Cuba faces a difficult economic situation despite Raúl Castro’s reforms, and a military-led economic transition appears more likely than a Vietnamese or Chinese model of change, Cuba analysts said Thursday.
“The reforms haven’t provided results. There are too many limitations … there’s an enormous stagnation in society,” said dissident Havana economist Oscar Espinosa Chepe in a speech recorded for the opening session of the annual meeting of the Association for the Study of the Cuban Economy.
Some 100 economists, social scientists, and other Cuba experts gathered at The Hilton Miami Downtown hotel to present their work on the policy challenges facing Cuba. This year’s topic: Where is Cuba going?
Cuba’s situation is “very delicate and difficult,” Chepe said. Among the problems he cited in Cuba’s plan to move massive numbers of state employees into self-employment is the lack of materials they need to run their businesses and the competition this creates with the rest of the population trying to make purchases for daily living.
Joaquin Pujol, a retired International Monetary Fund economist, said that very few of the people who have joined the ranks of the self-employed were really working for the government before. Most, he said, were unemployed, already working for themselves under the table, were retired or are students.
Vegard Bye, a Cuba expert at the Norwegian Institute of International Affairs, said Vietnam more than China is a model for the Castro government as it pushes toward a more market-oriented economy, although Cuba is unique in many ways.
“Cuba is different from everybody,” he said, adding that it will be difficult for island leaders to copy anyone else’s economic model during a transition.
Cuba, for example, hasn’t done as well as China or Vietnam in recruiting new generations of leaders and managers, Bye said, and as it reforms the economy, it is less likely to be able to maintain political controls as easily as Vietnam has done.
Bye noted that the thrust of Castro’s recent visit to China, Vietnam and Russia seems to be an effort to figure out how a market economy can be implemented and institutionalized without losing political control.
He said that the Cuban military and former military officers who have had vast experience in managing a large majority of the island’s state-owned enterprises are likely to have a strong voice in the island’s economic future.
Cuba, Bye said, essentially faces two scenarios: a Vietnam-like shift toward a more market-oriented economy with space for small- and medium-sized private businesses but with the government clearly in political control or the perhaps more likely “authoritarian militarized transition” in which military technocrats take control through cronyism and corruption.
“I hope for No. 1, but the tendency is very much toward the second one,” Bye noted.
He pointed out that in the economic transitions in Russia and Eastern Europe, three-quarters of the current economic leaders were previous party leaders during the Communist regime. In Russia particularly, he said, the old party chiefs became the owners of formerly public property, while in the other countries the trend has been for them to form the new managerial class.