Communist Cuba is on the brink of collapse

[El Presidente]

 

https://www.japantimes.co.jp/commentary/2024/03/20/world/communist-cuba-collapse/

Communist Cuba is on the brink of collapse

The surprise plea for food aid highlights the deepening economic crisis faced by the island

 

A soup kitchen distributes food in Havana on Jan. 15. The communist government of Cuba is grappling with its worst economic situation since the collapse of the Soviet Union more than three decades ago. | REUTERS

BY JUAN PABLO SPINETTO
BLOOMBERG

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Mar 20, 2024

 

Almost unnoticed amid the drama and crisis that hit Latin America every week, in the last days of February the Cuban government asked the United Nations for aid to address a growing food shortage.

The unprecedented cry for help from a communist regime that has always prided itself on its social welfare model captures Cuba’s dire economic straits. Hurt by tightened U.S. restrictions, decaying domestic production, a weak post-COVID-19 tourism industry and indifference from its allies, the island is living through its worst economic days since the collapse of the Soviet Union more than three decades ago. A string of blackouts brought people into the streets last weekend, shouting for "food and power” — a rare display of social unrest since the turmoil that shook the island in July 2021, which the regime contained with crushing force.

 

 

Today’s economic situation is a huge challenge for the Communist Party of Cuba that has controlled the nation’s life since Fidel Castro’s revolution in 1959. Witness the search for internal scapegoats and distractions: President Miguel Diaz-Canel announced an unusual investigation against an old ally and friend, Alejandro Gil Fernandez, for alleged corruption after firing him from the post of Economy Minister.

Of course, as distractions go, there’s always the U.S. embargo, Cuba’s historic go-to excuse during times of economic malaise. Yes, the embargo is a Cold War anachronism that should have been lifted long time ago, but it’s not responsible for the island’s food shortage: Since 2001, Cuba has been able to import food and other agricultural products from the U.S., to the tune of over $7 billion. And an embargo imposed 62 years ago can’t explain why the island lost at least half a million citizens, or close to 5% of Cuba’s total population, between 2021 and 2023. These are young, educated Cubans escaping hunger, economic mismanagement and political repression.

Once you get past the finger-pointing, what we’re witnessing is the collapse of Cuba’s socialist regime. This transition could take decades. Or it could happen in much the same way as that great Cuba aficionado Ernest Hemingway once wrote of bankruptcy: "Gradually, then suddenly.” One thing is clear: The crisis can’t be fixed without fundamentally changing the country’s centralized, state-controlled model where bureaucrats rule over every aspect of public life. That political change, which must come from within Cuban society, threatens the survival of the regime and the future of the revolution, an unacceptable risk for the well-fed old guard that still runs the country. That’s the essence of the conflict right now.

This situation also represents a significant test for the region — and an opportunity too. As naïve as it sounds, imagine a functioning and freer Cuba, with its highly qualified professionals and workforce able to tap the country’s potential, from tourism to agriculture and culture or maybe even crude oil.

Yet the most foreseeable scenario now is one of uncertainty and chaos. Some U.S. lawmakers might celebrate a sudden collapse of Cuba’s regime as a policy success. But if that did happen (a massive if, I know), no organized opposition is waiting to take over and correct the ship’s course. We don’t know what the reaction of the Cuban military would be either. As William LeoGrande, a longtime Cuba-watcher and professor of Latin American politics at the American University School of Public Affairs, told me, "the result could be a failed state with mass migration and transnational criminal organizations establishing a foothold. That would be a much bigger problem for the United States — a potential disaster.”

For now, Cuba’s government is trying to fix its economic problems by implementing a deeply unpopular austerity program that includes hiking gasoline prices fivefold — diesel and gasoline went from 25 Cuban pesos to 132 pesos or 428% — in an attempt to close a massive budget hole estimated at 18.5% of gross domestic product and contain rampant inflation. It’s seeking new external help (such as the U.N. food request) and working for the full recovery of its key tourism industry. There’s a chance that an increase in local production to allow for bigger exports, a recovery in remittances and some other "bits and pieces,” as LeoGrande put it, could restart the economy and enable the government to survive the crisis’s immediate effects.

But that would be the best-case scenario for a system long past its sell-by date. Old-school Latin American lefties like Brazil’s Luiz Inacio Lula da Silva, Mexico’s Andres Manuel Lopez Obrador, Colombia’s Gustavo Petro and of course Venezuela’s Nicolas Maduro, may still look to Cuba for ideological inspiration. But as other commentators have pointed out, younger Latin Americans are at best indifferent. Moreover, notwithstanding all the speculation about Cuba’s strategic relationships with Russia and China (Diaz-Canel visited both in 2022) the reality is that, beyond their geopolitical alignment and rivalry against the U.S., these nations are reluctant to bankroll a government with a systemic debt default track record.

As the U.S. prepares to pick a president in November, Cuba also seems buried at the bottom of Uncle Sam’s strategic priorities (aside from dealing with the influx of Cubans at the southwest border). Given the number of other geopolitical pots on the boil, and the bad politics of engaging with the Cuban regime after its ugly 2021 crackdown, the Biden administration’s reticence is understandable.

Nonetheless, the U.S. — and Latin America and the world — have strong reasons not to give up on envisioning a modern Cuba and preparing for a transition, whether rocky or smooth. More effort should go into promoting linkages with Cuba’s nascent private sector, which came into being following the legalization of smaller enterprises in 2021; by some calculations, it already employs some 35% of the island’s workforce. That would increase commercial activity and strengthen the island’s economic interdependence.

But as John Kavulich, president of the U.S.-Cuba Trade and Economic Council, told me, that strategy holds risks for the regime: "When you are allowing entrepreneurs to make money, now you have very visually wealthy people in Cuba and not wealthy people in Cuba. How successful can someone be before the government decides to take all this away?”

Still, Kavulich is pushing for the U.S. Embassy to approve a list of small Cuban companies with which Americans could do business, fostering trade relationships within existing regulations and bans even as the current political deep freeze with the U.S. continues.

It feels like a century ago that President Barack Obama visited the island — the first U.S. president to do so in 88 years — and the Rolling Stones played for half a million Cubans in Havana’s Ciudad Deportiva. Yet that was as recent as 2016, proving that things can change fast on both sides of the Straits of Florida.

As the great Cuban writer Leonardo Padura recently told a Brazilian outlet, "In Cuba we are currently missing fuel, missing food, missing medicine. But what we are missing the most is hope.” That may remain in short supply under the current government. But for the sake of Cuba’s people, its neighbors should help keep hope alive.

 

Juan Pablo Spinetto is a Bloomberg Opinion columnist covering Latin American business, economic affairs and politics.

[helix]

Impressive piece.  👍 Juan Pablo Spinetto .

[NSXCIGAR]

Wishful thinking.

The regime is firmly in control. This isn't the Soviet Union where it was becoming difficult to control the Balkans economically and militarily. As long as Raul is alive and the military is at the ready there will be no "collapse" unfortunately. 

[Arabian]

15 minutes ago, NSXCIGAR said:

Wishful thinking.

The regime is firmly in control. This isn't the Soviet Union where it was becoming difficult to control the Balkans economically and militarily. As long as Raul is alive and the military is at the ready there will be no "collapse" unfortunately. 

Or perhaps a Coup d'état from within the military. Regimes like this you gotta keep the military officials happy. 

[NSXCIGAR]

12 minutes ago, Arabian said:

Or perhaps a Coup d'état from within the military. Regimes like this you gotta keep the military officials happy. 

From what I understand the military is kept very happy. Again, I don't think the military could be turned against Raul so it's unlikely anything like that would happen until Raul croaks. 

The proceeds from all these hotel grifts are controlled and distributed among the generals by Raul directly. The extent to which Cuba is essentially a military dictatorship is often missed in the discussion. Cuba does a good job of keeping the military presence out of everyday life. They have a very extensive force of gestapo-like agents that pop up during any active dissent to cart the main agitators off to the gulag without much fanfare.

When there's a rise in dissent like now they usually open the "pressure relief valve" looking the other way when people try and escape. It's usually the loudest people who leave first and less people means more for those who stay quieting them for the time being. 

[SCgarman]

7 hours ago, NSXCIGAR said:

Wishful thinking.

The regime is firmly in control. This isn't the Soviet Union where it was becoming difficult to control the Balkans economically and militarily. As long as Raul is alive and the military is at the ready there will be no "collapse" unfortunately. 

Never underestimate the power of hunger and the lack of food for survival. It is essential for life, and without it people will sometimes do "whatever it takes". Sounds like things there are worse than ever. 

[ha_banos]

There's some quotes about any society is 3/9 meals away from revolution/anarchy.

[CaptainQuintero]

  Someone said that in any country you never have to worry about anything until the army isn't being paid, I'd suggest this is one of the reasons why the regime there has managed to hang on for so long. 

  I haven't seen much about the Cuban military grumbling, it seems too well entrenched in the system?

[VeguerosMAN]

On 3/21/2024 at 5:30 PM, NSXCIGAR said:

Wishful thinking.

The regime is firmly in control. This isn't the Soviet Union where it was becoming difficult to control the Balkans economically and militarily. As long as Raul is alive and the military is at the ready there will be no "collapse" unfortunately. 

The Cuban government is making sure the top officials in the military are happy. In order for Cuba to collapse the military must be turned against the government.

[Puros Y Vino]

IIRC doesn't the gov't and military pretty much own and run every official business in the country? They are one and the same no?

[NSXCIGAR]

1 hour ago, Puros Y Vino said:

IIRC doesn't the gov't and military pretty much own and run every official business in the country? They are one and the same no?

They don't officially control everything, for example Tabacuba. But Raul and the military have de facto control over everything, obviously. 

1 hour ago, VeguerosMAN said:

In order for Cuba to collapse the military must be turned against the government.

What you want is the soldiers to quit like in the USSR instead of another coup of senior officers of the kind that put Batista in power.

[JohnnyO]

The trend now is that MYPIMES are popping up with "El Cangrejo's" (Raul Gillermo) name attached to it. That is Raul's nephew. Car rental agencies, bars and stores at the airport to grab some of those tourist dollars. John

[KarlJ]

Very sad for the citizens of Cuba. It’s hard to imagine what they have had to get used to and what they’re going through. Even in America, or other developed nations, poverty exist. There are very poor communities. But even so, at least in America, those people have government and community resources to lean on. I think if a Cuban were to experience the resources that are available to poor communities in America, they’d consider it an upgrade.

I’ve wondered, if the U.S. lifted the embargo how much would it really benefit the the Cuban people under a communist regime? Would they really prosper? Or would the communist Cuban government just grow stronger?

Its a shame that the Cuban government can’t do what’s good for its people and abandon communism and bring the country into a more stable and human rights friendly environment.
 

[VeguerosMAN]

13 hours ago, JohnnyO said:

The trend now is that MYPIMES are popping up with "El Cangrejo's" (Raul Gillermo) name attached to it. That is Raul's nephew. Car rental agencies, bars and stores at the airport to grab some of those tourist dollars. John

Very interesting. I will have to dig into this.

[NSXCIGAR]

On 3/25/2024 at 4:46 PM, KarlJ said:

Its a shame that the Cuban government can’t do what’s good for its people

The Cuban government's people are the party elites so they're doing great for them! 

Very few people or groups have ever given away power. In fact the only one I can think of is George Washington. 

On 3/25/2024 at 4:46 PM, KarlJ said:

I’ve wondered, if the U.S. lifted the embargo how much would it really benefit the the Cuban people under a communist regime? Would they really prosper? Or would the communist Cuban government just grow stronger?

A very good question. In the short term it may well result in a more powerful government. But 60 years of embargo certainly hasn't worked. Even if the state did become more powerful it's difficult to imagine the ending of the embargo not increasing the standard of living for all Cubans. One thing for sure is that there would be much more personal and cultural exchange between US citizens and Cubans and the state's days of using the embargo as a scapegoat would be over. 

Perhaps they'd end up in an economy like China's where there's basically nominal private ownership with state control but profit and investment are embraced. I think the average Chinese citizen is far better off today than they were in 1990. 

[Hoepssa]

If Cuba goes democracy, cheaper Habanos era is coming back!

Maybe not...Everything cost more because of Covid, and inflation.

[Baccy]

5 hours ago, Hoepssa said:

If Cuba goes democracy, cheaper Habanos era is coming back!

Maybe not... Everything cost more because of Covid, and inflation.

Somehow I doubt that. I think they are already producing as much tobacco as possible. I would love to see that happen though. Even though I know that removing the embargo would be a very bad thing for American Habanos lovers such as myself, if I thought for one second that it would improve the lives of the Cuban people I would be all for it. The Cuban people have to do what's best for them. I don't know it would take to remove the communist regime from power but I would imagine the same thing it took to install it. For all the faults of Batista, I feel like Cuba would have better off continuing under his reign. Even though he certainly wasn't perfect by any means, communism is a nightmare, always...

[NSXCIGAR]

4 hours ago, Baccy said:

For all the faults of Batista, I feel like Cuba would have better off continuing under his reign. Even though he certainly wasn't perfect by any means, communism is a nightmare, always...

There have been a few academic examinations of the standard of living just before the Revolution that made a fairly convincing case that until somewhat recently the standard of living for the average Cuban was higher under the Batista regime. And it's still debatable how much better it actually is today if at all. 

As thoroughly corrupt as the Batista regime was it's remarkable that Fidel's regime was actually worse. Fidel was a sociopathic egomaniac that thought himself to be a Jesus-like figure. He didn't care about the conditions of the Cuban people unless he got credit for anything that helped them.