With Raul in charge, economic reforms debated

Posted on Sun, Jan. 21, 2007

CUBA
With Raúl in charge, economic reforms debated
Signs of a debate in Cuba about the country's economy are starting to
emerge for the first time since reformers were active in 1996.
BY JANE BUSSEY
jbussey@MiamiHerald.com

A debate over economic reforms that flourished inside Cuba in the early
1990s, until a crackdown in 1996, appears to be reemerging under the
presumably more pragmatic rule of interim leader Raúl Castro.

Barbed complaints by Raúl Castro about inefficiencies in the economy,
unusually public comments by intellectuals, and edgy newspaper articles
about the dysfunctional economy are just a few signs of the ongoing
discussions, Cuban and foreign analysts say.

''There is a debate,'' said Rafael Hernández, the editor of the
quarterly Cuban magazine Temas, or Issues, and one of the country's
leading intellectuals.

Hernández said the debate taking place at different levels of Cuba's
government and society focuses on proposals such as decentralizing the
highly centralized economy, forming cooperatives in areas outside of
agriculture, and creating openings for more small and medium-size
private enterprises.

A MODEST STEP

This is not the wholesale dismantling of the socialist economy that many
critics of the communist system would want. But it would represent
modest changes of the type that many analysts expect of Raúl Castro,
widely believed to be more pragmatic and efficiency-minded than his
ailing brother, Fidel Castro.

''In Cuba, no IMF formula is foreseeable,'' said Hernández, referring to
the International Monetary Fund and its free-market economic policies.

Another proponent of reforms, prominent Cuban economist Pedro Monreal,
recently told The Wall Street Journal that Cuba needs an overhaul to
inject motivation and innovation into the economy although the direction
of the debate is difficult to follow. ''It's a kind of black-box
process,'' he said.

Reached by telephone in Havana, Monreal said he told The Wall Street
Journal what he wanted to say and would have no further comment.

EARLIER EFFORT

Monreal, Hernández and others were at the center of a push for economic
reforms in the early 1990s, after the Soviet Union cut off its massive
subsidies to Cuba and the country's economy virtually collapsed.

While their talk of the need for economic reforms drew much attention at
the time, Monreal and Hernández and several others were forced out of
their jobs at the Center for American Studies in Havana during a 1996
retrenchment from some of the changes that had been adopted.

The Communist Party launched a notoriously fierce attack on the
reformers just days after the U.S. Congress approved the Helms-Burton
law tightening the trade embargo on Cuba. The reformers suddenly all but
disappeared from public view.

But the talk of reforms did not end, Hernández said.

In a 2002 article in Temas, Monreal wrote: ``The final decade of the
20th century has been the scene of an inconclusive transformation of
Cuba's economic structure.''

Today, the issue has reclaimed prominence as the absence of Fidel Castro
from public view stretches into the sixth month. He ceded power to Raúl
on July 31 after intestinal surgery.

Cuba watchers are now sifting through newspaper articles and Raúl
Castro's statements, trying to spot signs of possible changes or a
continuation of the hard line on the economy.

One sign came when Raúl Castro told Cuban legislators last month: ''We
are tired of excuses in this revolution.'' He spoke out after seemingly
growing annoyed while sitting through a series of bureaucratic reports
on housing and transportation.

Several days earlier, in a meeting with university students, Raúl Castro
had urged them to openly debate and disagree on Cuba's problems in order
to produce better solutions. He did not issue a carte blanche for
debate, however, adding that it must take place at the right place, time
and manner.

ONGOING STRUGGLE

Although the Cuban economy has largely recovered from its post-Soviet
collapse in the early 1990s and is much more integrated into the global
economy, the daily life of Cubans remains a struggle and inefficiencies
and corruption remain significant problems.

Philip Peters, vice president of the Lexington Institute in Arlington,
Va., said a three-part series in the Cuban newspaper Juventud Rebelde in
October -- about corruption and ''dysfunctionality at the state
enterprises'' -- caught his eye. It pointed to problems in supply
chains, where parts and goods were never delivered to restaurants or
repair stores.

''They started to get into some of the root causes, the deeper issues
beyond venality,'' Peters said.

A new Juventud Rebelde article Friday looked at the problem of
widespread ''indiscipline'' at state enterprises and questioned whether
urging Cubans to have more loyalty would remedy the problems.

''Salary increases that don't compensate for prices in the market are
not enough for real stimulus,'' the article said.

Reforms in the early 1990s legalized the use of U.S. dollars and allowed
private employment and family businesses. But they also created
inequality of incomes, which drew the ire of Fidel Castro and Cuban
labor unions.

Now, the new leadership is faced with the problem of how to integrate
these old and new economies, where a waiter at a tourist hotel may earn
in one day what it takes a physician or professor several weeks to net.

''I don't care whether it is Fidel or Raúl [in power],'' said Kirby
Jones, president of the U.S. Cuba Trade Association in Washington, which
favors increased U.S. trade with Cuba. ``No country is immune from the
forces that are generated by the people looking around the world,
looking at television and movies. They know what is happening, and they
want it for themselves.''

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