"A period special in peacetime"
ued. The Contras were thus in a weakened position when they arrived at Sapoa and the discussions revealed differences between the "military" and the "politicos". This was the time for the revolutionary government to demand the immediate
NICARAGUA / CUBA demobilization of the counterrevolutionary army, to bury it for ever. BANCO NACIONAL DE CUBA
But everything seems to show that the choice was made not to launch a final offensive which would have had a high political cost. The military capacity of the Contras was retained, although weakened, but the Front was also able to maintain popular unity in the face of a grave economic and social situation. It was then that the counter-revolution began to be treated as an official interlocutor, and, despite its weakness, was reinforced. A unilateral ceasefire was decreed [by the Sandinista government] which allowed the Contras to recover and act with more ease.
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AFTER the collapse of the Soviet-led Comecon trading bloc,
The maintenance of Contra military
Cuba has inevitably found itself in a profound crisis. Since capacity reinforced their political wing,
August 1990 it has been in a "period special in peacetime", to facilitating the coming together of different groups against
Sandinism; they employ Fidel Castro's euphemism for the most difficult period explained that, if the Front remained in in the thirty years since the revolution. The following article power, war, poverty, military service, the deals with the island's grave economic situation. In a economic blockade and instability would subsequent issue of IV we will publish the second part of this continue.
It is possible that, at that time, given the article, dealing with political developments in Cuba.
progress of the Esquipulas Accords, the pressure of public opinion and the deterio-
JANETTE HABEL ration of the internal situation, the Front could not take another way out than that of negotiating, believing that the elections would go better for it, and that, with a renewed mandate, recognized internationally, it would be possible to get the revolution back on its original track.
If, at that moment, it would have been difficult to adopt a more intransigent position, it is also clear, in any case, that if the
Contras had been crushed, military service could have been abolished, the army reduced and resources turned towards production...and disarmament achieved. The
FSLN would then have been able to postpone the elections, or at least, the achievement of the demobilization of the Contras would not have been seen as the work of the UNO government....
The logic of the continuation of the negotiations, to the detriment of a military solution while there was still time, brought the Contras from Honduras into
Nicaragua - they received land and had their own police — today their armed men are being used as shock forces in the towns. *
T HE plans for the country's eco-
nomic development for this decade worked out in the framework of the so-called "socialist division of labour" have been rendered more or less redundant. Based on guaranteed Soviet oil supplies, industrialization was to be centred on narrow specializations; in particular sugarcane products, which have a very important industrial potential; bio-technology stimulated by the successes of Cuban healthcare, indicated by the discovery of the vaccine against Meningitis B; the undertaking, in liaison with East Germany, of the manufacture of parts for information technology; the modernization of the sugar plants; and the technological updating of the nickel
Oil prospecting and the building of a nuclear power plant were to prepare Cuba to overcome its greatest handicap; the almost total absence of energy resources, leading to chronic external dependence for which, given the volatility of raw material prices on the world market and their manipulation according to events, sugar production cannot com-
The Gulf war has shown the fragility and speculative character of the oil market and Iraq's offer after the imposition of the UN embargo to provide free oil to the world's most impoverished countries struck a chord. In fact most Third World oil-importing countries buy in small quantities and at the highest prices since they do not have the money to finance long-term purchasing.
Until 1989 Cuba was free from this constraint, and this was without doubt the main advantage of "fraternal" aid, which in other respects was much less of a one-way business than is generally supposed. Any drop in oil deliveries means immediate chaos in transport and at work, affecting industry, food production and supplies to a population two thirds of which lives in urban areas. Latin America's second most powerful army
The country's defence is in the hands of what is considered the most powerful army in Latin America after that of Brazil - in one form or another 15% of the pop ulation is under arms — and its military potential is often presented as a direct threat to the USA. Just recently Jeane Kirkpatrick has spoken of the danger of the destruction of the nuclear power station at Florida's Turkey Point by Castroite commandos' Such assertions, whose political function is to put pressure on the Soviet government to further turn the screw on Cuba, overlook the fundamentally defensive character of the Cuban army, whose scope is in any case - 15 1. International Herald Tribune, March 31, 1991. April 29, 1991 • #205 International Viewpoint
----- photo credits and running heads -----
3 3
CUBA limited by its almost total dependence on external sources of oil and oil products, as well as for spare parts.
It is thus no exaggeration to say that it is the survival of the revolution that is at stake. For the first time it is not the risk of direct intervention that is to be feared but the more insidious combination of an extremely serious economic crisis, a reinforcement of the American blockade, extreme difficulties in daily life and on top of that real but too superficial political changes. Such a combination can lead to explosions in the most demoralized parts of the population with an unforeseeable
The result of eight months of discussions at a time when Cuban fears were at their height, Soviet-Cuban negotiations that began in May 1990 provisionally concluded in December with the signing agreement. Provisionally, because the new structure of bilateral trade for the new epoch that has opened has not yet been fully defined. The final statements only concern 1991 and further negotiations will be needed to fix the new mechanisms of future economic and trade
The uncertainty stems in part from the according to Cuban foreign trade minister Ricardo Cabrisas, the negotiations took place when neither the 1991 plan nor the Soviet budget had yet been approved ? Their completion is all the less certain in that the negotiators have yet to determine important details, certain prices; but above all the economic and political crisis in the USSR does not permit any certainty about the future of any agreement.
The old bilateral clearing system will continue to apply until March 31, but after that trade must be conducted in hard currency, with prices being worked out on the basis of those on the world market. Even at this price, and whatever the quality, Cuba will not have a choice as far as spare parts are concerned, since much of industry has of necessity been Soviet
Calculating the price of sugar
The taking into consideration of world market prices is not straightforward as far as the price of sugar products (for example) is concerned. As Cabrisas has pointed out, this price reflects neither trade between the European Community and the ACP (Africa-Caribbean-Pacific)
countries, on the one hand, or between the
USA and its traditional suppliers on the other, which takes place at prices significantly higher than those on the world market.
The Soviet Union finally agreed to buy four million tons of sugar in 1991 at the preferential price of $0.24 per pound, a lower price than under the previous agree16 Ten million tons of oil and oil products ment but twice the current market price. International Viewpoint #205 • April 29, 1991 are to be delivered - three million less than previously — at a price of $20 a barrel; slightly higher than the current world market price. Cuba will have to pay transport costs in hard currency. There are restrictions on other
Agreements had previously been negotiated with 62 Soviet institutions permitting 25,000 establishments to trade with the island 4. These accords have collapsed creating supply problems which have had to be met with emergency oil deliveries in January in order to avoid catastrophe.
The most surprising political measure concerns the payment of Cuba's debt to the USSR, on the abolition of which Castro has been counting for years. It is estiat approximately) 15 roubles which will be made out in hard currency from next year at a rate of interest that is not yet known. Given the severe shortage of hard currency which the Cuban economy is suffering from, made worse by the fact that it will no longer as in the past be possible to reexport Soviet oil, the 1990s are opening Food production cannot feed population
Cuba has big agricultural potential. However neither crop production nor progress realized, to feed the population. This is due to the priority given to export crops, and in the first place to sugarcane and citrus fruits at the expense of output in particular on the state farms; the importance of imports (fertilizers, seeds, spare parts); without forgetting the cost in of the mechanization of cane cutting, which is seen as a way of compensating for lack of labour in the coundependence and economic-political decisions have a big impact.
Food imports are being sharply back, with a big impact on supplies above all in Havana, where some 20% of the population live. The central importance assigned to the Food Plan is explained by the current necessity to ensure the coun try's self-sufficiency in food after the alarming deficiencies of 1990 which put the whole country on the alert: delays in
Soviet grain deliveries have provoked bread shortages, while the lack of grain to feed poultry has led to a spectacular fall in the production of eggs, which were previously freely available but are now strictly rationed at four or five a week
Bulgarian chickens and beer have not arrived and it has been necessary to reduce the quantities of imported rice, although this is a basic foodstuff
Cubans are not on the edge of famine, partly because the "libreta" (rationing card) guarantees basic nourishment for all and above all because Cubans eat once a day in the collective structures, work centres, schools and so on, which have their own food supply networks. The situation nonetheless is all the more difficult insofar as the restrictions combine with acute distribution problems which make daily life an unbearable headache. Queues can be hours long and require complex organization; the whole family is mobiLions arabir gazed with s organized with tickets; absenteeism from work has risen.
Since the end of 1990 the list of rationed items has lengthened. It includes 242 items of daily use such as shoes, clothes, furniture, toys, and
Recently detergent, soap, shampoo and razors have been unobtainable in some areas. The sale of electrical goods has also been severely limited for reasons of energy economy and because there is not the money to import them. Thus in Cuba, a tropical country, no refrigerators will be sold in 1991 while air conditioning appli-
- an urban inheritance of the American epoch — will be replaced by Chinese ventilators and only the newly
The bicycle age has arrived (the bicycles also being Chinese) at the cost of several serious accidents, since this form of travel is unknown in a country tomed to using cars in the towns and horses in the countryside. As for the press, the number of journals, the number of pages and their circulation have all reduced without any compensating improvement in the quality of the infor
Crisis in book production
The shortage of paper has also caused a big crisis in the book industry. According to The Economist (February 9, 1991) until last year around 500 new titles were published annually for "the island's inhabitants are avid readers and books sell so well that the Cuban Book Institute keeps a weekly list of the 10 bestselling titles."
It is worthwhile recalling at this point, as
The Economist's Havana correspondent does, that in "1959 a quarter of the population was illiterate." This shows both the dimensions of the cultural revolution in the past 30 years, but also the gravity of the present shock. Cuban scientists have been trying to find a way of using sugar cane husks to make paper, but meanwhile being printed and, despite a 50% price rise, the remaining stocks are disappearing from the bookshop shelves.
But the most significant symptom of the worsening situation is the strict control on the sale of medicines announced by the government in March. From now on, the
3. Informe Latinoamericano, February 7, 1991.
5. R. Cabrisas, Granma, February 3, 1991.
sale of a wide range of medicines in public chemists' shops will be reduced, individual medical prescriptions are being controlled and essential prescriptions are done in the hospitals. The price of certain medicines is to be raised so as to inhibit any unnecessary consumption. Given how proud Cuba is of its healthcare system, one of the most advanced in the Third World, these measures are a striking sign of the gravity of the situation.
Cuba must make itself ready for "the worst of economic situations" Fidel Castro warned on February 17, 1991. "We must gain time in this first stage of the 'special period' and prepare ourselves for the second and third stages." This third period could lead in the worst case - that in which even the current agreement with the USSR is not respected — to the establishment of a sort of war communism in peacetime. To avoid this, the leadership is relying on an increase in trade with China and Latin America, on increased tourism, on the setting up, under as yet unspecified conditions, of joint ventures with European countries and on the end - entirely hypothetical, alas — of the American blockade. It is necessary to find an economic policy — or simply a policy — which will permit the Cuban people to hold on until the end of the tunnel and until international solidarity shows itself.
### Joint ventures multiply
In the meantime it is necessary to prepare for the worst, make economies in all fields, in particular in energy, and play for time. The government has already changed its line on mixed enterprises. There are already many joint ventures in tourism: Spanish and Canadian firms have taken part in the building of new hotels and take on and fire staff according to their requirements. But there has until now been no recourse to foreign capital in industry.
For the first time the government has broken with a thirty year tradition and allowed a French consortium consisting of the Total enterprise and the Compagnie Européenne des Pétroles (CEP) to undertake off-shore oil exploration on Cuba's north coast.
The six-year contract signed in Havana in December 1990 with Cuba's Union del Petroleo, on financial conditions that have not been revealed, implies -according to a Cuban diplomat - that if commercially viable oil supplies are discovered "the income will be shared between the Compagnie and the Cubans. "7
Cuba is also considering permitting foreign buyers to have 49% participation in certain enterprises - the limit being fixed in the law on foreign investment on
1982. According to the president of the Association of Cuban Economists, Luis Cardet Henando: "foreign investment would permit the elimination of economic dependence on one market" from which Cuba suffers, which at the same time favoured investment in the sugar industry, sugarcane products, biotechnology and word Comecon framework & Processors in the
Furthermore another significant event took place at the start of 1991: on January 16, a five-year trade agreement was signed for the first time with China. Since the disappearance of the GDR, China has become Cuba's primary trade partner. The joint inter-governmental commission, which was set up in 1988, a year when trade increased by 50%, met for the third time in Beijing in January; in 1990 trade between the two countries reached $578,15 million. A five-year agreement has been signed along with a trade protocol for 1991. The Cubans will deliver sugar, citrus fruits, nickel and, for the
But, according to the Cuban Communist Party paper Grama, the best hopes cooperation; the Chinese have granted credits permitting the construction of bicycle and ventilator factories and there is also collaboration underway in clothing, shoes, ceramics, motors, machine tools, tractors, the food industry, electronics and more.
The Chinese foreign trade minister Li Langing has emphasized that the reasons for Cuban-Chinese trade are economic — China is hoping to expand relations with Latin America, while Cuba is seeking outlets for products that it used to sell to Eastern Europe. But he also identified a
CUBA political aspect — which may refer to the means of payment envisaged in the five-year agreement, which are not known. Traditionally, trade between the two countries has been conducted in dollars, but it can be supposed that the Chinese government has made concessions in this respect, given Cuba's lack of hard currency; since March 1990 China has granted preferential payment and credit facilities to Cuba. But, although trade with China is going to expand, this will far from compensate for the losses Cuba has suffered elsewhere.
Big expansion in tourism planned
The third possible way to alleviate the economic tensions is tourism. More than 320.000 tourists visited the island in 1989 and there has been an average 10% growth over the past six years. The government is looking to quadruple the number of hotels in 1992, which also means more mixed enterprises with Spanish, Italian, Austrian, French and Finnish firms. Nonetheless, even if the number of tourists from Canada and Europe is already on the increase owing to the cheap prices, a more thoroughgoing expansion requires visitors from the nearest neighbour, that is American tourists.
However, American trips to Cuba are strictly regulated, (apart from journalists, Cuban-American families and research6. The CEP, which specializes in the exploration and production of hydrocarbons, is an affiliate of the Interagra group, which is headed by Michel Doumeng, with wide experience in castem Europe as well as Laos and Vietnam. Cf: Investir, April 8, 1991. 17 7. Financial Times, March 8, 1991. 8. International Herald Tribune, April 1, 1991. April 29, 1991 • #205 International Viewpoint
CUBA / BOLIVIA ers) and the penalties can reach $250,000 or 12 years in prison. Even if these sanctions are largely theoretical, they are enough, in the framework of the embargo, to dissuade most potential visitors. Finally, the resentment aroused in the Cuban population by what some have described as "touristic apartheid" should not be under-estimated. The contrast between this privileged and protected sector and the difficulties of people's everyday life bears the seeds of conflict.
In theory, Cuba could take advantage of the breaking of its links with eastern Europe to return to its natural geopolitical framework: the Latin American continent. In practise, the country is no longer totally isolated and trade has developed. However this is limited by the fact that the Latin American countries are themselves too heavily in debt and the pressure of the American blockade is strong.
### Bad neighbours
The group of three Latin American producers of hydrocarbons (Mexico, Venezuela, and Colombia) from whom Cuba could buy oil with much reduced transport costs are refusing to make the slightest financial concession to Cuba at a time when they are involved in negotiations with the United States. The re-negotiation of the San José accord on oil deliveries in the region does not apply to Cuba, except to impose on the island conditions that Castro does not seem ready to accept.1°
Given the drastic international straints and an unfavourable immediate political environment, economic policy is made up from day to day. The tendency seems to be towards decentralization, with the Cuban foreign trade firms enjoying greater autonomy from the ministries, while Cuba's Chamber of Commerce is to play a more important role in foreign trade. The Arbitration Tribunal for Foreign Trade is being re-organized to resolve the likely conflicts between Cuban and foreign firms doing everything they can to circumvent bureaucratic con-
But the main problem is to know whether decentralization will also take place on the social and political levels, that is to say whether real powers of control and management are devolved both to the enterprises and localities at a time when bureaucratic chaos can only aggravate the poverty and infuriate the population. The idea of the need to re-establish a free market in agriculture and stimulate the peasants to improve food supplies seems to be widely shared at least in Havana."!
The suppression of the free markets was justified by the inequalities they caused, but it is not clear that inequalities resulting from the black market are better. The aim was to prevent profiteering by the 18 opment of an underground economy peasants and intermediaries but the develInternational Viewpoint #205 • April 29, 1991 favours, according to an official report, "a process of capitalization" thanks to "growing commercial profits."
The serious problems in distribution are an additional headache and there are countless chistes (jokes) deriding the inefficiency and waste of the state sector, from which corrupt functionaries, whose teque-teque (jargon) hides their doble moral, are nonetheless able to profit.
The danger of the criminal
In a report entitled "Mercantilism and crime in Cuba: present effects and future conseguences"12 "the constant growth in delinquency in the country, whether there is a severe penal policy, or whether some crimes are depenalized" and the danger of using the criminal law to "reduce social phenome-
Barral estimates that three sectors of the population are involved in seeking illegal profits: "a marginal or anti-social group...which penal repression tends to strengthen; a layer of corrupt employees and functionaries, who are criminals "by bourgeois layer formed of intermediaries and illegal traders and what remains of the former petty bourgeoisie", their common characteristic being that they are not prepared to renounce their own interests.
"Insofar as these interests are contrary to those of the revolution they constitute a social group with a very dangerous potential and who in a favourable conjuncture could provoke a spontaneous movement with considerable counter-revolutionary dynamism. In our opinion it is by no means excluded that the whole of the criminal classes may adopt negative political attitudes that could lead to spontaneous counterrevolutionary movements whose danger is all the greater at a moment when groups of intellectuals are helping them to become aware of themselves, of the identity of their interests, if they persuade them that the revolutionary institutions incarnate their enemy, if they succeed in giving them platforms and leaders."
This is the explosive context in which the fourth congress of the Cuban Communist Party will take place. This is supposed to be a "refoundation" congress according to some Cubans, but the date is yet to be fixed. * 10. According to the San José accord, Mexico and Venezuela supply oil to the Caribbean countries at preferential prices. This was revised in January 1991: the two countries have undertaken that 80% of the costs of oil deliveries can be paid over a five year period. See Informe Latinoamericano, February 7, 1991.
"Agriculture et alimentation: les enjeux de l'approvisionnement", Denise Douzant-Ronsenfeld in Problèmes d' Amérique latine, no. 99, January-March 12. Dr. Femando Barral: Mercantilisme et criminalité à Cuba, effets actuels et conséquences futures, AFP, Havana, April 1990.