Figure 24.4. Containers wait to be loaded on cargo ships at the Special Economic Opportunity Zone of Mariel. Photo courtesy of ZED Mariel (Special Economic Development Zone of Mariel), http://www.zedmariel.com/pages/eng/Informacion_General.php.
Cuban officials initiated the project to serve as a regional hub where large ships can transfer containers from Asia to smaller freighters for distribution along the Atlantic coasts of North and South America. Their current expectations for the port are realistically much lower than hoped-for future returns, which will be possible only when the United States lifts its embargo. More troubling is the ZEDM. Covering 180 square miles, the ZEDM’s plans include housing for workers and sites on which foreign investors can build factories for goods aimed at the Cuban domestic market, as well as international destinations. The government did ease some restrictions on investments in the ZEDM so that it could almost serve as an export processing zone, an area with no tariffs. But as of mid-2016, there were fewer than ten foreign investors who had signed agreements for the ZEDM. Even Odebrecht held off until February 2016.34
Exports
Cuba earned 17.9 billion pesos from the export of goods and services in 2014, which was 18.8 percent of its total gross domestic product. However, goods accounted for only 4.9 billion pesos of the total. Services included the work of doctors, teachers, sports trainers, and other professionals working in other countries. As Venezuela was the largest importer of Cuba’s services, the collapse of its economy in 2016 was a major reason Cuba’s economy suffered.35
The increased number of tourists who flocked to Cuba in 2015 and 2016 partially replaced the benefits of trade with Venezuela and helped prevent a major economic disaster from occurring. More than 3.5 million tourists came to Cuba in 2015, and four million came in 2016. Yet as we have observed in previous chapters, a reliance on tourism can undermine Cuba’s long-term development because the jobs do not encourage younger Cubans to advance their education.
Indeed, an important factor in holding down Cuba’s export earnings is that officials do not take advantage of Cuba’s greatest resource, its educated population.36 Cubans averaged 10.57 years of education in 2010—the “highest level of any country in Latin America and the Caribbean and one of the highest in the developing world.” This level of educational achievement should enable the country to make developmental leaps, Ricardo Torres argues, if it created incentives for young Cubans to gain further education in foreign languages and information technologies. He notes, though, that “Cuba’s greatest employment generators are not exactly sectors distinguished by the complexity of skills required in the workforce.”37
Teenagers see little reason for advanced education in order to obtain farm work and tourist industry service jobs. Yet apart from the pharmaceutical industry, these have been the leading sectors for foreign investment. While services abroad were Cuba’s largest source of export earnings and required highly educated professionals, it was a precarious basis for earning hard currency because it depended so heavily on one country, Venezuela.
Strangely, for a country accustomed to central planning Cuba has allowed the structure of its labor force to be determined by the market. In a sharp critique of the “updating” process, Cuban economist Pedro Monreal almost pleads instead for a “comprehensive strategic development plan.” The current approach “is based on a relatively limited group of export activities,” he astutely observes. However, the high education level “suggests the possibility of a more diversified export profile in terms of the type of activities as well as a greater number of export firms. . . . The country’s highly trained workforce is large, but significant segments are not being utilized.”38
Meeting Energy Needs with Fewer Imports
One of the hopes for Cuban economic development is underwater, literally. As we noted in the previous chapter, Cuban geologists estimate the country has oil reserves of up to twenty billion barrels. Cuba has leased to foreign firms only one-third of the fifty-nine offshore drilling blocks it has mapped.39 The remaining blocks are those likely to have the most oil. Some analysts surmise, according to an oil industry analyst who wishes to remain anonymous, that Cuba had not leased those blocks in order to entice US firms to lobby for changes in the embargo. But the increased availability of natural gas supplies in the United States makes that scenario unlikely in the near future.
Most of the potential fuel in Cuban territory lies in deepwater trenches off the northwestern coast. Cuba’s access to the deposits is contingent on world oil prices—the expense of such deep drilling would be viable only when the price of oil rises above $125 per barrel. Crude prices spiked above that threshold briefly in 2008 and foreign investors did explore the deepwater sites episodically between 2001 and 2013. But given the glut of oil in the world market, Cuba decided in 2014 to shift “its focus away from offshore oil, concentrating on renewable energy and improving output from onshore wells.”40
Figure 24.5. The increasing use of automobiles has led to greater gasoline consumption. Photo by Gabriela Veliz.
Cuba produced domestically nearly 38 percent of the oil it used in 2013.41 Yet Cubans used 30 percent more energy in 2016 than in 2011.42 With low prices from Venezuelan oil disappearing, the cost of importing the oil that Cuba needs has risen. Hence President Castro’s appeal for conservation and reducing fuel consumption.
Notes
1. Interview with Philip Brenner, December 8, 2011.
2. Raúl Castro Ruz, “Speech at the Ninth Congress of the Young Communist League,” April 4, 2010.
3. Armando Nova González, “Cuban Agriculture and the Current Process of Economic Transformation,” in A Contemporary Cuba Reader: Reinventing the Revolution, ed. Philip Brenner et al. (Lanham, MD: Rowman & Littlefield, 2014), 154; Koont, “Cuba’s Recent Embrace of Agroecology,” 403.
4. Raúl Castro Ruz, “Speech at the Ninth Congress of the Young Communist League.”
5. Raúl Castro Ruz, “Speech at the National Assembly,” August 1, 2010, http://www.cuba.cu/gobierno/rauldiscursos/2010/esp/r010810e.html.
6. Antonio F. Romero Gómez, “Economic Transformations and Institutional Changes in Cuba,” in Cuba’s Economic Change in Comparative Perspective, ed. Richard E. Feinberg and Ted Piccone (Washington, DC: Brookings Institution Press, 2014), 32.
7. Sixth Congress of the Communist Party of Cuba, “Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution,” April 18, 2011, http://www.cuba.cu/gobierno/documentos/2011/ing/l160711i.html.
8. Juan Triana Cordoví, “Moving from Reacting to an External Shock toward Shaping a New Conception of Cuban Socialism,” in No More Free Lunch: Reflections on the Cuban Economic Reform Process and Challenges for Transformation, ed. Claus Brundenius and Ricardo Torres Pérez (Heidelberg: Springer, 2014), 234.
9. Richard E. Feinberg, Open for Business: Building the New Cuban Economy (Washington, DC: Brookings Institution Press, 2016), 28–29; Romero Gómez, “Economic Transformations and Institutional Changes in Cuba,” 33–34.
10. Sixth Congress of the Communist Party of Cuba, “Information about the Result of Debate on the Lineamientos,” May 5, 2011, http://www.cubadebate.cu/wp-content/uploads/2011/05/tabloide_debate_lineamientos.pdf.
11. Feinberg, Open for Business, 140.
12. Philip Peters, “A Viewer’s Guide to Cuba’s Economic Reform” (Arlington, VA: Lexington Institute, 2012), 12.
13. Feinberg, Open for Business, 135–39.
14. Oficina Nacional de Estadística e Informació, Anuario Estadístico de Cuba 2010, Edición 2011, table 3.5, http://www.one.cu/aec2010.htm.
15. Nova González, “Cuban Agriculture and the Current Process of Economic Transformation,” 155–56.
16. Garrett Graddy-Lovelace, “United States–Cuba Agricultural Relations and Agrarian Questions,” Journal of Agrarian Change (2017).
17. Romero Gómez, �
��Economic Transformations and Institutional Changes in Cuba,” 34–35.
18. Oficina Nacional de Estadística e Informació, Anuario Estadístico de Cuba 2015: Agricultura, Ganadería, Silvicultura y Pesca, Edición 2016, cuadro 9.1, http://www.onei.cu/aec2015/09 Agricultura Ganaderia Silvicultura Pesca.pdf.
19. Koont, “Cuba’s Recent Embrace of Agroecology,” 405–6.
20. Raúl Castro Ruz, “The Revolutionary Cuban People Will Again Rise to the Occasion,” Speech to the Closing Session of the National Assembly, July 8, 2016, http://en.granma.cu/cuba/2016-07-13/the-revolutionary-cuban-people-will-again-rise-to-the-occasion.
21. Marc Frank, “Cuba Rationing Energy as Economy Minister Urges Spending Cuts,” Reuters, July 5, 2016.
22. Seventh Congress of the Communist Party of Cuba, “Resolution on the Results of Implementing the Lineamientos,” April 18, 2016, http://www.cubadebate.cu/especiales/2016/04/18/resolucion-sobre-resultados-de-la-implementacion-de-los-lineamientos-de-la-politica-economica-y-social-del-partido-y-la-revolucion-aprobados-en-el-vi-congreso-y-su-actualizacion-el-periodo-2016-2021.
23. US Department of Labor, Bureau of International Labor Affairs, Office of Child Labor, Forced Labor and Human Trafficking, List of Goods Produced by Child Labor or Forced Labor (September 30, 2016), https://www.dol.gov/sites/default/files/documents/ilab/reports/child-labor/findings/TVPRA_Report2016.pdf.
24. Philip Brenner and Colleen Scribner, “Spoiling the Spoilers: Evading the Legacy of Failed Attempts to Normalize US-Cuban Relations,” in Cuba-US Relations: Normalization and Its Challenges, ed. Margaret E. Crahan and Soraya M. Castro Mariño (New York: Institute of Latin American Studies, Columbia University, 2017), 406–8.
25. Sánchez Egozcue, “Challenges of Economic Restructuring in Cuba,” 134.
26. Quoted in Steven Mufson, “On Cuba, as Politics Advances, Business Leaders Wait for Their Breakthrough,” Washington Post, February 19, 2016.
27. Feinberg, Open for Business, 33.
28. Castro, “The Revolutionary Cuban People Will Again Rise.”
29. Emily Morris, “How Will US-Cuban Normalization Affect Economic Policy in Cuba?” in A New Chapter in US-Cuba Relations: Social, Political, and Economic Implications, ed. Eric Hershberg and William M. LeoGrande (New York: Palgrave Macmillan, 2016), 123.
30. Pavel Vidal Alejandro, “El shock venezolano y Cuba: Crónica de una crisis anunciada,” Cuba Posible, July 21, 2016, https://cubaposible.com/shock-venezolano-cuba-cronica-una-crisis-anunciada.
31. Feinberg, Open for Business, 96.
32. Feinberg, Open for Business, 79.
33. Damien Cave, “Former Exit Port for a Wave of Cubans Hopes to Attract Global Shipping,” New York Times, January 28, 2014; Eric Hershberg, “Cuban Infrastructure and Brazilian State Capitalism: The Port of Mariel,” AULA Blog, February 20, 2014, Center for Latin American and Latino Studies, American University, https://aulablog.net/2014/02/20/cuban-infrastructure-and-brazilian-state-capitalism-the-port-of-mariel.
34. Katheryn Felipe, “A Philosophy of ‘Surviving, Growing and Persevering,’” Granma, February 5, 2016, http://en.granma.cu/cuba/2016-02-04/a-philosophy-of-surviving-growing-and-persevering.
35. Oficina Nacional de Estadística e Informació, Anuario Estadístico de Cuba 2014, Edición 2015, tables 5.2, 8.3, 8.4, http://www.one.cu/aec2014.htm; William M. LeoGrande, “Venezuelan Contagion Hits Cuba’s Economy, Putting Reforms in Jeopardy,” World Politics Review, August 1, 2016, http://www.worldpoliticsreview.com/articles/19522/venezuelan-contagion-hits-cuba-s-economy-putting-reforms-in-jeopardy.
36. Romero Gómez, “Economic Transformations and Institutional Changes in Cuba,” 33.
37. Ricardo Torres Pérez, “Concluding Reflections of the Current Reform Process in Cuba,” in No More Free Lunch: Reflections on the Cuban Economic Reform Process and Challenges for Transformation, ed. Claus Brundenius and Ricardo Torres Pérez (Heidelberg: Springer, 2014), 223–24.
38. Pedro Monreal González, “Without Sugarcane There Is No Country: What Should We Do Now?” in No More Free Lunch: Reflections on the Cuban Economic Reform Process and Challenges for Transformation, ed. Claus Brundenius and Ricardo Torres Pérez (Heidelberg: Springer, 2014), 238–39.
39. Sarah Stephens, “As Cuba Plans to Drill in the Gulf of Mexico, US Policy Poses Needless Risks to Our National Interest” (Washington, DC: Center for Democracy in the Americas, 2011), 17.
40. Marc Frank, “After Offshore Oil Failure, Cuba Shifts Energy Focus,” Reuters, August 11, 2014.
41. Anuario Estadístico de Cuba 2014, tables 10.4 and 10.7.
42. Frank, “Cuba Rationing Energy as Economy Minister Urges Spending Cuts.”
Chapter 25
Securing Cuba’s Independence through Foreign Policy, 2010–2016
The waiting room at Cuba’s largest eye hospital, Pando Ferrer, is packed with patients. Many come from across Latin America and the Caribbean, with everything paid for by the Cuban government. Basil Ward is from Barbados and is in Havana to have a cataract removed for free. “I could have had the operation in Barbados but I would have had to wait a year, there’s a huge waiting list there,” he says. Others do not even have that choice; health facilities are almost non-existent or unaffordable in many of the poorest parts of the region. Mr. Ward is here under a program called Operación Milagro or Operation Miracle. . . . The Cubans have turned mass production eye operations into a fine art. Pando Ferrer Hospital alone can perform three hundred operations a day. Treatments range from cataracts and glaucoma to corneal transplants. . . . There are similar facilities throughout the island as well as dozens of eye surgery centres which the Cubans have opened across the Americas and parts of Africa. Operation Miracle is just one part of an extensive international medical assistance program, which some have dubbed Cuba’s “medical diplomacy.”
—Michael Voss1
As anticipated, once Raúl Castro officially became president Cuba’s foreign policy did not depart much from the internationalist path it had taken under Fidel. After all, the new leader had been vice president and minister of the armed forces for more than forty years and was a partner with his brother in establishing the path. Cuba continued to manifest a mix of pragmatic calculations aimed at securing Cuba’s independence with altruistic elements intended to assist and strengthen the world’s underdogs. Despite this continuity, there were changes occasioned by new opportunities and challenges in the period from 2010 to 2016.
An Outsized Role in Latin America
Even without Fidel as its leader, Cuba continued to play a role in Latin American affairs that was out of proportion to its size. But leadership changes in Brazil, Argentina, and Peru, along with severe economic problems in Venezuela and Brazil, undermined the bases for political and economic relations that Cuba had developed at the start of the period.
Latin America itself had undergone a significant transformation during the two decades prior to 2010. Yet US policy was still rooted in a century-old hegemonic presumption, a belief in a “special relationship” of domination.2 The United States was the largest trading partner outside the region for most Latin American countries in the early 1990s. But by 2010, their largest trading partners outside the region were China and Japan.
In addition, nearly every Latin American country experienced meaningful economic growth between 1990 and 2010. Brazil’s GDP grew by more than forty percent, and it moved from eleventh to seventh place in the world’s ranking. Notably, Brazil’s growth was inclusive, bringing many more people into the middle class than ever before. Along with Latin America’s reduction in inequality and poverty, a growing middle class was a region-wide phenomenon. These changes did not result from the “magic” of the free market or reduced government spending as preached by Washington. Well-planned government programs, such as the Bolsa Familia subsidy in Brazil, brought about the improvements. In short, at a moment when Latin America was feelin
g stronger and more confident than ever, countries in the hemisphere no longer feared defying the United States by working closely with Cuba.3
Recall from chapter 22, that in 2004 Cuba and Venezuela had started an ambitious project—ALBA—to integrate the economies of South America and the Caribbean. With the price of oil still high in 2010, Venezuela was using subsidized sales and loans to purchase influence and goodwill that spilled over to Cuba. ALBA’s program also appealed to a new group of leaders in the region who had grown up admiring the Cuban Revolution.
Traditionally, the Organization of American States (OAS) had been Washington’s preferred instrument for hemispheric cooperation. But recent US administrations had done little to buttress the OAS’s relevance, which created a vacuum that Latin American countries filled themselves with several new regional institutions. The one with the greatest potential is the Community of Latin American and Caribbean Countries (CELAC), whose members include every country in the Western Hemisphere except the United States and Canada.
CELAC was formed in 2010 by the Rio Group, an organization founded in 1985 to provide third-party mediation for the US-sponsored contra war against Nicaragua. In 2008, the Rio Group reached out to make Cuba a full member of the organization. By the next year, the Rio Group had expanded to include all the countries in South America, and it provided a semiformal forum to discuss regional issues. Just prior to the group’s 2013 summit, the European Union announced that CELAC, not the OAS, would be its counterpart organization for biregional negotiations, which increased CELAC’s importance. The 2013 summit meeting was held in Havana because the members had chosen Cuba to co-chair the organization for that year. Their choice was meant as a not-too-subtle message to Washington, which had prevented Cuba from participating in a 2012 OAS-led hemispheric summit.
Cuba Libre: A 500-Year Quest for Independence Page 43