Picking up the broken pieces of storm-battered, but now oil-rich Cuba, and moving ahead, with mixed prospects
- Island slammed by monstrous storms, but turns down U.S. aid
- Reforming Cuba during an epoch when scarcity and low living standards no longer are inevitable
- Good news from the E.U. and Geneva
- Offshore oil bombshell
Ever since the presidency formally changed hands on the occasion when Fidel Castro informally stepped down from his position as the island’s supreme leader, Cuba has been witnessing the build-up of its agricultural and industrial capabilities, and the country seemed to be on the brink of an economic epiphany. Although economic growth has been severely hampered as a result of the two Caribbean hurricanes that ferociously hit the island last summer, it now appears that the era of ‘Raúlism,’ which has commenced in earnest, will continue to be positive in terms of growth and diversification in spite of nature’s cruel blows and the legacy from the past. Change seems to be in the air, as economic good times could be around the corner. In essence, even U.S. State Department spokesman John Casey, who has not been entirely convinced that a quasi-democratic transition is taking place there, acknowledges that ‘Raúlism’ could lead to ‘greater openness and freedom for the Cuban people.’
In spite of circulating jokes positing Raúl as ‘Fidel lite,’ the new leader has been surprisingly successful in his ability to withstand being cast as a mere puppet of Fidel. If he is something less than a revolutionary hero (not quite comparable to the legendary Havana freedom fighter Ché Guevara) Raúl Castro, nonetheless, remains a serious man who appears committed to carrying out fundamental structural changes on his long-troubled island, with his reforms leading in the direction of social democracy, improved living standards, as well as toward some form of autochthonous communism. At least that was the model until Hurricanes Gustav and Ike slammed into the island this past summer. For a society where every nut and screw is counted and conserved, in which improvisation and jury-rigging have been made into an art form, the results of the storms were devastating and the island needed every bit of consideration and solidarity that the international community could muster.
Age of Raúl
Since his dramatic rise to the top of the ruling structure, Raúl has implemented a series of continuity-based policies and free flowing economic reforms that meet a reality test, while instituting a long modernization process, beginning just four days after his induction into power on February 28, 2006. The growing need for social reform has been highly conducive to promoting Raúl’s obvious long-time interest in world affairs, and especially in establishing strong South-South relations.
Despite inheriting total power as a form of almost dynastic right, Raúl has energized the state with a series of ‘revolutionary’ approaches, which are vital rather than static. The implicit pressure for Raúl to shape up the agricultural sector and prepare for future price increases, as well as the ultimate lifting of artificial trade restrictions, is gradually leading to the decentralization of the government and a modest opening up of an engaged and independent business sector. As he was struggling with real prospects of early success to broaden economic enterprise on the island, Cuba suddenly was plagued by a series of natural disasters known as hurricanes Gustav and Ike, which, among other damaging impacts, ravished the country’s precious nickel and sugar industries. In the midst of the ongoing economic crisis afflicting Cuba, Raúl has remained unyielding over the need to seek reforms in hopes of rebuilding a nation that has teetered for far too long without its basic institutions being subjected to critical review.
Even though the summer storms have drastically set back Cuba’s economic resurgence, Raúl has taken Cuba by his own storm, exuding an activist agenda accompanied by a slowly invigorated economy and benign external conditions. The probable doubling of Cuba’s estimated offshore oil deposits, which would make it one of the 20 largest oil powers in the world, is but the latest example of the good news that has coincided with Raúl Castro’s takeover of power. Since 2005, Cuba’s GDP has skyrocketed, increasing by 12.5 percent, while in 2007, the island maintained a growth rate of about 7 percent, in comparison to the rest of Latin America, which sustained an average of 4-5 percent annual increase.
The projection of a dramatic increase in Cuba’s oil reserves by the state-owned drilling company, Cubapetroleo, in conjunction with the Spanish corporation Repsol, has ignited an international buzz, as Cuban officials are normally hyper-cautious when projecting economic forecasts. These estimates, if fulfilled, would bring huge amounts of wealth to the island, nearly doubling, as a first step, the current production of oil from 60,000 barrels/day, and further validating the 21bn barrels in reserve, which adds up to nearly twice the size of Mexico’s current reserves, and just about equaling those of the U.S. The anticipated economic boom resulting from this new source of oil revenue has helped turn attention to the island’s entire field of renewable energy. In the central province of Sancti Spiritus, a hydroelectric power station has just been completed, signifying the triumph of Raúl’s pioneering of ‘green’ policies. Cuba is not only moving toward economic recuperation, but it also is slowly seeking independence from the vice-grip of western thinking on the Cuban economy and society on the one hand, and left over Marxist models on the other.
The Ramifications of an Eco-Conscious Agenda
In the race to achieve maximum economic autonomy from the United States, Raúl Castro implemented Law Decree 259 on July 18, 2008. This concerned a sustainable development policy which would allow Cuban farmers to expand and diversify production through means ‘rooted in an ecological rationality.’ The decree was directed to the use of organic fertilizers, soil conservation procedures and the creation of local cooperatives, community environmental education programs, land redistribution strategies, as well as a decentralization of government control. The newfound resilience of the Cuban economy is imbedded in its global commitment of the island to do its part (while solving some of the island’s own profound domestic problems) to abate the world food crisis by adopting ecologically friendly practices, beginning with agricultural sustainability.
As a result of Cuba’s latest economic transformation program that had its rudimentary beginnings under Raúl, only 15 percent of the island’s total farm acreage will remain under State control, versus the former 80 percent figure prior to Raúl’s ascent to power. Also, farmers are now allowed to use state issued CUC pesos (convertible pesos equivalent to the U.S. dollar) to cover anticipated additional costs of seeds, fertilizer, herbicides, tools, rope, and gloves, in order to allow for further expansion of the island’s private sector. The long time duality in the circulation of two currencies had contributed to the chronic depression of the Cuban economy, serving to establish a zone of fallow financial separation between the marginal national peso and the convertible currency, which could serve as Cuba’s most promising means of attaining the ingress of broad-scale foreign investment. Yet, the possibility of a centralized peso may be a viable route for the Cuban people to take, in order to achieve immunity from fluctuations in the global economy.
The Clash of Ideology: Foreign Policy and the Movement toward Economic Revival (After the Great Storms)
As the struggle for economic development progresses, Cuba’s confidence has grown, no longer hyper-focusing on the negative repercussions of the U.S.-Cuban embargo. Raúl’s impromptu refusal of $100,000 in the aid initially offered by Washington to Cuba after the tragic visits of Hurricanes Ike and Gustav, and Havana’s indication that it was prepared to turn down an additional U.S. offer of $5 million in foreign aid should have come as no surprise. According to the Cuban Ministry of Foreign Affairs, this relatively modest U.S. offering did not even remotely approach Cuba’s huge losses which had accrued over the years, as a result of the almost five-decade old U.S. embargo. This has cost Cuba approximately $224.6 billion in today’s dollars. Nor does it provide any compensatory funds for the future restructuring of the Cuban economy, after the damage caused by Washington’s aggressive worldwide war that it systematically had waged on the island’s economy.
In other words, if the United States wishes to extend its support to the Cuban populace after the havoc delivered upon the island by Hurricanes Gustav and Ike, ‘the only correct and ethical action for it to take would be to end the ruthless and cruel economic, commercial and financial blockage imposed against the Motherland for almost half a century,’ observed by the Cuban Minister of Foreign Affairs. At a minimum, he insisted, Washington should immediately lift the suspension and conditionalities on U.S. exports to Cuba.
The latest hurricane damage to Cuba has caused an estimated $3-$5 billion in damages and is projected to have a profoundly negative effect on Cuba’s tourist industry, which heavily fuels the country’s developing economy. The crushing damages inflicted by the category 3 hurricane have further contributed to an already critical housing shortage, as well as bringing about the loss of over 4,000 tons of foodstuffs in central Santa Clara. In addition, thousands of acres of sugar cane and banana plantations were completely devastated by Ike. In the eastern provinces alone, over 32,305 hectares of bananas, 156,600 hectares of sugar, and 10,000 hectares of additional crops were leveled with an additional 518, 879 hectares also being classified as being flooded. Furthermore, 877 organic vegetable gardens, 80 percent of the Isle of Youth’s poultry industry, and 392 miscellaneous farming sites were swept away. All of these were either trampled, flooded out, or otherwise severely impacted by the hurricanes. As a result, the planting of root vegetables as a substitute crop is underway on an emergency basis, as a means of partially countering the destructive erosion brought on by the storms. These last-mentioned measures have begun to push the economy back onto its feet.
In light of these developments, Raúl is adopting a series of decentralization policies to provide farmers with the purchasing power to buy essential supplies, as a means to jump-start production. This new policy has been used to restructure the original government-regulated system that offered rationed supplies, while allowing land under cultivation to experience the ‘rotting of crops.’ Under this new reform, farmers will be given state-sponsored credits on top of being compensated with the equivalent of standard prices to purchase invaluable tools and other supplies, and to be used in boosting the current production rates of food staples. As of now, these direct sales have opened up access to dairy farmers by allowing them to procure such critical inputs as ‘tools, herbicides and boots,’ thus reversing the original effects resulting from the 1960 government seizure of the retail sector. The cause of this decentralization may be attributed to the government’s renewed focus on ‘meet[ing] the basic needs of the population.’ Meeting these needs has become a challenge due to the continued import restrictions brought about by the U.S. embargo, along with the high cost and growing reliance on food imports, which have risen to $2 billion in 2007. In order to combat these inefficiencies, Raúl has undertaken an agriculturally-centered agenda, aimed at fighting complacency and any example of hobbled output.
In the country’s predominantly state-controlled sector, Cuba’s farming industry has been forced to depend on a state-supplied distribution system, giving farmers little incentive for further self-development. Accessibility to the private market has been greatly deterred as approximately 90 percent of the economy is still dominated by the public sector. Nevertheless, since Raúl’s ascendance to power, the nation’s private sector has undergone expansion, as he has since 2006 doubled and, at times, tripled the price in pesos that the state will pay for farm products. These growth-enhancing policies, along with the provision of incentives for the private sector are a part of a wide sweep of economic redevelopment policies targeted at lessening the deficits caused by Hurricanes Ike and Gustav. Due to the harsh effects of the hurricanes, a food rationing policy has been instituted in order to ensure that the entire population is receiving an equal share of the food now being generated locally or sent by donor nations. The government is also placing a quota on farmers’ market produce, in order to limit the amount of fruits, vegetables, rice and beans that individual citizens may obtain.
Cuba’s traditionally isolationist and autonomous policies may have turned out to be its saving grace, limiting the negative effects of the credit and financial crisis on the island. Yet, the credit crisis still may cause a significant abatement in the flow of foreign currency into Cuba from relatives living abroad as well as severely handicapping Cuba’s tourist industry.
The lack of access to basic staples has persuaded Havana to implement a universal rationing system aimed at guaranteeing 2 weeks worth of food to an often semi-famished public. A capping of food prices on basic staples has led to dwindling amounts of produce being offered in public markets. Another economic set-back has involved the storm’s destruction of 3,414 tobacco storage facilities and over 800 tons of agricultural goods awaiting distribution. Cuba’s electrical system in particular has been battered by Hurricane Ike, further delaying the modernization process of the Cespedes Power Plant in Cienfuegos, which would allow for the production of expanded quantities of electricity.
Rebuilding the electricity grid
In the midst of this economic bustle, Cuba’s renewable energy sector has shown great promise. The keenly anticipated opening of a new hydroelectric power station in Sancti Spiritus, is part of a Cuba-China project to produce an additional 2.7 megawatts in the national electro-energy system. According to the Cuban Ministry of Basic Industry, the power station will daily save 15 tons of fuel in the country as well as producing 48 megawatts per day. This substantial addition to the Cuban economy, in a project backed by the Chinese, is contributing to the increased intensity in bilateral relations between the two nations. In the next five years, Cuba, with Chinese support, is planning to open 21 additional power stations. Thus far, over 180 hydroelectric power plants have been built in Cuba.
Co-existing with these welcomed advancements in Cuba’s energy sector is the fact that the electrical system has been devastated by the storms, as five telecommunication towers, over 8,000 electric poles and 490 km of wires were wiped out, leaving very spotty service which has been dependent upon a hastily jury-rigged mobile telephone system. The paralyzing circumstances in which much of the nation now finds itself, with tens of thousands of islanders remaining homeless, are forcing the government to rebuild with the meager resources at hand. It already will take years to overcome a pre-existing housing deficit. In spite of the current tragedy spurred by the hurricanes’ onslaught, Cuba already has begun restoring electricity to the majority of adversely affected regions in the country. Yet, at this late date, at least 72,000 households remain without power, mainly in the provinces of La Palma in Pinar del Rio and Jesus Menendez in Las Tunas.
However, Cuba continues to rebound from the hurricanes’ destruction with the help of Venezuela, China, the European Union, Spain, Brazil, Mexico, Russia, and South Africa, along with smaller amounts of assistance from a number of other nations. Due to the solidification of bilateral cooperation agreements on the human rights front, the European Union has lifted the diplomatic sanctions it imposed on Cuba in 2003. These sanctions, which originally were installed as punishment against Havana’s often impaired human rights record, were aimed at discouraging high-level communication between major European and Cuban officials, while also banning any number of financial and commercial arrangements. These may have had a significant residual impact upon Raúl’s decision to sign a UN human rights accord, as well as Havana’s decision to offer cell phone and computer access to all Cuban citizens.
The European Union has invited socialist Cuba to engage ‘in a formal political dialogue’ which may ultimately encourage Washington to re-align its goals toward Havana with those of the international community. The arrival of European Commissioner for Development of Humanitarian Aid, Louis Michel, has solidified economic and political ties between Havana and the EU. Also Cuba and Russia have entered into a series of agreements on economic and social issues. In addition, further allocations of EU emergency aid is to be determined in the near future, with an emphasis on vivifying economic development on the island during the period of 2008-2013. This newfound cooperation between Cuba and the countries of the EU has reignited U.S. business interests on the island and prospects of lifting the embargo. In fact, from 1999-2007, the blockade has prevented an estimated 3,500 investments from taking place on the island, resulting in $232 million in missed foreign investment opportunities involving the U.S. alone, according to MINVEC (Cuban Ministry of Foreign Investment and Economic Collaboration). These major disruptions in the natural flow of foreign capital may be enough to invite U.S. policy reform, if only to better serve its own self-interests.
With the upcoming elections, a major revision of U.S. foreign policy toward Cuba may be coming fast upon us, depending primarily on the outcome of the presidential race. While Republican candidate John McCain maintains an uncompromising stance on the embargo, with him guaranteeing more of the same, Democratic candidate Barack Obama has asserted his willingness to engage in an open political discussion if sworn in as president. The political tone of the Democratic-dominated Congress might be open enough to lead to the reversal of the 46 year-old embargo, particularly if the U.S. business community more aggressively urges its preference for the removal of any restraint of trade and travel conditions with Cuba.
The normalization of ties with the E.U. is already initiating an economic and political surge on the island that is bound to rejuvenate its multiple foreign ties. Due to the immense damages caused by Hurricanes Ike and Gustav, Cuban Foreign Minister Perez Roque has been upgrading relations with a myriad of nations including Mexico, in hopes of securing aid and new commercial ties. Although these relations almost dissolved under President Vicente Fox (2000-2006), remaining ties have stabilized with the signing of a new migration agreement under current President Felipe Calderón Hinojosa. The accord was constructed to combat human trafficking of Cubans to the U.S. through Mexico. Further agreements have been aimed at the economic restructuring of the island first and foremost, then a subsequent initiative to end the U.S. economic embargo. Thus far, the Mexican Senate has assured Roque of its favorable vote at the UN general assembly that just took place.
In relation to South Africa, Cuba has continued to post several thousand medical personnel there, along with 320 staff members, who are now resident in the country and who work in such fields as health and construction. As of September 12, 2008, the Cuban Medical Brigade carried out its 17 millionth consultation, affirming Raúl’s policy of international outreach, with a special role to be played by Cuban medicine.
Cuban medical practitioners are once again expanding their scope of operation into the Middle East. Even though Cuba has sustained relations with Qatar over the past 15 years, a medical alliance between the nations awaited to be implemented until recently. This ‘medical collaboration’ includes travel around the territory by nine nurses and a doctor, accompanied by surgical and intensive care specialists. This bilateral expansion of Cuba’s healthcare exchange program continues to impact nations across the continental divide, emphasizing the island’s humanitarian outreach as one part of the numerous reform efforts brought forth under the Raúl Castro administration.
In Africa, a document recently was signed reaffirming bilateral relations between Cuba and the Congo by the Congolese Health Ministry and the Cuban Bio-Pharmaceutical Laboratory to combat malaria and other ‘vector-transmitted diseases.’ Through this agreement, the presence of Cuban medical practitioners will be utilized in Congo as a means to ‘expand bilateral cooperation in the fields of health care, education, and sports.’ Currently, over 450 Cuban medical specialists have participated in this exchange program with the African nation. The extension of Cuba’s advanced medical programs has contributed to another facet of ‘Raúlism’ and his deepening of diplomatic relations abroad.
Venezuela and Cuba are in the process of increasing their joint production of petrochemicals, enhancing the refinement of crude oil, along with the production of a line of fertilizers. With the U.S. Geological Survey now reporting that as much as 9 billion barrels of oil and 21 trillion cubic feet of natural gas reserves could lie within the North Cuba Basin, it is predicted that testing well production in the immediate area could begin next year. Exploration efforts will be led by the Spanish oil company, Repsol, and may verify the possibility of more sites being prepped for oil drilling before 2010. Cuba continues to rely on Venezuela for a supply of 93,000 barrels of oil per day in exchange for medical services of thousands of Cuban practitioners. The emergence of the island’s offshore oil industry appears to be a very promising development, representing yet another step Raúl has taken to further transform the economy and expand trade relations. The added emphasis behind such bilateral petrochemical projects significantly has contributed to Raúl’s revitalized focus on the full range of Cuba’s international relations which increasingly favor South-South bilateral ties, but are ever-mindful of the now blossoming relations with the E.U.
Uncovering the ‘Human’ in Human Rights
Striving for a sense of continuity and managing a range of contemporary reforms has thrust the Cuban people toward the beginnings of a higher standard of living and the advancement of social justice within society. While reforms are in the air, they hardly have all been realized. As Raúl continues to restructure government control, he is calling for one initiative after another to ensure the expansion of citizens’ rights. Furthermore, since Raúl’s rule commenced, his administration has carried out an astonishing 215, 687 consultations with the public in addition to hearing 1.3 million proposals, some of which already are being instituted. These initiatives, which involve over five million people, touch on any number of current issues while the government ensures the public that ‘all the proposals will be able to be applied entirely.’ Clearly, Raúl’s indefatigable efforts are not being ignored, as he continues to implement a variety of modest pro-freedom projects which increasingly have gained legitimacy in the eyes of the average Cuban.
On June 14, 2008, Cuba launched ‘Together with You,’ a government-endorsed movement to spread awareness of HIV/AIDS among men. This dynamic treatment of AIDS has been broadened to include planned proposals to affirm same-sex unions scheduled for 2009. The initiative backed by Raúl has once again surpassed the pace of comparable U.S. social reforms, pushing toward collective equality by also providing governmental coverage of applicable gender-reassignment surgery. Given the conservative nature of Cuban society, these monumental decisions, beginning with the abolition of anti-sodomy laws in 1979, has now surpassed faltering U.S. progress toward tackling homophobia. Up to the mid-1990s, Cuba was routinely condemned for its intolerance, at least until the release of the film Strawberry and Chocolate. With the screening of a film exhibiting homosexuality, Ricardo Alarcon, president of Cuba’s National Assembly, affirms the idea that ‘socialism should be a society that does not exclude anybody.’ In other words, Alarcon’s statement conveys the need to redefine and expand the definition of marriage, reforms which presently rest in the government’s hands. The decision to discuss same-sex unions is yet another indication of a more pluralistic agenda developing within Cuban society.
Raúl Castro’s concern for human rights may extend beyond symbolic reform, and instead may cater to the more moderate beliefs of an overwhelming majority of the populace. The adoption of the Covenant on Civil and Political Rights under Raúl could be a fundamental step in pursuing forward-looking measures which were all but ignored during the Fidel era. These accords grant basic civil liberties regarding: freedoms of religion, equal protection under the law, self-determination, peaceful assembly, and the right to exit from the country, as well as a lawful right to privacy. In addition, the International Covenant on Economic, Social and Cultural Rights guarantees citizens the right to employment, fair wages, trade union guarantees, access to social security, education, and the ‘highest attainable standard of physical and mental health.’
Furthermore, the present Cuban administration is making strides toward greater economic and social freedom and saw itself vindicated when the UN General Assembly condemned the U.S. embargo by a vote of 185 out of the organization’s total membership of 192. Raul’s painstaking efforts to begin ensuring islanders’ basic human rights were apparent in the country’s 17th successful plea to remove the ‘genocidal blockade policy.’ The resolution, entitled ‘The Necessity of Ending the Economic, Commercial and Financial Blockade Imposed by the United States of America against Cuba,’ was presented to the UN General Assembly by Cuban Prime Minister, Felipe Perez Roque. In fact, over the last 16 years, the international community has vehemently opposed the blockade, with last year’s results leaving only three nations in support of the U.S. policy (Israel, the Marshall Islands, and Palau) in the hugely lopsided vote. This year the Marshall Islands abstained.
Skimming the Surface of Social Revolution
In order to eliminate the excesses of bureaucratic intervention and to encourage an increase in governmental efficiency, Raúl is working toward a potential merging of the Ministry of Economy and Planning with the Ministry of Finances and Prices. These vital adaptations may begin to curb bureaucratic excess and ensure a national transition toward equality. Through the restructuring of these agencies, Raúl plans to simplify the functioning of government enough to allow for future coordination among the merged ministries.
Let Cuba be Cuba
In the words of the late Pope John Paul II, ‘may Cuba, with all its magnificent potential open itself up to the world, and may the world open itself up to Cuba.’ Although Cuba may engage in more open foreign relations, Raúl assured the Cuban public that socialism will continue to reign after the long-awaited EU negotiations. Now that these have been concluded and have become the bedrock of EU-Cuban relations, the terms of normalization between the two sides are bound to take place within the constraints of Havana-determined economic and social development, along with a European consensus. As long as Fidel finds ‘perfection’ in his brother’s policy changes, the regime is unlikely to undergo more than minimal reforms that suggest only ‘cosmetic’ restructuring.
In spite of Raúl’s call for drastic reforms, the country’s development rests in the ability of his administration to act upon foreign investment opportunities. With the re-establishment of bilateral relations with a multitude of global partners such as China, the E.U., and Venezuela, newfound economic advances have become an assured route to the island’s recovery from Hurricanes Ike and Gustav. Raúl’s own silent storm, which is based upon renewable energy, offshore oil, and agricultural reform, may secure Cuba on a path to ‘greater openness and freedom’ for the island’s citizens. The expansion of quasi-democratic policies may lead to an economic revival and the lifting of the U.S. embargo, which would end a period of intransigence on the part of the U.S. which now may be nested by an Obama presidency. This call for stark structural change truly has moved the country away from the constrictions of ‘Fidelismo,’ making way for an epoch of genuine revolution via a good society. Now, the era of ‘Raúlism’ may truly have a definition that counts.
This analysis was prepared by COHA Research Associate Melissa Penn
November 4th, 2008