Economy

Transition in Cuba: Between Economic Woes and the Necessity of Ideological Reform

Cuba marked the end of an era with the official transfer of power from the Castro family to the communist country’s first civilian leader, Miguel Diaz-Canel. On 16 April 2021, Raul Castro (younger brother of longtime Cuban leader Fidel Castro) relinquished his position as the first secretary of the Communist Party of Cuba. The formalities for the change of baton at a four-day PCC congress in Havana was a turning point for the country of over 11 million people, many of whom have not known any other leader who was not of the Castro family.

Cuba and Fidel Castro have almost been synonymous with the Communist Party that has ruled the country unchallenged since 1959. Since the Cuban revolution that toppled the ruling government of Fulgencio Batista, politics in the island nation has always centred around the Castros.

Raul Castro became Cuba’s president in 2008, after his brother’s incapacitation, and took over the first secretary role from Fidel in 2011. However, it was only in 2016 that Raul officially took over after Fidel’s death. Modern historians often refer to Fidel Castro as the man who gave the Cuban people back their history, the name of their island stamped firmly on the political map of the 20th century.

In 2006, Castro formally handed over power on a temporary basis to his brother Raul and in February 2008, he announced his resignation as president of the Council of State. It was then that Raul Castro, who was has been in charge of the military for 47 years, finally took control of the island nation. Eighty-nine years old now, Raul Castro is standing down as the party’s first secretary, but he left behind a country that was neck-deep in an economic quagmire, especially as it struggles with rising food shortages.

Following the power change, most observers reason it might be the best time for Cuba to make the necessary adjustment, especially ideologically, so as to benefit from being in the good books of America, having practised communism at her doorpost which has severed ties between the two sister countries.

Ties with the United States, after a historic but temporary easing of tensions under President Barack Obama between 2014 and 2016, worsened under Donald Trump, who reinforced sanctions. But just as Fidel’s death did not immediately transform antagonistic U.S-Cuban ties, Raul Castro’s departure is unlikely to create drastic changes. There is no likelihood of any radical ideological shift.

Amid rising calls for a new approach, the regime is projecting an image of business as usual. Mr Díaz-Canel’s Twitter hashtag is #SomosContinuidad which in English means, “This is Continuity,” and the congress is billed as the Congress of Continuity. Although in his final address to the party last Friday, the outgoing president affirmed a “willingness to conduct a respectful dialogue and build a new kind of relationship with the United States”, he stressed the country would not renounce “the principles of the revolution and socialism” as he urged the new generation to “zealously protect” the one-party dogma.

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A spokeswoman for the White House, Jen Psaki, said the United States was not planning any immediate change in its policy toward Cuba, which would continue to focus on “support for democracy and human rights.”

Miguel Díaz Canel who vowed to safeguard the one-party system has equally resisted calls for democratic reforms. According to him, “The most revolutionary thing within the Revolution is to always defend the party, in the same way that the party should be the greatest defender of the Revolution.” Whether he was only speaking from his mouth or heart, the new Cuban president has said the immediate past president, Raul Castro, would still be consulted on “strategic decisions”, and would give “direction and alert to any error or deficiency, ready to confront imperialism as he first did with his rifle.”

Neither leader is likely to risk his political future with bold diplomatic summersaults. But younger Cubans continue to separate themselves from the policies and priorities of their government, creating a basis for a different relationship with the U.S.

As earlier mentioned, Díaz-Canel took over at a tough time, with Cuba’s economy facing its biggest crisis since the collapse of the Soviet Union in the early 1990s. Cubans are currently battling worsening widespread shortages of basic goods, including food and medicine after a liquidity crisis was exacerbated by a tightening of decades-old US sanctions and the coronavirus pandemic. The COVID-19 pandemic has largely shut down the country’s vital tourism industry, causing the economy to contract 11% last year, according to the government. The economic situation is extremely critical. Some economic experts estimate inflation at 500%.

The dire state of Cuba’s economy will give reformers more urgency to push for economic liberalisation. While there is room to create an economy that works, there is very strong ideological dogmatism pitted against economic reforms, which political observers have described as the fear of losing control. As the outgoing president noted in his final speech, there were clear lines Cuba wouldn’t cross as it seeks to fix its economy “because it would lead to the destruction of socialism.”

Even so, the new president will have to balance many Cubans’ demands for greater economic and political freedoms, with entrenched resistance to change from a longstanding cohort of military and Communist party hard-liners.

According to political analysts, while the new generation of younger leaders is not expected to make sweeping changes to Cuba’s one-party, socialist model, it will be under pressure to pursue market-style reforms to resurrect the long-ailing and centrally planned economy.

Social reforms, especially the expansion of internet access, have strengthened Cuban civil society and small protests have cropped up across the nation. Recently, a group of activists known as the San Isidro movement challenged the government over freedom of expression, staging an unprecedented demonstration in front of the ministry of culture.

Meanwhile, the U.S. diplomatic representation exists as the United States Embassy in Havana, with a similar Cuban Embassy in Washington, D.C. The United States, however, continues to maintain its commercial, economic, and financial embargo, making it illegal for U.S. corporations to do business with Cuba.

The Barrack Obama administration had attempted to normalise relations between Cuba and the United States in what has been described as “the Cuban Thaw”. The agreement which was reached on 17 December 2014 led to the lifting of some U.S. travel restrictions, fewer restrictions on remittances, access to the Cuban financial system for U.S. banks, and the establishment of a U.S. embassy in Havana, which was originally closed after Cuba became closely allied with the Soviet Union in 1961. The countries’ respective “interests sections” in one another’s capitals were upgraded to embassies on 20 July 2015. On 20 March 2016, President Barack Obama visited Cuba, becoming the first U.S. president in 88 years to visit the island.

However, on 16 June 2017, President Donald Trump announced that he was suspending the policy for unconditional sanctions relief for Cuba, while also leaving the door open for a “better deal” between the U.S. and Cuba. On 8 November 2017, the Trump administration announced that the business and travel restrictions which were loosened by the Obama administration would be reinstated and they went into effect on 9 November that same year. Two years later, the Trump administration announced new restrictions on American travel to Cuba.

It was on 22 October 2020 that Cuba foreign minister Bruno Rodrigue presented an annual report on Cuba’s experience of the economic blockade with the U.S. to express its effects on Cuba and the Cuban people. The report criticised the blockade of the U.S. by calling it against the international laws that restrict the basic living of people and a question on humanity. It also questioned, “how any country put another country’s social development under assault?”

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In light of this, a protest was staged recently outside of the US embassy in Havana calling on President Joe Biden to lift the embargo. But as Mark Brennan, a renowned political commentator, averred, while speaking to Al Jazeera, he noted that Cuba, which Trump redesignated as a “state sponsor of terrorism” days before he left office, has, since Castro’s time, used the American embargo, which they call a blockade, as the kind of reductionist explanation for every single problem on the island.

He maintained that the country’s economic model was “doomed from the get-go”, even though he believes ditching the embargo and pursuing “complete and utter sheer openness” would get the US more results.

Analysts have also said that it is possible for Cuba to move towards a market-oriented socialist economy, with a strong state-owned sector and strong regulatory authority existing alongside a significant and growing private sector, that extends beyond the small businesses run from people’s homes that Diaz-Canel has already legalised.

Nevertheless, the 1959 revolution spearheaded by Fidel Castro and which the Cuban people backed, was largely about establishing the “sovereignty” of Cuba in all ramifications, and not bowing to the wishes of the US or other powerful countries. The Cuban leadership, as much as her people would as such love a reform that is done their own way, to meet the unique needs of the country’s present system.