Friday, 2 January 2009

Congrats to Otto!

The New Year starts with good news!!! Congrats to Inca Kola News for the nomination to one of Latin America´s ten best blogs. Kudos dear Otto, way to go!

Cuba (Part 3)

And these will be my last words in Cuba (for a while ...)

There´s been lots of wishful thinking seeking to present Raul Castro’s presidency and his recent reforms as a new chapter in the economy of Cuba. The policies so far implemented (boosting access to mobile phones and hotels and giving out land to private farmers) will hardly make a difference in terms of economic life for Cubans. Raul and the men who control Cuba are the men of the revolutionary generation. Vice Presidents Jose Ramon Machado Ventura and Abelardo Colome are old-guard. Why would you expect a new departure from three men well into their 70s?

But what may be the most significant and subtle development in the past two years (since Fidel fell ill) is the leadership’s change in focus. From blaming the outside world, Cuban leaders are now moving on to looking within for answers. Yoani -- the Cuban blogger I recommended you to read a few days ago, -- may say ''Are you crazy, Parra-Bernal?´´ But I can see some changes, and they are, we like them or not, positive: the leadership is going from blaming class differences within the country to lashing out the bureaucracy and the deficiencies of the system. More domestic issues are being debated, rather than marching hard and chanting anti-U.S. slogans. This is the reading I have from the initial reforms implemented by Raul. These are the issues I would rescue from his initial stance. And finally, the most interesting of all this is that the government is praising reward for individual initiative and instead of imposing restrictions, it is lifting some.

So, in my view, the media is confusing Raul Castro’s dampening of investment restrictions and changes in wage pricing with reforms. Changes in agriculture are accelerating and the next focus is likely to be measures to revamp the construction industry (this should come sooner than later, we believe.) We are still waiting for immigration reform (which was scheduled to be announced by the end of 2008.) At about the same time we were expecting the government to announce state restructuring plans. If you read the speech carefully, Raul wants (in his way) Cubans to understand reality as he presses for more productivity and works toward a model that subsidizes the truly needy and not everyone. Although the government has so far tried to show citizens it averted a serious crisis in the island (remember that the hurricanes in July-September triggered as much as $10 billion in losses, according to Reuters,) and there’s still money coming in from Venezuela, Raul is using the threat of a global recession to push his agenda.

I might be too optimistic, but in general this is the feeling that I got from a series of chats with other Cuba analysts. The political and economic scenario may be different within three to five years. Maybe at that point, there is going to be a new discussion in Cuba. But, unfortunately, it is unrealistic to think the final caretaker of the Revolution will change the premises of the Cuban economy and political system in the next two to three years. As the global recession unfolds, a shortage of capital in the marketplace will hinder foreign investment anywhere -- Cuba included. But five years from now, there may be a business upturn, and the revolutionary generation will step down, opening room for a new generation that may be mostly led by soldiers. We will talk about this later, but there are good and bad things about this. Let´s say that at a first glance the military-led entrepreneurship revolution isn´t that bad at all.

Raul Castro knows he must take steps quickly to help the Cuban economy navigate through the upcoming global slowdown. At some point in the future he will have to end the two-currency system, revalue the peso to cut import costs and seek ventures with allied countries to boost domestic output of raw materials and capital goods. Within the next 18 to 36 months, the government will seek to speed up experiments in agriculture so it effectively tests the military entrepreneurial model -- this is what a good source told me a few months ago. We shouldn’t rule out that the central governments grants more say at the municipal level.

Finally, one of the biggest challenges confronting Raul is corruption in Cuba. If there is something that the government is really concerned being more transparent about, it’s their handling of graft and embezzlement cases in office. How do they plan to tackle that if they are handing more economic and institutional power to the military? I wonder how.

Cuba (Part 2)

El Presidente Raúl Castro dió de nuevo pocas muestras de apertura política al discursar en el 50 aniversario de la Revolución. Diciendo que el régimen cubano es más fuerte que nunca, volvió a reiterar que los Estados Unidos ciernen una amenaza inimaginable a la Revolución, e instó a los ciudadanos a resistir -- por cuanto tiempo más?

Dice Castro: ''Resistir ha sido la palabra de orden y la clave de cada una de nuestras victorias, durante este medio siglo de ininterrumpido batallar, en que hemos partido invariablemente de jugarnos nuestra propia piel, sin dejar de reconocer la amplia y decisiva solidaridad recibida.´´ Al mismo tiempo, reiteró que ''hoy, la Revolución es más fuerte que nunca y jamás ha cedido un milímetro en sus principios, ni en los momentos más difíciles. No cambia en lo más mínimo esa verdad que algunos pocos se cansen y hasta renieguen de su historia, olvidándose de que la vida es un eterno batallar.´´

Sus palabras señalizan una posición inflexible, a semanas que Barack Obama asuma como presidente americano. Las expectativas que hemos recogido entre varios analistas que seguimos a Cuba es que el gobierno americano indique una virada en su politica de mas de 47 años de embargo financiero y económico a la nación comunista. Posiblemente, antes de iniciar algún diálogo con Venezuela o Bolivia, Obama tratará de negociar con Cuba como un signo de buena voluntad y de viraje hacia América Latina. Un analista que sigue a Cuba me dijo esta semana que espera que antes de final de año se relajarán las restricciones a viajes y a transferencias de dinero entre Cubanos residentes en los Estados Unidos y los isleños. es poco probable que el embargo, como un todo, sea desmontado hasta que Cuba demuestre importantes signos de apertura política.

Castro se olvida que hay una crisis financiera y económica global de inmensas proporciones, que la Revolución se dará seguramente el lujo de ignorar (a expensas de sus propios ciudadanos.) Las reformas implementadas por Castro al asumir la presidencia el año pasado contínuan siendo ineficaces y pocas para aliviar la situacion económica del país. Aun cuando Raúl Castro parece admitir públicamente que el escenario actual es más complicado que lo usual, instó a los Cubanos a mantener incolúmes los principios de la Revolución: ''Este país puede autodestruirse por sí mismo; esta Revolución puede destruirse, los que no pueden destruirla hoy son ellos; nosotros sí, nosotros podemos destruirla, y sería culpa nuestra.”

Me pregunto si la lentísima actitud de las autoridades cubanas de impedir una liberalización económica más agresiva no será el comienzo del fin para el régimen. Aunque los cubanos que entrevistye en mis tres visitas a la isla se sienten orgullosos de la cobertura médica y educativa que el régimen les ha provisto durante su existencia, es claro que la situación social se mantiene tensa porque hay pocos trabajos calificados disponibles, y la represión se mantiene fuerte.

Es claro que el gobierno de Raúl es un gobierno de transición que tratará de crear las bases para un estado donde las fuerzas armadas concentren mayor control de la economía. Este año será interesante para ver lo que el gobierno cubano hará con las concesiones privadas a la minería y el petróleo. Esperamos algún tipo de anuncio hacia mayo, cuando la situación de los mercados se haya calmado y los esperados cortes de producción de la OPEC hayan sido absorbidos plenamente en el mercado.