Cuba's challenges, in a nutshell

The Canadian Foundation for the Americas (FOCAL) puts out two highly relevant electronic publications that readers might find helpful and interesting. One, the Chronicle on Cuba, is a monthly compilation of top news items on Cuba, collected from diverse sources. The other, FOCALPoint: Canada’s Spotlight on the Americas, is a broader look at important current issues in the Hemisphere.

In the most recent FOCALPoint (April 2010), Archibald Ritter has an article entitled “Cuba in the 2010s: Creative reform or geriatric paralysis?” Although some of his points are a little exaggerated and others enlist a bit of wishful thinking, he has a passage that aptly sums up the bulk of economic problems Cuba faces at the moment. Warning: it’s quite staggering.

On an economic level, the global recession hit Cuba hard. The intense foreign exchange shortage has made the need for reforms urgent. The dual monetary system continues to generate a behavior-warping incentive structure deforming people’s work and lives. The internal blockade against small enterprise suppresses people’s initiative and entrepreneurship. Centralized economic control results in pervasive micro-economic absurdities as well as large-scale fiascos.

Infrastructure and housing deteriorate steadily due to the lack of maintenance and new investment. There are, for example, an estimated 1.2 building collapses per day in Central Havana alone. The manufacturing crisis continues: production in 2008 was at 52 percent of the 1989 level, according to official statistics.

Once a large net agricultural exporter, Cuba has become a huge net food importer, mainly from the United States. The 2010 sugar harvest is coming in at roughly one million tons, a historic low compared with an average of roughly 8 million in the 1980s.

Cuba has become dependent on Venezuela for subsidized petroleum, financial credits and state-to-state payments for Cuban doctors’ services abroad. Worst of all, Cuba’s average inflation-adjusted real wage in 2008 stood at 24 percent of the 1989 level, according to analysts from Cuba’s leading economic research institute, the Centro de Estudios sobre la Economía Cubana.

These are quite serious issues, and none fail to catch the eye of Cuban leadership. Still, the question remains: will there be movement toward “creative reform,” or will Cuba maintain a sort of “geriatric paralysis”?

Read Ritter’s complete article here.

(Photo: Nevartos / S. Creutzmann, Havanna, Galerie Sven Creutzmann)