The Financial Times boasted: “There is a new entry among Cuba’s roll of importantn dates. Alongside Fidel Castro’s 26th July movement and the January 1st 1959 ’triumph of the revolution’, there is now December 17th 2014.” (Financial Times June 15 2015).
The Financial Times is confusing revolution with counter revolution. December 17th 2014 was when US President Obama and Cuba’s Raul Castro announced a series of historic agreements to normalise bilateral elations. These restored diplomatic relations between the two countries, a relaxation easing on travel restrictions and the first tentative steps signalling the easing of the trade embargo which had been imposed since the revolution in 1959/60. Since then the US has re-opened it’s embassy in Havana.
These developments represent a decisive shift in the policy of US imperialism towards Cuba. It also, in this context, signifies a further qualitative step by the Cuban regime towards capitalist restoration. The latter has been unfolding for a number of years.
Obama made these announcements as he put it recognising that “You cannot keep doing the same thing (for more than 50 years) and expect a different result”. The European ruling classes, the Canadian and much of Latin American capitalism adopted a different approach – one which Obama has now embraced.
Raul Castro made the announcement and urged that Obama be awarded the Nobel Peace prize! A “peace prize” for a US president that has carried out more drone attacks than George Bush!
Since the Cuban revolution in 1959/60 US imperialism has enacted a strict embargo and undertaken various attempts – including armed intervention in 1961 - to overthrow the Cuban regime and restore capitalism. Despite the crippling consequences of the embargo - estimated to have cost the Cuban economy US$1 trillion since it’s enforcement - this policy has failed. This was mainly due to the deep social roots of the revolution and support for it which has lasted for decades. The trade embargo was a policy which was also geared to winning the political support of the Miami Cuban exiles who had fled from the revolution.
US imperialism is now adopting a new policy of beginning to move towards lifting the embargo. The threat of capitalist restoration to an isolated workers’ state can come not only from the threat of military intervention. As Trotsky warned in relation to the former USSR, it can come in the form of “cheap goods in the baggage train of imperialism”. The objective of US imperialism is the same but now they hope to reach it by a different route. Now they hope to flood the Cuban economy with goods and investment with the aim of fully restoring capitalism and exploiting Cuba’s resources for themselves. If this is achieved it will end Cuba being identified in Latin America and internationally as being a reference point of an alternative to capitalism.
This change of policy by US imperialism has been facilitated by a generational change and outlook within the exiled Cuban community. While previously wedded to support for the embargo and a struggle to overthrow the regime now, according some opinion polls, 52% of Cubans living in the USA now support ending the embargo. Sections of the capitalist class like the sugar magnate Alfy Fanjul, have pronounced in favour of the lifting of the embargo no doubt with an eye to the prospects of new markets and commodities to exploit within a new capitalist Cuba.
Cuba faces a devastating economic situation. Many Cubans are dependent on remittances they receive from families in the USA. An estimated 62% of Cuban households now receive support from abroad. According to some economic estimates they sustain an incredible 90% of the retail market.
The dire economic situation in Cuba has meant a disastrous situation for the masses. The massive social gains conquered as a result of the revolution and overthrow of capitalism are being eroded. The collapse of the former USSR and loss of subsidies devasted the Cuban economy. Yetb support for the revolution and hostility to capitalism and US imperialism meant that the Cuban regime incredibly was able to maintain the planned economy and bureaucratic regime throughout the 1990s (the ’Special Period’) and into the early part of the 21st century. This was despite the fact that the value of wages in Cuba today is estimated to be worth only 28% of what is was prior to the collapse of the former USSR!
The regime and planned economy hung on through this period despite the tidal wave of free market capitalism which dominated the world economy in this period. The regime regime was also able to sustain itself politically using the US embargo which fuelled hostility to US imperialism. The arrival of Hugo Chavez to power in Venezuela also brought it a breathing space through its supply of cheap petrol and oil. Subsidies from Venezuela are estimated to stand at US1.5billion per annum in an economy estimated at US$80 billion.
The lack of genuine workers control and democracy and consequential bureaucratic mismanagement and corruption further dogged and aggravated the economic and social crisis caused by the embargo and isolation.
The revolutionary convulsions which swept Venezuela, Bolivia and Ecuador at the beginning of the century offered the prospect for Cuba to break out of its isolation. A genuine workers’ democracy would have seized this opportunity and taken the steps necessary to try and form a socialist federation of these countries. This could have allowed economic co-operation and planning between these countries and could have begun to appeal to the working class of the whole of Latin America to offer an alternative to capitalism.
Unfortunately neither the Cuban bureaucratic regime nor the reformist leaderships of Morales, Chavez or Carrera were prepared to take this step. The latter have remained trapped within capitalism despite initially introducing reforms and taking some measures to encroach on the interests of the ruling class and imperialism. The Cuban regime on the other hand has introduced a series of incremental steps beginning the process of capitalist restoration. These latest developments threaten a further advance in the threat of counter revolution.
Although the easing on travel restrictions will be welcomed other steps represent a threat to the remaining gains conquered by the revolution which. These were already being eroded and dismantled. Any that remain are now under serious threat. The new labour code represents a serious attack on workers’ rights. The age of retirement was raised by 5 years in 2008. The introduction of the “dual currency” exchange whereby some workers are now paid in dollars vastly exacerbated inequality between those paid in dollars and those in pesos. The regime created the ’convertible peso’ or CUC which is pegged 1:1 with the dollar which is used in the tourist sector and imported products. Local products use the local peso CUP which is equal to about 1:25 of the CUC. The government announced its intention to scrap this dual currency but this has not so far been implemented.
This has inevitably boosted the black market. The government established a target of removing over 1 million workers from the state sector and allowing the establishment of thousands of small and medium sized businesses - 500,000 licenses have already been issued - “cuentapropistas”. However, these have centred on small businesses like restaurants – mainly operating from peoples houses.
The number of workers employed in the private sector has increased from approximately 140,000 to 400,000 since 2007. While this is significant it still represents a minority of the total work force of over 5 million.
A bridgehead for capitalist restoration has been developed in the tourist sector which has been the centre thus far of foreign investment from Europe, Canada, Brazil and more recently Chinese enterprises. Prostitution, banished from society following the revolution is now back on the streets of Havana, especially in the tourist areas.
Special Development Zones have been opened like the building of a new port facility in Mariel Bay – financed by investment from Brazilian and Singapore capitalism. This is viewed with a future eye for the ending of the US trade embargo and to capitalise on the expansion of the Panama canal and the new canal being planned in Nicaragua. Here investors will be given 50 years contracts compared with the current 25 year one. Investors can have 100% ownership. They will be charged no labour or local taxes and granted a 10 year reprieve from paying a 12% tax on profits.
However, despite these developments foreign investors are compelled to negotiate with the government or state run companies. While the Cuban regime still uses some socialist rhetoric, in part reflecting the support which still exists for the revolution, especially amongst the older generation, it increasingly reverts to Jose Marti, the leader of the independence movement against the Spanish colonisers.
The younger generation, desperate to enjoy new freedoms – use of the internet and travel amongst others – have experienced not the gains but the regression of the revolution and economic and social crisis and the stifling dead hand of the bureaucracy
Initially the attraction of the arrival of “cheap goods in the baggage train of imperialism” may hold an initial attraction until the reality of life in capitalist society becomes apparent.
These developments clearly represent an important retrogressive steps in the re-introduction of capitalism. This process is clearly under way in some sectors. However, it is far from completed. Steps towards the “free market” are allowed under continued state supervision, agreement and control. The state still maintains a powerful control and could choke off these steps at any time. Foreign investors still need to negotiate directly with the government or state controlled companies. The decisive sectors of the economy have still not been privatised or sold to foreign capitalists.
As Rafael Hernandez, the Cuban editor of “Temas” (A cultural state published magazine) pointed
out; “All of Raul’s economic reforms involved decentralisation, which is good, as cuba needs that. The problem is this ...it has not happened”. (Financial Times 15 june 2015).
Even US capitalists, eager to take back what they lost in the revolution, are treading cautiously. As one investor was quoted as saying, “It makes sense. Start small, learn how the system works and then see how it goes”.
For socialists and the working class the steps towards capitalist restoration represent a backward step. They will signify the erosion of the gains of the Cuban revolution for the masses. They will also be utilised by the ruling class, especially in Latin America, to try and again discredit the idea of socialism as an alternative to capitalism.
However, this will not have the same effects as the ideological offensive against the idea of socialism which the ruling class unleashed following the collapse of the former Stalinist regimes in the ex-USSR and Eastern Europe. A new phase of capitalist crisis and workers’ struggles has opened up internationally. The working class and the masses has passed through twenty five years of the “supremacy of the free market” and is beginning to struggle against it. In Brazil, Argentina, Chile and other countries a new cycle of workers’ struggle has begun.
The lifting of the embargo would represent a defeat for the past policy of US imperialism and its’ attempt to overthrow the Cuban regime. It will give Cuba more opportunity to trade on the world market. However, without the existence of a genuine workers’ democracy this includes the danger that can threaten the acceleration of capitalist restoration. A state monopoly of foreign trade, controlled democratically by a genuine regime of workers’ democracy is essential to help prevent this increasing threat. Socialists welcome the increased freedom to travel.
The transition to a full capitalist restoration in Cuba however will not be a straightforward uninterrupted process. Sections of the regime do not seem to want to go in this direction. Significantly Maiela Castro, daughter of Raul firmly stated as this deal was announced that: The people of Cuba don’t want to return to capitalism”.
There are many obstacles still to be overcome for the lifting of the trade embargo. Not least opposition to such steps by the far right wing of the Republicans in the US congress. The question of US$7 billion claims for compensation from former owners of companies nationalised at the time of the revolution. On theother hand Fidel Castro on his 89th birthday raised the question of “numerous millions of dollars” being paid in damages to Cuba by the USA to cover the costs of the embargo.
Under the conditions of new international capitalist crisis moves towards capitalist restoration can be checked. A mixed or hybrid situation could continue for some time. Initially such gains from the revolution such as the health care and the education system may be maintained although even these have suffered greatly from lack of investment in the recent period. Many obstacles remain to be overcome and some resistance is likely as the reality of capitalist restoration becomes apparent. Sections of the population are already fearful of loosing the gains of the revolution and of Cuba being turned into another Puerto Rico.
The need to build resistance to the developing pace of capitalist restoration and struggle for a genuine workers’ democracy and nationalised planned economy in Cuba is more urgent that ever. Such a movement could link together with the working class and youth throughout Latin America which is increasingly moving into struggle to defend its interests and begin to offer a real socialist alternative to capitalism which has fully learnt the lessons of the Cuban revolution..