Cuba’s Revolution Sold Out? III. Capitalist Restoration in Cuba: How it Took Place

 

 

 

The Stalinist states were “Transitional Societies”, states stuck in the transition from capitalism to socialism due to the rule of counter-revolutionary bureaucracies which blocked the advance of socialist revolution both at home and internationally. As Trotsky predicted in his writings, these states were and could only be transitional phenomena: they had to either move forward by means of political revolution against the bureaucracy or move backward with a social counter-revolution and the restoration of capitalism.

 

Internationally, the numerous blows against the workers’ vanguard by capital and their reformist and Stalinist lackeys, as well as the betrayal and decomposition of the centrist Forth International, paved the way for the second, negative option: the disintegration of the degenerated workers’ states and the successful restoration of capitalism in Eastern Europe, the USSR and China from 1989-92.[1]

 

Therefore we wrote in 2000: “The only workers' states today - both degenerate ones - are Cuba and North Korea. If and when it can be shown that the government and decisive forces within the bureaucratic-military apparatus in these states promotes fully-fledged capitalist restoration rather than limited market reforms we should then define them as capitalist states.[2]

 

We now think that this situation has changed and that by 2010/2011 the Castro regime turned decisively to restore a capitalist economy in Cuba based on the law of value. As we already have written above, Castroism has come full cycle and returned to its bourgeois roots.

 

This is not surprising, since the collapse of all Stalinist-ruled degenerated workers’ states has left Cuba, a small and industrially underdeveloped island, with no allies. As indicate earlier, after the embargo by US imperialism and its Castro’s affiliation with the Stalinist camp from 1961 onwards, Cuba was completely dependent economically on the USSR. It is possible that, by the 1980s, Soviet assistance to Cuba reached a level of as much as one-third of the island’s national output. [3]

 

Consequently, when the USSR collapsed, Cuba’s economy collapsed as well, and it has not recovered since. By 1993, Gross Domestic Product (GDP) had fallen by 31.6% from its 1989 level, per capita GDP had gone down by 34% and the economy ran at an estimated 60% of its capacity at best. [4] Sugar production – the traditional main export commodity of Cuba – sharply declined and has not recovered, as is shown in Figure 1. By 2008/09, sugar production was less than 1/5 of its level in 1984/85.

 

 

 

Figure 1 (see PDF file): Cuban Sugar Production, Area under Cultivation, and Yield (1984/1985 = 100) [5]

 

 

 

 

Cuban industry, aside from sugar production, was not fared much better. In 2010, industrial output was still only half of its level in 1989 (see Figure 2).

 

 

 

Figure 2 (see PDF file): Cuban Domestic Industrial Output 1989-2010 [6]

 

 

 

 

Consequently, between 1989 and 2008, the industrial share of GDP fell from 28% to 15%.[7] Accumulation of means of production – expressed as the share of Gross Fixed Capital Formation of GDP – fell from 25.6% in 1989 to only 8.2% in 2010 (compared with a regional average of 22.4% in 2008).[8] (See also Table 3 on this) This inability to renew production apparatus or even to cover the depreciation of existing facilities, is a clear sign of outright economic stagnation.

 

 

 

Table 3  Gross Fixed Capital Formation in Cuba, 2002-2010 (as Percentages of GDP) [9]

 

2002       2003       2004       2005       2006       2007       2008       2009       2010

 

9.1          8.2           8.3          9.0          11.5        11.0         11.4        9.5           8.2

 

 

 

While production declined, debt to foreign banks and states grew massively. As of the end of 2008, Cuba’s total known foreign debts – including its debt to the imperialist so-called “Paris Club” – in convertible currencies had grown to nearly US$31.7 billion, which is as high as 69.7% of GDP.[10]

 

The Castroite bureaucracy reacted to the economic crisis by cutting back the state sector and social security, and encouraging the private market. An observer writes:

 

In late 1993, the Cuban government began implementing a series of policies that would stabilize the economy and result in modest recovery. The new policies decriminalized the possession and use of hard currency legalized transfers of dollars from abroad, and allowed very limited forms of self-employment. State farms were converted into cooperatives, and farmers’ markets, where most products could be sold at free market prices, were legalized. Foreigners were allowed to own property, and foreign investment in the form of joint ventures with the government were encouraged. Government employment was reduced. Over the period between 1993 and 2000, real GDP grew by 29.3 percent and per capita growth by almost 26 percent. Yet by 2000, GDP and GDP per capita were still 12 percent and 17 percent below their respective 1989 levels. (…)

 

With the collapse of the Soviet Union, this system became untenable, and after initial resistance the Cuban government was forced to reduce state employment and allow the appearance of a small, but significant, private sector to absorb some of the displaced workers. Other workers were absorbed through government joint ventures with foreign firms, mostly in the tourism sector. These firms have to hire their workers through a government employment agency. The salaries of such workers are paid in dollars to the government agency, which then pays the workers in pesos at an exchange rate of one-to-one. The market exchange rate has not been below 20 pesos per dollar since possession of dollars was legalized, so the effective tax rate has been 95 percent or higher. Some reduction in state employment also appears to have been achieved through early retirement.

 

From 1989 to 1998, the state sector’s share of employment fell from about 95 percent to 79 percent, or about 687,000 workers, and the civilian government workforce fell by about 583,000, according to my research. Most of the decline followed shortly after the reforms of 1993-1994. This decline in government employment was accounted for by (1) converting most state farms into cooperatives (264,000 workers), which, though they have some autonomy, are far from being private enterprises; (2) increasing employment in the joint ventures between the government and foreign firms mentioned above (131,000 workers); and (3) the true private sector, made up for the most part of small farmers and the newly permitted self-employed (254,000 workers). The remaining decline in public sector employment was accounted for by declines in the labor force (82,000 persons). Unemployment was actually lower in 1998 than in 1989 (a decline of 65,000). The official data does not adequately account for informal activity, so the relative decline of the state sector may be understated. From 1989 to 1998, the size of the working age population rose (with 424,000 more people), and postsecondary enrollment fell (by 140,000 fewer students). Together with the declining size of the labor force, these numbers suggest an increase in the informal sector[11]

 

 

 

Social Gains of the Revolution in Danger

 

 

 

The consequences for the Cuban masses were severe. After the establishment of the workers state in the early 1960, a new unified and state-managed pension system was established, increasing labor force coverage from 63% to 91%. In 1989 the Cuban pension system had wide coverage and generous entitlement conditions, with low retirement ages (55 for women and 60 for men) and average retirement spans of 26 years for women and 20 years for men. Pensions were supplemented by a social protection network: subsidized prices for rationed goods, free health care services, free or low-rent housing and inexpensive public utilities. All this made Cuba’s pension system the most progressive in Latin America – retirement spans were the longest on average, due to the second-highest life expectancy in the region.

 

Life expectancy at birth in Cuba today is the same as for US citizens at 77 years and Cuba’s infant mortality rate was 6 per 1,000 live births, a figure less than that of the United States, which was 7.0 per 1,000 live births in 2007. Cuba’s patient-to-doctor ratio is still among the lowest in the world and significantly better than those of the United States and Canada. [12]

 

However the 1990s crisis undermined the positive features of the pension system: the number of private sector workers increased from 4% to 15% of the labor force between 1989 and 2001. Hence, fewer salaried workers were mandatorily covered by pensions, while self-employed workers and private farmers who voluntarily join the state pension scheme must now pay 10% of their earnings, a disincentive for affiliation. Tax legislation from 1994 which made obligatory pension payment contributions by private sector workers was suspended due to socio-political reasons; later, a 5% contribution was gradually implemented for workers employed by state enterprises under the Sistema de Perfeccionamiento Empresarial (one-fifth of all enterprises).[13]

 

Another social achievement of the Cuban revolution was the substantial increase in the standard of living for the Cuban masses. As we can see from Table 4, availability of food and beverages, clothing, housing, education and health all demonstrate the progressive effects of the social revolution which occurred after 1960/61.

 

 

 

Table 4  Availability of Basic Goods and Services per Capita--Cuba 1958-1978 (1958 = 100) [14]

 

Year                        Food & Beverage  Clothing                Housing                 Education              Health

 

1958                       100                         100                         100                         100                         100

 

1962                       99                           52                           107                         173                         105

 

1968                       102                         52                           107                         173                         105

 

1972                       110                         90                           103                         224                         120

 

1974                       120                         95                           103                         275                         151

 

1976                       123                         100                         103                         363                         175

 

1978                       125                         100                         104                         446                         202

 

 

 

As a result of the crisis and the Cuban government’s measures, real social expenditures per capita decreased by 78% and unemployment rose to 8%. Average wages in the state sector dropped in real terms by 85% in the period 1990-93. Less than one-third of public transportation functioned, daycare construction halted, and nutrition dropped as people consumed 30% fewer calories. Today real wages represent only 27% of the 1989 level.[15]

 

These social cutbacks particularly impacted the lower strata of the working class - women, Afro-Cubans, the unemployed and those with only a primary education. While the government does not publish poverty data, an academic study estimated that the urban population “at risk of having a basic need uncovered” rose from 6.3% to 14.7% between 1988 and 1996 (in Havana it grew from 4.3% to 20.1%). Despite increasing poverty, the real average social assistance benefit decreased by 29% between 1989 and 1994.[16]

 

It is therefore clear that the Castroite bureaucracy had to conclude that the old system of Stalinist planning could not be perpetuated. In order to retain its power and privileges, the regime had to turn towards restoration of capitalism and Cuba’s full integration into the world market.

 

However, there was and is an important obstacle to this Cuban restoration of capitalism: The nearest and most powerful capitalist power – the United States – is as deeply hostile to the Castroite bureaucracy as is the Cuban exile bourgeoisie (the reactionary “Gusanos”) This means that any capitalist restoration undertaken by command of US imperialism spells the complete loss of power for the Castroite bureaucracy. This, therefore, was not an option.

 

There was, however, an alternative: restoring capitalism the Chinese way, under the auspices of Beijing. As China is an emerging imperialist power that already has close allies like Venezuela and other ALBA states, joining the Chinese bloc was a viable option for the Castroites.

 

Before we l more closely examine Cuba’s march towards capitalism and China’s role in it, let us briefly view the different roads to capitalist restoration.

 

 

 

Many Roads Lead to Capitalist Restoration

 

 

 

It is a widespread myth amongst a number of so-called Marxists that the only road to capitalist restoration is the one taken by the Eastern European states and Russia, i.e., via the rapid destruction and privatization of state-owned industries and the formal introduction of bourgeois parliamentarian democracy. The propogation of this myth was certainly not hurt by its being that espoused by Western bourgeois market harbingers. However, recent history has shown that there are also other roads.

 

As we have already elaborated in The Great Robbery of the South and other documents, in China we find a different model of capitalist restoration: a state-capitalist road with the Stalinist party firmly holding power, disguised by the use of “socialist ideology”.[17] Such a road was also chosen by the Vietnamese bureaucracy.[18] In these countries the bureaucracy managed to transform itself into a ruling capitalist class as a whole (which now includes both private and state capitalists as well as the ruling state-capitalist bureaucracy). In contrast, in Eastern Europe and Russia, some sections of the former Stalinist bureaucracy lost power via the restructuring of the state apparatus after 1989-91.

 

Of course, the state-capitalist road does not preclude the systematic promotion of private capital by the regime. Quite the opposite, as we have shown: the private capitalist sector is growing massively in these countries too. However, the ruling class has retained a significant state-capitalist sector in industry and banking, while at the same time allowing a gradual accumulation of private capital , studiously avoiding the so-called “shock therapy” espoused by neoliberals.

 

Yet another form of capitalist restoration has been introduced in various Central Asian states as well as in Belarus. Here too, the bureaucracy abandoned any formal attachment to “socialist ideology” and has formally adopted bourgeois parliamentarian democracy. However, it has also retained a significant state-capitalist sector and managed to more or less preserve the political regime by renaming the Stalinist party. The regimes of Nazarbayev in Kazakhstan, of the Aliyev family in Azerbaijan, of Islam Karimov in Uzbekistan or Lukashenko in Belarus –are all renamed Stalinist parties ruling since the early 1990s.

 

Table 5, below, shows how the different forms of capitalist restoration express themselves in the different rates of transition to privatization during the first decade (1991-2001). In some countries –those industrially more developed and with closer relations to Western imperialist capital – the restoration process took the form of rapid privatization of the economy. In other countries, the share of the private sector in national output measured in Gross Domestic Product, as well as in employment, increased at a slower pace.

 

 

 

Table 5  Private Sector Share in GDP and Employment in Eastern Europe and the Former USSR 1991-2002 [19]

 

                                                                In GDP                                                                  In Employment

 

                                                                1991       1995       2002                                       1991       1995       2001

 

Albania                                                  24           60           75                                           -               74           82

 

Armenia                                                 -               45           70                                           29           49           -

 

Azerbaijan                                             -               25           60                                           -               43           -

 

Belarus                                                   7              15           25                                           2              7              -

 

Bulgaria                                                 17           50           75                                           10           41           81

 

Croatia                                                   25           40           60                                           22           48           -

 

Georgia                                                  27           30           65                                           25           -               -

 

Hungary                                                33           60           80                                           -               71           -

 

Kazakhstan                                           12           25           65                                           5              -               75

 

Kyrgyz Republic                                    -               40           65                                           -               69           79

 

Latvia                                                     -               55           70                                           12           60           73

 

Lithuania                                               15           65           75                                           16           -               -

 

Moldova                                                -               30           50                                           36           -               -

 

Poland                                                   45           60           75                                           51           61           72

 

Romania                                                24           45           65                                           34           51           75

 

Russia                                                    10           55           70                                           5              -               -

 

Slovenia                                                 16           50           65                                           18           48          

 

Tajikistan                                            -               25           50                                           -               53           63

 

Turkmenistan                                       -               15           25                                           -               -               -

 

Ukraine                                                  8              45           65                                           -               -               -

 

Uzbekistan                                            -               30           45                                           -               -               -

 

 

 

As we have already described, the Chinese Stalinist bureaucracy took a state-controlled road to capitalism. This is illustrated in the tables 6-8.

 

 

 

Table 6  China: Employment by Ownership in Selected Years 1980-2000 (in thousands) [20]

 

Year                        Total                         SOE                        TVEs                      Private Enterprises

 

1980                       42,361.0                8,019.0                  3,000.0                          -

 

1985                       49,873.0                8,990.0                  4,152.1                       2,826.9

 

1990                       64,749.0              10,346.0                  4,592.4                       4,672.3

 

1995                       68,065.0              11,261.0                  6,060.3                       6,801.7

 

2000                       72,085.0                8,101.9                  3,832.8                       8,986.8

 

Legend: SOE: State-Owned Enterprises; TVEs: Township-Village Enterprises

 

 

 

Table 7  China: GDP by Ownership in Selected Years 1980-2000 (in Billion Yuan) [21]

 

Year                        Total                       SOE                        TVEs                      Private Enterprises

 

1980                       199.7                      151.7                      28.5                        -

 

1985                       344.9                      223.7                      56.3                        21.0

 

1990                       685.8                      374.5                      167.3                      83.1

 

1995                       2,495.1                  830.7                      935.9                      523.6

 

2000                       4,003.4                  1,377.8                  942.5                      1,773.1

 

 

 

Table 8  China: State Share of Gross Industrial Output Value, 1991-1999 [22]

 

Year                        State-owned or state-controlling share holding in percent

 

1991                       56%

 

1995                       34%

 

1999                       26%

 

 

 

Similarly, we can observe the gradual, state-capitalist road of the Chinese bureaucracy in Figure 3 which shows the slow decline of the state sector in capital accumulation.

 

 

 

Figure 3 (see PDF file): Capital Formation in China: 1978-2007 [23]

 

 

 

 

 

 

Crossing the Rubicon in Cuba: The 2010/11 Reforms

 

 

 

As described in the previous section, in the early 1990s the Castroite-Stalinist bureaucracy adopted the promotion of the market to solve Cuba’s deep economic crisis. However, fear of losing power – a fear fanned by the spontaneous rebellions of sectors of the masses in Havana and other cities in 1994 – led to a temporary halt of economic liberalization.

 

But the continued economic decline, the successful model of Chinese capitalism, as well as the opportunity to become Beijing’s satellite, finally convinced the Castroite regime to decisively turn towards the restoration of capitalism.

 

This transformation is even recognized by anti-communist Western experts like Adrian H. Hearn who observe political and economic developments in Cuba: “As in China, the goal appears to be a mixed economy in which citizens follow their entrepreneurial dreams while generating tax revenue under the ‘supreme guidance of the state.’[24]These developments suggest that the Cuban government is distancing itself from Fidel Castro’s 50-year-long rejection of capitalism, and moreover, that China is committed to guiding the Western hemisphere’s only communist nation toward reconciliation with international conventions.[25]

 

The strongly anti-communist US think-tank Freedom House also praises Castro’s reforms: “The opening of a private sector, while still limited, is driving genuine change in Cuba. This is the most significant positive change to have taken place in Cuba since communism was introduced half a century ago. Cubans are moving from the state to the private sector, becoming entrepreneurs in growing numbers, taking the initiative to earn their own living, and in many cases succeeding to do better than Cubans in government jobs.[26]

 

What is the essence of this turn towards capitalist restoration?

 

* implementing the law of value in state-owned enterprises by mass lay-offs and restructuring

 

* promoting a private capitalist sector

 

* helping to strengthen the formation of a domestic capitalist class of private property owners

 

* cutting back the social benefits to create an industrial reserve army of labor and hence a more exploitable working class

 

* opening the economy for imperialist capital and becoming imperialist China’s bandwagon

 

* keeping the authoritarian rule of the Stalinist PCC

 

As we will see below, the decisive steps towards capitalist restoration began in the autumn of 2010, when the Castroite regime announced their plans for economic reforms. At the 6th Congress of the PCC in April 2011, these “reforms” were formally endorsed and the decision was taken to sign up for a 5-year-plan with China. Therefore, we maintain that Cuba’s regime and state machinery became fully capitalistic with the 6th Congress.

 

Let us now look concretely to these qualitative changes in Cuba’s economy and society.

 

 

 

Implementing the Law of Return in State-Owned Enterprises: Restructuring and Mass Lay-Offs

 

 

 

One of the most important decisions of the PCC leadership was its announcement in Granma, the party’s daily newspaper, in September 2010 to eliminate half a million of jobs in the state sector. This is the equivalent of about 1/8 of the total state-sector labor force which constituted at that time about 85% of all employed. The statement – which was cynically issued as an announcement of the official trade union federation Central de Trabajadores de Cuba – said: “Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls (and) losses that hurt the economy, are counterproductive and form bad work habits.” While this half a million state workers should be sacked in a year’s time (!), the statement added, that this was not enough and that another 500,000 “nonproductive” workers should be laid-off in the next few years.[27]

 

This was a very clear admission on the part of the Castroite leadership of their desire to run the public sector consistent with criteria of profitability. To achieve this goal, it intends to sack ¼ of the total state sector labor force. Or in other words, 1/5 of all working Cubans are threatened with unemployment in the near future.

 

The Castroite government proved with deeds that these announcements were not merely words, deeds which reflected the regime’s determination to restore capitalism. In 2011, more than 370,000 former state workers lost their jobs and turned to non-state forms of employment. In 2012, another 170,000 state-workers are said to have lost their jobs. And according to latest reports, it is expected that by the end of 2013, this figure will reach 600,000 state workers who have lost their jobs since the beginning of the capitalist restoration in 2010/11.[28] Another report from Economy Minister Adel Yzquierdo Rodriguez from December 2012 – which differs slightly from the figures cited before – stated that the government cut 228,000 public jobs in 2012, on top of the previously announced 137,000 in 2011, homing in on its goal to lay off 20%, or nearly a million jobs, by 2016.[29]

 

Some leading representatives of the Castroite-capitalist regime even proclaim higher targets. The finance minister projects that 1.8 million workers will join the “non-state” sector by 2015.[30] Whatever the concrete numbers will be, they all demonstrate beyond any doubt that the Castroite-capitalist regime continues to march on its restorationist road. The new line – the “Cuban Road towards capitalism” – was endorsed at the Sixth Congress of the Cuban Communist Party, albeit these decisions were obviously masked with diplomatic language.[31]

 

It is only logical that unemployment rose dramatically since the beginning of the capitalist restoration. While the official unemployment rate was 1.6% in 2009, this figure rose to 3.8% by the end of 2012. [32]

 

To this one has to add that there is a huge number of Cubans working in the informal, “grey”, sector. Economy Minister Rodriguez admitted that the official unemployment figures do not include a million Cubans who he said "do not actively seek employment."[33]

 

Furthermore, like the Chinese Stalinist-capitalist regime after 1992, the Cuban government wants to transform the state-owned enterprises into units which compete in the market based on the law of value. The regime grants the management greater autonomy in labor, investment, and pricing policies. At the same time, state subsidies to firms will be cut, and those firms facing repeated losses will be liquidated. (In 2010, state transfers to firms and cooperatives cost 11.2% of GDP.)[34] According to pro-restorationist economists from Havana University, the wage schema in the state sector must also be totally overhauled, since currently “the egalitarian wage structure (…) does not contain performance incentives (the highest wages are just 4 or 5 times higher than the lowest ones).[35]

 

 

 

Promoting Capitalism in the Agrarian Sector

 

 

 

This capitalist restructuring of the state-owned enterprises goes hand in hand with the strengthening of market forces in agriculture. In the 1970s and 1980s most of the land was in state hands (80.8% by 1981)[36] This has changed significantly. In 2010, private farmers worked 41% of Cuba’s farmland and accounted for 71% of the value of farm production. [37]

 

A significant percent of Cuban lands are idle (40%). One of the first pro-capitalist reforms of Raúl Castro was a decree issued in July 2008 which initiated a process whereby individuals and cooperatives could apply for 10- and 25-year leases to work idle land owned by the state.[38] Through April 2011, 1.2 million hectares (of a total of l.9 million hectares) was allocated to 132,000 private farmers and cooperatives to use for productive activities.[39]

 

By these measures, the Castro regime hopes to accelerate the formation of a capitalist agriculture market in order to reduce its extreme dependency on food imports (60-80% of its food consumption). This dependency is a result of the agriculture policy adopted by the regime in the 1970s and 1980s, to devote more than the half (53%) of arable land to export crops.[40] This makes Cuba a prime victim of drastic changes of food prices at the world market.[41]

 

 

 

Promoting a Private Capitalist Sector

 

 

 

Another aspect of the Cuban regime’s turn towards capitalism is its determination not only to transform state-owned enterprise into state-capitalist units but also to massively expand the private capitalist sector. As already mentioned, there are plans to move 1.8 million workers to the private sector by 2015.[42] Vice President Esteban Lazo predicted in April 2012 that the private sector’s share of GDP would grow from 5% to 45-50% within five years.[43] And Political Bureau member Esteban Lazo Hernandez recently predicted that by 2017, the growth of the private sector will see the state’s share of GDP fall from 95% to around 40%.[44]

 

However, massive changes have already been introduced in the recent past. The combined share of workers employed in the private or cooperative sector rose from 16.9% to 22.7% in 2008-2011 (see Table 9).

 

 

 

Table 9  Workers Employed in the Entire Economy, and the Private and Cooperative Sectors, 2008-2011 (thousands of workers) [45]

 

                                                                2008                                       2010                                       2011

 

Total                                                       4,948.2 (100%)                    4,984.5 (100%)                    5,010.2 (100%)

 

Cooperative Sector                               233.8 (4.7%)                         217.0 (4.4%)                         208.7 (4.2%)

 

Private Sector                                       602.1 (12.2%)                      589.4 (11.8%)                      928.5 (18.5%)

 

 

 

The government has recognized 178 categories of work or trade for non-state employment. To enhance the creation of private capitalist markets, Cubans can now sell homes and vehicles– even to foreigners or temporary residents. Businesses will be granted greater autonomy, and multiple licenses will be available for conducting business not only in one’s hometown but anywhere in the country. Private restaurants can expand from 12 to 20 seats.[46] The government has also turned over about 2,000 small state-owned businesses to their employees.[47]

 

During the last two years, the official number of people working in the private-sector has doubled to 1.1 million. The majority of the non-state workers, or about 610,000, were farmers, whose numbers have grown under Castro's agricultural reforms. The rest of the non-state workers are mostly in small retail businesses or are self-employed, such as carpenters, seamstresses, photographers and taxi drivers. Starting in 2013, the state plans to turn more than 200 medium-sized businesses, from shrimp breeding to construction and light manufacturing, into private cooperatives. The experiment will be expanded if successful. Since October 2012, the number of licenses granted to micro-enterprises has surpassed 113,000, a nearly 50% increase from before the start of the reforms.[48]

 

A Western advocate of capitalism hails the reforms of the Castro regime as the necessary steps towards the creation of a private market-economy: “Most important, the purpose has changed. In the past, when no thought was being given to changing the socialist model, entrepreneurship seemed to be viewed as a necessary evil, of marginal importance to the economy. It is now viewed as a strategic necessity for a government that is determined to cut costs and boost economic output by reducing government payrolls and expanding the private sector.”[49]

 

 

 

Helping to Strengthen the Formation of a Domestic Capitalist Class of Private Property Owners

 

 

 

The Castroite goal behind the promotion of the private sector is the formation of a domestic capitalist class. Surely, at the beginning, this will be mostly composed of relatively small capitalists. But it is nevertheless essential for the goal of capitalist restoration to create a class of private property owners which has a material interest in advancing this process. Table 10 as well as the figures 4 and 5 illustrate that significant progress has been made in this direction – in a first wave during the early 1990s and in a second wave since 2010/11.

 

 

 

Table 10                More Entrepreneurs in the Workforce [50]

 

                                                Entrepreneurs                       Workforce                              Percentage

 

1993                                       10-15,000

 

1995                                       170,000

 

1996                                       209,606

 

1999                                       156,600

 

2001                                       152,300                                 4.70 million                         3.2%

 

2003                                       151,000

 

2005                                       169,400                                 4.82 million                         3.5%

 

2006                                       152,600                                 4.85 million                         3.1%

 

2007                                       138,400                                 4.96 million                         2.8%

 

2008                                       141,600                                 5.03 million                         2.8%

 

2009                                       143,800                                 5.16 million                         2.8%

 

October 2010                       157,371                                 5.11 million                         3.1%

 

2011                                       357,000                                 5.11 million (est.)               7.0%

 

April 2012                             371,200                                 5.11 million (est.)               7.3%

 

June 2012                             385,775                                 5.11 million (est.)               7.5%

 

 

 

Figure 4 (see PDF file): Cuba: Self-Employment Licenses Granted 1989-2012 (in thousands) [51]

 

 

 

 

 

 

Figure 5 (see PDF file): Cuba: Self-Employment as Percent of Total Employment 1970-2011 [52]

 

 

 

 

 

 

Cutting Back the Social Benefits to Create an Industrial Reserve Army of Labor

 

 

 

Restoring capitalism necessitates the creation of a labor force which can be used and exploited as a commodity by Cuban and foreign capitalists. Beside the massive layoffs from state enterprises, the government has also undertaken substantial cuts of the social benefits in order to create an industrial reserve army of labor.

 

Cuba’s new leader Raúl Castro stated publicly – repeating a well know neoliberal slogan – that social cuts are necessary to force people not to rely on the social services: “We need to erase forever the notion that Cuba is the only country in the world where one can live without working.[53]

 

In February 2010, the Castro regime ended the practice of paying 60% of the salary of workers laid off from their jobs.[54] In addition, the Social Security Reform Law, which became effective in December 2008, increased retirement ages by five years for both sexes, raising it to 60 for women and 65 for men, to be phased in gradually over seven years. Pension calculations will be based on the monthly average of the best five annual salaries in the last ten years; and the number of required work years has increased from 25 to 30. The pension will be increased for each year that retirement is postponed.[55]

 

In addition, the number of products sold at subsidized prices has been reduced, or the amounts made available have been significantly cut back, resulting in a decline in the availability of certain important consumer products to the population. One consequence of this measure was a 19.8% increase in the average price of agricultural and meat products in markets outside of the rationing system. Expenditures in education and healthcare also have been reduced.[56]

 

 

 

Women Particularly Affected by Capitalist Restoration

 

 

 

Women are a major victim of capitalist restoration. Despite the Stalinist degeneration of the revolution, women’s rights are without doubt one of the areas where one can see the social advances of the workers state. There has been a significant increase in the participation of women in formal employment. While in 1960 women made up only 13% of the work force (and around 70% of these women worked as domestic servants), this figure rose to 38.3% in 1987 and 39.6% in 2010.[57]

 

Progress can also be measured by the increasing proportion of women in various highly qualified professions. For example, in 2000, 51% of Cuban scientists were women, as were 52% of medical doctors and 50% of attorneys. In 1995, 57.7% of university graduates, 62% of middle- and high-school level technicians, and 42% of scientific researchers were women. An important factor for this progress was the establishment of quality, government-subsidized day care centers. According to a 1989 statistic, at the time 136,000 children received day care in these facilities.[58] Cuba also has the world’s fifth highest share of female deputies in parliament (36%), and about 20% of officers in the Cuban armed forces are women.[59]

 

Nevertheless, massive inequality has remained. Even fifty years after the victory of the Revolution in 1959, the participation of Cuban women is in the labor force is substantially lower than men’s (65.7%). On average, Cuban women earn less than half of what men make. [60]

 

Women are disproportionately more employed in the public sector. They comprise 42.7% of public employees but only about 24% of those working in private enterprise.[61]

 

The mass lay-offs promoted by the Castroite restorationist regime will therefore hit female workers particularly hard. In addition, given the significantly lower participation of women in the labor force, they are more dependent on social services than men and therefore they will be hit particularly hard by social cuts.

 

One of the most glaring expressions of capitalism’s advance in Cuba is the massive increase of one of the oldest evils of class society – prostitution. Before the revolution, Cuba was a de facto colony for US imperialism not only economically but also socially. It had a huge tourism, gambling and prostitution industry – largely controlled by the US Mafia – which was frequented by hundreds of thousands of American tourists. According to estimates of the Cuban government, there were 270 brothels and up to 100,000 prostitutes in the country before the Revolution. (Compare this with the approximate total number of 194,000 Cuban women who were employed in 1953!)[62]

 

Now, prostitution has returned on a massive scale. It is a by-product of the Castroite regime’s decision not to focus on the development of a diversified industry but rather increase the country’s revenues by a massive expansion of the tourism industry in the 1990s. It has surpassed sugar production as the leading source of revenue. Part of the tourism industry is sex tourism, in which wealthy Western men come to Cuba to have easy and cheap sex with young Cuban women (as well as with homosexual men). Given the increasing poverty in Cuba, prostitution provides a way for Cuban woman (and men) to earn their living. While official figures for the number of prostitutes do not exist, according to many reports, this is a wide-spread phenomena and one can expect that this will increase even more so with the advance of capitalism.

 

 

 

Opening the Economy for Imperialist Capital

 

 

 

Given that Cuba is not only a small but also an industrially backward country, it follows that the Castroite regime has to court foreign imperialist capital to invest in the country. Hence a key feature of capitalist restoration is the opening of the country’s economy for foreign capital and, in particular, its strategic alliance with China. As the comrades from the Liaison Committee of Communists correctly stated in their document which we have referred to above and which we will prove below, Cuba effectively has become a semi-colony of Chinese imperialism.

 

As we have already noted, Cuba is increasingly indebted to various countries. It is mainly indebted to Venezuela, China, Spain and Japan as can be seen in Table 11.

 

 

 

Table 11                Cuba's Creditors, 2008 (2010) [63]

 

Creditors (Country)                             Debt (in US$)

 

Venezuela                                              $11.367 billion

 

China                                                     $3.170 billion (2010: $4 billion)

 

Spain                                                      $3.200 billion

 

Japan                                                      $2.775 billion

 

 

 

Cuba started to invite the investment of foreign capital during the 1990s. As is shown in Tables 12 to 14, foreign capital in Cuba was virtually absent before the 1990s. However since then it has grown significantly. Foreign Direct Investment (FDI) annual flows have quadrupled between 2006 and 2011 from 26 to 110 million US-Dollars, and doubling its share in domestic capital formation. Note that these figures are estimates and not official statistics because, according to the United Nations, the Cuban government does not publish official statistics on FDI inflows.

 

 

 

Table 12                Foreign Investment Inflows to Cuba, 1993-2001 (in Millions US-Dollars) [64]

 

Year                        Annual Flow                         Cumulative

 

1993                       54.0                                        54.0

 

1994*                     563.4                                      617.4

 

1995                       4.7                                          622.1

 

1996                       82.1                                        704.2

 

1997                       442.0                                      1,146.2

 

1998                       206.6                                      1,352.8

 

1999                       178.2                                      1,531.0

 

2000                       448.1                                      1,979.1

 

2001                       38.9                                        2,018.0

 

* The reported flows jump in 1994 when the government decided to fold in flows from years prior to 1993.

 

 

Table 13                FDI flows in Cuba, 2006-2011 (Millions of US-Dollars) [65]

 

2006       2007       2008       2009       2010       2011

 

26            64           24            24           86           110

 

 

 

Table 14                FDI Flows as a Percentage of Gross Fixed Capital Formation 2006-2010 [66]

 

2006-07                 2009                       2010

 

0.7%                       0.4%                       1.4%

 

 

 

Richard Feinberg, a professor of international political economy who worked as advisor for various US presidents and governmental departments, wrote in a recent study on Foreign Direct Investment in Cuba that the figures are much higher, reaching a FDI stock of about $3.5 billion in 2009:

 

Perhaps the best informed estimate of the stock of Cuba FDI comes from an international financial consultant (who wished to remain anonymous) with privileged access to foreign investment data. The source noted that according to the Cuban central bank, FDI inflows as of 2001 totaled $1.9 billion (…) and estimated that by 2009 the total stock may have reached $3.5 billion.” [67]

 

ECLAC/CEPAL (the United Nations Economic Commission for Latin America and the Caribbean) reported in 2010 that Spanish capital is a major investor in sectors such as tobacco, tourism, hydrocarbons, transport and financial services. Italian capital invests in telecommunications and French in rum production and export, while Canada’s investments are in the nickel industry and oil exploration. State companies from Venezuela, who is also Cuba’s main trading partner, made substantial investments in the oil and telecommunications sectors. These two countries are collaborating on a project to lay a fiber-optic cable that will connect the island to the continent. The French-Chinese company Alcatel Shanghai Bell has been hired to lay the cable. The project involves an investment in excess of US$ 60 million. Brazil’s investments in Cuba have also increased. Brazilian company Oderbrecht is in charge of the US$ 800 million construction project to expand and modernize the Cuban port of Mariel. Oderbrecht will also be the first foreign company to own one of the Cuban sugar mills that were nationalized in 1959.

 

In addition, Chinese capital is significantly increasing its foreign investment in Cuba, albeit not all projects are known due to the secretive policy of the Castroite government on its foreign investment. China is Cuba’s second largest trading partner. In 2010 China sold Cuba just over $1 billion of a wide variety of vehicles, machinery, consumer goods, and industrial inputs and imported just under $800 million in goods, primarily nickel and sugar. The two countries also announced in 2010 13 joint projects, 7 of which are located in Cuba in the mechanical industry, communications, agriculture, tourism, biotechnology and health sectors. The China Haier Corporation and the Electronics Group of the Ministry of Informatics and Communications of Cuba established a joint venture to manufacture electrical appliances and computer equipment. Also in 2010, the two countries agreed to build a luxury hotel in Havana, with an investment of nearly US$ 117 million. Lastly, China and Cuba announced several joint investments in the oil and oil products sector, including the expansion of the Cienfuegos refinery and the construction of a regasification plant and combined-cycle thermoelectric plant, an investment of US$ 6 billion that was due to start in the first half of 2011 and end in 2013. The Export-Import Bank of China (China Eximbank) is to finance 85% of the investment, which will be secured by China Export & Credit Insurance Corporation and guaranteed in full by the Government of the Bolivarian Republic of Venezuela in the form of oil from Petróleos de Venezuela (PDVSA).

 

In 2009, the Government of Cuba has announced changes in the tourist property sector, such as the extension from 50 to 99 years of the right of foreign companies to use state land and the issuing of permits for the construction of additional golf courses. If the land is to be used to build holiday homes or apartments, a perpetual lease may be granted.[68]

 

Corporations are interested to exploit the – as it is expected – significant oil reserves in Cuban waters. The US Geological Survey estimates that there are five billion barrels of oil lying in front of Cuba’s coast, while Cuban surveys claim as much as 20 billion barrels. Brazilian oil giant Petrobras, PDVSA – the Venezuelan state-owned oil explorer – and Spanish company Repsol, have key interests in the region, with the latter contracted to operate a massive platform in the gulf.[69]

 

Foreign Investment in Cuba takes place to a significant degree via state-capitalist investments from other states which reflect the centrality of Chinese state-capitalist investments. Feinberg reports:

 

20 investors accounted for nearly $3 billion of the $3.5 billion; indeed, the top 10 investors accounted for the lions share. The remaining universe of some 200 Joint Ventures, therefore, would account for only about $500 million in investment capital, or an average of $2.5 million per project.”[70]

 

 

 

Semi-Colonial Cuba to Get on Imperialist China’s Bandwagon

 

 

 

China’s influence is of decisive importance for Cuba’s transformation from a degenerated workers state into a capitalist semi-colony. It is, besides Venezuela, the largest trading partner, foreign investor and foreign creditor. And Venezuela itself is highly dependent on Chinese imperialism as we have already explained on several occasions.[71] An expression of the close relationship between China and Cuba is the establishment of the first Five-Year Plan for Sino-Cuban cooperation in June 2011.

 

China has used its influence to spur the capitalist restoration process in Cuba. Adrian H. Hearn, a Western expert on China and Cuba, remarked recently:

 

The Cuban reforms formalised by the 2011 Communist Party Congress will support a further convergence of positions, as they propose a more balanced mix of state and market forces. Although Sino-Cuban initiatives are managed under the banner of state-to-state cooperation, Chinese support for Cuba’s liberalisation agenda is prompting the Western hemisphere’s only communist nation toward alignment with international norms. (…) The Chinese government has a vested interest in the success of Cuba’s reforms, reflected in the negotiation of the first Five-Year Plan for Sino-Cuban cooperation in June 2011. As a long-time financier of Cuba’s development, many are looking to Beijing to underwrite the credits and loans aspiring entrepreneurs need to grow small businesses.[72]

 

In another article, Hearn added: “[China]’s relations with Cuba demonstrate this pragmatism: for over a decade China has been advising the island to embrace private entrepreneurship, and to buy Chinese manufactured products. From refrigerators and televisions to public transport and hospital equipment, China’s impact touches the daily lives of most ordinary Cubans.[73]

 

Richard Feinberg makes a similar observation:

 

Cuba irked the Chinese when it suspended foreign exchange payments during a 2008-9 financial crunch. Today, the commercially-minded Chinese press the Cubans for investment deals that meet basic business tests for financial efficiency and secure servicing of debts. According to a Chinese diplomat in Havana, ‘Chinese banks want business terms, they want to see borrowers’ profitability and means of repayment — and they demand Chinese government guarantees.’ Some observers opine, albeit with some exaggeration, that China has become Cuba’s IMF![74]

 

 

 

Keeping the Authoritarian Rule of the Stalinist PCC

 

 

 

The Castroite regime orientates towards the Chinese model of capitalist restoration not only on the economic level but also in the political arena. Its goal is to combine the formation of a capitalist class and a market economy with the continuation of the political rule by the Stalinist party as happened in China, Vietnam and Laos.

 

This is combined with a central role of the military apparatus in overseeing the country’s transformation into a capitalist state. Again similarly to the Chinese state-capitalist road, where the Peoples Liberation Army takes a central place not only in the political system but also in the economy, the Revolutionary Armed Forces (FAR) run a number of key sectors of Cuba’s economy. Despite a reduction of non-civilian employment in the crisis-ridden years from 1989 to 1998, according to official figures it still accounted for nearly 13% of the total labor force. It is a major factor in running the economy: “Though official figures are not available, it is clear that the Cuban military is heavily involved in the country’s economy, especially in sectors that earn hard currency, and its officers run many of the largest state enterprises.[75]

 

In order to manage a controlled improvement of the economy where any protest of the working class could be suppressed, the PCC regime decided to put the FAR military bureaucracy in charge of key sectors of the economy. The FAR began to play a crucial part in the implementation of the Sistema de Perfeccionamiento Empresarial (SPE), or Enterprise Perfection System, which was designed to increase effectiveness in Cuban industries by making them more market oriented and competitive in their economic output.[76] These were in fact first steps which objectively prepared the state-capitalist road:

 

By adopting Western style management and organizational techniques, the FAR first began its business operation with the Military Industries Union (UIM) and later created its own business improvement model — perfeccionamiento empresarial. The success of the UIM was a catalyst to expand into the key economic sectors of the Cuban economy: sugar and tourism. Utilizing the concepts of modernized methods of management and organizational structure, the FAR retooled economic socialist theory with a quasi-capitalist styled one.[77]

 

Today, according to one estimate, the military controls about 60% of the economy through the management of hundreds of enterprises in key economic sectors.[78]

 

So, as we see, the combined party and military bureaucracy have positioned themselves to lead the country Cuba towards capitalism in a highly-centralized, authoritarian way. They have concentrated the political and military resources in order to use them to oppress any possible working class resistance. Fighting against their authoritarian regime is a central part of the program for socialist revolution in Cuba.

 

 

 

Excurse: A Short Note on Cuba and the Maccabiah Games

 

 

 

One of the earlier signs of the transformation of the former USSR from a degenerated workers’ state to a capitalist state was the change of policy of the ruling bureaucracy towards Israel with Mikhail Gorbachev's rise to power in 1985. That year saw the start of significant improvements in Soviet-Israel relations that were severed following the 1967 war.

 

It is symbolic for Cuba’s march towards capitalism that, in 2013, the first official Cuban delegation participated in the ultra-Zionist XIX Maccabiah.

 

The Maccabiah Games are Jewish Olympics, held in Israel the year following the Olympic Games. Every four years, the best Jewish athletes from throughout the world compete in Open, Masters, Juniors, and Disabled competitions in Israel. This is not simply a sporting event; it is a major political event in support of Israel.

 

The Maccabiah is staged under the auspices of the Maccabi World Union (MWU), a worldwide Zionist youth and sports organization devoted to furthering the Zionist concept of the Jews as a world nation. The MWU is headquartered in Israel.

 

The concept of the Maccabiah Games was the brainchild of Yosef Yekutieli who, in 1928, proposed his nationalist-Zionist idea of organizing a sporting event to the Jewish National Fund. Its purpose was to symbolize the recognition of Palestine as the Jewish National Home – the embryonic Zionist state.

 

The original Maccabiah was held between 28th March and 6th April 1932. The Games were reborn in 1950, in the State of Israel, following the ethnic cleansing of the Palestinians. Today, the Games are organized by an International Maccabiah Committee and are sanctioned by the International Olympic Committee and World Federation of Sports.

 

Without comparing Israel to Nazi Germany, we should remind our readers that the same International Olympic Committee supported the holding of the 1936 Olympic Games in Nazi Germany, implicitly a gesture of political support, even though the Dachau concentration camp was already operating at the time, with the full knowledge of the International Olympic Committee. The alternative location for the 1936 Olympics – the former USSR – was rejected by the same International Olympic Committee.

 

The 44 Cuban athletes who participated in the 2013 Maccabiah Games wore their new uniforms in the red, white and blue of the Cuban flag – with the letters “PRT” sewn onto their sleeves. These letters are the initials of Preston Robert Tisch, the late American Zionist billionaire. His son, Steve Tisch, co-owner of the New York Giants American football team, who helped fund the participation of the Cuban team, decided to inscribe the initials on the uniforms as a “personal footnote” to commemorate his father. Mark Torriero, a 31-year-old Christian Zionist and wrestler, was another person who contributed to these uniforms by organizing a fundraising drive on the Internet to buy uniforms for the Cuban softball team’s “athletes of faith". [79]

 

The fact that an official Cuban delegation participated this year in the Maccabiah is not only a scabbing of the call by the BDS (the international boycott campaign against Apartheid-Israel) to boycott the Maccabiah because of its political nature. It also reflects the transformation of Cuba into a capitalist state, sending a clear message by the Cuban ruling class that Cuba is now on the side of the imperialists.[80]

 



[1] On the capitalist restoration in China see various documents which we published in our predecessor organization (LRCI/LFI). Peter Main: China: ‘socialism’ with capitalist characteristics” (in: Trotskyist International No. 11, 1993); Peter Main: China: Stalinists draw near their capitalist goal” (in: Trotskyist International No. 22, 1997); Peter Main: Restoring capitalism in China (2000), http://www.fifthinternational.org/content/restoringcapitalism-china;

[2] See on this League for a Revolutionary Communist International: The error of the 'Moribund Workers State' - a correction, Resolution of the LRCI’s V. Congress in July 2000, in: Workers Power (Britain) No. 248, November 2000, p. 12

[3] Luis Locay: The Future of Cuba's Labor Market: Prospects and Recommendations, Cuba Transition Project (CTP), Institute for Cuban and Cuban-American Studies, University of Miami, 2004, p. 7

[4] Antoni Kapcia: Cuba in Revolution. A History since the Fifties, Reaktion Books 2008, p. 157

[5] Joaquín P. Pujol: Where is Cuba Going? Economic Policies that Have Been Adopted and Results Thus Far; in: Cuba in Transition Volume 22 (2012), Association for the Study of the Cuban Economy, 2012, p. 2

[6] Joaquín P. Pujol: Where is Cuba Going? Economic Policies that Have Been Adopted and Results Thus Far, 2012, p. 4

[7] Carmelo Mesa-Lago: Social Services in Cuba: Antecedents, Quality, Financial Sustainability, and Policies for the Future; in: Rafael Romeu, Jorge F. Pérez-López, Carmelo Mesa-Lago: The Cuban Economy: Recent Trends, Woodrow Wilson International Center for Scholars, 2011, p. 74

[8] Carmelo Mesa-Lago: Social Services in Cuba: Antecedents, Quality, Financial Sustainability, and Policies for the Future; in: Rafael Romeu, Jorge F. Pérez-López, Carmelo Mesa-Lago: The Cuban Economy: Recent Trends, Woodrow Wilson International Center for Scholars, 2011, p. 71

[9] ECLAC: Economic Survey of Latin America and the Caribbean 2010-2011, p. 70

[10] Republic of Cuba - European Union: Country Strategy Paper and National Indicative Programme for the period 2011-2013, 2010, pp. 9 and 87

[11] Luis Locay: The Future of Cuba's Labor Market: Prospects and Recommendations, Cuba Transition Project (CTP), Institute for Cuban and Cuban-American Studies, University of Miami, 2004, pp. 5-7

[12] F.M. Critelli: A Barrel of Oil for a Doctor: Resilient Cuba, in: Alessandra Lorini and Duccio Basosi (Editors): Cuba in the World, the World in Cuba. Essays on Cuban History, Politics and Culture, Firenze University Press 2009, pp. 302-303

[13] Carmelo Mesa-Lago and Pavel Vidal-Alejandro: The Impact of the Global Crisis on Cuba’s Economy and Social Welfare, in: Journal of Latin American Studies, Volume 42 (2010), Cambridge University Press, pp. 705-706

[14] Claes Brundenius: Growth With Equity: The Cuban Experience (1959-1980), in: World Development Vol. 9, No. 11/12(1981) pp. 1083-96, figures reproduced from Louis Proyect: Cuban revolution, http://www.columbia.edu/~lnp3/mydocs/state_and_revolution/cuba.htm

[15] See Center for Democracy in the Americas: Women’s Work. Gender Equality in Cuba and the Role of Women building Cuba’s Future, 2013, p. 47; Pavel Vidal Alejandro: Monetary and Exchange Rate Reform in Cuba: Lessons from Vietnam (2012), p.1

[16] Reported in Carmelo Mesa-Lago and Pavel Vidal-Alejandro: The Impact of the Global Crisis on Cuba’s Economy and Social Welfare, in: Journal of Latin American Studies, Volume 42 (2010), Cambridge University Press, p. 708

[17] See the articles we published in the LRCI and which are mentioned above. We refer our readers also to several documents from the comrades of the “Liaison Committee of Communists” which arrived – as we did – to the conclusion that China has become an emerging imperialist power as they have documented in a pamphlet “The Rise of Chinese Imperialism” (The main document of this pamphlet can also be found in the internet on the CWG(A/NZ) website at http://redrave.blogspot.co.at/2009/12/flti-minority-report-on-currentworld_25.html) The CWG(A/NZ) respectively the Liaison Committee of Communists also published recently two excellent articles on emerging Chinese imperialism, the capitalist restoration and the consequences for the class struggle: "The Most Dangerous Class": Chinese Workers and Farmers Confront Chinese Imperialism: For the Socialist Revolution! Draft statement for discussion (which the RCIT published in its journal Revolutionary Communism No. 3 in June 2012), http://redrave.blogspot.co.at/2012/01/chinese-workers-and-peasants-confront.html; LCC: The Restoration of Capitalism in China: A Marxist critique of the process of the CCP’s counter-revolution, April 24, 2013, http://cwgusa.wordpress.com/2013/04/24/the-restoration-of-capitalism-in-china-a-marxist-critique-of-the-process-of-the-ccps-counter-revolution

[18] It looks like that the bureaucracy in Laos also entered already the road of capitalist restoration, albeit we could not study the latter case until now.

[19] Figures taken from European Bank for Reconstruction and Development: Transition report 1999. Ten years of transition, pp. 182-286; European Bank for Reconstruction and Development: Transition report 2003. Integration and regional cooperation, pp. 108-216

[20] Chenggang Xu, Xiaobo Zhang: The Evolution of Chinese Entrepreneurial Firms. Township-Village Enterprises Revisited, IFPRI Discussion Paper 00854 April 2009, p. 4. The reader should bear in mind that the figures for employment do not include the peasants which is why the added sum of the SOE, TVEs and Private Enterprises are not identical with the total figure. For the development of employment in China see also: Loren Brandt, Chang-tai Hsieh, and Xiaodong Zhu: Growth and Structural Transformation in China, in: Loren Brandt, Thomas G. Rawski (Editors): China's Great Economic Transformation, Cambridge University Press 2008, pp. 689-690 and Hyekyung Cho: Chinas langer Marsch in den Kapitalismus, Münster 2005, p. 38.

[21] Chenggang Xu, Xiaobo Zhang: The Evolution of Chinese Entrepreneurial Firms. Township-Village Enterprises Revisited, IFPRI Discussion Paper 00854 April 2009, pp. 4-5

[22] Hongyi Lai: Reform and the Non-State Economy in China. The Political Economy of Liberalization Strategies, New York 2006, p. 23

[23] Loren Brandt, Xiaodong Zhu: Accounting for China's growth (2010), IZA Discussion Papers, No. 4764, p. 35

[24] Adrian H. Hearn: China and the Cuban Economy, February 28, 2012, http://www.americasquarterly.org/china-and-the-cuban-economy

[25] Adrian H. Hearn: China, Global Governance and the Future of Cuba, in: Journal of Current Chinese Affairs, Vol 41, No. 1 (2012),, p. 163

[26] Alejandro Moreno, Daniel Calingaert: Change Comes to Cuba Citizens’ Views on Reform after the Sixth Party Congress, Freedom House 2011, p. 25

[27] See on this Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 8; Marc Frank: Cuba cuts state payroll, private sector jobs grow 23 pct in 2012, Reuters, Dec 27, 2012 http://www.reuters.com/article/2012/12/27/cuba-economy-reform-idUSL1E8NQ23A20121227; Samantha Nolan: Castro says Cuba's mass layoffs delayed, March 01 2011 http://www.ibtimes.com/castro-says-cubas-mass-layoffs-delayed-272151; José De Córdoba and Nicholas Casey: Cuba to Cut State Jobs in Tilt Toward Free Market, September 14, 2010, http://online.wsj.com/article/SB10001424052748704190704575489932181245938.html

[28] Trading Economics: Massive Cuba Layoffs to Continue, April 27, 2012 http://www.havanatimes.org/?p=68619

[29] Marc Frank: Cuba cuts state payroll, private sector jobs grow 23 pct in 2012, Reuters, Dec 27, 2012 http://www.reuters.com/article/2012/12/27/cuba-economy-reform-idUSL1E8NQ23A20121227; see also Omar Everleny Pérez: Will Cuba's Economic Reforms Succeed?, Americas Quarterly, May 13, 2013, http://portside.org/2013-05-13/will-cubas-economic-reforms-succeed; see also Victoria Burnett: Amid Fealty to Socialism, a Nod to Capitalism, New York Times, May 1, 2013 http://www.nytimes.com/2013/05/02/world/americas/on-may-day-in-havana-a-nod-to-capitalism.html?_r=0#h

[30] Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 9

[31] In the following we reproduce some excerpts of the decisions of the Cuban “Communist” Party at its VI. Congress in April 2011:

158. Expand employment in the non-state sector as an alternative form of employment, on the basis of the new forms of the organisation of production and services that are to be established.

159. Devise a nationwide process of workforce reorganisation that, based on the principle of demonstrated job suitability, contributes to the elimination of inflated payrolls and paternalistic practices in order to stimulate the necessity to work and reduce expenditure by economic entities and state budget outlays.

167. Adopt a new management model in line with the greater reliance on non-state productive forms, which must be based on a more effective utilisation of monetary-trade relations, delimiting state and enterprise functions with the aim of promoting greater autonomy for producers, increasing efficiency and making possible a gradual decentralisation towards local government.

“221. Modify the management model for local industry, making its operation more flexible to allow for the development of artisanal production and the manufacture of consumer goods in small or medium-sized production runs, as well as the provision of repair and maintenance services. This includes the opening up of greater spaces for non-state [i.e., self-employment, small business and cooperative] activities.

“276. The construction of housing must be organised on the basis of the adoption of various forms that include a significant proportion of individual effort, as well as other non-state initiatives

“287. Introduce non-state forms of management in commerce, above all in food services and in domestic services and tradespeople.

(See VI Congress of the Cuban Communist Party. Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, May 2011, Translated by Marce Cameron (Editor, Cuba’s Socialist Renewal blog www.cubasocialistrenewal.blogspot.com), p. 62)

[32] Cuba Unemployment Rate, http://www.tradingeconomics.com/cuba/unemployment-rate; Marc Frank: Cuba cuts state payroll, private sector jobs grow 23 pct in 2012, Reuters, Dec 27, 2012 http://www.reuters.com/article/2012/12/27/cuba-economy-reform-idUSL1E8NQ23A20121227

[33] Marc Frank: Cuba cuts state payroll, private sector jobs grow 23 pct in 2012, Reuters, Dec 27, 2012 http://www.reuters.com/article/2012/12/27/cuba-economy-reform-idUSL1E8NQ23A20121227

[34] Richard E. Feinberg: Reaching Out: Cuba’s New Economy and the International Response. Latin America Initiative at Brookings, 2011, p. 17

[35] David J. Pajón Espina, , Oscar F. Estrada, Anamary Maquei: Labour and Economic Reform in Cuba, National Economy Planning Department of the Economics Faculty, University of Havana, Global Labour Column, Number 97, May 2012, http://column.global-labour-university.org/2012/01/labour-and-economic-reform-in-cuba.html

[36] Karl-Eugen Wädekin (Editor): Communist Agriculture Farming in the Far East and Cuba, Routledge 1990, p. 97

[37] Philip Peters: A Viewer’s Guide to Cuba’s Economic Reform, Lexington Institute, 2012, p. 13

[38] Collin Laverty: Cuba’s New Resolve Economic Reform and its Implications for U.S. Policy, Center for Democracy in the Americas 2011, p. 19

[39] Richard E. Feinberg: Reaching Out: Cuba’s New Economy and the International Response. Latin America Initiative at Brookings, 2011, p. 19. See also Harlan Abrahams and Arturo Lopez-Levy: Raúl Castro and the New Cuba. A Close-Up View of Change, McFarland & Company, Inc., Publishers 2011

[40] Julia Wright: Sustainable Agriculture and Food Security in an Era of Oil Scarcity. Lessons from Cuba, Earthscan  2009, p. 64

[41] Pavel Vidal Alejandro: Monetary and Exchange Rate Reform in Cuba: Lessons from Vietnam (2012), pp.5-6; George Lambie: The Cuban Revolution in the 21st Century, Pluto Press 2010, p. 210

[42] Philip Peters: A Viewer’s Guide to Cuba’s Economic Reform, Lexington Institute, 2012, p. 4

[43] Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 9

[44] Jennifer Aron and Adrian H. Hearn: Without the Castros, What is the Fate of the Cuban Revolution? COHA Analysis, February 26, 2013, http://www.coha.org/council-on-hemispheric-affairs-analysis-without-the-castro-what-is-the-future-of-the-cuban-government/#sthash.gycIiAqK.dpuf

[45] Oficina Nacional de Estadística e Información (ONEI): Anuario Estadístico de Cuba 2011, p.165

[46] Omar Everleny Pérez: Will Cuba's Economic Reforms Succeed?, Americas Quarterly, May 13, 2013, http://portside.org/2013-05-13/will-cubas-economic-reforms-succeed

[47] Victoria Burnett: Amid Fealty to Socialism, a Nod to Capitalism, New York Times, May 1, 2013 http://www.nytimes.com/2013/05/02/world/americas/on-may-day-in-havana-a-nod-to-capitalism.html?_r=0#h

[48] Omar Everleny Pérez: Will Cuba's Economic Reforms Succeed?, Americas Quarterly, May 13, 2013, http://portside.org/2013-05-13/will-cubas-economic-reforms-succeed

[49] Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 4

[50] Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 13

[51] Joaquín P. Pujol: Where is Cuba Going? Economic Policies that Have Been Adopted and Results Thus Far, 2012, p. 7

[52] Joaquín P. Pujol: Where is Cuba Going? Economic Policies that Have Been Adopted and Results Thus Far, 2012, p. 7

[53] Quoted in Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 7

[54] Philip Peters: Cuba’s Entrepreneurs: Foundation of a New Private Sector, Lexington Institute, 2012, p. 9

[55] Carmelo Mesa-Lago and Pavel Vidal-Alejandro: The Impact of the Global Crisis on Cuba’s Economy and Social Welfare, in: Journal of Latin American Studies, Volume 42 (2010), Cambridge University Press, pp. 707-708

[56] Joaquín P. Pujol: Where is Cuba Going? Economic Policies that Have Been Adopted and Results Thus Far, 2012, p. 4

[57] See on this Helen Icken Safa (with the Federation of Cuban Women): Women, Industrialization and State Policy in Cuba, Working Paper #133, December 1989, p. 3; ECLAC: Anuario Estadístico de América Latina y el Caribe / Statistical Yearbook for Latin America and the Caribbean, Santiago, Chile 2012, p. 39; Charles Trumbull: Prostitution and Sex Tourism in Cuba; in: Cuba in Transition Volume 11 (2001), Association for the Study of the Cuban Economy, p. 357, Susan Eva Eckstein: Back from the future: Cuba under Castro, Routledge 2003, p. 246

[58] Amalia L. Cabezas: Economies Of Desire. Sex and Tourism in Cuba and the Dominican Republic, Temple University Press 2009, p. 169; Julie D. Shayne: The Revolution Question: Feminisms in El Salvador, Chile, and Cuba, Rutgers University Press 2004, p. 136

[59] As a side note we remark that there has also been important progress for Black and Mulattos who constitute 10% respectively 23,8% of the Cuban population. While there is certainly still no equality between them and the white population, it is clearly the case that there is much less racial discrimination – measured by access to education, skilled jobs etc – than it is the case in other countries in Latin America, the Caribbean or the United States. (See Alejandro de la Fuente: A Nation for All. Race, Inequality, and Politics in Twentieth-Century Cuba, University of North Carolina Press 2001, pp. 307-316)

[60] Center for Democracy in the Americas: Women’s Work. Gender Equality in Cuba and the Role of Women building Cuba’s Future, 2013, p. 45

[61] See Dalia Acosta: Cuba: Economic Reforms Hitting Women Hard, June 16 2011, IPS, http://www.ipsnews.net/2011/06/cuba-economic-reforms-hitting-women-hard; Center for Democracy in the Americas: Women’s Work. Gender Equality in Cuba and the Role of Women building Cuba’s Future, 2013, p. 57

[62] See Charles Trumbull: Prostitution and Sex Tourism in Cuba; in: Cuba in Transition Volume 11 (2001), Association for the Study of the Cuban Economy, p. 357; Amalia L. Cabezas: Economies of Desire. Sex and Tourism in Cuba and the Dominican Republic, Temple University Press 2009, p. 44; Alfonso Farnós, Fernando Gonzalez and Raul Hernández: The Role of Women and Demographic Change in Cuba, International Labour Organisation 1983, Population and Labour Policies Programme, Working Paper No. 138, p. 17

[63] Republic of Cuba - European Union: Country Strategy Paper and National Indicative Programme for the period 2011-2013, 2010, p. 88; Richard E. Feinberg: Reaching Out: Cuba’s New Economy and the International Response. Latin America Initiative at Brookings, 2011, p. 32

[64] Richard E. Feinberg: The New Cuban Economy. What Roles for Foreign Investment?, Latin America Initiative at Brookings, 2012, p. 20

[65] UNCTAD: World Investment Report 2012: Towards a New Generation of Investment Policies, p. 171.

[66] UNCTAD: World Investment Report 2012: Towards a New Generation of Investment Policies, Country fact sheet: Cuba

[67] Richard E. Feinberg: The New Cuban Economy: What Roles for Foreign Investment?. Latin America Initiative at Brookings, 2012, p. 21

[68] Figures in these paragraphs taken from ECLAC: Foreign Direct Investment in Latin America and the Caribbean 2012, p. 99 and ECLAC: Foreign Direct Investment in Latin America and the Caribbean, 2010, Briefing paper, p. 50, Richard E. Feinberg: Reaching Out: Cuba’s New Economy and the International Response. Latin America Initiative at Brookings, 2011, pp. 29-30

[69] Rita Lobo: Cuba libre!, March 6th, 2013 http://www.businessdestinations.com/featured/cuba-libre/

[70] Richard E. Feinberg: The New Cuban Economy: What Roles for Foreign Investment?. Latin America Initiative at Brookings, 2012, p. 21

[71] See Michael Pröbsting: The Great Robbery of the South. pp. 269-271; RCIT: Presidential elections in Venezuela: There is no alternative for the workers on the ballot paper!, 3.10.2012, www.thecommunists.net/worldwide/latin-america/elections-in-venezuela

[72] Adrian H. Hearn: China, Global Governance and the Future of Cuba, in: Journal of Current Chinese Affairs, Vol. 41, No. 1 (2012), pp. 170-171

[73] Adrian H. Hearn: China and the Cuban Economy, February 28, 2012, http://www.americasquarterly.org/china-and-the-cuban-economy

[74] Richard E. Feinberg: Reaching Out: Cuba’s New Economy and the International Response. Latin America Initiative at Brookings, 2011, p. 42

[75] Luis Locay: The Future of Cuba's Labor Market: Prospects and Recommendations, Cuba Transition Project (CTP), Institute for Cuban and Cuban-American Studies, University of Miami, 2004, p. 20

[76] Michael Aranda: The Evolution of the Cuban Military: A Comparative Look at the far with the Bureaucratic-Authoritarian Model of South America; in: Cuba in Transition: Volume 20 (2010), Association for the Study of the Cuban Economy, p. 202

[77] Armando F. Mastrapa: Soldiers and Businessmen: The FAR During the Special Period, in: in: Cuba in Transition: Volume 10 (2000), Association for the Study of the Cuban Economy, p. 432

[78] Carl Gershman and Orlando Gutierrez: Ferment in Civil Society. Can Cuba Change?, in: Journal of Democracy, January 2009, Volume 20, Number 1, p. 38

[79] See Chemi Shalev: First Cuban delegation to Maccabiah reflects revival of tiny Jewish community, Haaretz, 18.07.13, http://www.haaretz.com/news/sports/maccabiah-2013/.premium-1.534530

[80] I want to express my thanks to comrade Yossi Schwartz who provided me with this useful information on the Maccabiah Games and Cuba’s recent participation.