Adjustment Cuban Style

The translation that follows is the first part of a series of articles about Cuba published last year in Correspondencia Internacional, Issue 29.



By Mercedes Petit • mpetit (at)

On August 1, 2010 the Cuban Parliament approved a new legal framework that will expand self-employment (known as cuentapropismo), allow the construction of 16 golf courses and the sale of real state to foreigners as well as reducing multinational bank deductions, among other measures. The Parliament also announced the elimination of more than one million government jobs and justified these new laws by repeating the same old argument of “defending the revolution” and “socialism”. The question is: Is it true that these measures are meant to update “socialism “? No. The bad news is that, on the contrary, these measures are part of a capitalist adjustment for Cuban workers to pay for the economic crisis.

An undeniable fact is that millions of people around the world are sympathetic to the Cuban Revolution and condemn the U.S. trade embargo. So news about the economic problems, failures in agricultural production, hurricanes and other hardships that affect the Cuban people are matters of concern and solidarity for many fighters. In this context, the recent announcements by Parliament and Raul Castro are part of a longstanding debate. But are these new emergency measures being enacted in defense of “socialism” to confront the world financial crisis and the blockade as the leadership of the Cuban Communist Party (CP) argues? In our opinion, that is not the case. Unfortunately, these measures represent a continuity of a policy meant to restore capitalism in Cuba. That is why social inequality and misery that had been erased by socialist revolution have been reinstated.1 Recent announcements anticipate an economic adjustment plan for the benefit of thousands of foreign private companies that have been established in the island for quite some time.

A web of lies

During the parliament session Raúl Castro once again repeated a phrase that has become inevitable to leave behind: “socialism is irreversible” (Granma, 8/2). Thus, Cuba is not copying either China or Vietnam, according to the minister of economy. “The Cuban economic model must have a character: the defense of the Revolution and the confirmation of socialism” and that “capitalist reformism has been ruled out “(Pagina 12, 8 /2).

These have been the same lies employed by the Castro brothers and the Cuban CP for nearly two decades. Raúl Castro‘s dual speech has received the blessing of both Spanish and Brazilian governments and even by senior U.S. officials without any inconvenience. As a matter of fact, here are some recent examples of how some Western governments welcomed the new economic overhaul:

  • Negotiations between the hierarchy of the Cuban Catholic church and the Cuban government that culminated with the release of political prisoners in July were arranged by the Spanish foreign minister. He then declared that “he did not suggest Raul Castro to advance a process of social reforms, but that it was the Cuban president himself who mentioned his willingness to go further in the process of economic and social reforms and he has very clear ideas with regards to that.”(Clarín, 9 / 7).
  • The Brazilian Foreign Minister Celso Amorim said in an interview a little later: “Cuba is a state in evolution, and its political system will also evolve to accompany the economic changes already under way as attested by our companies that invest in the country.”(Clarín, 1 / 8)
  • Sarah Stephens, director of the Center for Democracy in the Americas, gathered in Havana in July with a group of U.S. legislators and experts to talk about energy and environmental problems. In a critique of the U.S. blockade against Cuba, she said that her own country does not see the “bigger picture.” According to her, with the recent release of prisoners, and the Church’s mediation, Raúl Castro is sending a message to the U.S. government on how changes are moving forward and that in fact he is willing to implement economic reforms (Clarín, 7 /22).

Moreover, the U.S. Chamber of Commerce and other groups who have been demanding the lifting of the blockade (with the aid of both The New York Times and Washington Post) stepped up their pressure. For example, Myron Brilliant, vice president of the U.S. Chamber of Commerce testified in Congress: “Cuba’s isolation is not helping with political renewal. The fastest way to improve the way of life on the island is to have [US-Cuba] trade relations, tourism and policies “(The Nation, 7 /9). He said dramatically: “We are losing business opportunities” due to Canadian and Brazilian businessmen who invest in the island. And with the typical insolence of the U.S. Empire itself, he ended up by saying: “The Cuban government is a relic” (Clarín, 7/ 11).

In short, so while Castro never leaves behind the usual oaths to socialism in his speeches –repeated like dogma by Castro and Chavez supporters everywhere–, everyday life for Cubans is taking a different road. In fact, governments and businessmen who invest in the island discuss the progress of their business deals investments in Cuba with natural ease. Additionally, many businessmen and members of the United States Congress are asking Obama to ease restrictions so there is more U.S. participation in business deals in Cuba. So far, Cuba’s official statement that rejects capitalism and reaffirms “socialism” has no encountered any questions or concerns from U.S. politicians and businessmen.

But what is the web of lies set up by the Cuban CP and propped up by those governments and companies that have business deals with the Cuban government trying to hide from the Cuban people and the left wing vanguard around the world? Basically, it is trying to conceal the 180 degree turn made by both Fidel and Raul Castro since the 90s (the two of whom, preside over a one-party Stalinist dictatorship) by restoring capitalism which had been banished from Cuba with the triumph of the 1959 revolution.

The situation in Cuba is not entirely new. It is been a while since the Cuban economic model  became a capitalist system with multinational companies, joint ventures and over-exploitation of its workers managed by a corrupt , dictatorial and dishonest bureaucracy. Lately, the Cuban people has been losing their working class gains and there has been a return of social inequality and social ills produced by economic readjustment such as unemployment and miserable salaries that are characteristic of the capitalist system. We must not forget that big business there are still in the hands of multinationals and joint ventures run by the bureaucrats while the Cuban government announces layoffs of state employees and the expansion of self-employment. Moreover, those parties involved in dismantling working class gains are lying to hide the real state of affairs.

Self-employment and adjustment

There were many questions and expectations in the air regarding the further deterioration of the Cuban economy since 2008 in the days leading up to the Parliament session. The roots of the present crisis can be traced to several factors. For example, the drop of living standards of  most of the population, who live on starvation wages of approximately ten or fifteen dollars per month., was due in part to a drop in tourism by world financial crisis, the fall of nickel prices and the failure of the sugar cane harvest and the agricultural development plan.

According to Raúl Castro Parliament approved, “Important decisions that are in themselves a structural change of concept in the interest of preserving and developing our social system and make it sustainable in the future.” As usual, he did not forget to add that “socialism is irrevocable” (Granma, 8 /2).

These days, the Cuban media highlights the expansion of small self-employment, which by the way, existed long ago. Among some of the small businesses in expansion are small house-based restaurants (the “paladares”), craft fairs that serve tourists and markets that sell vegetables. Moreover, there is a widespread black market comprised of underground economic activities of all kinds which includes illegal cabs, the purchase and sale of spare parts, making and selling pirate CDs and DVDs, and so on. The Cuban state has even legalized more of those activities deemed illegal in the past allowing self-employed Cubans to hire their own employees and pay them wages. Thus, in the process, self-employers are compelled to pay rent and taxes to the state. Additionally, private taxis have been authorized to operate and barbershops have already been legalized this year [2010].

Furthermore, the Cuban state announced the beginning of negotiations to build 16 golf courses funded by international capital (as of this writing, there are only two golf courses ) and a return to a legal framework implemented in the 90s that allowed foreigners to purchase homes —the sale of real state was frozen for a number of years. This measure is being accompanied by a renegotiation of external debt obligations to international creditors (approximately 600 million and 1 billion dollars) and reduced bank deductions for foreign companies.

However, the most striking announcement, was without doubt, the gradual reduction in public employment of more than one million workers (this data comes from various newspapers: Granma (Cuba); Pagina 12; Clarín and La Nación (Argentina), 8/2). Prior to that, Fidel Castro ‘s public reappearance was intended to show unconditional support for Raul who denied that there is no struggle between orthodox and reformist elements within the Cuban state, and that “their unity is stronger than ever” (Granma, 8 /2).

Getting rid of more than one million jobs

Since April 2009, the government revised the budget and began a policy of economic adjustment. For example, the state either suspended or delayed payments to vendors and imposed energy rationing which has not been in place since the “special period” after the fall of the USSR. And with respect to state workers, Raul Castro issued a major alert in a speech made in March 2010 at the Convention of the Communist Youth and delivered on April 4 this year. Back then he said that there was a “surplus of jobs” amounting to more than a million and that “this is a sensitive issue that we have the duty to deal with firmly and with enough political sense.” He then complained that there was a chronic lack of “construction workers, agricultural and industrial workers, teachers, police officers and other essential jobs that are slowly disappearing.”

In the Cuban Parliament, Raul Castro said that “after months of studying the  updating of the Cuban economic model, the Council of Ministers at its last meeting […] agreed to a set of measures to undertake, in stages, reducing considerably large areas[read: too many workers- translator’s note] of the state sector. ” This will be a gradual process that envisions lying off more than a million “unnecessary” or “unproductive” state workers. (The first phase of which will end in the first quarter of 2011).

The basis for Raul’s justification was a harsh argument: “The notion that Cuba is the only country in the world where one can live without working needs to be permanently erased from people’s consciousness” (Granma, 8/ 2). But this is another one of his cynical lies. In fact, Cuba is the only country in the world where people almost work for free.

In Cuba, skilled workers, doctors, teachers and nurses receive salaries ranging from $10 to $15 dollars (the majority of them) and those who work in higher positions in hospitals or schools receive salaries ranging from $ 35 to $40 dollars. As Raul Castro complained in the April speech, the official data above revealed that there are fewer and fewer “essential jobs”. So in order to fill up education positions, the government has called on retired teachers to return to the classroom. In the meantime, medical physicians go to work abroad to send remittances to their families and save some money while hospitals have fewer personnel and patients have to give money to low paid staff in order to get treated.

It is a fact: capitalist misery has been established in Cuba. The  strongest evidence for this assertion is the statement by Omar Everleny Perez Villanueva, an economist from the state, who states that, “[The system] cannot  find a solution to the income of a majority of Cuban families (there are segments of the population who do not cover their expenses with the earned income they receive, forcing them to either resort to alternative sources or waive a set of goods and services) “he added,” by the end of 2008, real wages amounted  to 45 pesos to what it was in 1989, thus, it represented  24%. “2. In other words, in 20 years Cuban workers lost 76% of the value of their wages. That is the true face of the capitalist Cuba under the Castro brothers.

The Cuban state: a job agency for the multinationals

No one today questions the fact that approximately 95% of the workforce is comprised by state employees. This estimation is based on official government data. Does mean then that 95% of the means of production and services are state run? No. It is quite the opposite case. This is one of the perverse peculiarities of Cuban capitalism where the little that remains under state control is employment.

As it is, most of the production and tourist sectors are private and set up as joint ventures. It works as follows: the Cuban state provides skilled and super exploited workers to Spanish, Canadian, Chinese, Russians, Brazilians and Venezuelans investors thus guaranteeing them high returns. As mentioned above, all these workers are paid meager wages in the form of the devalued Cuban currency [Cuban Convertible Peso-CUCS) while they purchase most products in CUCS equivalent to one dollar (24 pesos = 1 CUC = 1 dollar).

In the city of La Havana, all kind of odd jobs proliferate mainly in the tourist sector. In the interior, however, the economic situation is much worse. Thus, this is the state of affairs that is leading to the spread of theft, corruption and the black markets which ultimately, are forms of resistance to the prevailing misery. Here is a practical example: a bilingual tour guide who works 12 or 14 hours per day receives a monthly salary of 400 pesos ($ 17 dollars) from the state. The multinational company that employs the tour guide pays the Cuban government the sum of $ 150, which pockets the difference. Thus, the Cuban people spend their lives “inventing” schemes on how to get a little more CUCS to earn a little decent income.

Right now, the Cuban state wants to “relocate” more than four million state workers (between 20 and 30 percent) who earn miserable wages. (Relocating is the term used by both government officials and corrupt union bureaucrats). In reality, these are concealed lay-offs because its implementation would force workers to be relocated in the agriculture and the construction sectors which are in crisis as the state has been unable to re-launch. (For example, there are no plans to build housing for workers; only luxury hotels are being built). And prior to all this, the state announced a reduction in the unemployment insurance –reduced to only six weeks under the new economic adjustment.
There is clear evidence that the state’s economic reform has already begun this year [2010] in an incipient form in the midst of present hardships. As a matter of fact, tourist workers who have lost their jobs in the off season have been transferred to farms still run by the state. In Varadero, there were complaints by workers who were suspended without pay for several months. And as these events occur, Margarita González, Minister of Labor and Social Security, with a guilty conscience, recited her assigned fallacy: “Cuba will not apply massive layoffs in the style of neoliberal adjustments” (Clarín, 8 /19).

A Capitalist offensive without the right to strike or freedom to organize

As part of an integral mechanism to promote capitalist profit schemes practiced by the government of Raul Castro and the Cuban CP, the state proposed the reduction of more than one million jobs. This is part of other measures being implemented such as reduction of and/or outright closure of cafeterias that serve workers; the review of and/or the withdrawal of subsidies that fund cultural activities, sports and recreation and food for college students (who recently mobilized to complaint about the low quality food being served). Another measure being discussed by the state is the elimination of the traditional “ration card” which has almost ceased to be effective in practice long time ago.

These economic adjustments are leading to growing popular unrest. But in Cuba workers do not have the basic right to strike that exists in most capitalist countries thus, they are unable to organize and defend their working class gains. Labor unions are nothing more than “offices” of the Ministry of Labor and branches of the one-party dictatorship. There is no right to organize and discuss in free assemblies the whole situation that the Cuban people are going through and how to deal with layoffs and low wages. And under the misleading argument of not serving the “counterrevolution” and “not play into the enemy’s game,” the Cuban state prevents workers’ democracy and prohibits strikes or even a street protest calling for higher wages. Meanwhile, those opponents who are accused of being “counterrevolutionary” by the government, such as Omar Espinoza Chepe, the dissident economist member of the group of 75, hailed the recent economic changes made by parliament as positive (Clarín, 8 /3).

Pressure is building

In February 2010, the death of hunger strike inmate Orlando Zapata led to a political crisis in the country. The next day, another hunger strike began at the home of Guillermo Fariñas, a dissident journalist. Expressions of support came from artists and intellectuals from other countries who condemn the U.S. embargo and are in solidarity with the Cuban people 3. Cuban singer Pablo Milanes dared to say that “we must condemn Fidel Castro, from the human point of view that is, if the dissident Fariñas dies while on hunger strike,” and called the elections that took place in April a “farce”. Moreover, the writer Lucía Portela, a member of the National Union of Writers and Artists of Cuba, raised her lone, critical voice in solidarity and issue a statement: “Enough is enough … Whatever happens ”.

Social unrest is on the rise not only because of the lack of political freedom but because of the increasingly low standards of living. However, state repression stifles any expression of protest. But in October 2009, student protests took place at the Instituto Superior de Arte in Havana as a result of bad quality food and poor hygiene in schools. Prior to that, there had been complaints about the lack of rights to travel freely abroad. And more and more, expressions of youthful rebellion are happening largely underground with bands such as that led by rocker Gorki Aguila, rappers Los Aldeanos [The Villagers], Escuadrón Patriota [Patriot Squad], among others.  Their songs rally against the regime, the bureaucracy and extol social protest and freedom. People reproduce and circulate thousands and thousands of copies of pirate CDs in the underground. There is also a slightly greater access to the Internet (Cubans were not too long ago allowed to surf the web in hotels; it is very expensive for the people, though). This liberalization helps the dissemination of information and complaints that people have. That is how Yoani Sanchez, a famous blogger who critically commented on daily difficulties and the bureaucracy while keeping a certain distance from the gusaneria [right wing Miami based Cubans] emerged.

This is the context in which the government accepted the mediation of both the Catholic Church and the Spanish Foreign Minister to begin the release of 52 political prisoners several of whom have traveled to Spain. The release of prisoners is an important achievement in the field of human rights. But it is important to remember that the Spanish government and others that ask for freedom in Cuba are the representatives of multinational corporations that are conducting lavish business deals with the current dictatorship that, interestingly, has achieved the goal of making millions of people to work almost for free.

Thus, before and after the Parliament’s announcements, almost all commentators, including those in the U.S. have pointed out that the new economic measures are steps towards strengthening capital investment in the island. Additionally, we can add that these measures are part of the grand goal of the Cuban government: to strengthen its political control of the situation which is becoming complicated by accumulated economic and social difficulties.

Next step: A new socialist revolution in Cuba

Cuban rappers Los Aldeanos sing in one of their songs, “Viva Cuba Libre” (Long live free Cuba), “I stand firm with Ernesto Che Guevara, commander of truth.” Appeals to Guevara have never been more timelier and necessary to remember the battle against bureaucracy and privilege that characterized his role in the early years of the government. Again, it has never been timelier to remember his criticism of the increasing subordination of Cuba and the Castro regime to the bureaucracy of the Communist Party of the Soviet Union, and to evoke his now infamous phase: “socialist revolution or a caricature of revolution.” since Fidel, on both practice and words, began to negate such revolution. Let’s recall, for example, when he advised the Sandinistas leadership in 1979 to not turn Nicaragua into another Cuba; his advice to the Sandinistas encompassed the idea that they should not break with the bourgeoisie and that they should not move forward towards the socialist revolution. At the end, Fidel negated the revolution when he began to direct Cuba on the path of capitalist restoration in the 1990s.

Thus, it is not enough to reject the U.S. trade embargo and express the essential solidarity with the Cuban people. What this state of affairs calls for is a twofold solution: the fight for a socialist revolution to reverse the economic and social changes towards capitalism imposed by the Castros along with a political struggle, a revolution against the dictatorial regime to win political freedoms for the people.

We encourage labor, popular, student and peasant mobilizations to demand a living wage and end the current salary rate of $ 10 or $ 15 dollars. Others demands include: a minimum wage of 250 or 300 CUCS by abolishing the perverse system of dual currency; abolish separate markets for the rich and for the poor and oppose special wages and privileges for the ruling bureaucracy; more investment in health and education and reject capitalist firms whether they are mixed or completely private; enact a plan that re-nationalizes enterprises under workers control and management in the context of a single centralized plan and full democratic rights for workers, peasants and students so they can mobilize and organization independently from the state; allow the right to dissent, protest and strike and total independence of unions from the state and the government; in support of workers’ democracy, to make their complaints and elect their leaders, and form new unions; in support of total freedom for the Cuban people, none for the Miami right wing “worms”; free all political prisoners and in opposition of the one-party regime while supporting  the formation of new political parties. In support of total freedom for all Cubans so they can leave and enter the country; in support of uncensored use of the Internet, we say no to the censorship of music, art and information and support freedom for young people so they can have the right to organize freely and organize in their schools to voice their complaints.

A national economic plan is needed; to begin to regain monopoly of foreign trade, abolish the current dual currency system and provide immediate and substantial increase in wages. Additionally, a new economic plan with workers’ democracy, attacking social differentiation, the corruption of those at the top, reverse the restoration of capitalism and recover working class health and education gains won in the early years of the revolution. The government of the Castros and the CP must be replaced through mobilization to form a workers ‘government in order to achieve real socialism with workers’ democracy since it does not serve the people. To reach this goal, we encourage the construction of a new revolutionary leadership, that is, a new socialist party that can uphold the banner of Che and the early socialist revolution.

1. For further data, see Correspondencia internacional, No. 27, June-September. 2009: “Is is the end of the blockade?” at

2. Omar Everleny Perez Everleny et al: Perspectives on the Cuban economy. Edit. Caminos, La Habana, 2009.

3. See statement by the International Workers Unity (UIT-CI, for its Spanish initials) in El Socialista, No. 163 at 4/7/2010

Translated from Spanish by Emmanuel Santos on 1/7/11

Source: Correspondencia Internacional

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