Jul 14, 2021 • 40M

PODCAST: "Hexapodia" Is þe Key Insight XXII: Cuba!

Noah Smith & Brad DeLong's 30:00 < [Length of Weekly Podcast] < 60:00

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Key insights—economics, finance, political economy, and wrestling with how to teach the world good economics through every means possible, & some means impossible... <br/><br/><a href="https://braddelong.substack.com?utm_medium=podcast">braddelong.substack.com</a>
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Key Insights!:

  • Hexapodia!

  • Drop the embargo now!

  • There is nothing that enables an authoritarian régime—or, indeed, pretty much any type of régime—hang together other than an implacable external enemy.

  • For the Cuban military-bureaucratic junta-oligarchy, that implacable external enemy consists of the Cuban exiles in Miami and their descendants

Share Brad DeLong's Grasping Reality


&, of course:

Share Brad DeLong's Grasping Reality


Post-Fidel Timeline:

2008 February - Raul Castro takes over as president, days after Fidel announces his retirement.

2008 May - Bans on private ownership of mobile phones and computers lifted.

2008 June - Plans are announced to abandon salary equality. The move is seen as a radical departure from the orthodox Marxist economic principles observed since the 1959 revolution. EU lifts diplomatic sanctions imposed on Cuba in 2003 over crackdown on dissidents.

2008 July - In an effort to boost Cuba's lagging food production and reduce dependence on food imports, the government relaxes restrictions on the amount of land available to private farmers.

2008 September - Hurricanes Gustav and Ike inflict worst storm damage in Cuba's recorded history, with 200,000 left homeless and their crops destroyed.

2008 October - State oil company says estimated 20bn barrels in offshore fields, being double previous estimates.

2008 November - Russian President Dmitry Medvedev visits. Two countries conclude new trade and economic accords in sign of strengthening relations. Raul Castro pays reciprocal visit to Russia in January 2009. Chinese President Hu Jintao visits to sign trade and investment accords, including agreements to continue buying Cuban nickel and sugar.

2008 December - Russian warships visit Havana for first time since end of Cold War. Government says 2008 most difficult year for economy since collapse of Soviet Union. Growth nearly halved to 4.3%.

2009 March - Two leading figures from Fidel era, Cabinet Secretary Carlos Lage and Foreign Minister Felipe Perez Roque, resign after admitting "errors". First government reshuffle since resignation of Fidel Castro. US Congress votes to lift Bush Administration restrictions on Cuban-Americans visiting Havana and sending back money.

2009 April - US President Barack Obama says he wants a new beginning with Cuba.

2009 May - Government unveils austerity programme to try to cut energy use and offset impact of global financial crisis.

2009 June - Organisation of American States (OAS) votes to lift ban on Cuban membership imposed in 1962. Cuba welcomes decision, but says it has no plans to rejoin.

2009 July - Cuba signs agreement with Russia allowing oil exploration in Cuban waters of Gulf of Mexico.

2010 February - Political prisoner Orlando Zapata Tamayo dies after 85 days on hunger strike.

2010 May - Wives and mothers of political prisoners are allowed to hold demonstration after archbishop of Havana, Jaime Ortega, intervenes on their behalf.

2010 July - President Castro agrees to free 52 dissidents under a deal brokered by the Church and Spain. Several go into exile.

2010 September - Radical plans for massive government job cuts to revive the economy. Analysts see proposals as biggest private sector shift since the 1959 revolution.

2011 January - US President Barack Obama relaxes restrictions on travel to Cuba. Havana says the measures don't go far enough.

2011 March - Last two political prisoners detained during 2003 crackdown are released.

2011 April - Communist Party Congress says it will look into possibility of allowing Cuban citizens to travel abroad as tourists.

2011 August - National Assembly approves economic reforms aimed at encouraging private enterprise and reducing state bureaucracy.

2011 November - Cuba passes law allowing individuals to buy and sell private property for first time in 50 years.

2011 December - The authorities release 2,500 prisoners, including some convicted of political crimes, as part of an amnesty ahead of a papal visit.

2012 March - Pope Benedict visits, criticising the US trade embargo on Cuba and calling for greater rights on the island.

2012 April - Cuba marks Good Friday with a public holiday for the first time since recognition of religious holidays stopped in 1959.

2012 June - Cuba re-imposes customs duty on all food imports in effort to curb selling of food aid sent by Cubans abroad on the commercial market. Import duties had been liberalised in 2008 after series of hurricanes caused severe shortages.

2012 October - Spanish politician Angel Carromero is jailed for manslaughter over the death of high-profile Catholic dissident Oswaldo Paya. Mr Carromero was driving the car when, according to the authorities, it crashed into a tree. Mr Paya's family say the car was rammed off the road after he had received death threats. The government abolishes the requirement for citizens to buy expensive exit permits when seeking to travel abroad. Highly-qualified professionals such as doctors, engineers and scientists will still require permission to travel, in order to prevent a brain drain.

2012 November - President Raul Castro says the eastern province of Santiago was hard hit by Hurricane Sandy, with 11 people dead and more than 188,000 homes damaged. A United Nations report says Sandy destroyed almost 100,000 hectares of crops.

2013 February - The National Assembly re-elects Raul Castro as president. He says he will stand down at the end of his second term in 2018, by which time he will be 86.

2013 July - Five prominent veteran politicians, including Fidel Castro ally and former parliament leader Ricardo Alarcon, are removed from the Communist Party's Central Committee in what President Raul Castro calls a routine change of personnel.

2014 January - First phase of a deepwater sea port is inaugurated by Brazil and Cuba at Mariel, a rare large foreign investment project on the island.

2014 March - Cuba agrees to a European Union invitation to begin talks to restore relations and boost economic ties, on condition of progress on human rights. The EU suspended ties in 1996.

2014 July - Russian President Vladimir Putin visits during a tour of Latin America, says Moscow will cancel billions of dollars of Cuban debt from Soviet times. Chinese President Xi Jinping visits, signs bilateral accords.

2014 September/October - Cuba sends hundreds of frontline medical staff to West African countries hit by the Ebola epidemic.

2014 December - In a surprise development, US President Barack Obama and Cuba's President Raul Castro announce moves to normalise diplomatic relations between the two countries, severed for more than 50 years.

2015 January - Washington eases some travel and trade restrictions on Cuba.

Two days of historic talks between the US and Cuba take place in Havana, with both sides agreeing to meet again. The discussions focus on restoring diplomatic relations but no date is set for the reopening of embassies in both countries. President Raul Castro calls on President Obama to use his executive powers to bypass Congress and lift the US economic embargo on Cuba.

2015 February - Cuban and US diplomats say they have made progress in talks in Washington to restore full relations.

2015 May - Cuba establishes banking ties with US, which drops country from list of states that sponsor terrorism.

2015 July - Cuba and US reopen embassies and exchange charges d’affaires.

2015 December - Cuban and US officials hold preliminary talks on mutual compensation.

2016 January - US eases a number of trade restrictions with Cuba.

2016 March - Cuba and the European Union agree to normalise relations. US President Barack Obama visits Cuba in the first US presidential visit there in 88 years.

2016 May - Cuba takes steps to legalise small and medium-sized businesses as part of economic reforms.

2016 November - Fidel Castro, former president and leader of the Cuban revolution, dies at the age of 90. Cuba declares nine days of national mourning.

2017 January - Washington ends a long-standing policy which grants Cuban immigrants the right to remain in the US without a visa.

2017 June - US President Donald Trump overturns some aspects of predecessor Barack Obama's policy on Cuba which brought about a thaw in relations between the two countries.

2017 October - Diplomatic row over mysterious sonic attacks which are said to have affected the health of US and Canadian embassy staff in Havana.

2018 April - Senior Communist Party stalwart Miguel Diaz-Canel becomes president, ending six decades of rule by the Castro family.

2019 May - Cuba introduces food rationing.

2020 March - Cuba closes its borders in an attempt to keep out the COVID-19 plague.

2021 April - Raul Castro steps down as General Secretary of the Cuban Communist Party

Alexa van Sickle (2014): Viva la Revolución: Cuban Farmers Re-Gain Control Over Land: ‘As the state loosens its grip on food production, Cuban farmers and independent co-operatives will need support to help solve the country’s agriculture crisis: Last year, Cuba spent over $1.6bn (£1bn) on food imports… 60% of its domestic food requirement…. Since 2007, President Raul Castro, noting its connection with national security, has made food security a priority. State farms hold over 70% of Cuba’s agricultural land; about 6.7m hectares. In 2007, 45% of this land was sitting idle. In 2008 Castro allowed private farmers and co-operatives to lease unused land with decentralised decision-making, and loosened regulations on farmers selling directly to consumers. Since 2010, Cubans with small garden plots, and small farmers, have been allowed to sell produce directly to consumers. However, agriculture in Cuba remains in crisis. A government report issued in July 2013 showed that productivity had not increased…

LINK: <https://www.theguardian.com/global-development-professionals-network/2014/mar/11/cuba-agricultural-revolution-farmers>

Marianne Ward and John Devereux (2010): The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective: ‘All indications are that Cuba was once a prosperous middle-income economy. On the eve of the revolution, we find that incomes were fifty to sixty percent of European levels. They were among the highest in Latin America at about thirty percent of the US. In relative terms, however, Cuba was richer earlier on. The crude income comparisons that are possible suggest that income per capita during the 1920’s was in striking distance of Western Europe and the Southern States of the US. After the revolution, Cuba has slipped down the world income distribution. As best we can tell, current levels of income per capita are below their pre-revolutionary peaks…

LINK: <https://web.archive.org/web/20121217122436/http://econweb.umd.edu/~davis/eventpapers/CUBA.pdf>

Carlos Eire: Raúl Castro Leaving Power Won’t Bring Change to Cuba Anytime Soon: ‘Raúl Castro is relinquishing all power on the eve of his 90th birthday. It would be a mistake to think that this piece of kabuki theater will bring change to Cuba any time soon…. The Communist Party in Cuba, which has had total control of the island for over 60 years, is not about to relax its grip. And since this party is controlled by the Revolutionary Armed Forces, Cuba is really governed by an old-fashioned Latin American military junta. It is an unusual junta, full of former rebels, but it is a junta…. 

Raúl Castro is stepping down from the throne, so to speak, but he will keep casting a long shadow as long as he can. Moreover, plenty of generals and colonels remain, ranging in age from their 50s to 80s. A top member of that exclusive circle is Raúl’s son, Col. Alejandro Castro Espín, who is only 55 and runs the country’s dreaded secret police. Official posts outside of the armed forces have a cosmetic sheen to them. The prime example is President Miguel Díaz-Canel…. Raw power resides in men such as Alejandro Castro Espín and 60-year-old Gen. Luis Alberto Rodríguez López-Callejas, ex-husband of Raul’s daughter Deborah. A member of the Castro dynasty by marriage, he is one of the most powerful men in Cuba, totally in charge of the branch of the Revolutionary Armed Forces that runs most of Cuba’s tourist industry. Since tourism is the country’s main source of income, his clout is considerable. The two brothers-in-law are purported to be engaged in a fierce struggle behind the scenes for the throne vacated by Raúl…..

A new constitution in 2019…. Many articles outlaw dissent, such as No. 4: “The socialist system that this Constitution supports is irrevocable. Citizens have the right to combat through any means, including armed combat… against any that intends to topple the political, social, and economic order established by this Constitution.”… Article 229 seeks to drive a nail in the coffin of hope: “In no case will the pronouncements be reformed regarding the irrevocability of the socialism system established in Article 4.”…

What will happen next? Is it possible that among the younger Cuban communists a Gorbachev lurks?… Is it possible that the junta could be overthrown, somehow, in traditional Latin fashion? Theoretically, one must suppose, anything is possible…. Theoretical possibilities fall into the realm of faith rather than reason…

LINK: <https://www.washingtonpost.com/opinions/2021/04/20/raul-castro-leave-power-cuba-wont-bring-change/>

Carmelo Mesa-Lago (2019): There’s Only One Way Out for Cuba’s Dismal Economy: ‘The island’s economy is neither efficient nor competitive. To move forward it must deepen and accelerate reforms. The market socialism model could provide a way….. For the past 60 years, Cuba has been unable to finance its imports with its own exports and generate appropriate, sustainable growth without substantial aid and subsidies from a foreign nation. This is the longstanding legacy of Cuba’s socialist economy…. Between 1960 and 1990, the Soviet Union gave Cuba $65 billion (triple the total amount of aid that President John Kennedy’s Alliance for Progress gave Latin America). At its peak in 2012, Venezuelan aid, subsidies and investment amounted to $14 billion, or close to 12 percent of the gross domestic product. And yet, despite the staggering foreign aid subsidies it has received, the economy’s performance has been dismal…. Industrial, mining and sugar production are well below 1989 levels, and the production of 11 out of 13 key agricultural and fishing products has declined. Cuba is now facing its worst economic crisis since the 1990s.

Tourism has been a bright spot for Cuba. From 2007 to 2017, visitors to the island doubled, largely thanks to the arrival of more Americans, whose numbers grew considerably after President Barack Obama eased diplomatic relations in 2015. But Hurricane Irma and the tightening of travel restrictions by President Trump (like barring American tourists from using hotels and restaurants run by Cuba’s military) and the alert declared by the administration after the sonic attacks on United States diplomats in Havana led to a drop in tourism during the end of 2017 and the first half of 2018. Tourism rebounded in September, driven by a cruise industry that offers customers lodging, meals and tours. Those visitors spend about 14 percent of what those arriving by air spend….

Cuba’s woes are a result of the inefficient economic model of centralized planning, state enterprises and agricultural collectivization its leaders have pursued despite the failure of these models worldwide. In his decade in power, President Raúl Castro tried to face his brother Fidel’s legacy of economic disaster head on by enacting a series of market-oriented economic structural reforms. He also opened the door to foreign investment, but so far, the amount materialized has been one-fifth of the goal set by the leadership for sustainable development…. The pace of reforms has been slow and subject to many restrictions, disincentives and taxes that have impeded the advance of the private economy and desperately needed growth. It is time to abandon this failed model and shift to a more successful one as in China and Vietnam….

Poor agricultural production, the result of collectivized agriculture, causes the island to spend $1.5 billion a year on food imports. As part of his agrarian reform, Mr. Castro began leasing fallow state-owned land to farmers through 10-year contracts—now increased to 20 years—that may be canceled or renewed depending on the farms performance. Farmers must sell most of their crops to the government at prices set by the state, which are below market prices…. If reform is carried out and foreign investors are allowed to hire and pay a full salary directly to their employees, there will be a significant improvement in the economy and the government can undertake the desperately needed monetary unification that will attract more investment and eliminate the economic distortions that plague the economy.

LINK: <https://www.nytimes.com/2019/03/28/opinion/cuba-economy.html>

Cuba Employment Shares: Agriculture 25%, Industry 10%, Services 65%

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