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HavanaJournal.com: Cuba Business

After Castro, don’t expect any sudden changes in economic policy

Posted April 09, 2005 by mattlawrence in Cuba Business.
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Question: What economic path will Cuba take after Fidel Castro?

CUBA

Answer from William Rogers, a senior partner at Arnold & Porter and former U.S. assistant secretary of state for inter-American affairs: Cuba’s macropolicy, both short term and long term after Castro, will be decided in Havana, not in the United States. But whatever course the Cubans choose, it is unlikely that they will scrap his eccentric brand of socialism wholesale and overnight, wildly inefficient though it has been. One should not assume that Cuba will suddenly decide to jettison its own in favor of the experience of some other nation. Certainly, the Cuban people will be better off when Cuba opens up its economy and rejoins the international financial system. But it is impossible at this juncture to predict how it will do so, or whether quickly or in deliberate stages. It is doubly difficult to predict how the administration of the day in Washington will react, or to say when and how it will dismantle its own misguided economic policies toward the island. One might hope that post-Castro Cuba will shift, prudently but deliberately, to a growth-oriented, outward-looking system, but the process is likely to be less than tidy. And we must accept that it cannot be managed by outsiders.

Answer from Stephen Johnson, Latin America policy analyst at the Heritage Foundation: There are a lot of ‘ifs’ about a post-Fidel Cuba because Cuba runs on the commanding strength of Fidel Castro’s personality. One question is whether brother Raśl Castro would be Fidel’s successor. Another is if he would attempt to soften the regime so the United States would lift sanctions and do business. Raśl reportedly admires China’s market reforms, although his brother has dismissed them. Another ‘if’ might be whether aid from Venezuela and other donors could eventually boost Cuba’s national income toward a break-even point, eliminating the need for market reforms. Fate or politics could get in the way. Raśl might die first, making succession less certain. Cuban citizens might rebel against new leaders, which would bring the economy to a halt, provoking chaos. In the best of scenarios, in which a national dialogue emerges and helps dissidents and military leaders to negotiate competitive elections, Cuba would require massive injections of aid.

Answer from Beatrice Rangel, president of AMLA Consulting: Cuba post-Castro will certainly be capitalist, as Castro’s power structures are self-centered and thus will most certainly fail to succeed him. On the other hand, Cubans are educated and reasonably well fed; thus the country represents a far more attractive market than many Latin American nations. With a well-educated and disciplined work force and the creativity of the Cuban soul, we shall witness the Cuban miracle once Castro exits the political scene. I do not see how the U.S. would block the entry of Cuba into the World Bank and the IMF.


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Member Comments

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On April 09, 2005, bernie wrote:

The last sentence in this article really takes the
cake.  The worse action the CUBAN goverment, would be
the entry of CUBA into the world bank and imf.  Just
look at the countries that hooked up to the imf and
world bank.
CUBA has survived without these two organizations for
the past 45 years, please don’t even think about entry
into the imf and world bank.

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On April 09, 2005, johnjames wrote:

The posts above represent typical neo-con banal tripe and platitudes. Capitalism brings misery and poverty to small undeveloped nations. Representative “democracy” allows the US to bankroll its puppet candidate who upon winning sells out his country and gets fabulously wealthy in the process. These traditional oligarchs are quintessential parasites and traitors. Simply look at pre-Revolution Cuba or El Salvador or Guatemala today. The Cuban “miracle” will not happen at least not in the form envisioned by that Neanderthal Beatrice Rangel and her fellow sub-cretin morons at CANF. Cubans know that any inclusion within the US / Global Capitalist orbit spells doom for the tremendous social achievements of the Revolution and will they will soundly reject such overtures. Rangel’ phenomenally stupid statement “Castro’ power structures are self-centered and thus will most certainly fail to succeed him” exhibits the tremendous waste of US taxpayer dollars squandered on the likes of her and her fellow gusano “freedom foundations” that live parasitically off Bush’ politics-driven and perverse agenda. Remember that there was only a strengthening of resolve in North Vietnam when Ho Chi Minh died. Rangel’ faulty reasoning is two-fold: first, she thinks everyone is as obtuse as she is and therefore can get away with her profoundly ignorant and stupid musings; secondly, she thinks everyone is equally as selfish and greed-driven as herself. May Rangel and all her fellow pig-gusanos fouling the air on Calle Ocho rot in hell!!

John James

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On April 11, 2005, Cubana wrote:

It is so typical of people who hold views like John James to be abusive to those who do not share those views. Do you not understand that name calling does not add anything to the debate and simply shows that you have lost the argument? There is no reason why Cuba should lose any gains made in the fields of healthcare and education if it changed its economic system - witness Vietnam and China. Similarly one only need look to the example of Chile to see it is possible to have a successful economy after a period of dictatorship.

Bernie - the only reason Cuba survived without the World Bank and the IMF is the yearly bailouts it received from the Soviet Union. When this was cut off the Cuban economy went into freefall leading to the “Special Period in peacetime” when Castro had to make small scale economic liberialisations to save the economy. Subsidised Venezuelan oil is now keeping the economy afloat.

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On April 11, 2005, jesusp wrote:

Mr. Johnson and particulary Mr. Rogers analysis are much more realistic. The main problem with Ms. Rangel’ point of view is that she has trouble accepting, as most Cubans in exile do, the reality of Mr. Rogers’ statement with regards to a post Castro Cuba “that it cannot be managed by outsiders”

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On April 12, 2005, johnjames wrote:

Cubana, I reserve name calling for the vilest of the vile (e.g., KKK, Nazis, neo-Nazis, feces-eating Miami gusanos like yourself). Your reference to China exposes the stupidity of your specious logic. China embodies the most heinous aspects of capitalism with none of the benefits of socialism. China has been converted to a huge, hellish sweatshop designed to bestow economic and military parity with the US for the inevitable armed conflict within 10 years. Bush and his coterie of Nazi goons are fulfilling the prophesy of Lenin: “The capitalists will sell us the rope we hang them with.” There is limited free health care in China today. Chile is enjoying a modicum of prosperity due to abnormally low labor costs resulting from Pinochet’ union smashing and the murder of union leaders. The Bush administration via Powell published a vile fascist document last year outlining steps to accelerate “freedom and democracy” in Cuba and to impose US hegemony in post-Castro Cuba. Cubana, if you could read, you might glean the obvious that the US plans to revert Cuba to colony-status. The handful of maggot parasite traitors currently fouling the air in Miami would regain their overlord status and sellout their country and countrymen (again) to the highest foreign bidder in exchange for wealth and privilege. In other words, 10th verse, same as the first. The US will privatize key components of the Cuban public sector (e.g., housing) causing tremendous social displacement and misery. The result will be another typical and disgusting Third World paradigm of private affluence and public squalor. Cubana, if you stopped drinking for a few hours, your sotted brain might muster the cognitive ability to understand that tourism is the engine driving the Cuban economy today. Moreover, if you had read a newspaper in the past 4 months, you would be aware of the huge oil reserve discovered in joint venture with Spanish company off the northwestern coast of Cuba. The forthcoming oil will make Cuba self-sufficient followed by unprecedented prosperity. You pathetic little gusano maggots will have to resign yourselves to the fact that you will never regain your beachfront properties in Havana nor will you ever be welcome there. Eat shit and die you Nazi bitch!! 

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On April 12, 2005, Cubana wrote:

John James: your latest rant just proves my point about losing the argument. I find it pathetic that there are still people in the world that will not understand that communism has always FAILED wherever it has been inflicted on a country and has always had to be sustained by force rather than consent.

FACT: A huge oil reserve has NOT been discovered off the coast of Cuba - it is a minor discovery, although this may lead to more substantial finds but this is not by any means certain.

PS I am NOT Cuban-American but BRITISH and therefore when I do visit Cuba as a turista I am made very welcome!

Grow up!

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On April 12, 2005, johnjames wrote:

Lose the argument? By whose criteria? A borderline retard who can barely construct simple English prose? A neo-Nazi who gets teary at “God Save the Queen” but heartily endorses an illegal war that has slaughtered thousands of innocents? An intellectual Neanderthal who thinks the free-market offers hope to poor nations? By your logic, China is a failed state and one hundred million barrels of oil is a “minor discovery.” You proudly display your ignorance and stupidity. Read a book. Get a clue. But most of all, spare us your insufferable drivel.

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On April 12, 2005, Cubana wrote:

John James: You have lost the argument because you have from the start of your rant resorted to offensive name calling and abuse. Only those on weak ground do so - the force of one’ argument should be sufficient.

FACT: Cuba requires about 150,000 barrels of oil a day. This is about 54m barrels per year. Thus a 100m barrel discovery would account for about two years consumption and last for about four (as Cuba currently produces about 75,000 barrels per day) IF all the oil can be extracted - certainly not guaranteed). Therefore NOT a significant discovery.

PS I personally do not want a monarchy so certainly do not get teary-eyed at God Save the Queen (unless its the Sex Pistol’ version!). And the majority of people in the UK were against the Iraq war.

Toodle pip!

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On April 13, 2005, johnjames wrote:

Dear Brit-Bitch (I don’t want to insult real Cubanas): As usual, you miss the point and foul the air with your specious logic. I reserve name calling for the vilest of the vile which includes Nazis like yourself who would like to see the Revolution replaced with bourgeois values and hypocrisy. I excoriate vermin like yourself for spouting neo-con platitudes about socialism and failed states. I spit on maggots like you who envision condos and fast food restaurants along the Malecon and who claim the free-market creates widespread prosperity. It does not. Free-market politics and “democracy” in small, undeveloped nations generate grinding poverty and despair for the masses and obscene wealth for the small traitor class that allows entry to foreign marauders. Cuba suffers from US-caused economic mayhem, not political despair. The US would be deluged with refugees if Bush offered Central America the same political asylum and economic incentives. But the US cannot accept a socialist state in its own backyard, much less a defiant, prosperous socialist state. So it wreaks untold havoc on Cuba and then attributes the resulting hardship and chaos to inherent failings of the system. All to please those feces-eating gusanos in Miami while it coddles and nurtures the most vicious totalitarian regime in history.

Regarding oil numbers, 100 million barrels is huge to a country besieged by the economic behemoth of the world. Every extra drop staves off looming calamity. This axiom is reinforced by the precarious fate of Chavez who probably will be assassinated by Bush. In character with most neo-con swine, you trivialize the important and exaggerate the trivial to advance your bogus logic. Again, eat shit and die you Nazi-Bitch!!! Hasta la victoria siempre!!!!

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On April 13, 2005, Cubana wrote:

John James: glad you got your latest rant off your chest - it must have been excruciatingly painful lying there.

Calling me a Nazi shows how pathetic a person you are. My country fought alone against the real Nazis in the first two years of the Second World War while the US stood on the sidelines wringing its hands and the Soviet Union entered into pacts with the Nazis to carve up Poland. The only reason people like you are so hooked up on the Cuban “Revolution” is that as the last vestige of socialism in the world its one in the eye for the country that you really hate - the US and sod the pain the Cuban government’ ecomomic system inflicts on the Cuban people.

The US economic embargo on Cuba is wrong and should be stopped. But that is not the reason why economically Cuba is such a basket case - the major cause is the failed socialist centrally planned economic system it operates. There have been NO successful, prosperous socialist economies in the history of the world so to claim Cuba would be without the US embargo is preposterous!

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On April 13, 2005, johnjames wrote:

Brit-Bitch: Why do you insist on making such a public display of your ignorance and stupidity? You repeatedly utter the falsehood of failed Communist states. China’ growth rate for the past five years has ranged between 7% and 9%. Is that your definition of failure? China has replaced the US as the economic engine of the world.

Your blanket indictment of centrally planned economies is ignorant and stupid. Again, I point to the case of China. Also, Cuba’ emphasis on tourism will bring great prosperity to the island within 5 years. That is why some of the Caribbean nations secretly lobby to maintain the embargo. They realize that Cuba is the 500-pound gorilla in the tourism game. The improving energy picture will facilitate this growth. Even if the latest oil discovery proves marginal, Chavez is not going to be defeated in the polls meaning Cuba has access to basic oil for the next six years by which time it might be self-sufficient and/or tourism exceeds expectations.

No nation on earth (save Vietnam) has withstood the fury of the fascist kingdom like Cuba. You dismiss the embargo as wrong but imply it has done only nominal harm. Your ignorance on this point is astounding. The Torcelli Act combined with the Helms-Burton Act have put this tiny nation in a horrific bind. The world largely shuns Cuba for fear of invoking US wrath. Any ship that docks in Cuba cannot dock in the US for six months. Any country that trades with Cuba risks revocation of trade agreements including quotas. The Cuban embassy in France cannot readily procure toner cartridges for photocopy machines because the original French vendor was bought by a US concern who cancelled the service contract because of the embargo. The list of similar economic assaults is endless which in the aggregate explain the dire conditions in Cuba. Compounding the problem is denial of economic development loans. Lift the embargo and you will see phenomenal prosperity in Cuba. That is why the gusanos in Miami fight it so strongly. They realize that even the slightest warming of relations will jeopardize their interests. Concessions in the spirit of rapprochement will force them to abandon property claims which is anathema to them.

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On April 14, 2005, Cubana wrote:

Oh dear John James, hoisted by your own petard! The only reason that China is NOW such an economic success is that it has ditched its discredited soviet-style state planning for a market economy. China is communist in name only, something that Raul can see but Fidel refuses to.

Certainly tourism has been a lifeline for the Cuban economy over the last several years. However, Cuba is not necessarily a cheap Caribbean destination for what you get in the way of services and certainly not compared with Florida. If the travel embargo were lifted there would certainly be a large number of US tourists going there for curiosity reasons but I doubt this would continue in the long term. Certainly from talking to British tourists on the way back to the UK Cuba will not get a lot of repeat business until they improve their services and facilities.

Sorry, but you are wrong in placing all Cuba’ problems at the embargo’ door. The dire conditions in Cuba are mainly caused by Fidel Castro’ economic policies and the embargo is a convenient scapegoat that “useful idiots” like yourself fall for. FACT: Cuba is the world’ largest per capita debtor (it owes $12bn abroad) because it does not pay its bills. That is why foreign firms and countries are reluctant to trade with Cuba and it is so very sad that Cuba’ economic outlook will not improve until that stupid old man is dead.

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On April 14, 2005, johnjames wrote:

Brit-Bitch: Your stupidity becomes ever-glaring with each post. China has allowed limited free-market initiatives in the manufacturing sector to achieve parity with the US. Once said parity is achieved, the spots of the leopard will reappear and the neo-bourgeoisie will be purged mercilessly. Meanwhile, the vast majority of the population receives slave wages paid by the state in jobs mandated by the state. You will not see private property rights in this lifetime despite hoopla in the media last year suggesting overtures in that direction. You certainly won’t see any private ownership of farms. And private property rights are the lynch-pin of a capitalist society. China is the polar opposite of a free-market system. It is simply harnessing the greed-factor in certain key manufacturing sectors on an ad hoc basis. Any Chinese citizen who publicly made statements that China was not a Communist state would be summarliy arrested and detained indefinitely. You need to spend a week in Honduras, El Salvador and Guatemala. You will quickly note that life is immensely better in Cuba for the average citizen. 

As a tourist destination, Cuba is sui generis. It will outperform all expectations when the embargo is lifted, providing of course maggot-Nazi’ like yourself are not allowed to destroy its culture and character with fast-food restaurants and the rest of the bourgeois schlock you find so appealing in Florida. It’ a shame they allow the likes of you enter my country. It makes me want to wash my hands 20 times.

If you possessed any cerebral wherewithal, I would suggest you read some history of Castro and the Revolution and the incalculable harm the US has inflicted. You would not call him a stupid old man. Fidel has more intelligence and character than the combined lot of those drunken sots you call Parliament including that scum-bag liar Blair, aka Bush’ poodle.

One fact is very obvious. You have no real knowledge of Cuba or Latin America. But then you have no real knowledge of anything given your shamefully ignorant assessment of China. You simply rehash neo-con tripe heard the night before on Fox News or the Nazi equivalent in Limey-land. Given that you bring nothing to the table warranting reply, I sign off wishing you eternal anguish as payment for your rancid character and criminal stupidity. Indulge yourself with Chihuahua-like barks and snips. I won’t read them. Rot in hell Nazi-Bitch!!

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On April 15, 2005, Cubana wrote:

John James: a few observations on your latest rant:

You state in respect of China that “the vast majority of the population receives slave wages paid by the state in jobs mandated by the state”. Sounds exactly like Cuba! There the average wage is the equivalent in Cuban pesos of about $15 per month (such a blow somewhat ’oftened’ by food rations which are supposed to last a month but can’t, low rents and utility costs). Anything worth buying can only be bought in the dollar stores at high mark-up or on the bolsa negra.

China DID amend its constitution to enshrine in law private property rights on March 14 2004.

Cuba is only sui generis because it has been in a time warp for the last 45 years. Nice for the tourists but they can leave after a couple of weeks of gazing at decaying buildings or travelling in 50’ era motor cars. The locals have to live with it all.

You are signing off? I am devastated!

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On April 18, 2005, andrei c wrote:

john james: what books do you recommend for me to learn about real side of the events you’re speaking of?