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Actualizacin in Perspective Mauricio Font Bildner Center for Western Hemisphere Studies The Graduate Center, CUNY May 21, 2012 Evolution of Cuban Socialism } 1960-1970: Rise of Cuban Socialism } 1970-1985: Institutionalization } 1986-1990:


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SLIDE 1

Actualización in Perspective

Mauricio Font

Bildner Center for Western Hemisphere Studies The Graduate Center, CUNY May 21, 2012

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SLIDE 2

Evolution of Cuban Socialism

} 1960-1970: Rise of Cuban Socialism } 1970-1985: Institutionalization } 1986-1990: Rectification } 1990-2008: Post-Soviet Era

} “Special Period” (1990-1997) } Socialist reaffirmation (1997-2008)

} 2008-Present: Actualización

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SLIDE 3

1960-1970 Rise of Socialism

Origin and end point Elements

§

Consolidation of power (1959-1961).

§

Construction of socialism (early 60s).

§

US trade embargo 1962.

§

Alignment and formal cooperation agreements with the USSR.

§

Internationalism

§

Drive for ten million ton harvest of 1970 and

  • utcome.
  • Land expropriation and agrarian reform

(1961; 1963) and nationalization (early 1960s, complete in 1968’s “revolutionary offensive”).

  • Failure of industrialization strategy and

gradual rise of soviet influence.

  • Debate between “guevarismo” (ideas of Che

Guevara, inspired in Mao) and soviet bureaucratic model (“the new man” and moral incentives over economic incentives). Ideology and charisma as key political elements.

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SLIDE 4

1970-1985 Institutionalization

Origin and end point Elements

  • Revision of model after 1970

sugar harvest.

  • First congress of the Cuban

Communist Party (1975).

  • Close ties with Soviet

Union confirmed.

  • Africa wars (70s) and

development of armed forces (FAR).

  • Second Congress of PCC

(1980).

  • Institutional role of party

strengthened.

  • Cooperation agreement with the USSR: Soviet
  • il, machinery, military hardware in exchange for

Cuban sugar.

  • Adoption of new Economic Management and

Planning System (SDPE) to manage and coordinate economy.

  • Creation of farmers’ markets.
  • Liberalization of consumption of select goods;

parallel markets.

  • Wage and pricing policy to include material

incentives.

  • Cuban-Americans authorized to visit Cuba.
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SLIDE 5

1986-1990 Rectification

Origin and end point Elements

  • Third congress of PCC

(1986) launches “rectification” campaign.

  • Rejection of 1985 soviet

path (see Fidel Castro’s speech in July 1986), but close economic ties to the USSR.

  • Strong critique of bureaucracy, planning

system and on-going reforms (material incentives; farmers’ markets).

  • Return to volunteer work brigades, agrarian

collectivization, rekindling of moral incentives (“Che’s spirit”), and the primacy

  • f politics over economic (market)

considerations.

  • Reaffirmation of Fidel Castro’s personal
  • leadership. Adaptive practices from below

(“black market”) cannot be stopped.

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SLIDE 6

1990-1995 Special Period

Origin and end point Elements

  • Dissolution of the Soviet Union

and CMEA (1989-1991).

  • Fourth congress of PCC

(1991).

  • Global shift (Soviet and east

European transitions and liberalization in China and Vietnam) forces Cuba to seek reintegration into a markedly changed international order driven by economic globalization.

  • US trade embargo II: Cuban

Democracy Act, 1992

  • Exports and imports contract by 80%, GDP by

35%.

  • Fuel and other shortages: blackouts, reduced diets,

breakdowns in transportation, industry, and agriculture; sugar production sharply declines.

  • Informality and new forms of out migration.
  • Expanded foreign investment and tourism (1992).
  • Expansion of farmers’ markets, self-employment,

start of agrarian cooperatives (UBPC) in 1993.

  • In 1994-1995: attract remittances and legalization
  • f dollar; liberalization of currency exchanges;

hard-currency stores (consumer goods).

  • In 1997-1999: Financial & banking reform; more

policies to attract remittances. Slow recovery.

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SLIDE 7

1995-2008 Socialist Reaffirmation

Origin and end point Elements

  • Fifth congress of PCC

(1997).

  • US trade embargo III:

Helms-Burton, 1996

  • Fidel Castro’s “Battle of

Ideas” builds on post-1999 mass mobilizations (Elián González case).

  • Rise of Hugo Chávez and

Venezuela’s role as key supporter of the Cuban revolution.

  • Illness of Fidel Castro in

2006 and end of presidency.

  • Cooperation agreements with Venezuela:
  • il for medical and other services.
  • Reaffirmation of socialist ideology

combined with strong nationalism.

  • Fidel: “socialism is irreversible” renewed

emphasis on political unity/consensus against American hegemon and capitalism.

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SLIDE 8

2008- Actualización

Origin and end point Elements

  • Raúl Castro elected

president

  • Debate about reforms

and search for a new model opened.

  • Sixth Congress of PCC

(2011) formalizes Lineamientos (2012) or new economic plan.

  • PCC Conference in early

2012 to strengthen political institutions.

  • Pragmatism, economic reforms and search

for a new model of Cuban socialism.

  • Land to agriculturalists.
  • 2011-2014 economic plan

(Lineamientos) and small private businesses (self-employment or cuentapropistas).

  • Institutional development (limits to

terms in office) and role of Communist party.

  • Expansion of role of military and

former military personnel.

  • Emphasis on consultation. Dialogue

with the Catholic Church.

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SLIDE 9

5 10 15 20 25 30 35 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Services Industry Agriculture

Main Economic Sectors, 1970-2010

(Net Output, in Billions of Constant 2000 US$)

$Bn

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SLIDE 10

Sugar Production and Export

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Total Production (1000 MT) Total Exports (1000 MT)

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SLIDE 11

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Cuba Production (1000 MT) Cuba Exports (1000 MT) Brazil Exports

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SLIDE 12

2 4 6 8 10 12 14 16 18 20 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Services Industry

Agriculture

Main Economic Sectors, 1970-1985

(Net Output, in Billions of Constant 2000 US$)

$Bn

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SLIDE 13

2 4 6 8 10 12 14 16 18 20 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Agriculture Industry Services

Main Economic Sectors, 1985-1997

(Net Output, in Billions of Constant 2000 US$)

$Bn

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SLIDE 14

5 10 15 20 25 30 35 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Services

Industry

Agriculture

Main Economic Sectors, 1997- 2010

(Net Output, in Billions of Constant 2000 US$)

$Bn

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SLIDE 15

GDP Growth Rate, 1970-2010

  • 20
  • 15
  • 10
  • 5

5 10 15 20 25

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

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SLIDE 16

World’s GDP Growth by Regions

(Billions of Constant 2000 US$)

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SLIDE 17

Shares of World Income by Region

5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 1970 1975 1980 1985 1990 1995 2000 2005 2010 LAC/World East Asia & Pacific (all income levels)/ world NorthAamerica/World Europe & Central Asia (all income levels)

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SLIDE 18

Cuba Economic Indicators

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Real GDP Growth (%) 7.26 4.12 1.45 2.06 2.7 3.3 4.4 3.9 4.6 5 GDP 58,604 60,806 62,079 64,328 67,534 73,500 81,133 88,195 96,152 104,767 Fiscal Deficit (% of GDP)

  • 3.2
  • 6.9
  • 4.9
  • 3.6

Exports of goods & services 11,918 12,506 10,642 14,258 19,928 21,953 25,947 28,820 30,657 33,868 Imports of goods & services 10,333 14,806 9,565 11,358 13,910 13,816 13,888 14,527 15,043 16,048 Origin of GDP (real % change) Agriculture 1,886 1,898 1,894 1,781 1,817 1,889 2,003 2,083 2,187 2,318 Industry 9,755 10,151 10,222 10,087 10,413 10,996 11,656 12,255 12,884 13,544 Services 31,591 32,943 33,793 35,128 35,748 36,677 38,107 39,441 41,216 43,277 Population (m) 11.2c 11.2c 11.2c 11.2c 11.2 11.2 11.2 11.2 11.2 11.2 Unemployment rate (%) 1.8 1.6a 1.7a 1.6a 1.4 1.8 2 2.1 2.2 2.3 Trade Current-account balance 401

  • 2,309

424

  • 22

328 501 613 558 540 503 Goods: exports fob 3,686c 3,664c 2,863c 4,598 6,347 6,427 7,217 7,622 8,017 8,769 Goods: imports fob

  • 10,079c -14,234c -8,906c
  • 10,647
  • 13,257
  • 13,281 -13,469 -14,234 -14,886 -16,055

Net foreign direct investment (US$ m) 500 580 550 585 740 780 750 720 800 900 Total external debt (US$ bn) 16.7 19.6 20.2 20.5 21.5 22.4 22.9 23.4 23.9 24.8 Total external debt (% of GDP) 32.7 36.1 36.2 35.5 35.4 34.7 33.3 32.1 30.7 29.7

Source: Economist Intelligence Unit, CEPAL, ONE