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Economic reform and the future of Cuban socialism

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The following extracts are from an interview with Professor Jose Bell Lara, of the Faculty of Social Sciences, University of Havana. The full interview first appeared on Links: international journal of socialist renewal.


Johannes Wilm: The Cuban government recently announced some changes. Among other things, it will be possible for more people to work independently. What is it that Cubans expect from these changes?

José Bell Lara: This is a time of deep economic crisis globally. And of course Cuba is affected by this crisis. For the Cuban economy it has, taken together with the the embargo by the United States, a strong impact. To maintain the socialist project it is necessary to achieve an efficient functioning of the economy. In this sense, we must extend factors that can increase productivity and better conditions of life.

For a long time we have had a paternalistic policy on the part of the Cuban state when it came to state employment. There is more personnel than is needed. Where it takes five people, we have eight. Those who can produce more, produce less… We have to find the optimal number of employees in the state sector, while simultaneously giving opportunities for the extra workforce to be employed meaningfully.

In Cuba no one will end up unemployed due to our social protection mechanisms. In any country in Europe or North America, the surplus workforce would simply be sent home with four to six weeks’ of state aid. Here, together with seeking greater efficiency in the state sector, other possibilities are opened, such as working independently and through the cooperatisation of many activities.

In agriculture we are speaking both about cooperatives for the production of food crops that can be grown without much technical help, and others who produce more advanced crops and have the technological means to do so. More than 100,000 people are receiving a title of a piece of agricultural land.

Also in our towns there sometimes is difficulty with some services: general repairs, shoemaking, plumbing, personal services. Now there is an opportunity for people to develop that, both personally and as cooperatives. One can imagine cooperatives that build and repair houses or make construction materials or provide a service such as repairs or carpentry. In this area there is the prospect of growing the sector to solve both a social problem and also contribute to the efficiency of the country, resulting in a stronger economy.

It is necessary that the central state and, in my personal opinion also the public sector at a more local level through the popular councils, develops certain economic activities that benefit the community, thus contributing to the enrichment of the country. The important thing is, the state has to have the most basic means of production, which are decisive in the economy. But many basic services are very difficult to manage centrally.

In Nicaragua, cooperatives have been a fundamental part of the Sandinista program. Here in Cuba there are also cooperatives in sectors such as agriculture. But still not in other sectors, such as transport. Will we see them there as well?

There is a possibility. I cannot confirm that it necessarily will be that way, but we have a series of new mechanisms. For example, one could imagine that certain licences are handed out to cooperatives to operate in this sector, or that the state establishes a different kind of relationship with the drivers. There may be various forms within the transport sector. I think also with the production of crops, a series of foods can be meaningfully produced by cooperatives or individuals. For example, people can produce wine for themselves and their friends. Some might even produce enough to sell some.

And the mini-company? Will that be a small business that will produce a product?

The idea is not new. For example, in the city of Havana there are currently 23 state-owned mini-companies. They are not part of the central state, but rather properties of the municipalities. And others are cooperatives. There is a cooperative producing yoghurt and another producing soy sauce, for example. These companies are not that big and they get results. They are not used to produce hundreds of millions of gallons of sauce. In general, Latin America’s largest source of employment is not big business. Small and medium enterprises are those that produce more jobs. Why? Because those small companies that do not depend on very complicated technology generally create jobs with an investment of under US$50,000. Big companies have to get more US dollars than that to be able to hire someone.

But if production is organised as a business, what is the difference between this and a capitalist system?

It is different in character. The basic means of production are state owned… such as the sugar, mining, biotechnology and electronics industries.

How exactly does the pension system work here?

You deduct 5% of your salary for the social security system. Retirement starts at age 65, and is automatic. A worker submits an application for retirement, and 90 days later it is approved. There is one central retirement fund. And in the state budget there is an item devoted to social security spending. Whenever workers or companies fail to meet the expenditure, the state assumes the difference. In general there is a deficit of 200 million pesos. The state has to provide this amount.

Are there plans to change this system?

No. The system is indispensable. Moreover, the experiences of Chile and the countries that privatised their pension systems were quite horrible. That will never happen in Cuba.

So what are the major problems of the Cuban economy today? Other than the changes announced, are there programs to address them?

These changes are not isolated. One of the fundamental problems currently is food security. And the state confronts this in different ways. For example, developing biotechnology together with vaccines. What I call our scientific-productive health constellation. And the University of bio-informatics is doing everything possible to computerise Cuban society. Another strategy is the establishment of organic agriculture in cities. There is also a program of suburban agriculture around different cities.

Since the early 1990s there have been foreign capitalists operating in Cuba. In what sense is this different to the processes in Eastern Europe before 1990? There it also began like that. How do you prevent that these investments from leading to a capitalist lifestyle and dependence on foreign capital?

Capitalism is a relation of production that goes beyond the exact amount of foreign capital investment… A revolution, in order to compete and develop in a globalised world, has to understand the logic of capital and the ideology of the market. And foreign investment can provide some of that. Therefore it is a marriage of convenience. The foreign capitalist comes here to make money. We learn to work with the world of capital. To achieve a place in the market for some of our products and to prepare people to gain experience and work in the capitalist world.

Cuba in 1989 received a maximum of 200,000 tourists. Now we receive more than 1 million a year. That is the largest increase in the Caribbean. And so it is important to learn how to manage hotels. In the Caribbean, if you go to a hotel in any other country, the directors are all foreigners and represent gigantic companies.

We ensure first that the hotels continue to be Cuban property. And on the board of the hotels, there are Cubans. They are there to learn about the world of capital. And there are other hotels, like the Hotel Nacional, that are completely run by Cubans. The second aspect is that the capitalists who comes to Cuba do not invest whereever they want to, but where the Cuban government needs investment.  

But those who work with these tourists, do they not want that lifestyle? They mainly see foreigners throwing around a lot of money, right?

No doubt it has a cost, in the form of ideological influence. It is true that people who are associated with sectors handling foreigners earn much more than the rest. An engineer earns less than a person working in a hotel. But because there is this phenomenon, we cannot deny the necessity of the revolution.

The US embargo is likely the biggest problem of the Cuban economy. But at the same time, if the United States was to end the blockade tomorrow, would that not create chaos for the Cuban economy as well? Could it mean the fall of the socialist planned economy?

I wonder why one would come to such a conclusion. First of all, the embargo is not going to end. And second, if it were to be lifted, it would make the Cuban economy improve.

Yes, but a change so abrupt? If US President Barack Obama were to sign something tomorrow to end the embargo? What would happen if 500,000 US tourists were to arrive here next week! Would that not create any problems?

It may create some problems in terms of access to hotel rooms, but it will not end the revolution. When the pope was going to come, it was said “Here comes the pope and socialism will fall”. The pope came, a million people went to see him, and the revolution continued. Of course, if the embargo was lifted, it would permit us to show exactly what we are capable of doing. For example, the internet: here if you need to download a document you have to wait 30-60 minutes. While in other countries the same download takes five minutes. In this sense, the end of the embargo would allow us to do a lot of things we need to do.

In any case, it is an illusion to think that today, tomorrow or any day in the future the embargo is going to be lifted. The US will not accept the revolution. It will always do everything possible to eliminate it.

Outside of Cuba many people probably think that when Fidel Castro dies, 20 minutes later the US marines will land in the centre of Havana, capitalism will be installed within six months, and the whole country will be sold off to multinational companies within a year. Is this a realistic prognosis?

It is an illusion. If the US marines show up here, the US will see its second defeat here. The first one was in the Bay of Pigs. The Cuban people are not going to allow them to land, and we have an armed populace.
Furthermore it is not only Fidel. There is an entire party. There are generations of people who have the ideology of the revolution and will stand up to defend it. The revolution is just going to move forward. In fact, Fidel already is no longer leading. When Fidel got sick, the revolution continued without any problem. Nobody here began to mourn or anything like that. I think people outside Cuba will have to learn that there are thousands here who are capable of leading the revolution and take the positions of Fidel and Raul.

For many years Cuba was very lonely. Now it has found new allies in the framework of the Bolivarian Alliance for the Peoples of our Americas (ALBA). What does that mean for Cuba?

It means a lot for both Cuba and Latin America. For Latin America it means that we can begin to walk on our own. The political map of Latin America has changed, slightly interrupted by the military coup in Honduras, which showed us that the rulers of the world and the local oligarchy will not allow change. However, we have not gone back to what things were like before, because there is now a group of countries that is no longer ruled by the big stick of the US.

And what does the ALBA mean for Cuba specifically?

The possibility of economic cooperation. There is the possibility of a different kind of trade. There is the possibility of a common currency, which at the moment is virtual, the sucre, which allows exchange without using the US dollar. All other treaties of commerce and integration projects serve the transnationals corporations and do not prioritise social development. ALBA means another type of integration. So it is obviously important for Cuba, for the countries that are part of ALBA and the whole of Latin America.

Abroad it is often said that Cuba is a dictatorship. But in letters to the editor in the newspaper Granma, and in discussions with students, it seems that there is quite some room for criticism of the government and the revolutionary processes. Has it always been like this or is this something new?

To be honest, it wasn’t always like this. But without criticism, there is no real revolutionary process. There is no discussion of reality, and it is in reality that problems are encountered. Understanding that is a big step. In Granma newspaper on Fridays and in Juventud Rebelde on a daily basis, you can see letters to the editor criticising. That is part of a healthy revolutionary society – to see where there are problems.

In Eastern Europe they believed that it could destroy socialism.

That’s how we’re different, because we believe it strengthens us. And life shows us that we’re right.
So you don’t fear that one day it will lead to…

No, I have no fear.

I have not found students who would like to introduce the “savage capitalism” of the US. But some students tell me they would like to convert Cuba into a country like Denmark, which according to their point of view is not as capitalistic, due to its high level of social security. Do you think that capitalism could be introduced so that the standard of living in Cuba would be similar to that of Denmark?

I think that is an illusion, because we are an underdeveloped country. If capitalism gets here, it would be the capitalism of Honduras, Panama, Nicaragua or El Salvador. Objectively it is this way because capitalism is a global system in which peripheral countries are dominated by central ones.

So they cannot just turn Cuba into Denmark, just because they would like it to be that way. If we are to reach the standard of living of Denmark, it will be under socialism.

But they say “We have an educational level similar to that of the First World…”

…and a health care system.

So they wonder: “Why shouldn’t we be a First World country?”

Because we are constantly being attacked by the US. We are only 90 nautical miles from Miami. Denmark, Norway or Sweden are not in that situation.

True, but wouldn’t that end if Cuba changed to a capitalist system?

North American investors would come to take our wealth. They do not care about Cuba, but what they can earn. That is, simply, the real problem. There is a statement by Columbus: “I went to find gold.” And that’s what they would come here to look for.

In the northern part of Latin America, there have been three leftist revolutions that survived at least a few years during the last century: Mexico 100 years ago, Cuba a little more than 50 years ago and Nicaragua about 30 years ago. In the case of Mexico, the revolution ended in a deadly mix of corruption and neoliberalism. Will the same happen in Cuba? Is it impossible to make such revolutions last for more than a certain number of years?

Well, the problem is in the nature of the revolution. What social forces made these revolutions? In the case of Mexico, the fundamental social force was largely rural. It was a revolution against the Porforio Diaz dictatorship. But the leadership of this revolution was in the hands of the middle classes. And their social project went no further than to install a capitalism without the evils of the Porforio Diaz regime. And although there was a lot of participation by poor people, during the first decade of the revolution, most revolutionary leaders who had support among them were killed by other middle-class revolutionaries. It happened to Zapata, who represented the south and its peasant population and the most radical revolutionary project. The same happened to Pancho Villa. …

However, the restructuring of the ruling class in Mexico and the readjustment of Mexico to the worldwide capitalist system, always followed the general trend of the system. And the general trend of the system today is neoliberalism. Because there is no competition with the Socialist camp anymore, all the social gains in Europe and North America are being lost. And that is also the case in Mexico… 

In Cuba, the middle class had a very important role. However, it committed suicide as a class and identified with the interests of the rest of the Cuban people. It ditched its own ideology and took as its own the ideology of the poor. Che Guevara wrote an article about it, “War and peasant population”, that explained how people like him, coming from the urban middle class, identified with the rural peasant population. This identification led the middle class to be more radical. Besides, the revolution against imperialist aggression has not receded.

Imperialism cannot tolerate a revolution that is popular, that is anti-imperialist. No wonder Cuba has been blockaded 50 years. In the last 50-60 years, all popular revolutions in Latin America have been destroyed, minus that of Cuba: Guatemala in 1944/54, Bolivia in 1952, Chile in 1971-73 and Nicaragua in 1979-90.
Cuba has been able survive, although the US has committed sabotage, organised contra-revolutionary groups, and continues to publicly dedicate tens of millions of dollars every year to defeat the revolution.

Speaking of how revolutions were structured: in Mexico many different groups of revolutionaries were part of the revolutionary process. In Nicaragua there was a strategy of uniting almost all radical leftist forces, everything from Marxist-Leninists to anarchists, under the title Sandinista. But here in Cuba it is the Communist Party that is in charge. Does that make it easier?

Well, in the end it makes it easier, of course, because all revolutionaries are under the same flag. But that does not mean that it was easy to reach this unity. Creating a unified party was an experience we have had before, with José Martí and the struggle for independence from Spain. Martí founded a political party to lead the struggle for independence. That was the first time in the world that a political party led a war for national liberation.

[To make the Cuban revolution] Fidel managed to gather groups together in the early years, like the July 26th Movement and the Popular Socialist Party, which previously had also been called the Communist Party of Cuba. The new party took the name Communist Party, but it was a project unique to the Cuban revolution.

And the former communist party is part of this.

It was subordinated. Yes, exactly.

And the ideology of the new Communist Party…

…is Marxism.

But was there a difference between the Popular Socialist Party’s ideology and the new party’s?

It was different because it had a very important national component… Socialism in Cuba is a system highly adapted to the Cuban reality. It is not a copy of models that exist in other countries. And each socialism in Latin America will be different. In Venezuela it will be marked by the Bolivarian component, in Ecuador it will carry an important project of citizen rights, in Bolivia there is the Indigenous part. If it were any different, it would not be Latin American socialism. Copies of Cuba or Venezuela will not succeed because the realities are different.