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Posted September 21, 2004 by Dana Garrett in US Embargo

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Z-NET | Tim Anderson

Hidden behind the rhetoric of ‘democracy’ in the 458 page report titled ‘Commission for Assistance to a Free Cuba’, and underlying the Bush Regime’s plan for a ‘transition’, are all the major features of a US economic blueprint for Cuba. These features can be read in conjunction with packages administered by the US controlled World Bank, in a wide range of indebted developing countries.

The Bush approach to the blockade has been characterised by heightened ‘human rights’ language, designed to isolate Cuba internationally, and a dangerous escalation of threatening language.

However there is also a more naked corporate agenda, no doubt driven by the same corporations that fund his political machine (such as Halliburton and Bechtel) and are presently enjoying big construction and army supply contracts in war ravaged Iraq.

Although President Bush says he is making an “offer”, a “proposal” and a “challenge” to Cuba, there are currently more obstacles than ever to lifting the blockade. As an official at the US Interest Section (SINA) confirmed to me last week, there are now “more conditions” and there is “no explicit minimum” set out by the US Government. If Cuba made gestures or ‘concessions’ towards the Bush Regime, there is no guarantee at all that the US would respond in kind.

The SINA also talks of a “carrot and stick” approach. The latest “stick” (more restrictions on family visits and remittances) mainly hurts the vulnerable Cuban-Americans and their families; while the “carrot” seems to be promises of post-Revolution ‘aid’ to some Miami based opposition groups. However the SINA official also confirmed to me that the US may be making promises it cannot deliver. In other words, it could well renege on promises of financial support to Miami, if it achieved its political objectives in Cuba. Such was the case in post-Sandinista Nicaragua.

Economic demands well beyond the original compensation claim for property nationalised in 1960s are now on the US ‘shopping list’. In May 2002 President Bush added to his demands for US supervised elections, a claim for Cuba to make:

“significant reforms based on the market .. to change control over private economic activity .. [so that] private employers can negotiate with and pay their employees as they wish .. they must respect the right to property .. workers employed by foreign companies must be paid directly by their employers”

The SINA official revealed that her office had helped edit the 2004 report so that language like “Cuba must/will do” was changed to what the US will do “if Cuba requests”. Yet, despite this linguistic device, the same economic themes were repeated in 2004, in even more detail.
The US now claims it will help a ‘free Cuba’, but only if “requested”:

- to establish “the core institutions of a free economy”

- to “decontrol prices, including energy prices”

- to “rejoin the IMF and World Bank ... as quickly as possible”

- to encourage private foreign investment

- to “design an effective privatization
program ... and prepare enterprises for privatization”

- to settle outstanding property claims

- to establish a new finance ministry

- to “promote ownership of private property”, and

- to establish “free and efficient labour markets”.

The US also suggests a range of short term aid and says it may help in “modernising infrastructure” and “addressing environmental degradation”.

What does this all mean? Reading between the lines, and drawing on the experience of US-backed World Bank structural adjustment programs (now called ‘poverty reduction’ strategies), we can confidently say that the Bush plan aims at:

- establishing financial control (probably led by the World Bank) of industry and resources through crippling debt - partly through the compensation claims from the 1960s (several billion dollars), but also through new debt to fund the private contracts for infrastructure (several more billion dollars);

- establishing the optimal conditions for private corporate entry into Cuba - that is, minimal regulation, deregulated prices, the ability to hire and fire workers and to set wages (there is no ‘negotiation’ of wages with giant corporations);

- reestablishing US private control of key Cuban strategic industries, such as oil, sugar, nickel, and tourism; an equity for compensation swap could be offered, which would mean Cuban public assets would be really given away to US companies like Bacardi and Esso;

- rationalising and integrating Cuban industries into corporate global plans - this would mean the dismantling of a large number of ‘inefficient’ industries, the sacking of large numbers of workers, and reduction of all new investment into the key resource industries;

- ‘marketising’ of all basic services, with just a ‘safety net’ of state backed primary education and some emergency health services - higher education and higher level health services would be progresively privatised, thus limiting access to a small wealthy class, and probbaly to Havana.

This sort of financial discipline is of course already well established throughout much of Latin America and Africa, principally through World Bank monitored systems. It has led to unpopular privatisations of water supply, roads and health, and to disastrous collapses in social well-being in countries as diverse as Uganda, Indonesia, Papua New Guinea, Argentina and Bolivia. It invariably involves the privileging of export industries and a diminution of public services and social security.

The proposals for “modernising infrastructure” and “addressing environmental degradation” are certainly areas needing attention in cash-starved Cuba, but this plan would make investment in the construction of new roads, water supply and waste treatment (in Cuban cities) conditional on large contracts being awarded to private giant companies (such as Bechtel and Halliburton), with the main capital being paid for from an increase in public debt. Furthermore, there would only be new investment in infrastructure linked to private export industries, and environmental standards would be under heavy attack from the newly privileged private resource industries.

The latest report says the US would “provide examples” to Cuba from ‘transition’ privatisation experience of Eastern Europe - a corrupt disaster by any account, involving a ‘fire sale’ of assets to US corporations, and roundly condemned by former World Bank Chief Economist Joseph Stiglitiz in his 2002 book Globalisation and its Discontents. Life expectancy in Russia and the Ukraine actually fell in the 1990s, while poverty and unemployment exploded during this ‘transition’ period. In Mongolia’s ‘transition period’ in the 1990s, the rate of maternal mortality almost doubled.  For all the pain of Cuba’s ‘special period’, the country escaped such appalling developments.

The general impact of the Bush Regime’s economic plan for Cuba is not hard to assess because it has been seen many times before. There would be massive dislocation and unemployment, a collapse of social security and health guarantees, the privatisation and privileging of key export industries, and the fixing of low wages and high prices by large private companies. Social institutions and solidarity would be attacked as the new investment plans forced survival strategies on people operating as individuals in the new corporate dominated ‘markets’. Labour unions would be heavily restricted, with organised actions banned. Several thousand Cubans would benefit from their links with the newly privatised companies and commercial spin offs, but several million Cubans would be marginalised and driven into real poverty. Such is the case in Haiti, in Mexico, in Guatemala, in Peru and Argentina.

Even Cuba’s world famous health system would not be spared. In its 2004 report the World Bank recognises Cuba’s extraordinary health achievements, including an acknowledgement that much of this success was due to the “sustained focus of the political leadership on health for more than 40 years”. However the Bank suggests that such a comprehensive, publicly funded system in a cash poor country is just too expensive, and questions whether the system can survive the pressures for a “more open and free society”, including the pressure of “competition from an economy that relies more on the dollar.”

None of this is clearly explained in the Bush regime’s new report, but we need only look at the economic features of the report, and refer to the structural adjustment and transition experiences of countries such as Uganda, Indonesia, Papua New Guinea, Bolivia, Peru, Argentina, Mongolia and Russia to get the picture.
However Bush is not the last word in US politics. There are strong pressures within the US Congress and the US business community to resume trade with Cuba. The recent contracts signed in Havana are evidence of this, and they have opened a gap in the blockade. Perhaps John Kerry as President would lower the aggression and encourage further openings.


  1. Follow up post #1 added on September 23, 2004 by Jesus Perez

    Pressure,pressure, pressure will bring about capitulation and then we can go in and run Cuba like we run many other countries, long live democracy!

  2. Follow up post #2 added on September 27, 2004 by Gregory Biniowsky

    I assume your statement was sarcastic in intent.

  3. Follow up post #3 added on September 27, 2004 by Jesus Perez

    Yes Gregory my comments were sarcastic. Unfortunately this seems to be the best policy the U.S. govt. can come up with respect to Cuba.

  4. Follow up post #4 added on September 28, 2004 by Gregory Biniowsky

    That is what I thought. By the way, you might be interested in the ongoing “debate” (I am not sure that is the right word for it) that I am having with a fellow in the Sustainability of embargo article. It is quite colourful.

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