Poverty in Cuba Surpasses the Worst Moment of the ‘Special Period’

Poverty has increased considerably in Cuba in recent years, with inflation, the decline in the quality of assistance and the loss of currency value, among other things. (14ymedio)

14ymedio bigger14ymedio, Madrid, February 12, 2024 — Cuba has fallen thirty places in the Human Development Index (HDI) prepared by the United Nations in just 15 years and is at risk of moving from the group of States at a high level to a medium level, which would mean a severe blow for the Government, which for years has displayed this indicator – which, along with income, takes into account the life expectancy and literacy of the population – as one of its great successes. The data is even more worrying if one observes that in 1995, in the middle of the Special Period*, the Island was 13 positions higher than it is today.

The figure appears in an article published this Monday by the left-wing anti-capitalist media Kaosenlared entitled Cuba, Poverty and Data, signed by the economist, former spy and retired journalist Manuel David Orrio del Rosario, author of several recent articles very critical of the government policy. It cites several indicators about the worsening living conditions of Cubans, drawing attention to the two pillars on which the Revolution built its international myth, Education and Health, measures historically favored by the regime.

The HDI divides countries into four groups: very high (current index greater than 0.8), high (from 0.7), medium (more than 0.55) and low (all others). In 1990, Cuba was ranked 53rd in the world (with 0.68, which was then its highest score) and in 1995, during the Special Period, it fell to 70th place. However, coinciding with the beginning of the Venezuelan subsidy, Cuba recovered lost ground and climbed to position 55 (in 2007). In 2018, a decline began, later aggravated by the pandemic, which has taken it to 83rd place in the world ranking, with a score of 0.764.

As the article presents it: “The numbers are relentless: according to the economist and demographer Dr. Juan Carlos Albizu-Campos et. al., in recent years the largest of the Antilles is declining in its life expectancy at birth, its access to education and work and income, all of which would explain its drop of 30 places in the Human Development Index and would create the possibility that it would cease to be a country of High Human Development and become one of average.”

Another of the devastating data that appears in the text is the Gini coefficient, which has gone from 0.22 in 1989 to more than 0.45 in 2022. The number measures the inequality of the population in a figure that goes from 0 to 1 and makes it clear how the Island, although it achieves a good number compared to the rest of the continent, has doubled its rate of social differences.

The note makes it clear that the word poverty “is beginning to become common among academics, more than is desirable” and, although it “alerts” about the influence of the US “blockade” on Cuba, it places on the same level the “serious problems of the economic model, policy and performance, marked by virtual stagnation of the Gross Domestic Product (GDP) since more or less 2013.”

In addition, the author reproaches that the Government is hiding many other data that it neither publishes nor updates, among them the population and housing census

In addition, the author  reproaches that the Government is hiding many other data that it neither publishes or updates, including the population and housing census, which should have been carried out in 2022 and has already been delayed twice, allegedly due to economic problems. “How can there be governability without information? Are the deficiencies – basically fuel, according to reports – really so serious? (…) What is missing: resources or priorities?”

Orrio del Rosario also resorts to one of the data that raises the most eyebrows among the population, the excessive investment in tourism. For this he takes a graph prepared by the independent economist Pedro Monreal in which the percentages of public money allocated to business and real estate services, hotels and restaurants and investment in agriculture appear. The 47.6% allocated to tourism in 2020, the year of the pandemic and border closure, stands out, when in the same year 5.9% was dedicated to food.

“This policy is causing, from the beginning, a severe deficit in the supply of food and subsequent inflation, this deficit being recognized as the first cause of the galloping rise in prices, without prejudice to the impacts caused in other sectors and the effects on the value real wages and pensions, which have long been below 1989!” says the author.

Another of the factors to which the economist attributes the increase in poverty is the poor management of the reforms, which he considers very necessary but extraordinarily late. He notes, for example, that agricultural cooperatives were proposed in 1985, while MSMEs [Micro, Small and Medium Enterprises] arrived 21 years after the first mentions of their need. Nor does there exist, he reproaches, a business law, despite the insistence on saying that the state company is the main economic actor.

Another of the factors to which the economist attributes the increase in poverty is the poor management of the reforms, which he considers very necessary but extraordinarily late

The note addresses two other issues responsible for the increase in the crisis. One is the late, “poorly carried out and even counterproductive” monetary and exchange unification, whose purpose was to convert the peso into a sovereign currency and which has led to the circulation of three currencies and two units of accounts. As a consequence Cuba is facing inflation and the fall of salaries and pensions. According to some estimates, the nominal salary of 3,854 pesos in 2021 was equivalent to a real salary of 1,117 pesos in 1989, making things worse today after two years of rampant inflation.

Finally, he mentions an increasingly deficient attention to social policies, which is deteriorating the services that previously led Cuba to regional leadership in areas such as health and education, among others, “all of which are key factors in the decline of the HDI.”

“The four factors, plus others, come together in a kind of explosive cocktail that is attacking the credibility of the Cuban socialist project; none is directly related to the external factors mentioned above; they are internal political problems. Period,” the author concludes.

The article closes by asking the Government to explain what “errors and distortions” it intends to correct – according to its own announcements – and why these occurred, in addition to how it plans to stop once and for all the inflationary spiral that threatens Cubans with increasing poverty.

*Translator’s note: In addition to the articles linked to, more about the “Special Period in the Time of Peace” can be read here.

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