Havana Cuba Business Travel Culture and Politics

Havana Cuba News

Cuba Politics News

Posted September 09, 2004 by Dana Garrett in Castro's Cuba

Email this article | Print this article | Search Havana Journal        


Peter Bohmer is a faculty member in Political Economy at the Evergreen State College in Olympia, WA. He has been active in movements for social and economic justice and has studied and taught about Cuba since the late 1960’s.

Understanding Cuban society objectively is incredibly difficult, given 45 years of unremitting US propaganda against Fidel Castro, the Cuban government and Cuban society. Even for those individuals critical of the U.S. mainstream media, constantly hearing the Cuban government called a dictatorship that has failed its people, influences our perceptions. So do interviews or discussions with Cubans who have immigrated to the United States, most of whom are very critical of the Cuban system. I urge the reader to be open to the following article which presents a viewpoint at variance with the mainstream one of Cuba. This positive, but not uncritical analysis of Cuba, is based on in-depth study of Cuba for more than 35 years, two visits to Cuba in the early 1990’s, living there for four months in 2001, and the recent trip I made with 23 students in April and May, 2004.

To understand Cuban society, we have to place the political economy of Cuba today, its successes and real problems, in the context of the following:

1. 400 years of Spanish colonialism. This began with genocidal attacks against the indigenous people of Cuba, followed by an economy organized around sugar plantations, where most of the labor force were enslaved and super-exploited Africans. Slavery ended in 1886, but extreme racism and economic segregation of blacks continued until 1959.

2. U.S. domination and aggression. During the 1895-1898 Cuban war for independence, the U.S. intervened militarily, claiming to support independence for Cuba, but then dominated Cuba economically and politically until 1959. As a condition for the U.S. ending its military occupation of Cuba, Cuba had to sign the Platt Amendment, which was the basis for establishing the U.S. base in Guantanamo, Cuba. Today in Guantanamo, prisoners from around the world are being held indefinitely with no rights and subject to brutal treatment by the U.S. military. In addition, the U.S. and Cuban elites dominated Cuba from 1902 to 1959, with the U.S. sending troops and supporting Cuban governments who were favorable to U.S. investors and undermining those who weren’t.

3. Cuba’s alliances with the Soviet Union and the Eastern bloc. In 1961, two years after the victory of the Cuban revolution, Cuban President Fidel Castro declared the country socialist and increasingly oriented its politics and economy towards the Soviet Union. The Soviet Union and its allies paid a good price for sugar and sold Cuba oil at reduced prices. They also extended many loans to Cuba. Cuba’s economy, including its technology and machinery, consumption goods, imports and exports and methods of economic planning became increasingly integrated with those of the Soviet Union and its allies. This often meant utilizing technology and using products that were below the quality available in the West. Cuba diversified its economy slowly, continuing to rely on sugar exports as its main source of foreign exchange.

The Soviet system collapsed in 1989 and ever since, Cuba has had a very difficult time maintaining socialist principles while developing a different economic model from the Soviet-inspired one. The transition to different technologies has been difficult and costly. Cuba has attempted to but has not been successful in developing an economy that is both equal and also provides an increasing standard of living for its people. The Cuban government has called the period since 1989, the Special Period.

4. Global Capitalism. Cuba is part of a global economic system that is increasingly unequal within and between countries. For example, the price of Cuba’s main export good, sugar, sells for lower and lower prices relative to the prices of Cuba imports, e.g., machines, and consumer durables like refrigerators, on the world market.

5. The United States Blockade. During the period of Cuba’s alliance with the U.S.S.R., the U.S. claimed that hostility towards Cuba was because Cuba was an extension of the U.S.S.R in the Americas. However, notice that the U.S. intervention has become even more aggressive since the collapse of the U.S.S.R, which should lead us to question the U.S. rationale in the past as well as the present. The U.S. embargo, which the Cubans call a blockade, because it limits Cuban trade with other countries besides the U.S., means that Cuba has had to pay a higher price for goods on the world market that it imports such as medicines and food, and has had to maintain a larger military budget than it would otherwise. The blockade has also significantly reduced Cuba’s ability to export, which in turns means its ability to import has also been reduced.

This is the context for understanding Cuba today. So when U.S. leaders and academics say Cuba is a failed experiment, economically and politically, they ignore this context. To me, the five points I have outlined are the starting points for understanding Cuba but not the end points. My position is a critically supportive one that examines the Cuban model and its decisions and policy. There are a few aspects that I disagree with.

The Golden Period of the Cuban Revolution

From the 1960’s to the late 1980’s, Cuba was one of the most economically equal countries in the world. Almost all production was owned and organized by the state. There was free health care, equal access to free education, and full employment. Hundreds of thousands of apartments were built in Cuban cities-often in the form of huge apartment complexes such as Alamar in Havana. In the countryside, electrification, indoor plumbing, drinkable water and basic housing was provided for almost all Cubans. Hunger and absolute poverty were overcome.

Cuba was not a utopia during this period. There were limited and insufficient consumer goods, slow economic growth with a very slow rising of the standard of living; and a paternalistic system where the government listened to the people and management listened to worker complaints but the decisions were made at the top. There were important and major gains for women in accessing higher education and entering and advancing in significant numbers in many professions but little change in the sexual division of labor at home, as women still did most of the housework.

There were striking changes towards achieving racial equality as discrimination was outlawed, and the proportion of black Cubans in secondary and higher education and in higher status jobs began to approach their numbers in the population although the top leadership in Cuban society was still disproportionately white and male. The gains for families who were poor before the 1959 Cuban revolution, particularly in rural areas, was truly impressive-in education, income, health, housing, and in being treated with respect and dignity. Cuba had truly become a society that was successful in changing for the better the lives of those who had been historically at the bottom. This is an accomplishment whose significance cannot be overstated. In the early 1980’s, in an article in the Wall Street Journal, the author grudgingly admitted that the standard of living for working people in Cuba was the highest in Latin America, with the possible exception of Puerto Rico.

Cuba called itself socialist, meaning most production was nationalized and state-owned, and production was not organized for profit but rather was centrally planned to meet the economic needs of the population. However, the population had limited power in making major economic and political decisions, e.g., on whether to develop nuclear power.

The input of the population then and now comes mainly through the mass organizations, such as the community-based Committees to Defend the Revolution (CDR), the Federation of Cuban Women (FMC), and the Cuban Federation of Workers (CTC). It is through these mass organizations as well as through the Communist Party, whose current membership numbers over a million, and whose members are for the most part respected by the Cuban people and closely linked to the grass roots, that people can express their needs. In other words, to look at this system as totally top down where Fidel orders and the people follow misrepresents the reality of a government quite connected to popular sentiments. On the other hand, a viewpoint that claims that the Cuban people and their elected representatives have the power is also inaccurate.

The Special Period

With the collapse of the Soviet Union and various economic and trade arrangements that Cuba had with the Soviet bloc, Cuban production fell by more than one third from 1989 to 1993 and Cuban imports and exports were reduced by more than two thirds. In the early 1990’s, there was widespread eye blindness and other health problems from an insufficient diet and lack of vitamins. The survival of the Cuba revolution was at stake. Cuba has survived with slow but significant economic growth and a growing consumption of necessities over the last 10 years. Nonetheless, most of the population has a lower standard of living-around 25% lower than they had in the mid 1980’s. Most Cubans, unless they have some way of earning or receiving dollars, live in poverty although they are not hungry or homeless.

Most countries in the third world or global South have had to structurally adjust their economies since the early 1980’s because of balance of payments problems, meaning they imported more than they exported, and thus, had to make deals with foreign lenders such as the International Monetary Fund in order to get loans to pay off the foreign debt they were accumulating. The resulting structural adjustment plans have increased economic inequality and reduced social spending as countries have been forced to reduce government spending and public employment and to open their country up to foreign investors.

Cuba’s structural adjustment since 1989 has been different, although they too have a major foreign debt and have struggled to reduce the imbalance between high imports and low exports. To its credit, the Cuban state, has maintained basic social services-free and available medical and dental care, free education up to and including university level, and food rations for the population at low and affordable prices, although not the quantity or variety that Cubans need and desire. Housing and utility bills are affordable; although housing is often very crowded and most people do not have phones. Infant mortality has continued to fall and life expectancy has continued to lengthen. Infant mortality, life expectancy and the health of the population is the best in Latin America and is close to that of the United States.

With the exception of agriculture, most production is still organized by the Cuban state. Although there no longer is full employment, jobs are easier to obtain and keep compared to other countries in the Americas. Most young people can find jobs although wages for most jobs are very low. The unemployed as well as parents of children under a year old receive 60 to 70% of the earnings of their last employment, and parents are guaranteed their job back when they return to work. Child care is available and affordable.

Changes in the Cuban Economy

The major changes Cuba has made since 1989 have led to some improvement in the standard of living but has created a new set of social problems. The main changes are the following:

1. Legalization and widespread use of the dollar inside Cuba. Since 1993, both the dollar and the Cuban peso are used as money. Many goods in Cuba, mainly luxuries and imports are priced in dollars or if in pesos, their prices are very high for Cubans because they are converted from dollars to pesos at the rate of 25 pesos to the dollar. For example, chicken sells at about $1 U.S. or 25 pesos per pound. Because of the high prices of these goods and services in relation to salaries, this makes these goods inaccessible to Cubans who don’t receive dollars. The average salary in Cuba is 250 pesos a month. This is worth far more than ten dollars in terms of purchasing power which is what 250 pesos can be converted into at the exchange rate of about 25 pesos to the dollar. In calculating the purchasing power of Cuban salaries, one must consider that health and education are free; and that prices are low, even in pesos, for food purchased on one’s ration card. For other goods and services, a peso is roughly equal in value to a dollar, e.g., movies or bus transportation. On the other hand, for many imports, e.g., a pair of jeans the price is $20 or 500 pesos, twice the average monthly salary; and the price of cooking oil is $2 or 50 pesos for one liter (quart). Given the lack of goods available at affordable prices, life is very difficult on a peso salary.

Both the Cuban economy and Cuban families are dependent on remittances, which is money sent by relatives to their families in Cuba. This provides foreign exchange to the Cuban government, as much of this money is spent on Cuban goods and services, and the Cuban state and Cuban enterprises then use these dollars they receive to buy needed imports. It also provides purchasing power for the 40 to 50% of Cuban families who directly or indirectly receive remittances. George W. Bush in an increased effort to destroy the Cuban economy in order to cause an uprising, announced on May 6, 2004, further restrictions on sending remittances and gifts to Cuban relatives.

In addition, some Cubans in government enterprises earn dollars. Since 1993, some highly skilled jobs considered essential pay an incentive in dollars in addition to the salary in pesos. A friend of ours who is an engineer gets $11 a month in addition to his monthly salary of 350 pesos.

2. Tourism. About two million tourists now visit Cuba annually, mainly from Western Europe, Canada, and Mexico. The U.S. government not only is putting further restrictions on U.S. tourism but is trying to limit tourism to Cuba from other countries. Tourism is the main earner of foreign exchange and Cuba is increasingly producing more of what tourists consume. Two third of each tourist dollar is now spent on Cuban-produced goods and services and thus creates foreign exchange that can be used for imports for the Cuban people.

Tourism is a mixed blessing. It creates foreign exchange but it also increases desire by the Cuban population for a first world standard of living. It reinforces sexism as young Cuban women often sell themselves to foreigners. Tourism also furthers racial inequality as black Cubans are underrepresented in the tourist sector, both in Cuban-owned enterprises and in mixed enterprises, meaning joint Cuban and foreign ownership. The government and unions have acknowledged this problem but it continues.

Much of the income generated from tourism does trickle down to the general population as it ends up with the government and in government banks. It is then used to purchase necessary imports-medicines, buses, oil, machinery, even agricultural products from the United States. On the other hand, many Cubans working in the tourist sector get most of their income in dollars, mainly from tips, which greatly distort incentives in Cuba. Highly trained doctors, engineers and foreign language specialists often do not use their education and training but instead work as waitresses, taxi drivers, hotel doormen, and as cleaning staff because they can earn much more in the tourist sector.

The tourist industry and the aforementioned remittances also contribute to a growing inequality of income in Cuba, between those who get dollars and those who don’t. Cuba, while far more equal than the rest of the Americas including the United States is much less equal than it was 20 years ago and this is a source of discontent. Most tourism is of the “beaches and sun” variety. Other forms of tourism are less destructive of socialist values and are being promoted: ecological tourism; cultural tourism (tourists coming to learn about Cuba’s history, culture and revolution); medical tourism (visitors coming to Cuba for medical care); and educational tourism, such as the thousands of Venezuelan students studying in Cuba and ourselves.

3. Foreign Investment. Cuba permits and encourages 50% ownership by foreign companies in various industries, e.g., hotels, nickel mining, and biotechnology. This is an attempt to bring in foreign capital and become more integrated into the global economy and obtain up-to-date technology to replace obsolete Soviet technology. The hope is that this can be done without being dominated by and becoming totally dependent on multinational corporations. Most contracts include technology-sharing and teaching of skills. Perhaps most important is ongoing off-shore oil exploration. Cuba currently imports one half of its oil and all of the oil used for transportation needs. Finding low sulfur Cuban oil would substantially strengthen the Cuban economy; it would make it easier for Cuba to import other goods and reduce its continued imbalance in international trade.

4. Agriculture. In agriculture, Cuba has moved away from state farms and centrally planning agricultural production. There has been a steady growth of private ownership of farms, and of cooperative ownership of the land. Organic farming techniques are increasingly used, and there has been a large growth in urban gardens. Privately-run farmers markets play an important role in supplying food. In them, farmers sell produce, above what they are required to sell to the state, at market prices. These reforms have significantly increased agricultural production over the last 12 years, particularly the organic production of fruits and vegetables. Food consumption has increased significantly although meat, except for pork is still scarce and expensive. However, these reforms have also created a group of high-income Cubans who sell produce at the farmers markets at prices that are high for those Cubans who do not have access to dollars.

5. New Industries. Cuba has an educated and skilled labor force. There is significant research and development resources invested in state industries such as medical instruments, and developing and producing medicines for AIDS, for curing cancer, hepatitis, malaria and other diseases. This is part of what the Cubans call biotechnology. There is a growth in the development and production of computer software. Cuba hopes to sell these products globally although exports in this sector are growing much slower than the Cuban planners had projected. The continuing hope is that this industry could be globally competitive, pay a livable wage and bring in substantial foreign exchange. Not surprisingly, the U.S. is trying to prevent these sales by pressuring other nations not to buy Cuban goods, but there is interest in developing and marketing these products even by U.S. firms.

Overall Assessment

Cuban’s survival in the face of the U.S. attempt to destroy the Cuban revolution is a great achievement as is Cuba’s continuing to provide for the basic needs of its population. For example, every single person in Cuba has free dental and eye care. Every person in Cuba with AIDS gets free, high-quality retroviral drugs.

Our responsibility as U.S. residents is to stop the criminal embargo/blockade against Cuba that is being waged by the U.S. government in our name. For 45 years, the people in power in the United States have been unwilling to accept a sovereign, independent Cuba. That is the main reason behind the past and present immoral and illegal U.S. actions against Cuba; we have the responsibility to change U.S. policy. During our six weeks in Cuba, we were all impressed by how well we were treated and received by the Cuban people and government who consider the U.S. people, but not the U.S. government as their friends. It is up to us to make the difference between the people of the U.S. and our government greater, to make our government’s aggression against Cuba so unpopular in the United States that it is forced to accept Cuban sovereignty.

If the people in the United States are successful in getting our government to end the blockade, U.S. tourism to Cuba will grow exponentially. This will cause new problems in Cuba such as a growing desire for a first world standard of living, but it is up to Cubans who unanimously want the blockade to end, to deal with this.

In so far, as we work to end the blockade, we have a right to humbly criticize the Cuban system although the U.S. government does not have that right given its past and present policies. Cuba is as just as any country in the world; it deserves critical support from the people of the U.S. but there are real problems.

Cuba has not developed a workable strategy for simultaneously achieving economic and social equality, people’s power and an improving quality of life. The main efforts of the Cuban government have been to survive, to maintain basic services and to increase economic production. They have accomplished the first two of these objectives but have not so far developed a strategy for sustainable economic development. Economic growth is necessary; otherwise increases in needed services such as public transportation comes at the expense of other needed goods and services. Possibly, increasing worker participation and power in work places could lead to higher productivity and production.

Income inequality is still worsening. Income equality could be improved by increasing the types and quantity of goods available at subsidized prices on the ration cards, and/or moving to one currency and price system and raising wages substantially for those getting paid in pesos. However, unless production is increased substantially and higher incomes are taxed more heavily than now, these reforms will cause huge inflationary pressures as demand increases; and increase balance of payments problems as imports increase.

Cuban society is not the dictatorship you hear about in the media here; people do speak up and criticize, and there is no torture or disappearance of dissidents. There is some suppression of the organized opposition. This repression is because of the fear and the reality of the U.S. commitment to overthrow the Cuban revolution and return Cuba to a neocolonial status. We need to understand the context for Cuban government behavior without necessarily supporting it. The U.S. government does support much of the opposition in Cuba, for example, the 75 Cuban dissidents who were arrested and imprisoned in 2003. If Cuba openly financed opposition to capitalism in the U.S., or intervened in the U.S. elections, think how people in the U.S. receiving money from the Cuban government would be treated. Also, the U.S. is a clear threat to Cuba; Cuba is not to the United States, meaning that Cuban fears and actions are more justifiable than the United States actions would be.

Nonetheless, there is only a limited role for worker control in Cuban enterprises, and the state-owned media is limited in its criticisms of the government. Because daily life is difficult and time-consuming in Cuba, participation and activism in public life have declined. Cynicism and dissatisfaction have grown, particularly among the young. The Special Period has been particularly hard for women as it has meant that maintenance of the family and family responsibilities take more time, e.g., the decline in public transportation, and there is less income available. The burden of this time and money squeeze has mainly fallen on women so they have less time than before for participation at the workplace, in the community and in the women’s federation.

However, the Cuban revolution, the concept of socialism and Fidel Castro and the Communist Party are seen as legitimate by the majority of the population, and the overwhelming majority would fight in support of the revolution if the U.S. invaded. During our trip, we heard from many different Cubans that they and the revolution will persevere even with the most recent May, 2004 tightening of the blockade. This includes the reduced possibilities of U.S. travel to Cuba for educational purposes as well as by Cuban Americans, the increased funding by the U.S. government of groups who are actively trying to overthrow the Cuban government and of anti-Cuban propaganda, and other measures aimed at isolating Cuba and hurting the Cuban economy by reducing their access to foreign exchange.

The Future of Cuba

The Cuban government and many Cuban people fear a U.S. invasion. I think it is possible although not likely. There will, however be increased pressure and aggression against Cuba if Bush is reelected. U.S. provocations such as flying military planes with radio and TV transmitters, which Bush announced on May 6, 2004, could lead to violations of Cuban airspace and U.S. military attacks on Cuba if Cuba defends itself against these violations. John Kerry’s position on Cuba is not as bad as the current administration’s but he does not accept Cuban self-determination and sovereignty as the basis for U.S. foreign policy. Kerry has said, if elected President, he would end the travel ban but he would not end the embargo/blockade or establish normal diplomatic relations with Cuba. If we are concerned about human rights and the right of all nations to choose their own system, we should do what we can to stop the U.S. from waging war against Cuba, whether it is an invasion or the continuing blockade.

In conclusion, the survival and maintenance of the Cuban Revolution is incredibly important for the Cuban people and globally. It is an alternative to neoliberalism and a beacon of hope for oppressed people around the world. I am often asked what will happen after Fidel Castro retires or dies. I think there will be no big changes immediately in Cuba nor will U.S. hostility end as it is aimed at the Cuban system not just at Castro. My hope for the future of Cuba is that as we work to reduce U.S. aggression, and as Cuba gains more economic and political allies in the world such as Venezuela, that Cuba will experiment with more people’s democratic power and build a socialism that is participatory, egalitarian, and increasingly meets the needs of its people.

  1. Follow up post #1 added on September 09, 2004 by Jesus Perez

    How refreshing to see a non-partisan interpretation of the Cuban revolution, one that actually involved a little study and research, as oppose to the general view that sees it as “it’ socialism so it must be bad”
    Beyond that, the hostility that the U. S. has displayed against Cuba for the last 45 years is shameful and incomprehensible, and Mr. Bohmer is totally right when he states that we as a nation, must respect the rights of other nations to choose their own form of government.

  2. Follow up post #2 added on September 09, 2004 by Michael Hardesty

    Thank you very much for your historical and most informative
    report on the Cuban Revolution. It is a nice change from the
    constant agit-prop we are spoonfed from most of the US media.
    My partner and I are longtime supporters of the Cuban Revolution
    and hope to visit the island one day. We need to circulate your
    piece here to get some perspective on Cuba.
    We need to defeat Bush too.

Would you like to add more information?

Only members can add more information. Please register or log in

  • Advertise at Havana Journal Inc
Images of Cuba
Plaza at Cienfuegos
Follow Havana Journal
SUBSCRIBE to our Cuba Watch newsletter
LIKE us on Facebook

FOLLOW us on Twitter

CONNECT with us on Linked In

Section Archive
Havana Journal, Inc. BBB Business Review

Member of the Association for the Study of the Cuban Economy