Reports and Comment: Cuba

Castro faces his country's difficulties

A visitor can learn more about what is happening in Cuba today from the wall posters around Havana than from the dreary official newspaper Granma, although since the posters and billboards are also government-produced, they express the official line. The slogan most commonly seen on street corners and along highways in Cuba does not refer to the glories of socialism or to the "deepening friendship" with the Soviet Union; instead, it reflects the economic trouble in which Cuba has found itself of late: "We will confront our difficulties and we will overcome them."

The signs went up shortly after September 28, 1976, the day that Prime Minister Castro spoke to several hundred thousand of his countrymen in the Plaza of the Revolution. (When the Cuban government has bad news for its people, Castro delivers it personally. "There is only one newspaper in Cuba," explained one Cuban. "It is Fidel, when he speaks to the people.") In that speech, the Cuban leader outlined his nation's current economic difficulties and launched what promises to be a fairly extended period of domestic austerity.

Because sugar is the mainstay of the economy (Cuba is the world's leading sugar producer), it was natural that Castro should single it out as the culprit for the present "difficulties." Cuba spent 1973 and 1974 riding the crest of the booming international sugar market, but today the decline of that market foretells hard times.

In November 1974, sugar brought 65.5 cents a pound. Two years later, the price had dropped to 7.5 cents. The economic problem has been compounded by a lengthening drought and by the United States's tripling of sugar import taxes last year, an act which Castro called "a brutal aggression against all sugar-producing countries."

He went on to offer his analysis of the situation:

"The problem is not that the price of sugar has sharply declined. The problem is that the world is living in an era of international economic crisis, a time of extraordinary inflation, and while the price of sugar has greatly declined, the prices of articles we must import have remained very high, and in some cases have increased.

"And we are not like the petroleum producing countries, which have a monopoly that allows them to set prices at will ... petroleum is sold on the world market at some twenty times the cost of its production; sugar today is selling for less than its cost."

Castro then announced a new sacrifice that the already hard-pressed Cubans would have to bear: the weekly ration of coffee-Cuba's favorite drink-would be cut by one third as a reaction to the increases in world coffee prices.

Circulation troubles

The achievements of the Cuban revolution are familiar. No country in Latin America can yet match Cuba's accomplishments in housing, education, literacy, or health care. But less visible are the sacrifices the Cuban people have made for what they have built. In preparing for austerity, Cubans are not facing something unknown, but continuing a cycle of enforced sacrifice which has existed since the first days of the Castro era. Among his other talents, Castro is a master propagandist, and he has managed a feat that eludes most leaders: he has convinced his people that personal sacrifice is a patriotic duty.

The economic crunch in Cuba doesn't have the same effect on individuals that it would in a capitalist society. Cubans still have plenty of money. A paying job is not only guaranteed but mandatory for each adult male. Many families have more than one breadwinner; the labor-intensive Cuban economy can always absorb more workers. Basic expenses are minimal-education and health care are free, and rent cannot exceed 10 percent of the income of the head of household.

But although there is more money circulating more widely in Cuba than ever before, a familiar paradox emerges: there isn't much to buy. Consumer goods are rare and often allotted according to need or "revolutionary merit"; the purchase of clothing is restricted; travel abroad is difficult; and thousands of items which Westerners and even many Eastern Europeans take for granted are unavailable. A visitor to Cuba these days is likely to be approached on the street and asked to sell his jeans, T-shirt, or sunglasses.

The accumulation of wealth by individuals poses problems in a socialist society. As the amount of money in circulation increases, the amount available to the government decreases proportionally, imposing budget limitations which the government naturally sees as unnecessary and artificial. Cuban economists faced with this problem considered three alternatives.

First, and perhaps most obvious, Cuba could devalue its currency, thereby reducing the value of privately held money, and then print more for the exclusive use of government. This was rejected for "reasons of international trade," according to a Cuban official-which may mean that the plan would have created problems with the Soviets. Castro has repeatedly stressed his government's commitment to "meet its international financial obligations"; Cuba is, significantly, not among the nations calling for a debt moratorium with the West.

The second option considered by JUCEPLAN, the central economic planning body, was an across-the-board increase in prices, perhaps coupled with the temporary imposition of charges for some services which had been free. This was rejected, after what must have been an interesting discussion, for "ideological" reasons.

The final option, which was adopted when the problem first arose nearly, two years ago, was to impose selective price increases on popular luxury items. A Cuban who pays $2 for a pack of cigarettes (beyond his two-pack-a-week ration) or $10 for a standard restaurant lunch knows, therefore, that he is paying those prices for reasons of national economic policy, not to compensate for increased costs.

According to official sources, the amount of money in circulation is gradually declining, as planners had predicted. But the inevitably slow pace of recovery under this policy has contributed to the economic difficulty facing Castro's revolutionary government.

Another, more recent attempt to stimulate the economy is the re-introduction of taxes, which had been virtually eliminated in the early days of the Revolution. In the past few years there has been an easing of the restriction against private enterprise; it seems that the quality of repairs and personal services declined when the government clamped tight controls over prices and conditions of employment. Under new regulations, some dentists, doctors, electricians, carpenters, and photographers are allowed to do private work on their own time-but they must kick in part of their earnings as tax. A similar arrangement has been established for tailors, bootblacks, dressmakers, watch repairmen, gardeners, and others who are allowed to do private work on a full-time basis.

Plans for the future

Efforts to bolster Cuba's economy were further helped in December 1975, when Castro gave a two-day speech to the First Congress of the Cuban Communist party outlining the components of the nation's first five-year plan. He set a goal of 6 percent annual growth in the economy, which would mean, if successful, a doubling of economic production from 1969 to 1980. He called for a 35 to 40 percent increase in the sugar crop and a "significantly accelerated" program of industrialization.

The five-year plan has not been referred to recently by the Cuban press, so it is difficult to determine whether it is proceeding on schedule-though at, least some parts must inevitably have been substantially reduced in scope. Cuba's greatest economic strength is that it has a guaranteed market for sugar in the Soviet Union and Eastern Europe; its greatest weakness is being at the mercy of international forces when it comes to selling the balance of the sugar crop to the West, with neither guaranteed prices nor guaranteed purchases.

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