What Castro really means

Apparent U-turns have led some to declare Cuba's revolution dead. It has life in it yet, however

Richard Gott
guardian.co.uk,
Friday 17 September 2010

The ever-surprising island of Cuba has come up with some fresh economic measures this week that pose the question: is this the end of socialism? For President Raúl Castro to sack half a million state employees, and then allow his brother Fidel to hint to an American reporter from the Atlantic that the country's economic model is not working, suggests that there is certainly something significant in the pipeline. But this is not the end of the revolutionary dream, nor is it a simple rectification of policy, of which there have been many over the years. It is, more importantly, the start of a major new programme, long-awaited. How it should be ideologically defined remains to be seen.

Everyone who lives in Cuba and those who follow Cuban affairs closely know that the existing economic model has not been working well. It hardly needs Fidel to spell this out. Ever since the collapse of the Soviet Union 20 years ago, which deprived the island of its principal model and benefactor, the Cuban authorities have improvised brilliantly, breaking every rule in the rulebook, both socialist and capitalist. Tourism has replaced sugar as the country's principal earner of foreign currency. Collective farms have been broken up. Hundreds of thousands of people now work on their own account, soon to be joined by half a million others – or possibly more.

The outlines of the new programme are still barely visible, but will become more so in the months to come, as an embryonic private sector begins to re-emerge. In 1968, at the height of the Prague Spring, Fidel shut down all small enterprises, as well as cafes, bars and nightclubs, accusing them of fostering a counter-revolution. Havana and Cuba's other cities soon lost much of their sophisticated charm. The commanding heights of the economy were already in the hands of the state by then, so the attack on tiny businesses seemed motivated more by ideological severity than economic necessity.

Today the wheel has turned full circle and the small-scale private enterprises that characterise a city, and make it worth living in, will return. Yet the changes outlined this week have more to do with the wider plan for the future economic organisation of the country than any desire to make the cities more attractive. The plan has been worked on and endorsed by the country's powerful state trade union federation, and there is no doubt that the new policies will be well received by most people.

The Cubans are by no means thirsting to embrace the capitalist system, as some commentators have suggested, but they are certainly ready to take more responsibility for their own lives. Unlike many other people in Latin America (or indeed in the US), they are well educated, well looked after, and healthy. The state will not just throw the workers in at the deep end. There will be programmes of training to ease the move from state employment into the world of private enterprise.

This is the first step in the reorganisation of the Cuban economy, and the Cubans are fortunate in having the powerful backing of oil-rich Venezuela. Hugo Chávez will be helpful during this transition period, not least because the Cubans will be moving closer to the mixed economy that he has always favoured. The current arrangements, with Cuban doctors working in Venezuela and being paid for with subsidised oil, work well for both parties.

But what of the larger question of the wider economic framework? The Cubans, government and population, have been well informed about the collapse of the communist system in Russia and eastern Europe, and its replacement by unbridled capitalism of the most vicious and corrupt kind. There is little enthusiasm to start down that road. Nor does anyone want to see the rich Cuban millionaires in Florida returning to reclaim their homeland. (Nor, to be fair, do most of the millionaires.)

So, with private enterprise back on the agenda, the Cubans will soon have to formulate a strategy for relinking their economy with the wider world. Much has already been done. Cuba trades with Latin America with few problems, as it does with Canada, Europe and Asia, and of course with Russia and China. Even US agricultural produce now arrives by regular boat.

Foreign investment is another matter. Cuba wants a decent relationship with the US, and an end to the economic embargo, but it will be a long time before it welcomes foreign investment without strings attached. The Cuban revolution was always more nationalist than socialist, and while elements of socialism can be surrendered relatively easily, the nationalist achievements of the past half-century will not be lightly abandoned. The Cuban model, however modified, has life in it yet.