Lexington Institute publishes guide to Cuba’s economic reforms

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Last month, the Lexington Institute—a Washington-based think tank—published a 36-page booklet, A Viewer’s Guide to Cuba’s Economic Reforms that puts Cuba’s recently inaugurated and far-reaching economic and, to a lesser degree, social reforms in perspective.

Written by the institute’s Phil Peters, this excellent and highly readable synopsis is a must-read for anyone even vaguely interested in what the Cuban government officially calls an “updating” of its economic model. The restructuring is based on a detailed domestic policy blueprint (los lineamientos) of 313 guidelines approved by the sixth Congress of the Cuban Communist Party in April 2011.

In short, the reforms are a concerted effort to reduce the paternalistic role of the State and to stimulate small-scale private business, not least with a goal of moving 1.8 million (!) state employees into the private sector.

Initiated by President Raúl Castro, they add up to the most dramatic reforms in Cuba in decades and are a clear reversal, if not denunciation, of the over-weaning, micro-managing style preferred by Raúl’s decidedly geriatric (and finally irrelevant) elder brother Fidel.

Under Fidel, any Cuban brave enough to publicly tell the popular joke that “the government pretends to pay us and we pretend to work” would have been begging trouble. Now it’s Raúl who tells the joke—except he clearly doesn’t think it’s funny.

“Sometimes in socialism, two and two makes three,” he stated to the National Assembly in July 2008, putting me in mind of another popular Cuban joke as regaled by journalist Andres Oppenheimer in Castro’s Final Hour:

”Fidel visits a pig farm and stops to admire a pregnant pig. ‘Beautiful species,’ says Fidel, ‘I bet it will produce at least ten piglets.’ Everyone applauds and nods in agreement. Fidel leaves. Two weeks later, the pig gives birth but delivers only six piglets. The farm’s administrative office is beside itself with panic. The farm manager fears Fidel will be furious at the lower-than-expected production, so he records in his report that the pig delivered seven piglets. His supervisor, the regional farm director, raises the number to eight and passes his report to the national farm director, who changes the figure to nine. His boss, the minister of agriculture, adds one more piglet and submits the report personally to Castro. ‘Fabulous! Ten piglets!’ says Fidel, delighted that his prediction has come true. ‘We’ll use 60 percent of the pigs for export, and 40 percent for domestic consumption.’”

Raúl has been brutally honest. Whereas Fidel liked to blame everything on the embargo, Raúl has, in effect, said “Stop blaming el bloqueo!” (Cuba refers to the embargo as “the blockade”.)

”It’s not a question of shouting ‘Fatherland or death, down with imperialism, the blockade hurts us!” he said in a speech in Holguín on July 26, 2009. “The land is there, waiting for our sweat.”

Peters provides a succinct analysis of how the structural reforms, which call for the private sector to expand from five to 45 percent of the nation’s productivity by 2017 (personally, I don’t expect Cuba to come anywhere near that goal) are essential to Cuba’s fiscal and future well-being. “It is a bellwether for the entire reform program,” he writes.

The booklet provides a sector-by-sector guide of the reforms, from self-employment to housing and foreign investment.

Hence we learn such interesting tidbits as:

• Almost 25,000 state-operated workers lunch-rooms (a $350 million burden and a major source of food sold on the illegal black market) are to be closed... a boon to the private food sector.

• The escuelas de campos (rural schools where juveniles also helped bring in the harvest) have been closed—no doubt to the delight of parents: The state newspaper Juventud Rebelde once accused the city-raised youngsters of engaging in orgies—“a collective exhibition of the most crude coitus”—and went on to warn youths against “excessive fornication.” (A full description of the schools, initiated in 1971, is told in my literary travelog: Mi Moto Fidel: Motorcycling Through Castro’s Cuba.)

• State corporations must now turn a profit or die. State subsidies will be ended and managers will ostensibly be freed from bureaucratic dictates and be given authority to manage on their own.

Washington’s response has been to throw cold water on the reforms. See my blog post: “Cuba’s liberal economic reforms snubbed by Washington”.

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