Saturday, September 18, 2010

Cuba’s Economy to Shift, Though Not Necessarily to Capitalism

Sources: Julia Sweig Shares Her Conversation With Castro Cuba’s Public-Sector Layoffs Signal Major Shift Fidel: 'Cuban Model Doesn't Even Work For Us Anymore' Cuba to Cut State Jobs in Tilt Toward Free Market

The American airwaves were shocked earlier this month when Jeffery Goldberg, a journalist with The Atlantic, announced that Fidel Castro said the Cuban economic model is not worth exporting because it does not even work for Cuba anymore. Many people’s first reaction to the quote was that someone had misunderstood Castro’s Spanish—not that the leader of one of the world’s most famous revolutions had admitted that his entire endeavor was all for naught. Castro himself backtracked, saying that he meant the opposite: that the American model no longer works even for the United States, and therefore is not worth exporting.

Julia Sweig, a leading expert on Latin America with the Council of Foreign Relations who was present at the Goldberg-Castro interview, affirmed that Castro had indeed said that the Cuban model no longer worked, but offered as an explanation that Castro was trying to reassure Cubans that admitting the Cuban model does not work does not mean that Cuba will be shifting to the American model.

A second bombshell coming out of Cuba was current President Raul Castro’s announcement that 500,000 state workers will be laid off. The outside world has long hoped that Raul would spur the dramatic changes that most people agree Cuba needs, but until this announcement his policies have shown only muted differences from those of his brother. Now he is signaling a shift towards the development of the private sector in the country where approximately 85% of workers are state-employed.

According to the Cuban government, the laid-off workers will be encouraged to seek employment in the almost non-existent private sector. Some see this as a relegation of those employees to unemployment for the foreseeable future, while others (including Sweig) believe that the economy is in such need of reform that the private sector will easily swell to absorb these new job seekers. Some have suggested that this is a clear overture to the United States, signaling that Cuba is ready to negotiate and change the status quo of the U.S.-Cuba relationship, but only time will tell if this is the beginning of a major shift towards capitalism, or a minor shift in the course of the Cuban Revolution.

1) What do you make of Fidel Castro’s comments about the Cuban economic model?
2) Over the course of the Cuban Revolution the government has at various times attempted what many would deem capitalist reforms during dire economic times. Once the economy re-stabilized those reforms have always either been entirely revoked or dramatically scaled back. Will the current move towards a larger private sector have staying power, or do you think this is a temporary reform that will be scaled down as the Cuban economy recovers?
3) Is now the time for the U.S. to reconsider the trade embargo? The travel restriction? Or, is now the time for the U.S. to begin negotiations with Cuba over all issues? Should the U.S. government wait longer to see how these changes play out before making any move? Would that risk a further chilling of the relationship if Cuba interprets the U.S.’s inaction as a lack of reciprocity?

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