Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Saturday, October 8, 2011

Vietnam presses Cuba on debt


Before increasing investment in oil and construction on the island, Vietnam wants Cuba to find a way to its debt with rice exporter Vinafood and allow the opening of a Vietcombank office in Havana, official daily Viet Nam News reported.

Debt is rarely mentioned in the official communication between the two long-time partner countries.

Prime Minister Nguyen Tan Dung urged a Cuban delegation, in Hanoi for routine bilateral talks, to “continue creating favorable conditions for Vietnamese enterprises to invest in the Caribbean nation and to encourage more Cuban investment in Viet Nam,” according to the official daily. Dung suggested the partners should “come up with solutions to settle outstanding debt” and urged Cuba to speed up the permit process for Vietcombank, the government foreign trade bank, to open a branch in Cuba.

“The presence of the bank will help facilitate the financial settlement between Vietnamese and Cuban companies and enable Vietnamese investors to invest in Cuba, particularly in the fields of construction, oil and gas, and trade,” Dung said, according to the newspaper.

Foreign Trade Minister Rodrigo Malmierca, who led the Cuban delegation, said Cuba wants Vietnam to continue to sell rice, and pledged to honor Cuba’s financial commitments by gradually reducing credit debts with Vinafood, according to Viet Nam News. Malmierca said Cuba wanted the partners to agree on a joint development strategy.

Neither Cuba nor Vietnam have released details about the debt.

Vietnam, a close political ally of half a century, has been selling 400,000 tons of rice per year to Cuba under generous conditions, making the fellow Communist nation the island’s main source of the basic staple. Payment terms in the past have included 450 to 540 days and either interest-free or very low interest financing. In September 2010, state company Vinafood 1 signed an agreement to sell Cuba 200,000 tons of rice, including 50,000 tons for a low price of $496 per ton.

Affected by a cash crunch in Cuba, bilateral trade dipped to $250 million in 2010 but is expected to grow again this year.

State oil company PetroVietnam leased an offshore block in Cuban waters and partnered with Russia’s Zarubezhneft, but has not performed an exploration drill yet. Meanwhile, state construction company Housing & Urban Development Corp. (HUD) in 2008 signed a letter of intent with Grupo Palmares to jointly build a 300-hectare golf community near Bauta, just west of Havana. HUD has also been negotiating construction of another golf course resort in Varadero as well as a hotel at Playa Santa Lucía in Camagüey province. In 2009, Vietnam also agreed to set up textile and electronics joint venture production in Cuba.

Dung committed to Vietnam’s continued support of rice cultivation programs in Cuba. Agricultural projects supported by Vietnam have played “a very important role” in Cuba, Malmierca said.

Meanwhile, Cuba wants to introduce new pharmaceutical products to the Vietnamese market, Malmierca said.

Source: Cubastandard


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  • Friday, August 12, 2011

    CUBA: The Disaster of Castro's Revolution


    This book, "CUBA: The Disaster of  Castro's Revolution", analyses the current situation existing in Cuba and describes in detail the real disaster caused in every aspect of Cuban life by the so-called revolution of Fidel Castro, including how it has affected the different components of Cuban society

    The author gives detailed summary of the main indicators of the Cuban economy and society before 1959, when Fidel Castro took power, indicating how they compared favorably at that time with other countries of the world, including many which are considered part of the developed world in our days. 

    The book demystifies numerous aspects of Castro's propaganda that his followers have considered as great achievements of his government and puts them in perspective in regard to what Cuba could have had nowadays if it had been ruled by democratically elected governments. The book profusely documents the system of corruption and privilege established in the island and analyses the obscure role of Castro in a number of important events related to the United States, including references to his links with drug traffic, money laundry and the promotion of terrorism activities, among other criminal activities. 

    One of the aspects the book describes in more detail is the lack of political freedom and the repression of independent thinking and free expression existing in the island, which is part of the overall control on everybody's life established by Castro, which is implemented by a gigantic machinery of terror and survelliance.

    The book describes the role of Cuban military and intelligence in numerous important events of world politics during the past five decades, including their role in Africa, Latin America and other regions of the world and it includes some questioning about the possible role of Castro in the assassination of President John F. Kennedy. It considers Castro's interpretation of foreign policy and the way he has disregarded all norms of international behavior. 

    The book also discusses the case of the enormous debt accumulated by Castro's government and how many of these resources have been deviated to well camouflaged foreign accounts and investments by Castro and some of the top people around him. 

    One of the interesting things about this book is the analysis it makes about the situation of youth, women and blacks within the present Cuban society and the detailed description about how the people in general live and how this has evolved under Castro's tyranny

    It also includes an analysis of the exiled Cuban community. Andres Solares discusses the real facts behind Castro's long tenure of power and shows the contradictions between what he and his supporters say and the crude reality of what happens in Cuba. His book also enters in details about the degrees of decomposition existing at all levels of the political establishment of this obsolete communist regime

    The book describes the enormous damage caused by Castro's policies to the environment of the island and the state of destruction of all the main networks of services, as well as the stagnant conditions of the economy. It includes the author's views on the different possible scenarios for Cuban political future, once Castro and his brother, one way or another, are no longer able to control Cuba. 

    This book is a strong denounce of the longest dictatorship that has existed in America and it serves as an eye opener for all those who ignore the crude reality of what happens in that beutiful country. It is also a moral message of hope for a better future for the Cuban people

    Mr.Solares has used his professional and personal experience, together with his direct knowledge of the Cuban society and economy, to give us a very intersting account of the situation in his country, which will serve those who read it to comprehend better what we can expect there.

    Available on Amazon: 


     

    About the Author


    Andres Solares is a former Cuban political prisoner, who was imprisoned for trying to create a new political party in the island to oppose Fidel Castro's policies. He was freed thanks to a worldwide campaign promoted by Amnesty International, America's Watch and Of Human Rights, the personal intervention of Senators Robert Dole and Edward Kennedy and the requests of the American Congress and British authorities. He is a Civil Engineer specialized in Economics in Great Britain and he lectured post-graduate courses on these subjects in Cuba. He has carried on and published numerous studies on Cuban matters. He lives in Miami with his wife Adriana and their children and family.


    Repression never stops in Cuba. Detention of the dissident Ivonne Mayesa Galano



    On Aug 5, 2011, Ivonne Mayesa Galano was detained (video) when she was heading to a meeting with other dissidents. She was beaten and kept in the Police Station for several hours without any formal charges. She was detained and beaten again last Monday, Aug 8.


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  • Wednesday, July 6, 2011

    Chavez's illness spells trouble for Cuba

    Hugo Chavez back in Venezuela, last Monday, the 4th July.

    Cuba depends on Venezuela for billions of dollars in subsidies that could disappear if Chavez doesn't recover.


    As Hugo Chavez boarded a plane here early Monday for his return to Caracas, he stood on the tarmac with Raul Castro and offered some parting words of reassurance: “Venezuela and Cuba are the same thing, the same country,” he said.

    And that, precisely, is what’s at stake for Cuba with Chavez now battling cancer. Billions in Venezuelan subsidies to the island — and other regional left-leaning allies — are riding on his recovery.

    Two decades after the Soviet Union’s implosion brought chronic blackouts to Cuba and sent the island’s economy into a ditch, Havana is once again highly dependent on foreign largess to keep the lights on. Chavez provides Cuba with more than two-thirds of its petroleum needs, and the island earned an estimated $3.5 billion in trade last year with Venezuela, its largest source of hard currency.

    Chavez, 56, has not disclosed what type of cancer he has, or what the prognosis is, only that he had a growth described as a pelvic abscess removed and that “cancerous cells” were discovered by Cuban surgeons.

    When he landed Monday in Venezuela in preparation for his country’s bicentennial celebration, Chavez appeared upbeat and energetic, sending out messages to his 1.7 million Twitter followers and assuring television audiences he was “devouring” his meals.

    But in Havana, it has been the start of concern. Chavez’s imperiled health brings new attention to the fragility of Cuba’s economy, at a time when 80-year-old Raul Castro is struggling to put the island’s finances in order and proceed with carefully managed, incremental liberalization measures.

    Cuba’s communist government is planning to lay off hundreds of thousands of state employees over the coming years and is allowing the expansion of small private businesses and cooperatives. One big reason Havana can afford to conduct the reforms at its own pace is the dependable revenue coming from Caracas.

    If Chavez’s rule were to end because of his illness or impact his December 2012 re-election bid, the return of 40,000 Cubans now working in Venezuela — mostly in the health care sector — would create still more financial strain for the Castro government.

    Of greater worry is Cuba’s energy supply. Steady oil shipments from Venezuela have largely eliminated the chronic blackouts that plagued Cuba in the early 1990s and led to riots in Havana, as well as the chaotic departure of thousands of rafters for the U.S.

    Back then, Fidel Castro was still at the height of his political powers, taking to the airwaves almost daily to pull Cubans through the crisis by the sheer force of his will. Now he’s 85, and far too frail to rally the country once more.

    Public unrest in Cuba is closely linked to the power supply — especially during the torrid summer months — and over the past decade, Cuba has stabilized its electrical grid by installing a series of relatively small fuel-burning power plants. They run mostly on Venezuelan crude, and even as oil prices climbed over $100 a barrel in recent months, Cuba has continued to enjoy a reliable energy supply.

    Cuba isn’t likely to find a quick alternative to Venezuelan oil, either. The island produces about 50,000 barrels of oil per day from domestic sources, used mostly for generating electricity. Spanish oil consortium Repsol is planning to begin drilling in offshore beds along Cuba’s north coast in the coming months, but even if it has a major strike, experts say it will take years to bring the crude to market.

    Then there are hundreds of other commercial and trade agreements with Venezuela that could be jeopardized if the country’s next president isn’t as simpatico. Cubans privately worry those arrangements may be only as healthy as Chavez himself, a man who views Fidel Castro as his political father figure.

    Other socialist allies around the region, like Nicaragua’s Daniel Ortega, are also highly reliant on Venezuelan oil diplomacy, along with the 19 nations of the Petrocaribe alliance, whom Chavez buffers from the global oil market’s volatility.

    Chavez insists he is fine, and on the path to full recovery. In a written “Reflection” dedicated to Chavez’s illness Monday, Castro said the Venezuelan president had launched “a decisive battle” that “will lead him and his country to a great victory.”

    But that victory now depends on the Cuban oncologists tasked with saving Chavez. While the location and stage of his cancer has been kept secret, experts speculate the area of affliction could be Chavez’s colon or prostate. A late-stage form of colon cancer would be extremely dangerous.

    Chemotherapy treatments could force Chavez to withdraw from public view again, so his return to Caracas this week may also be a final attempt to put his political team in order before a lengthy absence.



    Source: Global Post


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  • Tuesday, June 28, 2011

    Cuba: Microcredit Knocks on Door...Softly



    'Until about a year and a half ago, you practically couldn't talk about this issue, but now the situation is different,' a European diplomat told IPS. He preferred not to be identified, to avoid undermining progress on the issue, which has its own particular complexities in the case of Cuba. 'The idea of microcredit went from being almost sacrilege to something interesting,' he noted.

    Juan Diego Ruiz, general coordinator of Spanish cooperation in Cuba, said the word microcredit is not part of the Cuban vocabulary, and actually might not be the most correct term in this case.

    'Today what's being talked about more is credit policy, credit for the productive sector, and it's an issue that is being discussed both on the street and in offices,' he told IPS.

    One of the entities feeling out the situation on the ground is the Italian National Committee for Microcredit. It has organised a couple of visits to Cuba, evidence that the subject of microfinance is drawing attention little by little in the context of development projects and an opening to the private sector, where international cooperation could play an important role.

    This type of loan was created in the 1970s as a financing alternative for low-income people in need of capital to set up small businesses. Unlike traditional credit, no collateral is required, the amount is usually relatively small, and payments are weekly or biweekly.

    These differences lead to micro-financing institutions being described as entities with high administrative costs covered by the high interest rates generated by their portfolio of clients, composed of a large number of small, short-term loans, without guarantees, concentrated in a specific geographic area.

    Credit exists in Cuba in the form of Cuban pesos and focused on consumption, such as the individual purchase of domestic goods, and agricultural cooperatives.But the strategy launched by the sixth congress of the ruling Communist Party of Cuba (PCC) to modernise the economic system anticipates expanding and diversifying possibilities in terms of bank loans.

    The 313-point programme charting the country's economic and social guidelines for the coming years specifies that credit policy will be essentially oriented towards providing necessary support for activities that stimulate national production and generate hard currency income or replace imports, as well as activities that promote development.

    Meanwhile, since March, banking and credit policies have been in place for individuals, such as loans for farmers to buy equipment and supplies in retail stores with the goal of boosting national food production.

    Also, loans may be granted to people authorised to engage in self- employment, to finance their working capital and investments via the purchase of assets, supplies and equipment, and to allow these self- employed workers to sell products and services to state entities through contracts.

    It is precisely in these emerging sectors, which have developed from the distribution of idle state land to thousands of farmers and the expansion of trades and activities in which self-employment is allowed, where microcredit could have the greatest impact, at least initially.

    However, the legal framework that will regulate the new policies on credit in general has yet to be defined.

    In these new forms of non-state activities, small-scale loans could facilitate access to machinery, tools, supplies and equipment, and increase the individual's ability to contract services or labour, which would stimulate the economy.

    It is in the area of self-employment 'where microcredit fits best, with a focus on individuals,' Tomas Marco, head of agricultural development in Cuba for the Spanish Technical Office for Cooperation, commented to IPS. 'What's opening up is a possibility; it's not even a certainty. Nobody knows if loans in hard currency for self-employed people will be permitted.'

    Cuba's dual currency system, in which the Cuban peso is the national currency and the convertible peso (CUC) replaced the U.S. dollar as hard currency in all transactions in 2004, is another challenge to overcome in making credit more widely available. However, no short-term changes to the system are on the horizon.

    'Another major obstacle is purchasing power,' Marco said. 'You might give a hard currency loan to a UBPC (Basic Unit of Cooperative Production in agriculture), but the cooperatives cannot directly buy in hard currency. We have to wait until regulations are created for the (new economic and political) guidelines, and see how these aspects are regulated.'

    Rodolfo Hernandez, an official with the Swiss Agency for Development and Cooperation (SDC), said microcredit could benefit Cuba 'fundamentally' in the low and medium-income sectors, with a certain amount of priority given to women and young people.

    'It would be important for loans to be granted in both currencies, for shops and other locales to be created that sell at the municipal and sub-municipal levels, and for the credits to carry a payable interest rate that would make the process sustainable and that would make loans accessible to people in low and medium-income segments of the population,' the expert said.

    In his opinion, funds should be channelled through the Bank of Credit and Development or local banks created for that purpose, and by associations of cooperatives - whose partners are other cooperatives - that have enough income to take on the commitment. For his part, Ruiz did not rule out that in the context of international cooperation, non-commercial but reimbursable credit instruments could operate. 'The opportunity and the will are there. In recent months, our headquarters (Spanish Agency for International Cooperation) has made several visits, and has reported on credit experiences that could have work here,' he commented.

    By Grogg, Patricia 

    Source: IPS


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  • Saturday, March 5, 2011

    A new dawn for Cuba as capitalism eclipses communism

    Communism has nothing to offer to Cubans.
    The party begins to pop at about midnight when the half-naked male models point the last stragglers to the open roof top.

    On a second level above us under the stars the DJ turns it down briefly to allow a solo trumpeter to play a sensuous salsa serenade while behind the bar – as long as a swimming pool and sagging with mojito cocktails – lesbian porn from the nineteen thirties is projected on an bare wall.

    The guests, in from Sao Paolo, Mexico City, Paris and Madrid, take it in their sophisticated stride, navigating past mattresses for the boozed up and the louche and feigning insouciance as Oscar-winning actor Benicio Del Toro brushes past. There had been a clue in the invitation about what was to come. Dress code: "tropical glam".

    Yet there is wonder if not actual shock in their smiles even as they dance their last dance and surrender to the approaching Caribbean dawn. We are not in Miami, Palm Beach or even Los Angeles. This is Havana, home to one of the last Soviet-style regimes in the world. Now in the lift going back down an impossible rumour goes around. Two of Raul Castro's sons attended the party. You never saw them?

    Cuba is changing. The roof-garden fete, with its decadent pulse, was not something you see in Havana on your average Saturday night. Some may have thought of it as an aberrant flashback to the pre-revolution days when frolicsome behaviour was the norm. But to others it seemed like a back-to-the-future experience. Was this a glimpse of this grand but crumbling city 10 or 20 years from now, raring once again for fun? A reporter meanwhile tries to straighten out those Castro sightings. The surprise: no sons but two grand-daughters had indeed shown up.

    Grandfather Raul, who turns 80 this year four years after taking over as President from his ailing brother and founder of the revolution, Fidel, will not have given the party a second's thought. That Cuba is tiptoeing back into the sunlight is of his own personal doing, after all. It was last September that a stunned nation as told that the centrally planned economy was dying and needed radical surgery. By the end of this April, the government decreed, 500,000 Cubans would have been fired from state jobs. In the longer term, the Raul-sanctioned plan would eliminate about 1 million jobs, or roughly 20 per cent of the workforce.

    It is an audacious blueprint that will kill the socialist model erected by Fidel and his co-revolutionary Che Guevara 53 years ago or save it from collapse. Its success or failure will depend largely on whether Cuba, with its epic inefficiencies and laid-back rhythms, can rediscover long-suppressed capitalist instincts. Today, the state employs almost 90 per cent of all workers. As many of those are now laid off they will be encouraged to apply for licenses to try their hand at private enterprise. Fidel did something similar 15 years ago, but on a far tinier scale – Havana saw the opening of a handful of family-run restaurants and hostelries for tourists – and he later backed away. This promises to be much bigger.

    What it means is that Cuba is in a state of high agitation. Interviews over several days with Cubans of all backgrounds suggested a people uncertain whether to be deeply afraid of what is coming or grateful that after decades of stagnation, their leaders finally are ready for reform. And there have been other signs of movement from the top. In February, the regime with little fanfare lifted the internet firewall that for years had blocked much of what Cubans could see on the web (though only a fraction of the population has access to it). And the months since last July have seen 60 political prisoners released, all originally rounded up in the so-called 'Black Spring' of 2003. Only seven of those arrested in that crackdown now remain behind bars.

    Miguel Barnet, the President of the Writers' and Artist's Union, an amiable man about Havana who has a direct line of communication with the Castros (and is therefore not free to speak entirely candidly), accepted that Cuba is in a tricky place but was certain that Raul knows what he's doing. "I am very optimistic for Cuba," he tells me. "What would be tricky is if there was no transition going on. We need to do this."

    Raul has support from other members of the top communist leadership. Next month, a Communist Party Congress will be convened, something not seen in a decade and a half. It will approve the full Raul reforms that not only will significantly broaden the areas in which free enterprise will be tolerated and even encouraged but – perhaps most surprising and risky – will simultaneously introduce a system of income tax.

    We also know, however, that resistance has been powerful at the next level of communist leaders – the ones who have to choose who is to lose their jobs and then tell them. Sources spoke of uproar one recent night at the luxury, state-operated Melia Cobiba Hotel when top socialist officials gathered the staff of 580 people and told them only 480 would be returning the following day.

    In an attempt at consultation and fairness, committees were established to discuss how the lay-offs might work. Their work was concluded last weekend and on Monday Raul acknowledged that progress on sacking the first 500,000 workers had been slow. The end-April deadline, he said, would therefore be extended. He gave no new clear schedule for reaching his final goals.

    Speculation abounds that he may also be slowing the pace because of Tunisia, Egypt, Libya and other countries in the Middle East where citizens have risen up against authoritarian regimes. However, Cuba is different. It does not have a youth-heavy population, access to sites like Twitter and Facebook is extremely limited and there is no issue of corruption or great displays of wealth among the ruling elite. "We write to our capitals every day and say it is not going to happen in Cuba," says one junior diplomat at the Canadian embassy here. "Change is going to come not at once, but bit by bit."

    Then there is this: while the prisoner release programme has cheered human rights groups and even some dissident leaders in the country, no one supposes that old habits of repression have died. Thus two weeks ago, on the first anniversary of the death from hunger strike while behind bars of dissident Orlando Zapata Tamayo, the regime moved temporarily to round up 45 dissidents and confine 60 more in their homes to diminish the chances of street protests. All were released when the anniversary was over.

    "Some positive steps have been taken," a diplomatic source in Havana said, noting the release of the 60 political prisoners. "But we remain extremely worried about the human rights situation." He described a security apparatus that remained alert and ubiquitous. Any kinds of street gatherings are instantly quashed, in part by thugs hired by the state. The front page of the Communist Party paper, Granma, last week reported that the spokesperson for the Ladies in White, a protest group of wives and relatives of those first incarcerated in 2003, had been unveiled as a government informer. What motivated the paper to run this is unclear.

    The United States, which maintains its 49-year-old economic embargo although restrictions on sending money and travelling to Cuba have been eased by President Barack Obama, has its own human rights crisis with Cuba, involving US citizen Alan Gross, 61, who was to go on trial in Havana yesterday. Caught distributing satellite reception equipment to Jewish groups in Cuba to improve their access to the internet, he was arrested on charges of espionage and could face 20 years in jail if convicted. The US has protested and demanded his release.

    The embargo is a big part of what ails Cuba, which was kept afloat for years by Moscow until the Soviet Union collapsed in 1989. The other problem is the lack of liquidity in Cuba, where no system of credit exists. Meet Jose, for example, who for years worked as a carpenter before – in the Cuban equivalent of winning the lottery – landed a job last year driving a tourist horse-drawn buggy in Old Havana on a monthly salary of $11 that is multiplied many times over by tips. With two of his four sons along with him, he acknowledges that he risks being fired under Raul's reforms. "We will deal with that if it comes," he says, before revealing an ambition to open a paladar – the name of the private restaurants permitted to serve tourists: "I will be the waiter and my wife will cook." But he echoes the worries many others have.

    "The pillars of our country are all gone – coffee, sugar, rum – they aren't good any more," laments Fran, 66, once a farm labourer who now earns $4 a month as cabaret singer for the state aviation institute. He too is lucky as the holder of one of Fidel's original licenses to entertain tourist groups. He sings old Beatles' numbers at a creaking paladar on a river outside Havana. Fran tells me something that would be hard to credit were we not in Cuba where nothing seems too bizarre. He claims his son Ojani was married in the early 1990s to Jennifer Lopez. "I told him not to worry about the money and just leave," he says with a smile of obvious chagrin. He is pessimistic about the Raul reforms. "So, the people will be allowed to work for themselves and have their own business. Yes, fine. But how do you that without any money? We have no savings."

    "It will all come from Miami," says a US businessman who has permitted business dealings in Cuba. In spite of the embargo, the US is Cuba's fifth trading partner. This is why the relaxation of the rules on money remittances to Cuba by Obama are seen by some as crucial, because those dollars may fuel the nascent free enterprise sector.

    Few in Cuba, however, expect the embargo to end soon and most react sceptically to the idea that when Fidel dies, Uncle Sam will come with dollars and cruise ships and take the island for itself. "I don't think that the Americans want another mortgage," says Mr Barnet, the union leader. "We have to do this for ourselves."

    More important now, with the Communist Congress around the corner, is if ordinary Cubans think it can be done. That they want to have faith is clear and they don't need rooftop parties to feel the breeze of possible change. But the gap between Raul's promises and free enterprise taking root is wide and fear still reigns over hope. "This," says a diplomat "is their last chance, because the country is in dire shape."

    By David Usborne

    From: Belfast Telegraph


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  • Thursday, December 9, 2010

    Cuba: Life After The Castro Brothers


    The subject assigned to me, “Cuba: Life after the Castro Brothers”, poses quite a challenge. In the words of a renowned Danish physicist, “prediction is very difficult, especially about the future.” And I would add: more so in the case of Cuba, where even predicting the present is very difficult.

    After all, who would have foreseen the “resurrection” of the Narcissist-Leninist Fidel Castro, who was near death not too long ago and has now resumed the role of Maximum Pontificator?

    Before venturing into Cuba’s cloudy future, let me share with you a few key facts to provide some perspective. Cuba is facing today the worst economic and financial crisis since the end of Soviet life support in the early 90s. Agriculture is in such dire straits that Cuba has to import 80% of the food it consumes, including sugar.

    To secure subsidized oil and generate hard currency, the cash-strapped Castro regime has contracted out to Venezuela and other countries more than a third of its licensed doctors and teachers, along with hundreds of Communist experts in espionage and repression. Last year, the regime, bordering on insolvency, froze bank deposits of foreign investors in Cuba and deferred payment of a large number of overdue accounts.

    To pare costs, the Raul Castro regime slashed imports, rationed electricity, and started to phase out workplace lunches as well as the subsidized food basket (ration card). Recently, it announced the layoff of 500, 000 government employees out of a total of 1,000,000 unproductive state jobs, or 20% of the workforce, which will be cut over 2 to 3 years.

    To revamp agriculture, the regime distributed fallow lands to some 100,000 small farmers, but only on lease, without providing fertilizers, tools and bank credits. One year later, two thirds of the distributed lands remain unproductive.

    The regime is now stepping up the granting of licenses to individuals and hired staff to render a variety of services on their own, ranging from quasi restaurants at home, with a cap of 20 chairs, to barber shops to artisan work in small ateliers. Many of these activities have been going on in the black market for some time. The government now expects them to come out in the open. But to avoid what it calls “concentration of wealth”, the mini businesses will be saddled with four different taxes, including an income tax as high as 50% if the income exceeds $2000 a year.

    The proclaimed objective of Raul Castro’s reforms is not to scrap or transform the failed Communist system, but to make it more efficient. Although some believe that Cuba is approaching a China-type opening, the fact is that the bulk of the economy remains under the control of mega State enterprises led by loyal army officers. To quash growing discontent, Raul has intensified repression and exiled most of the prisoners of conscience who were recently released.

    The reforms under way signal the beginning of the end of State paternalism in Cuba; the unraveling of the unaffordable government support system that meagerly supplements the average salary of $20 a month. But what is being offered as a solution is nothing more than stopgap measures that do not significantly deregulate the centralized economy, unleash the entrepreneurial spirit of the Cuban people, and cure the dire crisis.

    The bankrupt regime may hang on for some time, particularly if it’s bailed out with U.S. tourist dollars and financing. But it will not survive the Castro brothers. The totalitarian grip will eventually splinter and slacken, the fear will wane, and all those yearning for freedom, including the marginalized reformists within the government and the army, will emerge, weigh in and prevail.

    Liberation could and should, in my view, be hastened by providing support to the dissident movement, as the U.S. did with Solidarity in Poland, and applying U.S. technology to penetrate Castro’s censorship firewall and overcome the jamming of Radio and TV Marti.

    When Cuba truly opens up, I foresee a phased, negotiated transition, culminating in a government of national unity that will install the rule of law, restore individual rights, and pave the way for multi-party elections. The process is bound to be bumpy and messy, but Cubans on the island can draw on the do’s and don’ts of the post-Communist transitions in Eastern Europe and the post-Franco transition in Spain.

    Cuban-Americans, with their business experience, contacts and resources, can be very helpful, if they return to the island with a forward-looking mentality—not with the greed of recovering, but with the zeal of rebuilding.

    Cuba will definitely resurge post Castro brothers, but it will take some time for the wounds to heal and for the country to settle down. Recovery will require revitalizing the Cuban heritage, dismantling the stifling regulatory system, and renegotiating the country’s huge external debt ($30 billion to the Paris Club of creditors– the largest on a per cap basis).

    It will also call for the reconstruction of the island’s dilapidated infrastructure, the shoring up of its social services, and the creation of a business-friendly environment that will attract responsible foreign investors willing to partner with Cuban entrepreneurs.

    Investment opportunities will then abound in such areas as tourism, agro-processing, minerals and oil, biotechnology, assembly or maquila, banking, and IT outsourcing.

    By Nestor T. Carbonell

    From: The Americano

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