Binoy Kampmark: The Cuban Economic Crisis

Over one million state workers will have to relocate to the private sector, according to the Cuban authorities. The drive to self-employment and self-sufficiency will become the new ideological mission of the Castro regime. The economy is groaning under the weight off a bloated public sector. The economic indicators, according to the country’s National Statistics Office, are poor. Construction and agriculture have underperformed. The slump in tourism has been dramatic. The private sector is fast becoming the boon, the salvation of an ailing system. Has a certain faith in capitalism been invigorated? Will Cuba endorse a form of China’s Market Leninism? Either way, the market liberals, battered into silence by the global financial crisis, will be eager to see their ideas applied to a state that remains stubbornly opposed to market solutions.

The official Cuban labour federation claims that 500,000 jobs would go by March. Numbers will peak and reach a million after that, making it the most disruptive economic influence in decades. ‘Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls [and] losses that hurt the economy’ (Guardian, Sep 14).

Fidel Castro has certainly been readjusting his views for the press, something that sceptics see as an attempt to better position himself in the leagues of posterity. To The Atlantic’s Jeffrey Goldberg, he admitted that, ‘The Cuban model doesn’t even work for us anymore.’ Fidel has since refuted the suggested meaning of that statement. He had, in fact, meant ‘the exact opposite’ (Thai News Service, Sept 14). ‘I expressed to him without bitterness or worry. It’s funny to me how he interpreted it, word for word, and how he consulted with Julia Sweig, who accompanied him and gave a theory’ (Huffington Post, Sep 10).

For Fidel, capitalism remains a noxious disease. ‘My idea, as the whole world knows, is that the capitalist system no longer works – neither for the United States nor the world, which it steers from crisis to crisis, which are ever more serious, global and repetitive, and from which there is no escape.’ Such a model was surely, he argued, inappropriate and unworkable for a state such as Cuba. The effects of that statement, whatever the veteran communist leader might have meant, are still reverberating and cause of much debate.

Cuba watchers are attempting to read the signs of the regime and its next move on the subject of the economy. Fidel’s various public appearances since July have been taken to be tacit approval for his brother Raúl’s policies. He is, in the words of Geoff Thale, program director of the Washington Office on Latin America, ‘trying to pick up the pace of reform’ (Newsweek, Sep 20). Various reforms, as part of this new focus, have involved the unrestricted sale and distribution of cell phones, licensing of various private taxis, privatizing various state-run barbershops and the distribution of fallow government land for personal use by farmers (Huffington Post, Sep 10). While these resemble a rather piecemeal approach, the policies are set to become more wide ranging.

That pace may well force Cuba into a market orbit it can scant control. There is only one thing certain in this – the drive to self-employment will shortly become the new slogan, and few people will welcome that. There is no hand of God in the market, but nor is the solidity of a socialist system divine, let alone reliable. Perhaps Cubans will have to, as has been mooted before, ‘think like capitalists but continue being socialists.’

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

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