos today, when it appears). And the fish in the largest of the Antilles, surrounded by water on all sides? For 40 years it has disappeared from the Cuban diet and has become almost a super luxury, when 50 years ago fishing represented the second source of income for the country and there was an important fishing fleet that supplied a network of fishmongers throughout La Havana. Now a law is approved that announces the promotion of fishing and the removal of the thousand restrictions that weigh on the fishing of individuals and cooperatives. Popular phrase: "It's like discovering warm water."
5. The energy sector. Relying almost entirely on technologies dating back to the first decades of collaboration with the Soviet Union more than half a century ago and having failed to achieve any major modernization or renovation of the technologies in situ until now, their vulnerability materializes in the days of the hurricane. Ian when the entire national electronic energy system (SEN) almost completely collapses. Russia continues to fail to respond favorably to the many Cuban requests in this sphere, while -inexplicably- the Cuban authorities dismiss offers from major Western firms such as Siemens and TOTAL. Cuban oil production continues to decline - it covers less than 50% of the country's needs - and prospecting projects by foreign companies continue to be conspicuous by their absence, mainly due to the high costs and complexities of prospecting n in the deep waters of Cuba. Meanwhile, renewable sources -particularly solar- that were always dismissed by the Cuban government, are only now beginning to provide some alternative solutions, but they still do not represent even 10% of the country's needs and their current development is still very slow. . Popular phrase from other times: "Let the lock light..." indicated a remedial solution, but today there is hardly any bright light to feed the lock.
6. The private sector (officially called “non-state”)
It has had a discreet growth since its official approval a little over two years ago -although it had been establishing itself with multiple ups and downs since the 1990s under the self-employment formula- and today there are already some six thousand activities such as micro, small and medium-sized enterprises (MPYMES ) covering a very diverse group of productive activities and services, generating thousands of jobs. They still navigate in the midst of bureaucratic restrictions and limitations -especially related to access and facilities in terms of state financing and foreign trade- and not a few continue to be prohibited, such as the exercise of medical professions and services, legal assistance and others, but still financial activity is the most notable, although in practice it is strengthened and becomes visible in home purchases and other basic means, in ventures such as paladares (restaurants), B&Bs and various loans. Capital flows towards these activities originate mostly from remittances channeled through informal mechanisms, since they involve considerable volumes of cash.
This sector, until today, has a very limited growth in the provinces, concentrating mainly in Havana, Santiago and Holguín.
External Sector
1. Cuba's obligations towards its heavy external debt with the Paris Club countries have been postponed once again, but a new agreement must be renegotiated by the end of this year, to which Cuba has promised to start paying its various obligations. With China and Russia there are voluminous debts. In the case of China, benign solutions have been produced by the Chinese government after the visit of President Díaz-Canel in November of last year. With Russia, it is unknown whether similar arrangements have been made (See previous analysis of the international tour of Díaz-Canel). Meanwhile, the Cuban authorities obtusely insist on refusing to join, if not fully at least partially, the World Bank and eventually the IMF. Cuba cannot and should not continue to be a pariah in the world of international finance, trying to survive behind their backs, no matter how much they don't like it. Articulating a working relationship with the World Bank -without being a member of the IMF- is perfectly possible as a first step. Then the pros and cons of an IMF membership would be assessed. This first step -association with the World Bank- would provide Cuba with greater credibility -which today it does not have- which it does not have today, being an important incentive for the potential flow of EI to the Cuban market.
2. Import volumes (with a high percentage in food products, given the acute deficit in food production in the domestic sector) and export volumes -mainly sugar and nickel+cobalt- are at their lowest levels. Productions that remain stable, such as tobacco and rum, continue to be a source of strong currency income from stable markets that are close to one billion dollars. An increasingly important component that has been added has been the export of biopharmaceuticals to third world markets.
3. Regarding remittances from relatives abroad -mainly from the US- any approximation to the possible figures is pure speculation given the informal channels through which a large part of them flow. Speculations in foreign sources suggest a figure that is around 3 billion.
4. The tourist industry. The effects of the pandemic reduced income from this channel to zero -characterized by the government as its main source of hard currency and which reached around five million visitors by 2018, placing it in second place among the Caribbean countries- and a very slow recovery has just begun. The plan for 2022 was 2.5 million, but it was far below (around 1.6 million), influencing this in a very pronounced way the reduction to almost zero of cruises, the restrictions that the US weighs on this important activity and those that stop a potential massive flow of North American tourists (which according to academic estimates could reach more than three million in an initial phase). The war in which Russia is engaged has subtracted 20% of the tourist potential of this country for the past year. In the past year this industry made important investments and In the hotel sector, culminating in the completion of several hotels in Havana and other major tourist centers. On the other hand, dozens of airlines (including several important US ones) have restored or started regular flights to Cuba. We still do not have realistic studies on the cost/benefit correlation in a sector that is highly dependent on heavy logistics for its operations, given the few offers that local markets have to offer.
5. Export of medical services and biopharmaceutical products. It continues to be an important pillar of the external sector (impossible to provide reliable figures because the government does not make them public) to third world countries, particularly countries in the Middle East, Africa and Latin America. If -as Brazilian President Lula has announced- Brazil resumes its popular "Mais Doctores" program and resumes levels of cooperation in this field with Cuba, this would introduce a significant increase in this area. The fact that Mexico contracted these services for the first time last year, as well as the acquisition of four million vaccines (Sovereign 2), has created an important and valuable precedent.
6. A discreet component of relief are the many donations and free collaboration projects from some European countries (Germany, Italy and Spain among the most prominent), from the Arab World, mainly from some of the best positioned monarchies in the markets international organizations such as Qatar, the United Arab Emirates and Saudi Arabia and whose contributions to improving the situation of hospitals and sewers have been notable. Japan has also continued to make some useful contributions such as transportation and public health.
7. Foreign Investment. This line of the external sector continues to be the "Achilles heel" of any effective economic reordering. For years, the so-called "opportunity portfolios" offered by the Cuban government to potential investors pass, without shame or glory, to the drawers and best wishes of the Cuban Government to attract significant IE projects. The Cuban authorities continue to resist remodeling the legal, financial and operational framework and its insufficient subsequent variations to attract large investments, limiting these to some minor projects of medium-sized industries with little financial and/or technological impact, as the projects were in their time. with Sherritt, Pernod and others. What appeared at the time as potential agreements with Siemens and Total fell by the wayside without a satisfactory explanation from the Cuban authorities. Meanwhile, the ZEDM languishes with a profile well below the expectations that encouraged its foundation. Nothing relevant appears on the horizon of EI in Cuba for this year. The big projects with which China and Russia committed themselves at the time -from nickel mining in San Felipe (Camaguey province), the central railway and oil prospecting- continue to be shelved, while both countries carry out ambitious projects in Caribbean countries and Latin America, which generates not a little resentment and suspicion among Cuban authorities.
The well-founded reasoning of the Cuban economist Juan Triana years ago before senior officials of the Ministry of the Interior (MININT) can never be forgotten. Allow me to paraphrase his approach: If Cuba intends an annual growth of 5% of its GDP, it is essential to attract an foreign investment of no less than 2.5 to 3 billion per year. Such reasoning has not lost an iota of validity.
Tensions and conflicts.
1. Cuba now is experiencing its basest levels of poverty, extreme deprivation and an uncontrolled and galloping inflation that turns salaries and pensions into almost nothing. It is today a miserable survival society devoid of tangible alternatives, where one of the jewels in its crown from the past, the health system, is collapsing resoundingly.
2. One of the fundamental pillars of any society, its human capital, succumbs in the midst of no less extreme mediocrity (with very few exceptions) and a total lack of incentives. Result: in a little less than a year, more than 240,000 Cubans -mostly young- have left the country for the United States. No matter what is said, it is an unequivocal indicator of the final bankruptcy of a model and a "new direction" (the Ordinance), whose consequences are almost unimaginable.
3. The current levels of social tensions reach their most dangerous point and the ghost of July 11, 2021 persists in gravitating in many studies and proposals. The blackouts that followed Ian heralded something similar. And such a scenario is not the most attractive for IE.
4. Corruption and privileges today exceed the behavior patterns of the highest levels of the country's leadership, from gasoline, food, electricity, automobiles and others that are paid to family members and friends. Included It also includes access to foreign currency, bank accounts abroad, and vacations abroad. Today's popular phrase: When Fidel traveled, he was never accompanied by his wife; neither did Osvaldo Dorticós and Raúl Roa García, president and chancellor respectively. Today Díaz-Canel is accompanied by his wife on his extensive tour last year, which represents an additional expense that cannot be justified in any way. These trends of exaggerated privileges and corruption had already been reported by the top management of State Security in the early 1990s. Was anything done to curb these trends? Nothing absolutely.
5. Such a level of crisis also raises another scenario. The very few actions of the Biden administration's foreign policy regarding a possible reduction of the enormous burden of hostile actions against Cuba has helped not a few specialists to once again consider various scenarios of a possible normalization of relations with the United States. They are wrong. The times of Kennedy (just before his assassination), Carter or Obama are definitely behind us. Today what seems to prevail in the circles of power in Washington, both Democrats and Republicans, is that LIKE NEVER BEFORE THEY VISUALIZE THE HYPOTHESIS OF THE COLLAPSE OF THE CUBAN GOVERNMENT IN THE SHORT TERM: Nothing should be done that could represent a relief to the tensions and challenges it faces today's Cuban leadership in order to precipitate, finally, its long-awaited collapse of Cuba for more than 63 years. Write this down: behind the new immigration policy announced by President Biden there is another undeclared objective: Once the easy access of Cubans through Mexico or by ferry is finally closed, the manifest intention of Biden and his advisers is to transform escapism (“ the pyre” as the most desired option) of many Cubans in a force that adds to the explosive potential of that population eager to emigrate and that will no longer be able to do so (very few can count on sponsors).
6. The current Cuban leadership has to face these conflicts and tensions. They may or may not take or dismiss the great lesson of the Chinese and Vietnamese: having reached a point of crisis that was impossible to overcome with the old models, they assumed the notion of a total, comprehensive turnaround, which they successfully represent today (beyond the particularities of each one). Not doing so brings the Cuban experience closer than ever before to its total bankruptcy, to its political suicide, to losing everything. This is the main responsibility of the Cuban government today, leaving aside mercurochrome band-aids or punctual tinting. If they don't, history won't absolve them...
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