Archive for August 29th, 2011

The reform of the Cuban economic model: Causes and perspectives (1 / 3)

August 29, 2011

by Salim Lamrani

Faced with economic sanctions imposed by the United States for over half a century, the global financial crisis and an ongoing problem of productivity, Cuba is forced to reform of its social system and economic order to preserve its social and lifestyle. If external factors partly explain the difficulties confronting the Cuban society, it is impossible to evade the internal responsibilities. As stressed by Cuban President Raul Castro at the Ninth Congress of the Union of Young Communists April 4, 2010, “the economic battle is now more than ever, the main task […] managers as of it depends on the sustainability and preservation of our social system “[1]. A few months later, December 18, 2010, during a speech to the Cuban Parliament, Raul Castro gave a speech more alarmist and put the government and citizens to their responsibilities: “Either we correct [what does not] or we sink after too long lined the cliff “[2]. The historic leader of the Cuban Revolution, Fidel Castro, agreed with this analysis and supported the process of updating the economic system [3]. The alternative is clear: the Cuban economic model must urgently undergo profound structural and conceptual changes under threat of collapse.

External factors
The main obstacle to economic development is economic sanctions that Washington imposed unilaterally in Havana in July 1960, which affect the most vulnerable sectors of the Cuban people and all sectors of society. Unanimously condemned for the 19th consecutive time by 187 countries in October 2010, at the meeting of the General Assembly of the United Nations economic sanctions, in addition to block any substantial trade between the two nations (except some raw food since 2000 ), also have a retroactive and extraterritorial. Since the adoption of the Torricelli Act in 1992, the Helms-Burton in 1996 and the new restrictions imposed by the Bush administration in 2004 and 2006, trade with third countries is greatly affected [4].

Thus, since 1992, any vessel landing at a Cuban port is denied entry to the United States for six months, resulting in a significant additional cost for Cuba, which essentially depends on the shipping because of its insularity. Similarly, since 1996, while foreign entrepreneur investing in Cuba on land nationalized in 1959 risk of having its assets frozen in the United States. In addition, since 2004, while car manufacturer, regardless of nationality, must demonstrate to the Treasury Department that its products do not contain a single gram of Cuban nickel to be able to sell in the U.S. market. It is the same for all food companies wishing to invest in the U.S. market. Danone, for example, must demonstrate that its products do not contain any Cuban raw materials. These retroactive and extraterritorial measures deprive the Cuban economy and many Cuban capital and exports in many markets around the world. [5]

On the other hand, the economic crisis, financial, energy, environmental and food have had a disastrous impact on developing countries in general and Cuba in particular. The soaring prices of food commodities, whose price has doubled since 2007 and which the island depends to 83%, and the fall in mineral resources that Cuba exports (such as nickel which the price fell by more than 50%) balance balance of payments and drastically reduced available cash. Between 1997 and 2009, Cuba suffered a net loss of more than $ 10 billion due to declining terms of trade and has seen its purchasing power reduced by 15%. Moreover, Cuba is denied all access to external financing from the International Monetary Fund or World Bank, because of economic sanctions. Cubans abroad, the United States in particular, have reduced the amount of their remittances to the island because of the economic downturn. Tourism revenues also fell for the same reasons. [6]

addition, there are natural disasters – cyclones sixteen in total – between 1998 and 2008, caused damage worth more than $ 20 billion [7]. Thus, Hurricane Gustav which hit the Caribbean in late August 2008 had a dramatic material cost. The provinces of Pinar del Rio, Matanzas and the Isle of Youth offered a spectacle of ruin and desolation. Of 25 000 dwellings in the Isle of Youth, 20 000 were partially or completely destroyed. Nearly 45% of homes in Pinar del Rio, or 102,000 homes were severely damaged. Fidel Castro compared the damage caused by the cyclone “a nuclear attack [8] ” . For its part, Hurricane Ike destroyed in September 2008, among others, 323,000 homes, 700,000 tons of food, much of the electrical infrastructure and drinking water supplies. [9] In addition, erratic between November 2008 and June 2010 have affected crop production and reduced opportunities for exports of certain food commodities (tobacco, rum, sugar) [10].

These hazards have led the Cuban authorities to block financial transfers to the outside from 2008 to avoid a flight of foreign capital. Havana has also been forced to renegotiate its debt deal with payment difficulties. As for growth, it was 2.1% for the year 2010 [11].

Next:
– “Internal factors” 2 / 3
– “The economic and social measures” 3 / 3

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[1] Raúl Castro, “Discurso pronunciado por el General de Ejército Raúl Castro Ruz, Presidente de los Consejos de Estado y de Ministros, y Segundo Secretario del Partido Comunista del Central Committee of Cuba in the clausura del IX Congreso de the Unión de Jóvenes Comunista “ República de Cuba , April 4, 2010. http://www.cuba.cu/gobierno/rauldiscursos/2010/esp/r030410e.html (accessed March 26, 2011).
[2] Raul Castro, “Discurso pronunciado por el General de Ejército Raúl Castro Ruz, Presidente de los Consejos de Estado y de Ministros, in the clausura del Sexto Período Ordinario Sesiones of the Legislature of the Asamblea Séptima Nacional del Poder Popular, en el Palacio de Convenciones, el 18 de diciembre de 2010, “Año 52 de la Revolución”, “ República de Cuba , December 18, 2010. http://www.cuba.cu/gobierno/rauldiscursos/2010/esp/r181210e.html (accessed April 2, 2011).
[3] Agence France Presse , “Fidel Castro Apoya cambios por su hermano Raúl impulsados,” November 18, 2010.
[4] Salim Lamrani, State of Siege , Paris: Editions Estrella, 2011.
[6] Partido Comunista de Cuba , “Resolución sobre los lineamientos the política económica y social del partido y la Revolución” Prensa Latina April 18, 2011. http://www.prensa-latina.cu/Dossiers/LineamientosVICongresoPCC.pdf (accessed April 20, 2011). See also Andrea Rodriguez, “Alza of precio de alimentos afecta a Cuba,” The Associated Press , April 15, 2011.
[8] Fidel Castro, “A nuclear golpe” Granma , Sept. 3, 2008, Ronald Suárez Rivas, “Housing, the Greatest Challenge,” Granma 2 September 2008.
[9] Marta Hernández, “Más de 320 000 casas dañadas” Granma , Sept. 11, 2008. Orfilio Pelaez, “vivienda Perdidas Millionairess in the” Granma , Sept. 13, 2008; Granma , “Cuba prioriza alimentación por Huracán Gustav damnificados of” September 5, 2008, Prensa Latina , “Cuba prosigue evaluación y recuperación tras danos of Huracán Ike”, September 11, 2008; Freddy Pérez Cabrera, “todo lo relacionado Recuperar con la producción de alimentos,” Granma September 11, 2008; EFE , “Los supermercados presentan problemas de La Habana abastecimiento of” September 16, 2008, Wilfredo Cancio Isla, “Perdidas 700.000 tonelada de alimentos” El Nuevo Herald , 12 September 2008; The Associated Press , “Cuba Estimates Gustav, Ike Damages at $ 5 Billion,” September 16, 2008; Granma “Información oficial sobre los preliminare de datos por los danos ocasionados huracan Gustav e Ike,” September 16, 2008.
[10] Raúl Castro, “Discurso pronunciado por el General de Ejército Raúl Castro Ruz, Presidente de los Consejos de Estado y de Ministros, in the clausura del Sexto Período Ordinario Sesiones of the Legislature of the Asamblea Séptima Nacional del Poder Popular, en el Palacio de Convenciones, el 18 de diciembre de 2010, “Año 52 de la Revolución” “ op.cit.

 


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