NATIONS World Events
For nearly 6 decades the Castro brothers built Cuba into a communist nation. With Raul Castro stepping down from presidency, the new president Miguel Diaz-Canel has been elected.
“A revolution is a struggle to the death between the future and the past.” - Fidel Castro
Nearly 6 decades ago, when Fidel Castro along with his brother Raul and the army of rebels (26th of July Movement) marched into Havana, the Castro regime began by the removal of the authoritarian government of Fulgencio Batista.
Prior to the revolution, Cuba experienced a period of significant instability and a dictatorial rule. Plagued by high unemployment and limited water resources, the government formed lucrative links with organised crime and allowed the American companies to dominate the Cuban economy and the local resources.
Shortly after Batista seized power through a military coup in 1952, Fidel Castro - then a young lawyer and activist petitioned for the removal of Batista, accusing him of corruption and tyranny, which the Cuban courts rejected. After realising that the dictatorship could not be replaced legally, brothers Fidel and Raul began their revolutionary movement by founding a paramilitary organisation which consisted of 1200 members of the disgruntled working class from Havana. Later Argentine revolutionary, Ernesto Che Guevara, joined the movement, and the revolution went on for nearly 6 years which ended with Batista fleeing Cuba and the placement of Castro as the Premier of Cuba.
After coming to power, the Castro government faced the Bay of Pigs Invasion, sponsored by the US to overthrow Fidel Castro. Then fearing another invasion, Castro allowed the USSR, to deploy nuclear missiles on the island, which led to the Cuban Missile Crisis.
The Castro government introduced Agrarian reforms which capped the amount of individual landholdings. Land redistribution was done rigorously. Following a socialist form of government, changes to state wages were implemented, bringing down the wages of the middle class and raising that of the lower class along with measures to increase the people's purchasing powers. Productivity decreased, and the country's financial reserves were drained within no time. Since 1962, people have been dependant on the Libreta de Abastecimiento (the rationing system), instigated in 1962, for daily rations. Per capita GDP rose roughly in line with total GDP over the years of the government. Cubans remain very poor compared to the US, for example, where per capita GDP was $55,800 in 2015 according to the World Bank.
After the collapse of USSR in 1990, the Cuban economy took a huge hit as it lost the USSR’s economic support - from which it didn’t recover for almost half a decade.
Isolated by the US and its allies during much of Castro’s rule, its economy struggled. But at the same time, it invested heavily in education and healthcare sectors, providing free education and healthcare services to all its citizens. The government initiated the National Literacy Scheme in 1961 - the result of which Cuba has a literacy rate of over 99.75% and spends a massive 12.9% of its GDP on education. [Info Source: UNESCO Institute for statistics] As for the healthcare sector, the life expectancy rate is 79.55 years with a doctor-to-patient ratio of around 6.6 doctors per 1000 patients.[Info Source: World Bank]
The government set the basic official salaries for every job, with a very little room for private, non-state businesses to grow. The reality, if one is employed, whether or not he is doing the job in a decent way, he’ll get paid. For example, if you are an ice-cream vendor, you’ll make the same amount of money irrespective of how many ice-creams you sell.
This model doesn’t work and the problem was identified by the government in the 90s. The government then started issuing private licenses at a significant rate. The average income of a government employee is around 20$ a month. So now a government worker has to put in some extra work to earn a bit extra on top of their monthly income. The concept of Black market reminds us of things, dangerous and shady but in Cuba, black market ranges from ice-cream vendors and newspapers-stalls to the television series from round the world.
This created a number of skilled workers leaving their fields to go and work in the private sector which has been on the rise lately. You will easily find engineers driving taxis, cooking at private restaurants and setting up their own private businesses as their salary won’t be set by the state. So now with a private business, one earns almost as double the average monthly salary per day. An interesting example, on an average a doctor in Cuba earns around 40$ monthly while a taxi-driver makes around 60$ per day.
After Raul Castro took over the presidency in 2008, he saw that economic reforms will be necessary for the survival of the Cuban Communist Party. The new government under Raul, approved a program of reforms in 2011 beyond the limits of the statist economy. The government also approved the “Social and Economic Guidelines” after a process of political deliberation within the society at large. In addition to this, the government introduced a massive land leasing program in the strategic agricultural sector and provides greater opportunities for foreign investment, including the creation of a special economic zone in the port of Mariel.
With Fidel gone, it was expected Raul to be more liberal to massive economic reforms. Given the variety and magnitude of changes that have occurred in post-Fidel Cuba, it is hardly surprising that there is controversy about how relevant or successful Raul’s reforms have been. There is indeed some consensus that important systemic changes have occurred, including redistribution of employment toward private, non-state sectors. The creation of a whole set of institutions to serve the expansion of markets and expanding the policy frontiers of the economic debate.
Fidel believed in Cuban nationalism, which ought to remove the class system by proper distribution of wealth. Unlike many other communist leaders around the world, he did not create monuments for himself or lend his name to streets and buildings. He was the leader of the revolution which overthrew dictatorship and established a communist government on the island. It was a combination of his personal charisma, his ideas of nationalism that kept him in power.
The government relied significantly on foreign aids from the Soviets in the beginning and after 1990, they eased up on the foreign assistance - notably from Venezuela and Bolivia and had a growing relation with the People’s Republic Of China.
What good did the Castro government do?
Before the revolution there was an unequal distribution of wealth among the citizens, but soon after the revolution the income gaps were reduced and the economy was totally controlled by the state, ultimately diminishing the class divisions. The people have a better life expectancy and a huge literacy ratio. Technology, isn't at the peak, but through peoples' creative DIY skills, they have been able to find alternatives. The economy has not been growing enough but the government has been issuing private or non state licenses, and this has been having a good impact. The outward flow of skilled workers is an issue on the question here but the government under Raul opened the economy to self-employed workers and the non-state businesses.
On the world scale, Fidel Castro was considered a giant. After he stepped down from his presidency, Raul Castro took over in what was considered a seamless transition of power. Raul Castro, aided Fidel in the revolution and was long considered the successor of Fidel. His economic initiatives, allowing for privatisation of some state properties, opening the state for foreign investment. Such reforms have been considered as opposing to the policies established by Fidel, but the ambitious reforms suggests that the Cuban economy is evolving.
Following the communist form, Cuba has been able to create an identity of its own on the global scale, the one that is not influenced by the capitalist greed or the United States.
Democracy as we know it - the government "of the people, by the people, and for the people" is quite incompatible with economic models that concentrate wealth through destitution. On the other hand privatization restricts access to services required for the fulfillment of human rights (i.e. education, health, water), and market liberalization that can decimate national industry and jobs hinder freedom from want.
The fact that “market freedom“ is not equal to “political freedom” is evident from the case of Cuba. The country was rebuilt on the principles of communism with equal socio-economic opportunities for everyone in mind.
Contrary to what many believe, democratic elections were held in Cuba this month and Miguel Diaz-Canel has been elected as the new president of Cuba.
With change in presidency, the new president will face hard challenges. Continuation with Raul’s market liberalisation, he’ll alienate Communist Party conservatives, while advancing too slowly will hinder the economic growth. Another issue, which he’ll have to address is the freedom of expression, as criticization of the regime has been growing as more and more people connect to the internet.
Having a Castro as the president for almost 6 decades, the Cubans fear a certain instability. If Díaz-Canel can deliver on the economic situation which is the top priority for most Cubans – he’ll be judged a success, which seems as a challenging task for now.
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