Archive for 17 diciembre 2011

Cuban Chaotic Economy

diciembre 17, 2011

• Reaching Out: Cuba’s New Economy and the International Response
http://www.brookings.edu

The first paragraph of the section “The Cuban Economy: Distorted Development and Gradual Reforms” by Mr. Richard E. Feinberg, November 2011, shows the following naïve statement:

“In its early years, the Cuban revolution made great strides toward providing universal access to quality health care and guaranteeing education for all citizens.”

Let me remind Mr. Feinberg that those “great strides” were funded by the richness acquired from the confiscation of all businesses, including shoe shining booths, without compensation, and by the Soviet Union subsidies in the context of the Cold War.

It is well documented that Castro’s job as dictator has resulted in economic chaos (a) in Cuba, despite the Soviet Union subsidies, the unpaid commercial credits and loans to European and other nations that came to the rescue, to “stick it” to the Americans, when the Soviet Union abandoned Cuba, and currently from the Venezuelan’s largess.

After Castro’s confiscation of American properties in 1960, the Soviet Union seized the opportunity to get a foothold in America’s lower belly. The Soviet Union became Castro’s Cuba “sugar daddy.” This was the direct result of literally having the Soviet Union purchase Cuban sugar at a premium price, well over the prevailing world sugar price, and providing oil at below market price, thereby subsidizing the Cuban economy.

“Soviet subsidies of Cuba, mainly through Moscow’s supply of low-cost oil and its purchase of Cuban sugar at inflated prices, have been estimated at $4 billion to $5 billion a year. . . . [1]

Castro made Cuba an earring, hanging on the Soviet Union’s ear lobe. It was his first step in establishing the Cuban earring economy, which has continued over the years.

(a)
I remember a conversation with Ives Daude, Bureau Chief for Agence France Presse in Havana in 1965. I was the Bureau’s Accountant. He knew Latin America well as he had been to Buenos Aires and other posts in Latin America.

Ives was reserved and business-like most of the time, but in that conversation he elaborated about the Cuban situation. He made an insightful remark along the following lines: Cuba was the last colony in America to gain independence from Spain at the beginning of the last century. The Spanish colonization was highly bureaucratic, and left a profound influence in public life over all the countries under its dominance. Its imprint was freshest and most long lived in Cuba. Putting a Communist bureaucratic system on top of the Spanish bureaucratic legacy was guaranteed chaos in Cuba.
[1] Clyde H. Farnsworth, Soviet Said to Reduce Support for Cuban Economy, The New York Times, March 16, 1988.