Miércoles, 12 de Diciembre de 2018
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Cuba-US Relations

Cuba: more reliant on the US than ever

A man with Cuban and US flags (GEAB)

The best way to appreciate how that Cuba's economy today depends on the US more than ever before in its history is to engage in a very simple mental exercise: imagine that Washington banned travel, remittances and packages to the island, except for medicines and special visits by Cubans to see very sick relatives.

What would happen? Can anyone even make a coherent assessment of a scenario like this?  Many shudder at even the notion. This is not going to happen, but the mere thought places many's hair on end – especially that of the Castroist political and military elite. Political science also encompasses possible situations and potential scenarios.

For 60 years the regime's propaganda has been vociferously claiming that before 1959 Cuba was a pseudo-colony of the US. Of course, media and academic centers on the island have been prohibited from researching or publishing anything about how, in fact, "revolutionary" Cuba was much more dependent on the USSR than "bourgeois" Cuba ever was on the US. And, what's worse, now it depends more than ever on American cash, especially in the wake of the devastating economic crisis in Venezuela.

Hypocrisy in the regime's realpolitik and its two-faced policies are evident. On the one hand, it waves the flag and stirs up enmity against the "Empire" and the "criminal blockade", while simultaneously supplicating, wheeling and dealing, and spreading its tentacles behind the scenes, both in political circles on the left, and within the US business community, to encourage travel and commercial flights to Cuba, and for Congress to lift the embargo so that they can obtain access to international loans and foreign investment.

The latter, getting loans, cash and investments, is vital to the dictator and his military junta. The plans of the Government and elite of the Communist Party (PCC) to pass power to a new generation of leaders, military and civilians, starting in 2018, call for stabilizing financial support that they currently lack.

More American money than ever

Between remittances, packages and trips to Cuba from the US, in 2016 Cuba brought in more than 7 billion dollars. According to experts that figure has already surpassed the amount from Venezuelan subsidies. It is triple the revenue from the Cuban tourist industry, almost double the value of Cuban exports in 2016, which did not reach 4 billion, and 15 times the value of sugar exports. Incidentally, this last harvest in 2016 yielded only one third of the sugar produced back in 1925 (5.1 million tons).

From 1902 to 1958, although nearly 80% of Cuban sugar was exported to the US (at rates higher than those on the world market) and the rest of the Island's trade was largely with its northern neighbor, there were two big differences to the situation today: 

  1. There were not, as there are today, almost 2,000,000 Cubans in the US, furnishing the country with more money than all of Cuba's exports, including sugar, nickel, tobacco, rum and pharmaceutical products, combined. The funds obtained from goods exported from the island in 2016 came to half of total monies received from the US.
  2. There were private enterprises in Cuba that generated the bulk of its Gross Domestic Product (GDP), for a per capita GDP higher than Spain's and almost equal to that of Italy.

Genetic parasitism

The problem is that, unlike a market economy, Cuba's is parasitic, due to the congenital defect of its Marxist-Leninist statism, which is contrary to human nature, such that it can only work if it is subsidized from abroad; first by Moscow, and then by Caracas. Now, with the crisis in Venezuela, the Cuban economy is sustained by "counterrevolutionaries" in Miami.  The profound irony is that the cash that meets most of Cuba's needs today is "imperialist" in origin.

This had never happened before. According to official figures, in the 50s the US acquired 57% of Cuba's total exports. That is, the Island sold almost half of its exportable goods to the rest of the world, including cattle, coffee, pineapple and other products that the country was later unable to export when the Castros rose to power. In that pre-Castro decade Cuba produced 60,000 tons of coffee annually. In 2016 it produced a grand total of 5,687 tons. Incredible, but true.

With regards to dependence on the USSR, renowned Cuban economist Professor Carmelo Mesa-Lago offers some impressive figures. In 1989, Cuba received from the Soviet Union (and, to a far lesser degree, other allied countries) 98% of its oil, 80% of its machinery, 57% of its chemicals, and 53% of its food. 78.6% of all imports also came from those Communist nations.

According to the few official figures available in this regard, since Cuba joined the Council for Mutual Economic Assistance (CMEA) in 1972, between 75 and 80% of its total trade (exports and imports) was with the USSR and other Communist countries. The highpoint occurred between 1984 and 1991, during the zenith of Soviet subsidies, when Moscow paid Castro 45 cents for a pound of sugar – while the price on the world market was at 4 or 5.

What few people know around the world is that Cuba got the lion's share of these supplies for free, as it never paid its huge trade deficits. In fact, it racked up a debt of 35 billion dollars with Moscow. 90% was pardoned in 2014 by Vladimir Putin, aware that they would never collect. He did try to force Castro to pay at least 3.5 billion, however. But he's not going to get a penny.

I still have a yellowing paper teletype, an AFP report from back in 1995, indicating that between 1984 and 1991 Cuba had accumulated a trade deficit of more than 16.08 billion dollars during those 8 years, an average of over 2 billion per year, with a spike to 2.74 billion in 1989. And almost all that unbalanced trade was with the USSR. 

Total subordination

Furthermore, the island received billions of dollars in weapons of every type: planes, tanks, artillery, ships, rockets, vehicles, guns, and equipment, allowing it to wield the largest and most powerful army in Latin America after Brazil. Cuba even received 42 nuclear missiles (able to reach Washington and New York), which put the world on the brink of nuclear war in 1962.

But what takes the cake is that in the 80s (until 1986), then Economy Minister Humberto Perez told me, off the record, that Moscow was selling to capitalist countries almost three million tons of crude oil that Cuba did not use, from its annual quota allocated by the CMEA, and then sending the money to Havana, these funds exceeding the amount generated by all its sugar mills.

We can clearly see that Cuba was not a pseudocolony of the USSR, but an outright one, as we can add that the largest apparatus for intelligence and repression in Latin America, the Castros', was organized and trained by the KGB, with the help of East Germany's neo-Nazi Stasi. All for free.

Despite its trade dependence on the US before 1959, Cuba was never as subordinate to its northern neighbor as it was later on the USSR, 19,000 km away, beyond the Mediterranean.

Given the parasitism endemic to Castroist socialism, Cuba today depends on the US so profoundly that if the scenario described at the outset of this article were to come to pass, the nation would come to an utter standstill. It would be another Cambodia, with people eating out of communal pots. Without "Yankee" money, Castroism would be unsustainable. 

 *In an earlier version of this text the caption stated that the image was from Havana. The picture was, in fact, taken in Washington, DC.