Castro Military Counterintelligence: An Example of Cuba’s Internal Embargo/Blockade

The state apparatus of control and repression is among Cuba’s largest employers.

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, November 6, 2022 — Cuban communists blame the embargo/blockade for all the ills that occur in Cuba, but they know that argument is not true. On the contrary, there is an internal blockade by the regime on the Cuban people that prevents them from reaching the levels of prosperity and well-being they want. A much more harmful and lethal internal blockade. There are many examples of this historical attrition. Interestingly, the information is offered by Granma, the Communist Party’s official newspaper, in the article entitled “The history of Military Counterintelligence is the history of the Revolution.”

Here we have a magnificent example of that internal blockade that grips the lives of Cubans: military counterintelligence, which has just turned 60 years old. It’s not surprising that Raúl Castro, through an emotional letter, has abandoned his golden retirement to preside over what Granma calls “the political act and military ceremony on the occasion of the 60th anniversary of the founding of Military Counterintelligence, constituted on November 7, 1962, and whose history is, for many reasons, the history of the Revolution itself.”

Well, yes. The history of the revolution, the model of social, economic and political organization that has made Cuba in six decades one of the poorest countries in the world. And why is this counterintelligence an example of the internal blockade? For many reasons. Let’s start with the economic, organizational, functional cost of the thousands of chiefs, officers, non-commissioned officers, cadets, sergeants, soldiers and civil counterintelligence workers.

Thousands of people are engaged in unproductive and inefficient tasks, which respond only to the regime’s objectives of surveillance, control and repression. Unfortunately there are no data to back up this statement, but employment in the branch of public administration, defense and social security, including the state apparatus, reached a total of 31,500 people in 2021, 7% of the total, more than in construction and almost the same figure as in the manufacturing industry. In addition, since 2017, it registered a growth of 6% while total employment decreased by -0.8%. continue reading

What seems obvious is that these people occupied in the tasks of counterintelligence don’t produce food or manufacture products; their work is only reflected in being an instrument of the internal blockade, which is to report information to eliminate from the root any social initiative contrary to the objectives of the so-called “revolution.”

Raúl Castro’s letter confirmed the personal interest of the country’s ruling circle in the members of this body to continue to preserve, “with the professionalism and honesty that characterizes them, the security of the Revolutionary Armed Forces and the work of the Revolution.” Let’s say that if that supposed professionalism and honesty were dedicated to more productive and necessary things for the well-being of ordinary Cubans, this argument could be justified, but giving security to the revolution is now getting old, and the effort dedicated to this task is so enormous, that much of the country’s energy is lost in this activity, which counterintelligence performs masterfully.

And apparently not only Raúl Castro wants this organization to continue working and blocking the Cuban people. The speech of some leader of the new generations of officers recognized that, even though much work has been done, the challenges ahead are even greater. And he added, “for revolutionaries there is no rest; we have to be united and work to continue consolidating the gains achieved”: a message that reinforces that unproductive character of counterintelligence, based more on the confidence that the direction of the revolution places in it than on the use of the work of those thousands of people in pursuit of the social good of all Cubans.

The 60 years of existence of this organization have depended on alleged attack plans of the internal and external enemy. Beliefs that, based on being repeated over and over again, end up becoming dogma; in reality, those attacks have never occurred. What usually happens is that the regime, to block the people, identifies a legitimate social protest, such as 11J, as an attack on national sovereignty, and imprisons thousands of people, with long sentences for exercising a widely recognized right in all countries of the world. That is, internally blockading the population.

Are there privileges to be part of this organization? In a general sense, possibly, but it doesn’t seem that employees who engage in these activities have, except in very few cases, better living conditions than average. They have lived with a non-existent creed for 60 years and curiously prepare for an uncertain future, in which, once the nation chooses the path to freedom and democracy, the internal blockade exercised by counterintelligence will disappear forever.

It will disappear as in the famous film, “The Lives of Others,” in which the protagonist, a spy with East German counterintelligence, is faced with a new reality alien to the one he had lived in the period of dictatorship. Most likely, democracy in Cuba will make the entire history of counterintelligence disappear, the history of its “founders, heroes and martyrs,” because unlike what Granma says, we will not inherit anything from them, except a lot of suffering, repression, destroyed lives and internal blockade, and this, of course, at incomprehensible costs for any state.

And as it doesn’t appear that this will happen, the communist regime that governs the destinies of Cubans, the same one that created counterintelligence 60 years ago, will not assume the historical responsibility of transforming the organization so that it really serves the interests of the people and ceases to be an internal blockade. They won’t. Not even with that critical reflection or analysis of what Granma says they do. Many of these actions help to understand the internal blockade that Cuban communists deny, although it exists and is especially serious, above all at this time when the people begin to wake up and realize what is being lost.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Cuban Regime Takes the ‘Doberman’ of the Embargo for a Walk at the United Nations

Image of the 2021 vote in the UN General Assembly against the US embargo on Cuba. (UN)

14ymedio bigger14ymedio, Elías Amor Bravo, Valencia, 3 November 2022 — There is no doubt about it. The Cuban communist regime has taken the fierce U.S. embargo/blockade for a walk in the United Nations, which it keeps for the appropriate occasions. As of now, it achieves international attention in this forum of nations. And, if there is something that continues to provoke rejection and fatigue towards the castrista outcry against the blockade, it’s the way they have to try to convince the world, and to a large extent themselves, of what is that blockade that only exists in the feverish minds of a few.

To begin with, as we have pointed out in this blog on numerous occasions, there is no blockade as such, since Cuba trades, invests, receives tourists and subsidies from 192 countries of the world completely freely. And let’s use correct language. The dictionary of the Academy of the Spanish Language says that a blockade is “a maritime force that blocks.” Has anyone seen any US ship closing Cuba’s traffic since those days of Soviet nuclear missiles? No. Obviously, there is no blockade. What there is is a dispute, and it would be better to use this term.

For example, Castroism says that “the blockade is a system, based on hatred and punitive measures against human beings.” However, for many it isn’t, and it represents a legitimate option of economic rights that, at the time, were trampled upon by the same political regime that governs the destinies of Cubans. No one was worried then about the billions of dollars of property that was seized by Fidel Castro’s communist regime and, worse, the joke of committing to payments that never arrived.

Nobody remembers that episode, but there were tens of thousands of people who lost all their assets, and were not only dispossessed. They were repressed and imprisoned by the regime that had confiscated their property. Between 1959 and 1968, more than 90% of the assets of foreigners and Cubans passed into the hands of the State. No one has ever given the slightest proof of complying objectively and correctly with the compensations. The permanence of the dispute between the United States and Cuba is a firm commitment of the former to the rights of its citizens. It is not an act of hatred, precisely. The punishment applies to those who fail continue reading

to comply. Then, with the passage of time, the dispute acquired other nuances until it reached the present time, 63 years later.

From this perspective, if the international community makes claims for the dispute to disappear, it’s because it ignores the background, or simply, it  has taken the side of the Cuban communists. The dispute is not a “crime against a neighboring nation, noble, solidarity, respectful, that has never attacked or will attack the US.” On the contrary, it is a defense of the interests of its citizens, who were aggrieved by that neighboring nation, and a firm commitment to freedom and democracy.

At the same time, Cuban communists stretch the rope of the blockade to the limit.

For example, they usually say that “the blockade causes Cuban children who suffer from the lack of a drug, the implantation of an organ, or the use of a reagent, for the ridiculous reason of having only 10% of American components.” Or when they say that “Cuba can’t buy food or has to look for it in distant markets, or simply do without because the banks where we must pay don’t accept Cuban financial transactions.”

False. It allows, precisely, the purchase of food of all kinds and medicines and medical equipment in the United States. The data support it. Purchases of these products exceed 200 million dollars a year. The only condition is that Cuba pay in cash. The truth is that with Cuba’s data on debt defaults, that requirement not only seems reasonable, but should be extended to all countries that trade with the Island. The United States does well to protect its exporters.

And of course, there are lies and more lies to distort reality. It’s not true that because of the blockade “the use of the US currency has had to be suspended because no necessary resource is allowed to be acquired with it, whatever it may be.” The dollar is used in Cuba today more than ever, and there is a stable demand that keeps the price high in informal markets, reflecting the deep imbalances of the economy.

Cubans demand dollars and will continue to do so, above the existing supply, because they are a safe haven, a trustworthy currency, and they increase purchasing power and facilitate access to all kinds of goods and services. The necessary traceability of those dollars is something very different, and here once again, if the regime doesn’t get Cuban dollars accepted in foreign banks, it is because the origin of them is unknown, and international payment standards must be complied with, which, for example, Fidel Castro despised. Taking Cuba off the list of terrorist countries can, in this case, even be reckless.

If relations between the United States and Cuba continue to be assessed through the framework of the dispute, there is only one party responsible: the Cuban communist regime. In the text it is very clear what has to be done and how to leave behind this situation that, on the other hand, has always existed and only becomes a threat in those moments when Cuba ceases to have some external partner willing to subsidize its economic and political adventures. In that sense, between 1959 and 1993 there was no talk of any embargo. Reason? The generous Soviet subsidies. Later, with the economic emergencies of the Special Period, the argument of the embargo arose, but when Chávez’s oil arrived, the tension calmed down again.  Until now, when Castroism is in the terminal phase and doesn’t know what to do.

It’s even possible that the dispute is in its final hours. However, there are those who think that it’s now more justified than ever. At the United Nations, Cuba wins every year in votes on this issue. David’s false fight against Goliath always has supporters. What there is no doubt about is that the sacrifice of the United States for giving continuity to a policy that began as a defense of the interests of its citizens and ended up being a wise strategy for the democratic, economic and social transformation of Cuba, will be rewarded when Cuba joins the set of democratic countries of the world. And that will be soon. And then, the dispute will be over.

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Editor’s note: This article was originally published on the Cubaeconomy blog and is reproduced with the author’s permission.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba and Vietnam: Where’s the U.S. Blockade?

The bust dedicated to the Vietnamese leader Ho Chi Minh in a Cuban park being refurbished among general indifference. (14ymedio)

14ymedio biggerElías Amor Bravo, Economist, 22 April 2022 — Not even they can clarify it. In the morning, the Cuban communist leaders get tangled up in furious attacks on the United States over the blockade/embargo, blaming it for all the island’s economic problems, and, in the afternoon, they issue clear instructions to the official press to say the exact opposite.  See if it isn’t true; the article in in the State newspaper Granma titled “Vietnam, second Asian partner in the Major Antilles”. This is where the state that “in spite of the geographic distance, the commercial bilateral trade is going well, and now Vietnam has four projects in operation in Cuba with a capital value of 44 million dollars”. Not a word or mention of the blockade/embargo. Congratulations. Therefore we have to ask again, where is the blockade?

Let’s take it one step at a time. Maybe the Cuban communists don’t speak Spanish.  Don’t think so. So, perhaps it’s best to go to the definition of “blockade” in the Real Academia de la Lengua dictionary, and there blockade is defined as the action “to block”, and so, if we look for the definition of this verb, we find the following entries:

1. tr. Intercept, obstruct or close the way. This is clearly not what is happening.

2. tr. Prevent the normal operation of something. Unthinkable.

3. tr. Make difficult, or hinder the carrying out of a process. That’s really difficult.

4 tr. Hinder, paralyse a person’s mental faculties. Well, that’s beside the point.

5. tr. Carry out a military or naval operation to cut communications to a place, a port, a territory, or an army. Yes, this happened over three or four days when dozens of Soviet nuclear missiles arrived in Cuba in ships, and Kennedy gave the United States navy the order to prevent their passage and force them to turn around.

It can be seen that this image has stayed with us from the start of the ’60’s of the last century. Can the term “blockade” or “to block” really be applied to the present situation in Cuba? Difficult. And if not, ask the Vietnamese. continue reading

And if they don’t agree, what does the dictionary say about “embargo” or, “to seize”, which is the other hackneyed term used by the Cuban communists. This is more of a fine point.

1.m. Prohibition of trade and transport of arms and other equipment for use in war, decreed by a government. Nothing of the sort.

2. m. Retention, sequestration of assets, on the orders of a judge or competent authority. Nothing of the sort.

3. m. archaism. Indigestion, stomach upset. Hardly.

4.m. archaism. Damage, inconvenience. Well, this could mean anything.

To sum up, none of this seems to exist in Cuba at the moment, and the communist allusions to blockade and embargo are more a reverie about the past and a desideratum than anything else. The Vietnamese know it and don’t have the slightest problem in trading with the Cuban regine leaders. Nor do they care about the supposed threats. In the same way, 190 other countries in the world, including the United States, the target of the Cuban communist attacks, with whom it is possible to trade, so long as you pay in cash.

Granma points out in their article that Vietnam “has become  Cuba’s second largest Asian partner (obviously, China is the first), with the trade transfer between the two countries reaching 102 million dollars in 2020”. This information was made known in the seminar in Ho Chi Minh City to promote investment in the Mariel Special Development Zone (ZED Mariel).

But, if we analyse the statistics, we need to lower these claims. In Quarter 1, there are presented the exports and imports between Cuba and Vietnam since 2015 and the result (in index numbers with 2015 as base = 100) is nothing to write home about. One can see an important decline from the levels achieved in 2018. The trade is not going well.

Quarter 1.- Trade between Cuba and Vietnam (index 100 = 2015)

Therefore, this seminar organised by the Ho Chi Minh City Center for Promotion of Trade and Investment and the office representative of the Cuban logistics operator Almacenes Universales S.A. offered Vietnamese and Cuban companies the opportunity to update the strategic changes and benefits of the Vietnam-Cuba Commercial Accord. That’s to say, “reset” the deal with absolute freedom and without limits. And all that in spite of the embargo/blockade and the COVID -19 pandemic.

An open and shut case. Even a news agency, Vietnam Plus, has stated regarding “this gathering in the Indochinese country has as its aim increased economic cooperation, in terms of investment, commerce, tourism and health between this Asian centre and Cuban regions”, some economic relations that as can be seen in Graphic 1, collapsed during the Covid-19 pandemic.

Supported by what the state press calls “ties of friendship, brotherhood and mutual confidence between Vietnam and Cuba” they have arranged a series of projects and commercial accords which are very interesting for the island, because they permit the reinforcement of the eternal ideological message against the United States.

It is hard to believe that the Vietnamese, commercial partners with that country, with which they maintain excellent economic and financial relations, would allow themselves to be trapped in the Cuban communist verbiage. But, the fact is that there we have the results and see the business between the island and the Asian country on the increase.

This climate of economic relations has been preceded since last year by a series of political meetings between communist leaders of the two countries, leading some analysts to think that the Cuban leadership is contemplating an exit from the serious crisis by way of a Doi Moi (ed. note: programme of economic reforms implemented in Vietnam in 1986), which permitted Vietnam to get past its periods of hunger and convert itself into the emerging power that it is today.

It doesn’t seem as if that was to be the way forward. The Cuban and Vietnamese communists have spoken more about help, contributions, cooperation and solidity, than about structural changes in the economy. A shame.

And that was in spite of the fact that a spokesman for the Cuban regime said that “we are interested in continuing to study the experiences in Vietnam which could be useful for the updating of the Cuban economic and social model, including food security and the attraction of direct external investment”, precisely the type of “experience” of the least help to the Cuban economy in overcoming its backwardness.

The two countries, apparently, and according to official information, have established accords in distinct sectors of food, biotechnology, communications, tourism, and energy, but, without doubt, the most important element has been the help sent by Vietnam for combatting Covid-19, especially the supply of 18,000 tons of rice. Cuba, for its part, sent anti-Covid vaccines.

Translated by GH

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba and Brazil: First Economic Points of Lula’s Victory

Presidential candidate Luís Inácio Lula da Silva salutes followers at a campaign in Fortaleza (Brazil), prior to the election. EFE/ Jarbas Oliveira

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 31 October 2022 — The Cuban communist state press reacted quickly to Lula’s victory in Brazil’s presidential elections. Díaz-Canel, recovering from his speech to the communists gathered in Havana on the occasion of the XXII International Meeting of Communist and Workers Parties, didn’t miss a moment to congratulate Lula, calling his victory one of “Latin American and Caribbean unity, peace and integration.”

The words of Díaz-Canel resonated to old chants like those spoken by economically-ruined Fidel Castro during the Special Period to a triumphant Chávez in Venezuela, who over time became a source of subsidies for the Cuban extractive economy. Perhaps Díaz-Canel believes that history repeats itself, and hence his joy at the triumph of the left in Brazil, with Lula at the forefront.

But sometimes things don’t go the way you want. They happen in another way. And many of us fear that this Lula, in his second presidential period, will not embark on dangerous operations that might return him to the courts he knows so well.

In fact, in his victory speech, he already worried about making his objectives clear: combating Brazil’s misery and poverty and uniting society after very divisive elections. How he does it and, above all, his appeal to the enormous potential of the Brazilian economy, will be a matter to take into account.

He reiterated his commitment to the environment and announced that he will resume the protection of biomass in the country, especially the Amazon. This is a rough matter, especially if he wants to receive support from the Chinese, whose model of global exploitation has little to do with protecting the environment. This bet takes him away, perhaps without knowing it, from those who could be his main allies in this new stage.

With an agenda like the one proposed by Lula, the position of the Cuban communist regime will be weakened. The failure of the Mariel weighed a lot on the state of economic relations between the two countries. The data is eloquent. continue reading

In 2016, Brazil represented 2.8% of exports and 5.2% of Cuban imports. Five years later, the respective percentages were 0.11% and 2.8%, respectively, bringing along a trade deficit and increasingly reduced trade. There is little business for a country like Brazil, with more than 200 million inhabitants. Exports fell by 96%, imports by 48%.

Regarding tourism, out of the 35,000 Brazilians who arrived on the Island in 2016, there were 416 in 2021, in the midst of the pandemic. Unlike other tourism markets in Cuba, Brazil didn’t register the highest value in 2019, and in 2018, reaching 41,000 tourists, it was barely 0.87% of the total. Compared to the country’s population potential, tourism from Brazil to Cuba is insignificant.

And more data could be offered, all of them equally eloquent. The powerful Brazilian economy has little, scarce interest in what Cuba can offer, and also, Cuba’s purchasing potential is insignificant to sustain a stable framework of relations with Brazil. So between the two countries, the flows of capital and business leave much to be desired.

Can it happen that Lula changes the character of these tendencies? Of course, that’s what Díaz-Canel wants, but is Lula in a position to mortgage the future of Brazil to someone who doesn’t pay or who does it late and badly? What benefit can Lula obtain from the Cuban communist regime located at the antipodes of this national reconciliation project of which Lula speaks? What does Cuba have to offer Lula, besides doctors, spies, coaches, etc.?

Some advisor to Díaz-Canel should have listened to Lula’s victory speech in a little more detail, especially when he said that his victory is “for all women and men who love democracy and want freedom,” and then added clearly that “it’s not a victory for me or the PT (Workers’ Party).” Díaz-Canel’s opportunistic message of congratulations to Lula was along the opposite line, when he said, “but they could not prevent you from winning with the people’s vote. The Workers’ Party of Brazil returns; social justice will return.” This is just what Lula doesn’t want to hear, in search of that unity he talked about. With this type of leftist and radical approach, Cuba and Brazil will not go very far. Time will tell.

It’s evident that there is a clear difference between the speeches of the two leaders, and the impression is that Brazil will go it alone and not show a particular interest to the Cuban communist. It’s enough to listen to another of Lula’s speeches to realize his intention to govern for all. “This is a victory for all women and men who love democracy, who want freedom, who want culture, education, fraternity and equality.” In short, it’s a clear concern about “how to begin defining and repairing this country.” The messages of “decadent capitalism, the victory of socialism, the recovery of the ideas of Marx, Engels and the Communist Manifesto,” and other stupidities enunciated by Díaz-Canel at the meeting in Havana, were not even heard in Lula’s speech. He has learned his lesson. We’ll see how everything ends.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba: A UMAP for ‘Social Transformation’ of People Who Do Not Study or Work?

A contemporaneous article about the UMAP force labor camps in Cuba. “A brilliant initiative of military cadres.”

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 27 October 2022 — A brief note in Cuba’s officials state newspaper Granma has set off the alarm. It’s getting ugly. During the council of ministers, which met yesterday, October 25th, they presented general directives for preventing and confronting crime, corruption, illegalities and lack of discipline. It was about time, but now the regime is willing to put an end to any behavior deemed illegal. No matter that, thanks to these activities, many Cuban families are able to put food on the table, after searching unsuccessfully in the state-owned bodegas.  The note in Granma states that one of the ten points taken up during the council of ministers was directed at “combatting excessive prices and the resale of essential products.” To that end, they drafted a request to regime and party leaders at all levels, but especially in local government, “to not waiver in these situations, and not allow space for theft and diversion of resources.”

What does this mean? Well, nothing other than, as of now it will be more difficult to find food, and the weight of the repression will be unlimited against people who offer these services to their fellow citizens.

But the repressive actions, in fact, have already begun in some agricultural markets in the capital. Authorities issued fines to vendors who were reported for abusive price fixing and other illegalities. Specifically, last weekend operatives of the Municipal Inspection Directorate (DIM) in Playa, Havana, imposed fines of up to 8,000 pesos to six vendors in the supply and demand agricultural market at 19th and 42nd for price violations and other illegalities.

Two of those sanctioned were fined for abusively fixing the price of tomatoes, bell peppers, and carrots at 300 pesos per pound as well as limes (200 pesos per lb.), and pineapples (100 pesos per unit). Two others were fined 5,000 pesos for not including in their lists the product price or for “finding 999 nylon bags without a receipt, for which the responsible party was fined 1,500 pesos and the merchandise confiscated.” continue reading

These infractions are included in Decree Law 30 of 2021 which establishes the personal infractions, sanctions, measures and procedures to apply to violations of the norms dictated in the price and tariff policy. In summary, the repressive apparatus is already functional and investigations will continue, especially after those latest instructions of the council of ministers.

Leaders want to identify the sources of these products as well as the houses converted warehouses for sale on the illegal market, so that they can confront the illegalities and lack of social discipline. This will be followed by a crackdown against the sale of foodstuffs, hoarding, theft of merchandise from state-owned stores and abusive prices.

It’s the same old, same old. If instead of concentrating their effort on unproductive activities such as surveillance, snitching, inspections, and repression, the authorities would dedicate themselves to produce more, so an increase in supply would flood the market and contain prices, it would be another story. It is obvious that they are not going to do this, or worse, from a communist ideological perspective, repression is the motivator.

What the regime describes as “illegalities” is so astonishing and extensive that someone should begin to worry about those anomalies that only exist in Cuba. Not even in impoverished Haiti is it so easy to find such illegalities, for example the sale of propane tanks at bakeries and other stores, where Cuban communists confirm that there is “probable complicity of some employees in the theft of more than 1,000 tanks.”

Another, with respect to the sale of fuel at service centers, where the deficit or the delay in service is due to “problems in shipping, an increase in demand, and an increase in the time required for the purchase transaction at these establishments.” To say nothing of the electricity, less than 20% of the lights have come back on in the capital city, which remains dark. With housing, another, homes affected by the hurricane remain in the same situation (of 1,176 affected only 166 have been repaired). Another record.

But what truly worries authorities are the prices. Authorities want prices to adjust to the costs and reject the laws of the market, in both the state and non-state sectors. And, especially, they do not want to produce wealth, which is what sets apart the economic actors of the state political power. Bankruptcies and closures will follow. People can’t sell at a loss. There is no making heads or tails of this.

Conclusion. The regime takes the Doberman of fear out for a walk, and prepares for the worst. This time, as if a novelty, in the council of ministers they announced the traditional “strategies for the social transformation of people who neither study nor work, so they may contribute to society.” Social transformation? What the devil is that? Perhaps a new UMAP* is coming in the 21st century? Will the world remain impassive in the face of these communist practices in Cuba?

In the same ministerial meeting, Gil informed on the country’s economic performance as of the end of September this year, but nothing has changed. Perhaps he did this to justify the spending on that survey which claims to measure consumer satisfaction among Cubans. An absurdity. Granma says nothing in regard to this, only that during the council, the following matters will be discussed: the portfolio of opportunities for foreign investment (a failure from the start), the national hydraulic plan (impossible to implement without investment in hotels), the decree law on conflict mediation (after the family code, anything is possible), and the expected assignments for the 2023 graduates of higher education and mid-level technical schools (employment for all, even if they’re worthless). All very interesting, right now.

*Translator’s note: UMAAP = “The notorious Military Units to Aid Production (in Spanish: Unidades Militares de Ayuda a la Producción), internment and forced labor camps where the Cuban government imprisoned homosexuals, the religious, intellectuals, dissidents and any other “suspicious elements” between November 1965 and July 1968.” Source: Ernesto Hernandez Busto

Translated by: Silvia Suárez

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Failure of the Cuban Communist Regime’s Employment Policy

Granma masthead, headline and illustration. (Granma)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 23 October 2022– Cuba’s official State newspaper Granma describes the more than 152,000 people who have joined the workforce in the non-state sector of the economy as a success and linked it to the measures to diversify society’s economic actors implemented in the country over the last several years. Neither one, nor the other. Enough of the propaganda, let’s get to objective conclusions that can be obtained from these data. ##The labor market in Cuba continues to be dominated by the communist economy, the increase in employment is insufficient and the new economic actors, estimated at 5,500, have not played as large a role as was expected in terms of creating jobs. The results lead, if you will, in a different direction.

It’s all the same, the official communist periodical celebrates as a success the 152,373 people who, by the end of August, had joined the country’s labor force; of those, 123,321 are not associated with an employer, according to data from the Ministry of Labor and Social Security (MTSS).

The weight of the state sector on employment continues to be great and does not allow the private sector to close the gap. Even so, the job offers for those 44,619 were in public sector organizations; 107,754 in the non-state sector, of which 101,461 were self-employed, 4,491 in other forms of private business, while 1,802 benefitted from being allowed to use state-owned fallow land.

This increase in non-state employment, clearly insufficient, is purported to be associated with the measures to diversify society’s economic actors implemented in the country over the last several years. However, in reality, those data mask the requirement imposed on self-employed workers with more than three employees that they register as a ’mipyme’ (a microenterprise) if they want to continue operating legally. A good proportion of the employment created is related to the measures imposed by the regime to “whitewash” the data about the process of creating new actors. continue reading

Thus, highlights Granma, that of the people identified, 38% are people younger than 35 years of age and 31% women, while among those who are not employed, 44% are women and 29% young people.

A good example of the mediocre data presented by the ministry can be found in the comparison with the same period the previous year. If this is the case, the increase in those entering the labor force was only 16,117 people.

What do these data tell us? They quickly confirm that the communist regime’s employment policy is another failure, it continues without adequate linkages to the rest of the regime’s political and social economy. In essence, one policy aimed at padding the staff rosters of state-funded businesses and organizations, where there is underemployment, and low levels of productivity which are not commensurate with the salaries received. The labor market in Cuba is non-existent, and does not comply with technical functions to satisfy the staff qualifications needed by the companies, and it is much less socially useful to guarantee workers suitable career paths.

The most glaring example of this failure can be found in the non-compliance with the Communist constitution of 2018 and of the so-called labor code, Law 116/2013, which establishes fundamental labor principles, such as the rights and social duties of citizens, implemented through the Decent Work Program. But in practice they lead to this situation of state underemployment which tends to reproduce itself over time, without creating adequate space for private activity.

The failure of the employment policy at MTSS and the institutions that comprise it, in combined with the demands of the national economy, and the local development strategy of each territory is evident in the denouncement of the few foreign investors who venture to operate in the country: that they cannot find qualified personnel for the positions they have on offer.

Similarly, with slim offerings in the private sector, which attempts to carve out a path in the country, many high-level professionals (doctors and researchers) prefer the salary of a waiter or cook to those they get from the state-funded sector. That is an absolute communist mess; their employment priorities from “those graduating from regular day courses at several levels of education, those graduating from active military service and other people of interest to the state, especially women, people in vulnerable situations, and those who serve their [criminal] sentences or security measures while free,” do not satisfy those people who yearn to develop professional careers based on what they know how to do.

Proof of the failed employment policy can be measured alternatively taking into consideration that, of the total of 4,770,000 employed workers in the state sector as well as the private, the latter barely total 1,600,000 or 34%, which has remained stable since Raúl Castro, around 2011, authorized the reduction of padded state staff rosters. The largest employment sector in Cuba continues to be the communist state, reaching up to 66%, higher than any other country in the world, as a paradigm of inefficiency, low competition and wasted resources.

The fact that only 1,802 Cubans have applied to rent land, which is the only semi-private formula the communist regime will authorize in Cuba, it is a good example that private formulas in Cuba continue to be lower than their true potential, and that in this environment, like many others, one must work and hard.

The article in Granma also offered some indications of how the regime intends to continue promoting “modalities of telework and remote work as one form of employment that benefits the organization as well as the employee,” including that “diversification of the work force, in a way that is more flexible than the in-person modality.”

Nonetheless, at the same time, the article clarified that “this model is not applicable to all job vacancies as it depends primarily on the duties performed by each worker at their work place, the position they hold, among other things.

In summary, for the directors, telework and remote work depends “also on the employer creating the conditions, control mechanisms, and watching out for the security and health of the employee and guaranteeing that, in this way, neither the employee nor his/her work will be affected.” That is, that the regime doesn’t have a clear strategy for telework either and they are spinning their wheels. In reality, the limitiation lies in the area of information technology and the capacity of the networks to allow working from home. And then there are the blackouts. What productivity could they possibly be talking about for a teleworker who spends 12 hours a day without electricity?

The regime is not up to the task to provide for innovation in labor policies. Meanwhile, the communists entertain themselves embroiled in the labor framework and now they want the ministry to lead, through collective labor agreements, a registry of the posts, which by their nature, could be conducted in telework mode or working remotely; in this way there is collegiality among workers, the sindicate and each employer organization. Bureaucracy, paperwork and an even bigger mess. The Cuban communist regime’s labor policy is a total failure.

Translated by: Silvia Suárez

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba’s Economy: Less Control, More Freedom

Cuban farmers have been hit hard by lack of inputs, fuel shortages and drought. (Flickr / Kuhnmi)

14ymedio bigger14ymedio, Elias Amor Bravo, Economist, October 22, 2022 — There is not a single country in the world whose leaders spend as much time, or consume as much energy, revising and perfecting systems for monitoring and controlling the economy as Cuba. If one were to add up all the hours dedicated to this task, they would surely set a world record for pointless activity.

The consequences are plain to see. The communist economic model, obsolete and exhausted, is one of chaos. The more power its leaders have to devise legal tools and implement action plans for involving themselves in the economy, the worse it gets. Things work better without so much tinkering, oversight and control.

But will the communists acknowledge the failure of their system after sixty-years? Not in your dreams. On the contrary, Granma recently published an article, “Stay on the Path That’s Been Approved,” in which it reports that Prime Minister Manuel Morrero met with the country’s governors and their managers in the Palace of the Revolution to “promote high-priority programs and step up efforts to combat illegal activity.” Granma says his remarks were “right on target” but we fear they will be of little use. Let’s look at why.

Marrero stated that, even when a provincial or municipal problem concerns the central government, it may not be best resolved at the national level. In many cases, he pointed out, the best solution is a local one that takes into account to the conditions of a particular region. What problems is Marrero talking about? The usual ones: “Illegalities and violations that undermine the institutional framework and undermine governmental management.” Therefore, he points out, “the irregularities which are being committed today with such impunity, which have such a direct impact on the public, cannot be tolerated.”

What kind of “irregularities” is Marrero worried about? The ones he is supposed to fix. For example, the recurring issue of accounts receivable and payable. According to the prime minister, this area has been a breeding ground for corruption and criminality. A series of ongoing defaults, in which goods and services are provided before they have been paid for, is an example of poor economic management. This kind of financial malpractice results from the collusion and improvisation endemic to a communist economy. continue reading

Another irregularity that keeps Marrero up at night is the issue of coleros,* which he discussed during a meeting dubbed “Operation Anti-Colero.” This initiative is supposed to put an end to the widespread climate of disorder and illegality caused by the serious economic crisis that the nation’s leaders are incapable of solving.

There was also talk during the meeting about the low productivity of farmland and its impact on the nation’s food supply. The 63 measures intended to encourage the agricultural sector have been a failure. This was confirmed by the National Office of Statistics and Information, which reported that agricultural output has fallen for three consecutive quarters. Marrero was in charge of promoting an alternate reality that nobody else in Cuba has experienced, claiming that hard-to-find produce and other agricultural products were making their way to Cubans’ tables. The truth is that no such data confirms this phenomenon. Food in Cuba is scarcer now than it was a year ago. And its price has skyrocketed, with food inflation twenty points higher than the CPI average.

The problems are the same as always and caused by the regime. Besides the 63 agricultural measures that have not worked, there have been delays in leasing idle land to farmers and delays in the planting of seasonal crops. More than 3,800 hectares have yet to be planted and acreages set aside for growing banana, sweet potato and malanga have been reduced. As long as food is not a priority, the situation will only get worse.

There was also talk about meat and milk not being delivered, how roughly 4,143 suppliers have not fulfilled their contracts with meat companies. National leaders called for local authorities to conduct a case-by-case investigation but we already know the reason for this. It has to do with the disconnect between supply and demand, which is caused by sweeping state interventionism.

The communists feel they need more control, not in general but at the municipal level. The reality, however, is there is already too much control, rigidity and interventionism. If producers had more freedom to produce and to trade with whomever they wanted, the situation would be very different. There are already plenty of tools for control at the municipal level in the Castro economy.

Unlike what was claimed at the meeting, the process by which the state contracts farmers to grow food is burdened by excessive government control and interference. What is really needed is what Vice President Valdes Mesa called spontaneity. He should know because he remembers what Cuba was like before 1959. At that time, there was one cow for every person and no one had trouble finding meat to eat or milk to drink. Not only was there spontaneity back then, there was freedom too.

The meeting also addressed the subject of housing, one of the most intractable problems facing the country. Concerted efforts have yet to made on the ground, leading to understandable public frustration. It was announced at the meeting that, as of late August, 15,790 homes had been completed. Of those, roughly half had been built by their owners and 1,985 were basic housing blocks. With fewer than 30,000 new units in 2022, it looks like another terrible year for housing. Meanwhile, some observers say the country needs another million new units.

Housing construction is still not keeping pace with the production of building materials such as stone, bricks, concrete blocks, roofing and flooring. But the problem goes beyond the materials themselves. What is needed are builders capable of handling large-scale construction and remodeling projects.

The Maternal and Child Care Program was discussed at the meeting also. As of October, 72,846 live births and 539 deaths were recorded, and an infant mortality rate of 7.4 per 1,000 live births. The most common causes of death were perinatal conditions related to prematurity, low birth weight and intrauterine growth retardation, followed by congenital deformities and sepsis.

The problems with the program, such as staff shortages, ineffective attempts to reduce premature births and prenatal diagnostic errors, require immediate attention. What also requires attention is the mortality rate — currently, no one knows what it is — along with the fertility rate, a measure of the number of births by women of childbearing age. Cuba’s fertility rate happens to be one of the lowest in the world, which does not bode well for long-term population growth.

Inflation was also a topic for those at the gathering but little or nothing was said beyond mentioning the need to combat the illegalities without clearly indicating how to do it. There was also talk of new “economic players,” such as small and medium-sized private business, which currently number more than 5,340. There are 59 such state-owned operations, 58 non-agricultural cooperatives and 126 affiliated companies. While the contribution of these private businesses in supplying the public with goods and services was acknowledged, some new measures were announced that will contradict an essential principle of the communist economic model: the socialist state-owned company is the lead player while other types of businesses exist to complement it. This is a bad idea.

Marrero announced that progress is being made in drafting rules that would regulate these new businesses, from the national level all the way down to the the municipal. The idea is to include them as part of local development strategies. This would involve incorporating them into local economic ecosystems by linking them to state-owned companies, governments, universities and banks, and encouraging their participation in social responsibility efforts.

Hadn’t we agreed that these new businesses were to be set up so that they would be free to consolidate within a network of private companies? So why this new attempt to control them and interfere in their operations? Has the law gone into reverse? Many of these businesses are going to shut down if they start feeling too much pressure from the regime, as has happened before. And then we’re back to square one.

Translator’s note: people who are paid by others to wait in line for them.

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba: Embargo, Yes? Embargo No? Exposing the Eternal See-Saw

Cuban Minister of Foreign Affairs Bruno Rodriguez

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, October 21, 2022–It takes just a small step to go from  the sublime to the ridiculous. Bruno Rodríguez, Minister of Foreign Relations of the Cuban communist regime, who just a day before publicly thanked the U.S. State Department for the $2 million in assistance for hurricane damages, the following day, in a speech widely covered by the state press, stated, “the world would be better without the blockade against Cuba.” I insist, from the sublime to the ridiculous.

With this blockade jargon, the Cuban communists have won the propaganda and misinformation battle. That there is no taro root in Cuba, is the embargo’s fault. That there is no electricity, the embargo’s fault. That tourists don’t go, the embargo’s. That financial markets do not lend Cuba money, the embargo’s fault. And so it is; every part of life in the nation are influenced by contentions with its neighbor to the north, the solution of which, on the other hand, is within reach of the communist regime. If it doesn’t do so, it must have its reasons.

And in reality, if there is no food in Cuba, one can observe serious shortages, stockouts, long queues, anxiety, among the population faced with difficulties to secure even the basic food basket, the only embago/blockade responsible for this situation is the internal one; the one imposed on the population by the regime and its economic model. Cuba can purchase food on the market of 192 countries around the world, and it also does in the United States. The problem is the availability of financial resources to make those purchases, which, due to non payment of its debts, are not easy to obtain. What deprives Cuba of access to financial markets is data on its failure to responsibly make payments on its debts. No one, under normal circumstances, is willing to lend to those who do not honor their commitments.

In any case, the blockade/embargo is one of the communications points the communist regime, devised by Fidel Castro, masterfully played in international fora, alarmingly obtaining alignment of countries with theses and arguments that do not fit within any basic economic analysis. continue reading

Such is the effort that a national report was promoted at the United Nations, under Resolution 75/289 of the U.N. General Assembly, titled “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba” (August 2021-February 2022), to which the Cuban communists dedicate special attention each year. The referenced document will be discussed for the thirtieth time on November 2nd and 3rd. They are already campaigning.

Moreover, each year, the regime takes advantage of any external factor to dress up the content of the report with a dramatic tinge. This year, why not, it’s Ian’s passage through Pinar del Río. It aggravated the effects of the serious international economic crisis, which is already being felt on the Island though ECLAC barely touches on it in its most recent forecast. The regime’s partners are not in a position, for example, to give away money.

And, since one thing cannot occur without the other, in this year’s report, Rodríguez Parrilla went on to explain that the blockade has taken on new forms, more detrimental if that was possible, in its attempt to accentuate the impact on daily life. Although for that they need to revert back to historic dosuments from 1960, such as that Memorandum of Assistant Secretary Lestor Mallory, who 62 years later continues to give opportunities to the Cuban communists to attack. C’mon it was not that long ago.

To this point, and with history’s rancid analysis, arrives a new estimate of the losses caused by the blockade, which according to the regime, between August 2021 and February 2022 were 3.806 billion dollars, a historic record during a period of only six months. It is as if the Cuban economy depended solely on the economy of the United States, a sort of anexionist focus or something similar.

The regime does not spare any effort. In six decades, at current prices, the cummulative damages total 154 billion, 217 million dollars. At the current price of an ounce of gold, taking into consideration depreciation, the cummulative damages amount to 1 trillion, 391 billion 111 million dollars. And clearly, the political conclusion is always the same: imagine what Cuban could have done if it had had access to those resources. What Cuba would be like if the country had used those resources.

Well, nothing. And everything. An economy doesn’t function better just by having access to money. Just the opposite. The key is how the money is used and whether the resources are allocated in ways that are profitable. And it does not seem that the Island’s prevailing economic model would allow it to reach such profitability with the resources. The blockade/embargo only goes so far, and no further. Everything else is science fiction.

In reality, the United States is the second largest tourist market for Cuba, it sends over 8 billion dollars in remittances per year and allows commerce and imports of 200 million dollars per year. No one sees the embargo anywhere, except for those who have a political interest in it being so. Going from the quantitative calculations of losses, be they the 3.806 billion dollars mentioned or the 6.364 billion dollars of the Biden era, the estimates in terms of GDP is risky and sets a bad precedent.

There is something in the estimates of losses in the report that merits attention for its novelty. The regime maintains that the GDP growth could have been 4.5%, had the blockade/embargo not existed during the period between August 2021 and February 2022. One cannot make heads or tails of this 4.5% and it forces a reflection on the cummulative economic magnitude, how they were calculated and what they really mean.

To begin with, it is convenient to really know how much the Cuban economy has grown in the period mentioned. Data on GDP growth are provided by the ONEI by quarter. Given the dates, it covers from the third quarter of 2021 to the first quarter 2022.

According to data from ONEI, the 2021 inter-annual growth in GDP was -1.4% in the third quarter, then it reached 10.9% in the fourth quather and another 10.9% in the first quarter of 2022. A simple mathematical calculation suggests that, in this period, the GDP grew by 6.8%, clearly more than the 2021 median, which was 3.2%. Then, what is the regime talking about with that 4.5%, which they say could have been achieved without the embargo?

Beware of unfounded statements, and with the calculations that are not adequately justified. Now it so happens that, even with the embargo/blockade, the Cuban economy grew faster than the rate desired by the regime if this dispute did not exist. Who do you believe?

The regime blames the embargo for: the lack of fuel; the obstacles in acquiring replacement parts and other resources based on American technologies; and the difficulties with regard to financial banking matters; commercial, financial or investment transactions; in the direct persecution of producers, transporters, shipping companies, insurers and freight forwarders; problems with the electrical energy system; and medicine. But in reality much of these claims have to do with existing obstacles that prevent the economy from functioning freely. That’s the real embargo.

Translated by Silvia Suárez

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Argument of the Embargo and the Ridiculousness of the Cuban Communist Regime

A Cuban farmer makes extra money turning the invasive marabou weed into charcoal for export. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, October 16, 2022 — When a government ignores economic problems, it does so for two reasons. Either because of incompetence, or because there are substantive reasons that prevent the adoption of appropriate measures to meet social demands. Or it can happen as in communist Cuba, where the two converge. For example, incompetence and ideological pressure are the factors that condition the terrible results of Cuban agriculture, with declines in GDP in the second half of the year that are above the average of the economy as a whole.

In other words, neither the “63 measures” planned for agriculture, nor the “94 of sugar” have served to change the trend of the two fundamental sectors of the Cuban economy. And, as always, in these cases, the state press directs its accusations to the U.S. blockade, holding it responsible for alleged millions of losses in agriculture, which are added, of course, to those of the other sectors.

Strangely enough, Cubans have experienced this sequence of events since the earliest times of Fidel Castro. Blaming the blockade has always been present, and now, when people can’t take it anymore, Cuban communists shamelessly unleash the embargo/blockade doberman again. The point is that this excuse is no longer believed by anyone in Cuba or in the rest of the world.

In an amazing way, the anti-blockade argument changes over time. Interestingly, the regime now says that “the blockade is the main obstacle to the implementation of the 2030 Development Agenda.” A false complaint, which aims to reach the United Nations forums where these issues are addressed, like the Summit on Sustainable Development Goals, held in the context of the 74th session of the U.N. General Assembly two years ago, where such a statement still has force.

Foreign Minister Rodríguez, increasingly irrelevant in international forums, seeing that friends are fewer and fewer, pulls this new story of the embargo/blockade and the 2030 agenda out of a hat. If this aptitude for defining insubstantial paradigms were applied to food production, maybe things would go another way.

Cuban communists, seeing themselves isolated at the international level, have returned to the charge against the impact of the economic, commercial and financial blockade, insisting that it slows the country’s economy and considerably affects  development in all sectors. They have now set their sights on agricultural production. And to that end, they have unloaded again a numerical figure that says the losses due to the blockade amounted to 270 million, 852 million, and 548 million dollars between August 2021 and February 2022, according to estimates by the Ministry of Agriculture. Almost nothing. continue reading

Where does that absurd figure come from? Specifically, it was the director of International Affairs of the Ministry of Agriculture, Orlando Díaz Rodríguez, who was in charge of making it known that the estimate, “summarizes the income not received by exports of goods and services, losses due to geographical relocation of trade, as well as from effects on production and services, monetary and financial ones and technological limitations.” Of course, optimistically, no one can beat them.

Income not received from exports is child’s play. The first thing would be to see if those exports have a demand or interest in the U.S., and they don’t seem to. The concept of “geographical relocation of trade” follows the same trend as always but is false. All countries look for the necessary goods and services wherever they are, and then transport them. As for the “allocations,” this is already known. The internal blockade of the regime is much more negative and has been so for 63 years.

The tireless Cuban communists accuse the 243 coercive measures adopted by the Donald Trump administration (2017-2021), still in force with the Biden administration, and say that “they put the brakes on the business system, which includes cooperatives and individual producers, making it impossible to position their products in the North American market.” False. There is nothing in the dispute that prevents independent producers from placing their sales in the U.S. market. The problem is the same as always: is there demand for those products? Cuban communists talk about tobacco, fresh fruit, honey and charcoal  as the products affected by the embargo, but could more of them even be produced? We doubt it.

According to the communist leaders, Americans have been deprived of these Cuban products and cannot purchase them because of the blockade. In particular, in the health sector, he alluded to Vidatox-30 CH, a homeopathic drug developed by Labiofam used as a complementary therapy for the treatment of cancer, which, due to the “criminal policy,” cannot be commercialized in the northern nation. As if the pharmaceutical industry in the U.S. didn’t have similar drugs, validated by the World Health Organization.

Not satisfied with everything said, there was also talk of the interest of entrepreneurs, producers and other “representatives of the agricultural sector in denouncing the blockade, as well as the measures that intensify it, and they’ve expressed their interest in cooperation, investment and commercialization with the Island.”

##Do you know when they’re going to collect if they sell on credit to Cuba? The U.S. chicken producers and farmers already market their products under the current conditions [i.e. payment in cash at time of sale]. What reason is there to sell if they can’t collect until later? In addition, agriculture in Cuba needs to import animal feed, inputs, technologies and raw materials for the sake of food production for the people. What are they going to pay for it with?

It’s the same old song. The embargo is guilty of everything. They fall into the most absolute ridiculousness. More opportunities will come for accusing the embargo/blockade of all the ills of the Cuban economy.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Exchange Market Analysis and State Intervention (II)

Cuban 20 peso note signed by Che Guevara.

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 17 October 2022 — When Cuban Minister of Economy and Planning Gil decided, unilaterally, two months ago, to create an exchange rate of 1×120 for the dollar relative to the peso in an attempt to counteract the trend in the informal market, it was soon observed that the limits imposed on the availability of currencies, the geographical scope and access to purchase, limited to natural persons, would cause more problems than solutions, since this process eliminated the basic principle of convertibility of the foreign exchange market.

The minister’s decision, far from redirecting the situation, alerted the informal market, which began an unprecedented escalation of the dollar to around 200 pesos. After all the failures, the authorities now intend to redirect the situation and position the foreign exchange market between the national currency and the foreign currencies, preventing the Cuban economy from being dollarized. It won’t be easy. A very valuable amount of time has been lost, and now the cost of the adjustment will be higher.

The minister is determined to control all the currencies that enter the economy to channel them into the state coffers, and as they are fewer and fewer, decisions are increasingly risky. We remember that the stores that only accept payment in MLC (freely convertible currency) were adopted as a temporary and necessary solution to maintain socialism, and they are still there after more than two years. Everything that is proposed for a while ends up becoming permanent. And that’s how it goes.

On the other hand, there is concern among Cubans about what may happen with the peso exchange rate in the coming months. Those who have stocks in this currency don’t know whether to change now, at 190-200 per dollar, or to wait and see. The uncertainty is great, because the functioning of the informal market deviates from the conventional schemes that explain the trends in the value of currencies, and there is no anchor for the analysis. In any case, it doesn’t seem that the leaders are going to change the conditions of the environment that have led to this situation, so things will continue in the same way. continue reading

So, in the face of the current exchange rate crisis of the peso, which the authorities are unable to reverse, there are messages in the official press regarding the fact that the Cuban peso should be the center of the financial system, including an inclusive price system for all economic actors and a market that works with a certain level of wholesale and retail offers. So, why don’t they succeed?

The foreign exchange market is considered one of the essential elements in the recovery of the convertibility of the national currency, but it’s much more than a nominal exchange of currencies. In fact, the official thesis points out that its absence was a great obstacle to the full use of productive capacities, limiting the country’s economic growth. The foreign exchange market is a reflection of other balances or imbalances that affect the relative value of the currencies. It’s not an isolated entity.

The directors of the Central Bank of Cuba rightly consider that the foreign exchange market involves the possibility of connecting the national currency with foreign currencies, through a well-founded exchange rate and that, in addition, this should be reflected in practice, in the relations that are established between economic agents, both state and private. The inconvertibility that occurred after the approval of the rate of 1×24 meant the emergence of alternative mechanisms to access foreign currencies, such as the dollarization of the economy in informal markets. The leaders want to set limits on this, since it opposes the objective of increasing the purchasing capacity of the national currency.

From this perspective, the official position assumes that the non-convertibility of the currency generates imbalances, because economic actors cannot meet their currency needs with the national currency at the current official exchange rate. When this process is carried out in a disorderly manner, it puts the economy in a complex situation, and an example of this is the current scenario of the dollarization and development of the informal market, which the authorities want to stop.

On this point, the official vision emphasizes the need to correct the sources of imbalance that gravitate on the foreign exchange market, mainly those associated with large national currency issues to support the fiscal deficit. So, they suggest that through an orderly and coherent intervention, using the economic policy instruments that the state has as a regulatory body, a foreign exchange market can be implemented that responds to the purposes of convertibility.

The directors conclude that macroeconomic stability is essential to be able to grow, and that growth is what allows the expansion of productive capacity, which enables the economic development of the country, and in that development lies the possibility of building socialism. To achieve this objective, a set of structural transformations that lead to the full convertibility of the national currency must be implemented on the fly. The question is the same as always: what structural transformations?

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba’s Exchange Market Crisis and State Intervention (Part I)

A line outside a currency exchange (Cadeca) in Havana. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 17 October 2022 — The official voice of the party has finally spoken. Like Don Rafael del Junco in that radio serial of the great Félix B. Caignet that paralyzed the country for a long time, the official state newspaper Granma talked about the foreign exchange market in order to blame the informal market and inflation for everything bad. And it has done so with arguments that are more political than technical, with evidence that is more propaganda than scientific. Let’s take a look. What it has always done is nothing more and nothing less than what we could expect.

According to Granma’s official analysis, “in the nation’s current conditions, it’s essential to capture a greater number of currencies, formalizing their entry into the financial system, stabilizing the exchange rate and making it the only one, for both natural and legal persons.” [A ’natural person’ is an individual human being, while a ’legal person’ can be an entity.]

Wrong. A greater influx of foreign exchange doesn’t guarantee control of the financial system, nor will exchange rate stability be achieved. So what does Granma want? Let no one be mistaken: to fill the state coffers and then allocate these funds to the regime’s objectives, which, as we know, have little to do with ordinary Cubans.

This idea was what led Cuban Minister of Economy and Planning Gil two months ago, to improvise a new exchange rate for the purchase of foreign exchange by the State (1 USD per 120 CUP), as he said at that time, to establish an exchange market in the country aimed at “increasing foreign exchange income and gradually advancing in the recovery of the economy.” This is the first thing, of course. The second thing has already been seen. Quarterly GDP growth fell from 10.7% in the first quarter to 1.7% in the second, a full-fledged collapse of the economy, dragged down by the terrible results in agriculture, sugar and manufacturing. continue reading

The communists cannot understand, under such conditions, how in a very short time the official exchange rate collapsed compared to the informal market, which at one point reached 200 Cuban pesos/US dollar. There were many reasons for the failure, but it was clear that the simple sale of foreign exchange, limited in amount and only for natural persons, was not going to go very far, as in fact happened.

It is useless for Granma to launch all kinds of attacks against the informal market, which they describe as a “crooked and illegal” business. Although Granma doesn’t recognize it, the informal market has been the winner of this whole process, and unless the State represses or eliminates it, it will continue to be so. Basically because this market, unlike the state of Minister Gil, provides its services to the population without limits, regulations or ties. Granma says, belittling the agents of the informal market, that “it is the only exchange service that is now profitable and open at midnight outside the CADECA [the state exchange service], attending to the line and then selling places in line at 1,000 or 2,000 CUP, or even at dollars.”

The Cuban Economy is Without Direction and Internationally Isolated

The corner of Galiano and San Lázaro in Havana crumble away without restoration. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo Economist, 15 October 2022 — With the Cuban economy’s GDP in the second quarter practically stagnant, 1.7% compared to the same period of the previous year; with CPI inflation climbing to 32% also in a year-on-year rate in August; with the blackouts that don’t cease, the depreciation of the Cuban peso in informal markets, the difficulty with choosing a combination of economic policies that puts an end to the process of deterioration suffered by the Cuban economy, like sugar and manufacturing, and in the face of a new default on the tourism plan, the Cuban communist leaders remain unmoved, incapable of choosing  a combination of economic policies that can put an end to the process of deterioration suffered by the Cuban economy.

The bad thing is that the worst is yet to come. While in other Latin American countries the pre-pandemic GDP levels have recovered, efforts are made by central banks to control the increase in inflation, and the depreciation of exchange rates and adjustment measures are adopted to face the new global competitive scenario, in Cuba no one does anything. The people live every day with the anguish of what to eat, and the regime remains stuck in its obsolete, failed communist model, unable to provide solutions to problems.

This is a differential element that Cubans who can travel abroad immediately see as soon as they get off the plane. Nobody understands what is happening on the Island, and therefore, the protests are increasing, the banging of pots and pans in protest is heard daily, louder and louder, and people have lost their fear of talking.

And instead of acting to eliminate daily anguish in the population, adopting economic policies that facilitate the take-off of productive forces, the regime is the same as always: take the doberman dogs for a walk and put fear into the population, from the rapid response brigades, to the Black Berets, through the prosecutor’s office. continue reading

Once again, the machinery of repression and communist control is put at the service of the single party to prevent Cubans from exercising their rights and freedoms. It’s the worst possible path, before the astonished gaze of the international community.

Consequence: fewer and fewer friends. The regime has looked for them and reacts clumsily and slowly, as when the other day it abstained, along with China, in the United Nations vote against Putin’s referendums in the conquered areas of Ukraine. With friends like that, anyone can go party.

With everything, the international allies of the Cuban communist regime are being diluted, and bank demands arise for unpaid debts, for which the communist organisation is not prepared and which will mean a real blow to the waterline when, perhaps soon, the sanctions are known.

What’s coming is not good, and it is necessary prepare. The friends of this aimless and futureless Cuba disappear. Unlike that honeymoon of Fidel Castro and Chávez that saved the regime after the Special Period, now no one appears willing to sustain an economic system without the capacity for indebtedness. There are only a few old communists left in Europe who are reluctant to recognize the failure of their dreams, if they ever had them, and when other countries visit the Island, their leaders are received by Raúl Castro, who, by the way, gives signs of life, as happened during the visit of of Vietnam’s minister of public security.

The Cuban economy is not here to play cat and mouse. Sooner rather than later it will have to face an internal and external agenda, for which the current leaders have no answer, nor do they want to offer one. Installed in defending the communist ideological model, they haven’t realized that the world is going any other way, and that any decision that has to be made, doesn’t allow for delay.

They should listen to their Vietnamese colleague. In five years that country overcame food famines and is now the number one exporter of rice in Asia, ahead of China. Cuban communists don’t want to believe it but reforms in property rights can change the direction of a country. Cuban communists don’t dare. For good reason.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Alternatives to Providing Cuba’s Communist Regime with Aid for Those Affected by Hurricane Ian

Damage such as this, from an earlier Hurricane Matthew, is ‘routine’ on the island. (EFE)

14ymedio bigger14ymedio, Elias Amor Bravo, Economist, 5 October 2022 — Attentive to the first measures announced by the regime for precariously addressing the effects of Hurricane Ian in Pinar del Rio. The leader has been the minister of Domestic Commerce, Betsy Díaz, who during the first edition of Mesa Redonda (Roundtable) on Cuban TV, announced a series of measures which I analyze in this blog entry.

Apparently, the hurricane delayed the regular supply of family food baskets as a result of the “slowdown of activities at the ports, and although there are other products which had already arrived in the country, they needed to halt operations and it was not possible to deliver these, as is customary, before the first of each month.”

We need to look at the unbelievable. The food baskets stuck at the ports due to the hurricane. Not even Mrs. Díaz herself believes that. She later said that “we are ending the coffee distribution, except on the Isle of Youth and Holguín; we are finalizing a substitution for the yogurt, which could not be produced; and we are finishing up the delivery of last month’s meat products throughout eight territories such as La Habana, Mayabeque, Pinar del Río, Sancti Spíritus, Matanzas, Ciego de Ávila, Holguín and Granma.”

Instead of forgetting about the food basket for once, they back themselves into a corner and proceed with the distribution of goods in dribs and drabs; such that the only reaction it elicits is popular indignation. The bureaucratic planners do not understand that every Cuban is different and that treating everyone the same is a big mistake. The precariousness of the measures seem insufficient for the 903 damaged facilities, of which 22 are warehouses, said the minister. Furthermore, 871 retail units were affected; of these 520 bodegas (ration stores], 429 in Pinar del Río. continue reading

With regard to the energy deficit caused by Ian as it passed through the westernmost provinces, the minister stated that they have begun distributing charcoal for cooking. That is, a return to a past long ago.

She also said that there is a delay in the distribution of domestic gas in the provinces of Holguín, Ciego de Ávila, Granma and Las Tunas, as well as delays in the distribution of salt as all operations are paralyzed. It is not strange that people protest in a situation such as this, absolutely not justified by the effects of the hurricane. The minister concluded by saying that all inputs for the food basket are in the country, for which she begged the population for calm in this matter.

She added that “as of October 6th, food modules for the affected provinces,” including the distribution in four provinces and the special municipality of Isle of Youth, [will contain] supplementary food, taking into consideration the damages to agriculture and the energy deficit.

Specifically, three additional pounds of rice for the entire population of the territories mentioned above. Similarly, preserved meat will be distributed depending on household size. “This measure will benefit more than 3,553,000 consumers,” according to the minister who also announced more potatoes, hygiene products, grains in Pinar del Río and Havana, and beginning on October 6th, food modules for all consumers. She even spoke of mattresses for those who have requested them. Dribs and drabs instead of liberalizing and freeing markets.

She references aid received from international organizations such as the World Food Programme, specifically tents, tarps, lanterns, mobile warehouses to protect foodstuffs, and kitchen kits, which will be controlled by the communist Defense Councils.

But of everything mentioned above, the most interesting has to do with the sale of construction materials, especially for the facilities and homes affected by the hurricane.

And the solution is subsidies. More spending. People affected may be assessed for subsidies, access to bank loans, or could pay cash if they have the financial means to do so; also, as a new feature, they are offering payment plans to sell these goods.

The discount is 50% of the price. This is the only thing being rolled out in a singular and generic manner; it is the same for a Cuban who earns 2,500 pesos per month and one who earns 5,000 per month. This is communist equality, that later ends up creating shameful distortions in society. Because, furthermore, it subsidizes 50% of the materials for someone who is without a home or business due to the hurricane, and someone who has some roof or wall damage which requires minor repairs.

Has no one thought of adjusting the percentage of the subsidy? It seems unreal that in a country with a centralized economy and planning, aid cannot be tailored to the personal circumstances of the applicant. Providing equal aid to everyone is pure communist demagogy and lack of motivation to work for the collective good. The minister still has time to change the aid formula and stop distributing products as if this were an old parroquial charity office. During catastrophic situations in communist Cuba, public administration leaves much to be desired.

Translated by: Silvia Suárez

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Agricultural Development Development Fund Has Been a Failure

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 3 October 2022 — One of the most resounding failures of the 63 measures approved by the Cuban communist regime to increase agricultural production has been the so-called Agricultural Development Fund. One year after its creation, the balance sheet cannot be more demoralizing. The official state newspaper Granma explicitly recognizes it when it points out that “in Ciego de Ávila there could be more credits approved, because it’s a purely agricultural province,” but only 22 credits have been granted in the amount of about 230 million pesos. A trifle. For it to be useful,they have to keep in mind what they intend to do in Pinar del Río, selling construction materials at half the price to fight the destruction of Hurricane Ian. This type of measure doesn’t work.

But let’s go to the case in question. The 63 measures that sought to encourage the progress of agriculture and speed up food production haven’t worked a year later. It’s logical, since they are poorly designed and try to achieve objectives without first making structural transformations.

Far from attributing responsibilities for the failure to the banks of Credit and Commerce and Popular Savings, which are only transmission belts of a program, which, I emphasize, is poorly designed, the only ones who should respond to the failure is the regime, the ministry and even Díaz-Canel himself for relying on measures that are imprecise, poorly designed and of little social utility, such as this fund.

Why do we say that the design is incorrect? continue reading

Well, basically because of those who apply for and get the credits from the fund. These are state companies that will be supported by political and partisan criteria. Since this financial modality was launched, the banks have also approved reduced loans with a small amount, destined for state companies, such as Arnaldo Ramírez and Porcina.

Very few independent farmers benefited from the loans. Those who benefited from the Agricultural Development Credit have been state companies with a weight in food production, such as Agropecuaria La Cuba, Agroindustrial Ceballos, Agropecuaria Chambas, and integral Agropecuaria, and only three entities in the cooperative sector participated, which received 108 million pesos for the cultivation of bananas, guava, potatoes and the promotion of pasture for livestock.

On the other hand, Granma’s note reported that the Agricultural Development Bank approved 2.8 billion pesos for the planting of cane, in addition to other amounts for the production of pork, protected crops, the planting of cassava, corn, soybeans, sweet potatoes, rice, fruit trees and protein plants for animal feed. And yet, the sugar campaign was the worst since colonial times. Bandec is now in charge of managing the committed debt, but, as Granma says, the greatest responsibility lies with Agriculture and Azcuba, responsible for defining the natural and legal persons who meet the requirements to receive the loan and are in a position to increase production, as intended, and be able to repay it.

This is the question. What is the requirement to be met? It seems that we are talking about irrelevant issues, but efficient banking practice is clear about it. Property rights are a necessary, but not sufficient, condition for an effective financial policy. If this relationship is not established transparently and with the utmost legal respect, things cannot go well. And so, after a year, as Granma says, the credits approved in a purely agricultural province are scarce, and it is recognized that, “even though all the scenarios have been used to divulge the advantage of the initiative, it’s never enough, because it doesn’t always go directly to the producers.” Once again, communication, and start blaming the complex situation of the economic and social environment for failure.

Translated by Regina Anavy

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Reasons for the End: In Search of Lost Unity in Cuba

Hurricane Ian left nearby buildings standing in this location, but took down large trees, (14ymedio)

14ymedio bigger14ymedio, Elias Amor Bravo, 2 October 2022 — As of now, that unity has nothing to do with the necessary process of listening to society, interpreting their motivations, tending to their demands and resolving problems, making them participants of the reality. That process is not related to the “teachings of Fidel” nor to the accumulation of nonsense and interference by those in power whom Cubans have had to tolerate for 63 years. The people have said, “Enough,” and they want a new start, one in which a true democratic process of leadership and public management, which have never existed in Cuba, can be applied.

Therefore, to speak of unity to achieve a recovery is a recipe that will not work, it is useless. Cubans have every right to chose other formulas.

The people are fed up when, each time new problems emerge, for which the solution does not seem possible, such as the nationwide blackout due to the hurricane that crossed over the western region, the regime only offers unity, unity in work, solidarity and the public’s own participation. And similarly, in the official language, why not add the influence of the “nefarious monstrosity” of the United States blockade, just as the regime’s conversations requesting assistance from its northern neighbor became public.

Unity and falsehood. A description of the reality which aims to hide from Cubans the truth, which they do not want to change, in fact, they just want to continue at the helm of power. It is the same as insisting, time and again, that the Fatherland does not have “a road map other than the one created by the example of the historic generation of Fidel and Raúl.” Lies. The democratic road map is the one Cubans now want to decide on, to face the future on new foundations that mean progress for all, and not just for the few. continue reading

The official propaganda accuses the “enemy” of “attacking because it fears the continuity represented by the new generation at the helm of the country,” when the new generations do nothing but say they have no interest in leading anything, they simply want to leave the country. The 200,000 Cubans that have left the country en route to the United States this year, are mostly young people who do not want to see unity nor continuity of anything. The leaders no longer know how to interpret the signals and do not wish to do so, and this is another indicator of the end.

While the official press does not skimp on effort as it creates an alternative reality far from human reason when it says, “the enemies of Cuba never offer a solution that does not respond to the interests of subverting our socialist society; and it is in that eagerness that they take advantage — and even fabricate — the vicissitudes we are going through.” Let’s see if the true enemies of Cuba are the ones who insist on staying in power at any cost, waiting out their terms without stepping aside, as is needed. Perspective is very important, in any case.

Is it that perhaps the problems, unresolved for generations by Cubans, are not the responsibility of their government, or regime, which is the same? Of course, the hurricane has also wreaked havoc in the north, but there, very soon, it will be possible to see a return to normality.

In Pinar del Río, many of the destroyed houses had been destroyed by past hurricanes. Problems in Cuba are not fixed, they are frozen. The issue is to gain time. The worst enemy of the Cuban people is its regime or government, which in 63 years has not been able to create professional emergency units to deal with crisis situations and catastrophes, and which is incapable of providing a definitive solution to the problems of the people. It is not good to think about the “other,” without reviewing in depth what lies within.

And thus, the regime’s official propaganda, after trying to justify unity with fantastic and hilarious arguments, launches another much more alarming argument, “healing the damage from Hurricane Ian will not be an easy nor a short-term task.” It will be long term and no one can say they were fooled. Those affected should start looking for other areas or counting on the help of family or those living outside their areas. The recovery will be long and in many cases will not arrive.

Not even international solidarity has arrived well. The usual friends (Iran, North Korea, Russia, Venezuela, Mexico, Nicaragua) have their own problems and no one is giving away money during complex times like these. Here, also, the end seems near. The unity argument falls apart, but the Cuban communist regime does not want to acknowledge it. Loneliness is the worst consequence of not knowing how to do things well.

Translated by: Silvia Suárez

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COLLABORATE WITH OUR WORKThe 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.