Monday, April 23, 2007

Cuba's growing economy a springboard to global partnerships diversity

Jamaica Gleaner

Published: Sunday | April 22, 2007

By David Jessop

Quietly and with great care, Cuba has been enlarging the economic space within which it operates.

It has been doing so in a manner that will enable it in the not-so-distant future to globally diversify its relationships and have the ability to finance the further development of its social programmes.

If it can achieve this it will have succeeded in resisting pressure from Europe, the United States and others for political and economic change and have options available to it to enhance the material well-being of the Cuban people.

This may surprise those who rely on newspaper reporting, who doubt the veracity of Cuban statistics or who regard the Cuban political system as being illegitimate.

However, what is becoming apparent is that the complex survival strategy developed after the collapse of the Soviet Union in 1991 is now resulting in rapid economic growth and is providing the strength and stability necessary to change relationships.

As noted in this column before, Cuba has experienced steady economic progress since 2003.

Cuba's recorded economic growth in 2006 was 12.5 per cent and it is forecasting that this will continue at slightly lower levels for the next two to three years.


While this figure reflects a local formula, a deduction of three to four per cent brings it into line with standard international calculations of GDP but still leaves it on a par with figures for China or Argentina.

Statistics produced by the Economist Intelligence Unit suggest that Cuba's tight economic controls are working, and that it has inflation in check and is addressing eighty per cent of its medium and long-term commercial debt.

It is receiving long-term finance from China and to a lesser extent Russia and Venezuela.

Another indicator of success is that it has become highly selective about inviting in external investors. Its focus has shifted to new priorities and the need to encourage companies with special expertise or technology in areas such as oil exploration, power generation, and transport infrastructure.

It is also now well advanced in developing external investments that will cause its economy to become more service-sector oriented. In this respect, of likely long-term importance are joint ventures that have been established in China, India and in other populous regions for the manufacture of sophisticated Cuban biotechnological and IT products.

What this suggests is that the island is effectively globalising its economic relations and achieving significant room for manoeuvre without requiring the involvement of either Europe or the U.S.


Oddly, such relative success may now be of some value to the U.S. and Europe. For a short period after President Castro underwent surgery, there was a wholly unrealistic anticipation about the imminent collapse of the Cuban system. Since then it has been recognized in private at least that the stability provided by a unified Cuban Government managing a positive economy is as much in the interests of the US and others as that of the Cuban people.

What this seems to suggest that - short of some hard to forecast natural disaster, an unwanted US military adventure arising from a Cuban American created incident, or internal dissent about the eventual succession after President Castro - Europe and perhaps in time the US are coming slowly to recognize that they have no option other than to engage in a dialogue based on equity and respect.

The first signs of this and an implicit recognition that European and by extension US policy on Cuba has failed, occurred on April 2 when Cuba's Foreign Minister, Felipe Perez Roque, met with the Spanish Foreign Minister, Miguel Angel Moratinos.

Speaking about Spain's role as "a privileged negotiator" within the EU, Cuba's Foreign Minister said that the visit "is a clear sign of 'rectification' - a Cuban term for recognition of past errors; "of a change in direction, of needed openings: clear evidence of the Spanish government's genuine interest in dialogue with the Cuban government based on mutual respect and equality."


The visit demonstrated a complete reversal of the EU's previously common approach with Cuba offering, without Spanish conditions, twice-yearly talks on human rights; the future signing of a new reciprocal agreement on the protection and promotion of investments; the convening of a conference to encourage closer cultural cooperation; the lifting of its veto on inter-governmental cooperation and the launch of negotiations covering the refinancing of Cuba's debt to Spain.

While Europe remains split on Cuba, Spain's willingness to engage on this basis suggests that a similar improvement in relations may occur with those EU nations that accept Cuba's right to choose its own direction.

How Cuba is achieving this should be an object lesson to the rest of the Caribbean about the purpose of sovereignty and its exercise.

Cuba has turned its external difficulties to its advantage. The U.S. Embargo, the stalemate in its relations with the US and Europe; its economic ties to the world's most rapidly developing economies, and its adherence to its principles have all been built on it sense of historic identity.

Last year in Havana I was reminded by a Cuban Minister that the starting point for understanding Cuba is that its revolutionary process is in the 1890s in its wars of independence and the fierce sense of nationalism and a pride in the defense of sovereignty that this engendered.


The revolution of the 1960s, he suggested, built on this cultural force by creating a national focus on long term social and moral objectives and a belief that participatory democracy and collegiate decision making were more important than parliamentary democracy or the individual.

It also demonstrated the importance of a caring and responsive leadership and the need for reform to be undertaken on a gradual and measurable basis.

As a consequence, Cuba has, he argued, a highly educated and thoughtful society that will not compromise on basic principles but is able to respond pragmatically in a Cuban way when internal and external change is required.

No one should doubt that many in Cuba want more materially and at least some of the related freedoms that go with aspects of the market.

However, many of the young in particular are for the most part not inclined toward achieving this at the expense of the island's independence, or the emergence of gross social inequity or instability.

History may well show that the failure to focus on any of the real issues that provide continuity and political legitimacy in Cuba will be why 'western' policies are have failed to obtain traction or leverage and why gradual economic success and a desire for stability may now enable Cuba to pursue engagement on its own terms.

David Jessop is director of the Caribbean Council.

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