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 Cuba set for small-scale change

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Date d'inscription : 28/05/2005

25022008
MessageCuba set for small-scale change

Cuba set for small-scale change
By James Painter
BBC Latin America analyst

When Fidel Castro announced his retirement as Cuba's president, some analysts had speculated - and many Cubans had hoped - that his brother, Raul, would introduce changes to Cuba's state-run economy.

There was talk of Raul Castro adopting the Chinese or Vietnamese model where political control by the Communist Party would remain, but the economy would be open to free market reforms.

After all, since he became de facto head of state 19 months ago, Raul Castro had spoken of "structural changes" to come, and admitted that Cuban workers were not paid enough to acquire basic necessities. He also encouraged a process of consultations in the work place.

But an analysis of his speech to the new national assembly suggests that if the new Cuban leader is going to introduce economic reforms, they will be cautious, gradual and carefully managed.

Resentment

Typical is what he said about the dual currency system, which is a source of constant complaint from ordinary Cubans.

Most Cubans are estimated to earn between 400 non-convertible (Cuban) pesos for a factory worker to about 700 to a professional (the equivalent of between $17 and $30 or £9 and £15.)

Non-convertible pesos are good for buying the subsidised official rations of rice, cooking oil and other perishable goods.

But most other goods usually have to be bought with convertible pesos known as CUCs, which are mostly restricted to Cubans working for foreign companies and tourists. The dual system has caused income disparities and a lot of resentment.

"'We are examining the progressive, gradual and prudent revaluation" of the Cuban peso, Raul Castro said.

But he added that any changes would only happen when various other economic factors were taken into account. He hinted that the ration card system may be changed, calling it "irrational and unsustainable".

Among the other hints of possible change he mentioned were:

* the need to increase agricultural and livestock production and improve marketing
* the government's priority of meeting the basic needs of the population, but only within the context of greater economic growth and higher production
* the need to increase basic wages

Several delegates at the national assembly told the Havana correspondent of the BBC Spanish American service, Fernando Ravsberg, that any changes would take place within the basic socialist model.

One possible change to come is the promotion of some small-scale farming or co-operatives, its correspondent says.

He points to the example of a tobacco co-operative in the western department of Pinar del Rio, where 90% of the producers providing good quality tobacco to state factories are small-holders.

There is plenty to suggest Raul Castro will be cautious.

Before officially taking over, virtually the only modest reforms he introduced were in the countryside where he cancelled the debts of some small farmers and increased the price paid to them for milk and beef. This was designed to ease shortages.

Fidel Castro's presence behind-the-scenes may continue to be a decisive brake on economic changes.

While Raul Castro is widely considered to be more pragmatic and less ideological than his older brother, Fidel is generally against free market reforms as he believes they encourage anti-socialist individualism.

In his speech, Raul Castro made it clear he would be consulting his brother on a range of policies, including economic development.

Orchestrated

Analysts say the Cuban government has delivered widely acclaimed achievements in the health and education sectors, but there are serious shortages of food and basic goods and services for the majority of the island's 11 million inhabitants.

Macroeconomic stability has been strengthened in recent years by five factors: large oil and other subsidies from President Hugo Chavez of Venezuela, remittances from Cubans living abroad, income from tourism, soft Chinese credits and good prices for Cuba's main export, nickel.

A recent book by the Cuban ambassador to Caracas, German Sanchez, quoted in the Economist, estimated that Mr Chavez provided Cuba with about 90,000 barrels a day of oil and with other aid worth $1.5bn in 2007.

Remittances are thought to be worth between $500m and $1bn a year.

In his speech, Raul Castro made no direct reference to foreign investment.

It is often thought he is in favour of more companies investing in Cuba due to his experience as head of the armed forces presiding over the military's involvement in tourism and other businesses.

In the past, foreign capital, mostly Spanish, has invested in joint ventures, notably in tourism.

But recently there have been no new projects with Western companies, except in oil exploration.

Press reports from Brazil suggest Raul Castro personally told President Luiz Inacio Lula da Silva on a recent visit that he wanted Brazil's support in speeding up changes in Cuba, including Brazilian investment.

But whatever Raul Castro decides to do, it seems likely that any economic change will not be the kind of pro-capitalist opening seen in China, and will be carefully orchestrated from above.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/7263541.stm

Published: 2008/02/25 17:41:02 GMT

© BBC MMVIII

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