• Submitted by: manso
• Editorial Articles
• 11 / 01 / 2010

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Behind the New Economic Measures in Cuba: Advancing the Revolution in the Concrete World Situation of Today. Genesis of the Cuban Economic Crisis. By Ike Nahem.

The University of Havana Speech

As mentioned above on November 5, 2005, eight months before his near-fatal medical emergency and surgery that led to removing himself from his formal leadership posts in the government and state, Fidel Castro gave a remarkable, sweeping speech at the University of Havana , which laid out the framework for the economic and social crisis facing Cuban socialism and the general line of march on how to move forward. It is a good starting point to understand the origins of the new economic policies that are now being concretely formulated and codified.

The speech was brutally frank, nothing less than a tour de force revealing,explaining, and attacking - with facts, humor, anger, sarcasm, and real passionate humanity - examples of corruption, inefficiency, bureaucratism, and the administrative mentality that had to be addressed and transformed for the viability of the socialist revolution and its survival. "This country can self-destruct; this Revolution can destroy itself, but they can never destroy us; we can destroy ourselves, and it would be our fault."

At a time when Cuba was producing less than one-and-a-half million tons of sugar a year Fidel, to cite just one example, said to the gathered students, "You will be amazed when I tell you that, according to its inventory, the Ministry of Sugar has 2000 to 3000 more trucks than it had when it was producing 8 million tons of sugar. It's tough, but I'm going to tell it like it is."

At the time of Fidel's November 2005 speech the Cuban economy and finances had been steadily advancing, with several years of regular, and in some years strong, economic growth. Economic ties with Latin America and China had increased significantly. Revenues from tourism were high and growing. And it was in this framework, ascendant from the miserable depths of the Special Period,that Fidel addressed head-on the structural and systemic problems, the new contradictions that were accumulating.

New Blows

Within a few years, however, the revolutionary government now led by Raul Castro was grappling with the same problems as laid out by Fidel in 2005 but now magnified many times over by a number of concrete national and international developments.

First and foremost was the extensive material devastation caused by the 2008 Hurricane season, particularly the effects of Hurricanes Gustav and especially Ike (no relation to the author of this essay). In the hurricane damage over 320,000 houses were destroyed or severely damaged with over 2 million Cubans displaced. In the agricultural province of Villa Clara over 70% of agricultural production was destroyed. Over 3300 tobacco houses were destroyed. And so on. The United Nations Office for the Coordination of Humanitarian Affairs estimated damages at nearly $4 billion.

What truly marked the beginning of an unfavorable new dynamic in the Cuban economic reality was the world-historical concrete new fact of the 2007-08 world capitalist financial crash. Among other direct consequences of this for Cuba was a radical drop in the world market price of nickel, a major Cuban- produced raw material commodity essential in many modern manufacturing processes. (Of course,the modernization of Cuban nickel-mining operation was a result of a Cuban partnership with foreign capitalist firms - those with the capital - most notably the Canadian Sherritt International Corporation.) There was also a significant drop in the revenues brought in by tourism as the effect of the world capitalist crisis and retraction hit consumer spending in the advanced capitalist countries where much of the vacation travel to Cuba comes from.

Acquiring Capital for the Cuban Workers State

Given the paucity of capital in Cuba - that is, the monetized savings in hard currency for investing in agricultural and industrial machinery, factories,rolling stock for railroads and other industrial infrastructure, and so on - it is inevitable that, for the foreseeable future, what the revolutionary government must do, will necessarily involve co-operative and contract agreements with private or "state" firms in capitalist countries.

These firms will invest, of course, not out of the goodness of their hearts but in order to generate profits. (Although some individual "investors" may harbor sentimental feelings or affection for Cuba. Good if that's the case, but even those will want and need to make money.) In that sense they will be allowed to siphon off a portion of the surplus value created by the labor output of the Cuban industrial workers employed in these enterprises.


Cuba, of course, has much to offer to firms willing to invest in Cuban means of production, in particular a highly educated and healthy population. Cuba also has a number of products and services from its already existing industries such as biotechnology that with further development and market access will have high demand on world markets.

Within the borders of Cuba, the capitalist market is no longer dominant but Cuba functions in a world economic framework where private capital - that is, a handful of giant capitalist firms operating through a handful of advanced capitalist states utterly dominate world production and exchange. Cuba must trade in hard currency (that is, the currency of advanced imperialist countries) which it can obtain only with great difficulty due to the US attempts to blockade it.

Developing Cuba's Oil Fields

Perhaps the most crucial economic project being undertaken now in Cuba involves the extraction of apparently large oil deposits discovered in Cuban territorial waters. This will involve deep-sea drilling from massive platforms. Years of searching, chartering, mapping, discovery, and preparation are now finally giving way to actually building the platforms and extracting the oil.

These fields, once they start producing, will be a tremendous boost to the Cuban economy. But Cuba is nowhere near having the capital, technology, or management expertise to undertake this huge task without the assistance of foreign capital and either foreign private capitalist monopoly enterprises or state-owned firms from capitalist countries.

After these firms take their slice - and it will have to be enough to make it worth their while - then the remaining surplus value created will go to workers wages, plant maintenance, and the Cuban workers state to bolster, among other things, free medical care and education. Not a dime will line the pockets of a private bourgeoisie in Cuba.

(Washington, which waived safety rules and regulations and turned a blind eye to the recklessness of BP leading to the 2010 Gulf oil spill disaster, has tried to stoke fears about the Cuban project.)

Ike Nahem is the coordinator of Cuba Solidarity New York (cubasolidarityny@...) a member of the National Network on Cuba, and a founder of the New York-New Jersey July 26 Coalition. Nahem is an Amtrak Locomotive Engineer and member of the Brotherhood of Locomotive Engineers and Trainmen, a division of the Teamsters Union. These are his personal political opinions.

Source: http://groups.yahoo.com/group/CubaNews/message/118659