The Consequences for the Cuban Economy of the Death of Lopez-Calleja

López-Callejas was reported to maintain a low profile despite his powerful positions. (Screen capture)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 2 July 2022 — The bankruptcy of the Cuban economy and the administration of the enormous wealth of the Castro family are two factors in a first assessment of what Luis Alberto Rodríguez López-Calleja’s death means from the economic perspective, and his legacy can be evaluated in terms of these two objective data. The economic crisis is caused by the limitations to growth in the private sector,  the SMEs [small and medium enterprises] and the CNAs [Agricultural Cooperatives]. In addition, the State’s absolute control of economic activity (the internal blockade) is one of the worst legacies of the hidden, unlimited power exercised by López-Calleja from the monopoly of GAESA, the Business Administration Group of the Revolutionary Armed Forces, which contributes 80% of the economy’s GDP.

In fact, López-Calleja was, from the shadows of his political position, one of the main opponents of the development of private actors in sectors such as hospitality, gastronomy, transport, small craft trade to tourists, etc., as soon as he saw that they became a counterpower that could curb the spectacular balances of the Regime’s mixed businesses with foreign companies. His man in government, Prime Minister Manuel Marrero, was in charge of making things more and more difficult for emerging private actors.

There is no doubt that López-Calleja was efficient in managing the Castro family’s wealth and income. He maintained the most absolute lack of transparency, moving amounts that are estimated to be spectacular and increasing the results from year to year, which is what is expected of managers.

In fact, thanks to this, he was promoted to the highest levels of the army and even represented the republic in the Assembly, which was interpreted as a direct political statement to Cuban President Díaz-Canel in the face of his possible replacement. The position of “counsel to the president” was a direct and clear message.

Therefore, the two unknowns of who will be the substitute for these very relevant functions raise, at least for the time being, a scenario of crisis and uncertainty about the political model of the Regime. It’s even possible that Raúl Castro, who is responsible for this decision and who, at an advanced age, may be thinking that life disappears around him at great speed, will ignore these issues. The position that until now was concentrated in a single person could even be divided, and this would also be a challenge for the Regime, accustomed to dealing with a single element for the two tasks.

Apparently, at the time these lines are written, it seems that one of the unknowns has already been resolved, with the alleged appointment of Raúl’s son as the head of GAESA, which implies that the family has blatantly showed Cubans, even more than with López-Calleja, who rules the economy and the country. A false move? Or could it be that there is no one else in the Regime to occupy these decisive positions of great economic and political influence?

As the State newspaper Granma says in the eulogy that has been dedicated to the deceased, “he was a man of high commitment and loyalty to the Cuban revolution” with “great ability to make decisions and take on challenges.” Finding someone with these characteristics is a priority because if they don’t get it right, the bases that support the Regime can falter.

López-Calleja had all the economic power, and if he didn’t want more, it was for his own reasons. In recent years, from the Economic Political Commission in 2006, and later from 2011 in the Government Commission for Attention to the Mariel Special Development Zone, he made a good part of the decisions that have been a brake and an obstacle to the development of the private sector, which in this blog is called the “internal embargo” of the Cuban economy, much more harmful and detrimental than the external one.

Granma concludes his eulogy by saying that “his contributions to the defense of the Homeland and the development of the national economy, together with his attitude in the fulfillment of each of the missions assigned throughout his exemplary life, made him worthy of various decorations and recognitions granted by the Council of State of the Republic of Cuba.” This confirms that closeness to the core of power that acted as an element of pressure and fear in the face of his potential rivals. No one dared to oppose him.

But the official communist newspaper is wrong. It’s not true that López-Calleja’s legacy highlights that “model of business system that serves as an example to the country, for having demonstrated its efficiency.” In reality, the management of political monopolies says very little about who is in charge. It’s an easy task, which, on the other hand, usually has the impact of who has been at the forefront for so long. His substitute, whether Raúl’s son or someone else, will find it difficult. The sale of GAESA to the private sector will always be a possibility if things don’t go as expected, but then, will the sale of the means of production pass to the Cuban people as the constitution says? I doubt it.

Translated by Regina Anavy


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