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As Cuba gives private sector a try, experts ponder future


Supporting Member
DP Veteran
May 13, 2010
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Los Angels, USA
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Slightly Conservative
As Cuba gives private sector a try, experts ponder future

By William Booth
Washington Post Foreign Service

MEXICO CITY - As Cuba embarks on a bold new experiment - firing 500,000 state workers and letting them plunge into freer markets - experts in the region are watching to see whether the communist government and its baby entrepreneurs can salvage the economy without sacrificing the nation's "socialism or death" model.

The government layoffs, amounting to 10 percent of the 5 million state employees in Cuba, represent the most significant economic changes since President Raul Castro took over from his ailing older brother, the semiretired maximum leader Fidel, in summer 2006.

"It is a major step forward," said Wayne Smith, former chief of the U.S. Interests Section in Cuba and a senior fellow at the Center for International Policy. "But they have little choice but to try something because the economy is going down the tubes."

All 500,000 workers are scheduled to be pink-slipped by March 2011, the government announced in Communist Party newspapers and on state television Monday.

"It's a big deal, a big breakthrough, because for the first time the government acknowledges that the private sector, the small-business operators, are not bit players but a strategic part of the Cuban economy, that they are the solution, that they will help save Cuba," said Philip Peters, a scholar at the Lexington Institute and adviser to the Cuba Working Group in the U.S. Congress.

What will the hundreds of thousands of Cubans who suddenly have no day job do? The document suggests that they will have to hustle for themselves. No plans have been announced for capital injections, small-business loans, retraining or more opportunities for foreign investment. No large, relatively successful state enterprises are for sale or lease.
Philip Peters article says the following with regard to the self-employment:

"It is a major step forward," said Wayne Smith.

"It's a big deal, a big breakthrough, because for the first time the government acknowledges that the private sector, the small-business operators, are not bit players but a strategic part of the Cuban economy, that they are the solution, that they will help save Cuba"

A major step forward? A Big deal? A big breakthrough? For the first time?

Phil Peters apparently is unaware that this is not the first time the Castros military dictatorship has used private employment to save it from the economic disaster of its own, as this Reuters article from 1995 indicate:

Self-Employment May Be Answer to Cuba's Problems
Self-Employment May Be Answer to Cuba's Problems : Economics: As factories shut down in recession, tens of thousands take out licenses to provide goods and services. - Los Angeles Times
There are two possibilities for a loosening up like this, which can be encapsulated by the experiences of China and the USSR. In the first, you gradually break down the socialist economy providing a relatively smooth transition into a more free market system, while the communist party and its oligarchs retain power. The second is a rapid breakdown that snowballs out of control ending in both a massive recession and the overthrow of the previous government.

Firing 10% of your government workers is no small thing and I find it highly questionable that a small, oppressed private sector getting no government help for the transition will be able to accommodate those workers. It seems like Castro is being forced to produce an out-of-work, dissastisfied class of workers. If the economy doesn't then turn around fast we could be seeing the start of a Soviet-style snowballing collapse.

On the other hand, the Castros are not Gorbachev and won't let up on the oppression and thus quite probably can keep a lid on the problem (as long as the army stays with them anyways).
This Philip Peters gaffe will soon be ignored by the media the next time they quote from him. Even though the media can’t depend on the credibility of his information, they would every time depend on it, since this is what they want to hear, and ultimately that is all that matter to them.
The majority of “Cuba experts” are just following what the regime wants to say, and the media quote them along the lines of their reports on Cuba. It is very telling that not one of them is Cuban or of Cuban heritage. It looks that being Cuban is a disqualifying factor for many news organization searching for a “Cuba experts” to explain in detail Cuban relate topics.

These "Cuba experts" have a common viewpoint with regard to the embargo, they oppose it. They also share their serious lack of insight into the Cuban dissident organizations.
In spite of the huge Soviet Union subsidies, the regime economy fell gradually into poverty. Raul believes the communist system can be fixed using capitalist tools. The reality is that he can’t change it. The regime control of the economy cause the actual problems, which can’t be revarse by lukewarm application of capitalist tools.

Cuba sugar production under the communist regime reach only 1.3 million tons in 2009, less than 100 years ago. In 1959 Cuba exported 5.0 million tons. In the years just preceding the 1959 Revolution, Cuba has been the larger exporter of sugar cane in the world. Who would have imagined a few years ago that the world's largest exporter of sugar would have to resort to external supplies to meet its needs?
Cuba was one of the most prosperous countries in Latin America before 1959. Under the Castro brothers military dictatorship the island economy has been ruined beyond recognition, transforming it into a third world country. After 51 years of a failure still there are people defending this regime
Cuba is an excellent example of how a very successful nation in the western hemisphere was destroyed by state run collectivism in the 20th century. There are so few positive things to say about communist dictatorships like Cuba, that leftists everywhere have no choice but to point out flaws in other countries to keep some of their self-respect.
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