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CUBA IN A NUTSHELL: PART TWO (1959-2011)

September 29, 2020 by Lisa Reynolds Wolfe

The video below is the second in a two part series that takes you quickly through the last 50 or so years of Cuba’s political and economic history.

Here are the salient points:

By 1990, when the Russians were gone, things were really tough. It was becoming very clear that the Cuban people could not sustain life at such a minimal level indefinitely.

Castro and his advisers came up with a new strategy.

Agriculture was one of three areas of focus.

Acquisition of scarce hard currency through tourism and biotechnology was also central.

The key was to develop things that would produce a high rate of return.

Cuba’s economic decision-makers wanted to allow capitalist investment and enterprise to operate within Cuba itself.

They counted on the appeal of Cuba’s beautiful beaches.

They also believed that historic attractions like Old Havana could be used to promote the tourist sector.

Prostitution has increased and inequality between those working in the dollar economy and others has become a reality.

Multiplier effects include sales of tobacco and rum.

In mid 1990, the first joint venture hotel opened in Varadero beach with profits to be split 50-50.

The hotel, built with foreign capital, had construction costs of $30 million.

The growth of the tourist industry has been accompanied by large investments in construction to enlarge hotel facilities.

By 2011 there were well over 2 million tourists, many more than before the Revolution.

Joint venture capital includes major investors from Spain, Germany, Austria, and Finland among others.

Cuba’s military is highly involved in the tourist sector.

There has been substantial construction of tourist facilities within Havana itself, which retains its position as the main tourist attraction within the country.

Old Havana, a UNESCO World Heritage site, is particularly attractive to tourists.

Old Havana, the colonial core, is known for its lovely old buildings.

Finance was centered in Old Havana in an area known as ‘little Wall Street.’ This was a symbol of North Americanization.

Most activities was centered around the various plazas.

In Havana, rather than displacing residents of the old core, the area is being redeveloped with a concern for the integration of social services and living quarters.

While commercial activities are in place on the first floor of many buildings, renovated housing is available on the upper levels.

Due to a shortage of classrooms, elementary school classes are held in the public space of recently reconstructed museums.

Joint ventures and foreign real estate investment insure that resources are available to redevelop historical commercial structures.

UNESCO continues to assist with the renovation of convents, cathedrals, and other designated buildings.

Despite strenuous US objections, tourism alone is ensuring Cuba a fair amount of success in its efforts to be reintegrated into the regional economy of Latin America and the Caribbean.

Jamaica, Mexico, and other Latin American nations are involved in substantial joint ventures related to tourism.

Other Cuban trade efforts are also meeting with regional success.

The relaxation of US sanctions would provide a definite boost to the Cuban tourism industry.

Raul says: “We have to eliminate forever the notion that Cuba is the only country in the world where one can live without working.”

He goes on to say: “Without an increase in efficiency and productivity, it is impossible to sustain definitively the enormous social expenditures of our socialist system.”

Right now Cuba’s economy is stagnant.

The real value of wages in Cuba remains at around 40% of the 1989 level.

Cuenta-Propistas — the self-employed — have become the designated saviors of the Cuban economy.

Raul diplays remarkable faith in micro-enterprise and the “Gospel of Productivity.”

The key question: Can the micro (and cooperative)-enterprise sector absorb 500,000-1,200,000 apparently redundant workers?

The Fidelista model is discredited.

We will have to wait and see what happens.

________________________________________________________________

Video by Lisa Reynolds Wolfe

(Please don’t use the contact info at the end of the video. You can always reach me at lisa@coldwarstudies.com)

 

Filed Under: Cuba

CUBA IN A NUTSHELL: PART ONE 1959-1990)

September 22, 2020 by Lisa Reynolds Wolfe

I wrote this post for Cold War Magazine in 2016 when, for the first time in 88 years, an American president was visiting the island of Cuba. Now, Cuban Americans are in the news again because of their voting power in the upcoming 2020 presidential election, so I thought this would be a good time to reprint the article. The focus is on what’s been happening in Cuba since the 1959 revolution.

The video below will give you the insight you need to understand Cuba’s sociocultural, political, and economic conditions.

It is the first of two parts that will take you quickly through the last 50 or so years of Cuba’s political and economic history. (I’ll post Part Two next week.)

Here are the highlights:

Fidel Castro – popularly named “Savior of the Fatherland” and “Maximum Leader” – reached Havana on January 8, 1959.

President Batista fled Cuba very early in the morning on January 1, 1959.

Opposition to Batista first emerged in 1955. By December 1958 most Cubans despised his government.

Even the Eisenhower Administration wanted Batista out of office.

At the time of the Revolution, Havana was home to the privileged, hardworking, and marginalized.

A great deal of American investment was in the Vedado section of Havana where the Hotel Nacional was located.

In the 1950s, Havana was the center of commercialized vice, much of it underwritten by US organized crime.

The city was famous for its glitzy atmosphere.

At first everything was fine between Castro and the American government. But soon bad blood ensued.

When Cuba nationalized US petroleum properties, Eisenhower eliminated Cuba from the US sugar quota.

As the 1960s progressed, Castro was preoccupied with developing a model of socialist self-government that was uniquely Cuban.

Castro wanted to “ruralize the city” and “urbanize the countryside.”

Resources poured into rural areas for electrification and the construction of new towns.

Roads and buildings in Havana suffered from a lack of upkeep and maintenance.

In 1972, Cuba joined COMECON, the economic arm of the Soviet bloc, and in 1975 Cuba began implementing Soviet economic and planning principles.

Soviet models of economic and social planning facilitated Havana’s social, cultural, and political integration with the Soviet bloc.

1986 marked the beginning of a new period called the Period of Rectification. By this time, Cubans were disillusioned with the Soviets.

Cubans were pressuring their government to return to the core Revolutionary project with its significant gains in the status of women and blacks.

Unfortunately for Cuba, glasnost and perestroika in the Soviet Union put an end to any hoped for reforms.

In 1990, with the end of the Cold War, Cuba entered a challenging period known as The Special Period (of War) in Time of Peace.

Cuba had an oil driven economy and 98% of the island’s petroleum came from the Soviet bloc.

Aside from oil, 66% of Cuba’s food, 86% of all raw material, and 80% of machinery and spare parts came from Soviet dominated trading partners.

Factory closures became common, food scarcity was widespread, and the already inadequate technology base began eroding.

Exports were also affected since 66% of Cuba’s sugar, 73% of the island’s nickel, and 98% of the country’s citrus fruits had been exported to the Soviet bloc.

Cuba’s abandonment by the USSR was further complicated by a tightening of US sanctions.

Things were very tough. Learn more in Part II.

___________________________________________________________

Video by Lisa Reynolds Wolfe

(Please don’t use the contact info at the end of the video. You can always reach me at lisa@coldwarstudies.com)

 

Filed Under: Cuba

Havana (Cuba): A Cold War City No More

May 21, 2019 by Lisa Reynolds Wolfe

Note: This will be our last regular post until fall. Over the summer, you can follow @coldwarstudies on Twitter. You can also join the Cold War Studies Facebook community. We’d love to have you. Meanwhile, have a wonderful summer and we’ll see you in September.

By the mid 1980s, Havana was receiving more military assistance from the Soviet Union than ever before. Moreover, the city had mobilized its population for war in response to the Reagan administration’s  increasingly heated rhetoric. Nevertheless, despite a continued willingness to accept the protection of the Soviet nuclear umbrella and massive deliveries of Soviet weapons, Cubans were beginning to express their disgruntlement over the impact of the institutionalization of the 1970s. One Cuban scholar argued that:

By early 1986, there was sufficient evidence to show the problems that arose not only from errors and/or deficiencies in technical operation and control, but from something much deeper, namely, the consolidation of an “ideology of economics” that was associated with a belief in a “socialism of the productive forces.” This ideology, operative for decades in the former Soviet Union and the ex-socialist countries of Eastern Europe, had been assimilated by Cuba in the 1970s, giving rise to a parallel conception of bureaucratic-led development. This ideology was a subversion of socialism and one which in fact later become [sic] defeated, ironically, by the productive forces of world capitalism.

A colleague adds that the period from 1971-1985 saw the “erosion of the most rigorous and original aspects of the Cuban Revolution.” Discussing the “errors” of this period she states”

1984 saw the beginning of the most severe internal criticism concerning this erosion which later culminated in the period of Rectification in 1986 . . . . With regard to the economy there was criticism of the system of economic management . . . . An analysis of obsolete standards governing labor participation was formed and a call was issued for the end of state paternalism.

An interpretation of the problem by a non-Cuban scholar notes that there was:

. . . the creation of imbalances in the Cuban economy by encouraging monoculture sugar production and facilitating the failure of economic diversification and industrialization; the manipulation of Cuban economic dependence to obtain the adoption of Soviet approaches to economic management, organization and planning and the abandonment of a Cuban road to socialism; growing Cuban indebtedness; the extraction of economic benefits through a division of labor; and finally, the economic dominance to cause changes in key policy areas such as revolutionary strategy, to secure diplomatic and ideological support against China, and to gain strategic advantages vis-a-vis America.

Scholars were not the only ones to delineate problems. Ordinary Cubans were also critical. They knew that their salaries didn’t cover their expenses and they were aware of the many inequities in the work place. They noticed when their colleagues “received a full day’s pay for half a day’s work for the state and then spent the afternoon pursuing their private gain at other jobs.” They could see that “managers contracted skilled labor at higher than prescribed wages without subsequently enforcing labor discipline to increase productivity” and they observed that “management regularly inflated prices to meet output in value without regard to the quality of production.” The people were upset and demanded change.

Although there had been important achievements in health, education, and the status of women and blacks, there was consensus among all segments of society for the need to “revitalize the Cuban socialist project by emphasizing the most genuine elements of the Revolution. There was a demand for greater attention to social development and for the political integration of religious believers into the Communist Party.

In response, the government attempted “to redefine its own model based on new guidelines.” This focused on restoring “the original aims of the Revolution seeking the creation of a society where moral values, solidarity, and cooperation can overcome individualism and selfishness as the basic mechanisms that motivate people.” The objective, of course, was a return to the concept of conciencia expounded by Che Guevara in the early years of the Revolution.

Institutional changes were also in evidence. Popular Councils were created in order to increase local participation in politics and there was a 50 percent decrease in the number of government officials. Also, those workers in the lower 10 percent of the labor force received salary increases of 10 to 18 percent. Further, guidelines for management were re-evaluated, and there was the beginning of a process “to make ideological discourse more flexible.”

Overall, the government was responsive to calls for a return to the social project of the Revolution. As evidence, “in Havana alone, 100 children’s centers were opened in 1989; 20 clinics were finished in four years along with 24 special schools and 50 production lines of construction materials for home building under a program that called for 20,000 homes per year.”

The construction program had a dual purpose. In addition to marking a renewed commitment to revolutionary promises regarding adequate housing for every Cuban, the program absorbed much of the surplus labor created by personnel cuts resulting from the new emphasis on efficiency in the workplace. By mid-1989 over 33,000 workers had been placed in micro brigades.

In sum, during the period of Rectification, Cubans, deservedly proud of their strong social achievements, took a critical look at their past relationship with the Soviet Union. They determined to forge a new future which was to build on the accomplishments of the Revolution while providing for the civil defense. In this context, even though Havana still held geostrategic importance for the Soviets, an emphasis on homegrown militarization which had emerged in the early 1980s, along with the rejection of the Soviet economic model and a return to conciencia, meant that the city no longer met Cold War City criteria. Moreover, changes in the Soviet Union beginning in 1986 were to expedite the erosion of even this model, bringing a swift end to the process known as Rectification.

In 1990, Havana entered a challenging era known as The Special Period (of War) in Time of Peace. Subsequently, the regime could no longer focus on social development and the correction of inappropriate policies. Instead, as almost all vestiges of the Cold War were removed from Havana’s urban landscape, the total withdrawal of support by the Soviet bloc led to a struggle for the city’s very survival.

______________________________________________________________

Sources:

Delia Luisa Lopez-Garcia, “Economic Crisis, Adjustments and Democracy in Cuba,” CartaCuba: Interdisciplinary Reflections on Development and Society, Lessons from Cuba’s Special Period, ed. Jose Bell Lara and Richard A. Della Buono (Havana: FLACSO-CUBA, 1995), 29.

Elena Diaz Gonzalez, “The Quality of Life in Cuba’s Special Period: Examining the Impact of U.S. Policies,” CartaCuba: Interdisciplinary Reflections on Development and Society, Lessons from Cuba’s Special Period, ed. Jose Bell Lara and Richard A. Della Buono (Havana: FLACSO-CUBA, 1995), 15.

Kosmas Tokhas, “The Political Economy of Cuba’s Dependence on the Soviet Union,” Theory and Society 9 (1980): 321.

Lois M. Smith and Padula, Alfred. Sex and Revolution: Women in Socialist Cuba. (New York: Oxford University Press, 1996), 119.

Filed Under: Cuba, Havana

Slow Growth in a Cold War City

April 16, 2019 by Lisa Reynolds Wolfe

Migration from the countryside of Cuba to the nation’s capital, Havana, was extremely sluggish during much of the 1970s. This, along with other factors, contributed to the capital’s low population increase.

Havana’s percentage increase remained low compared to that of other Latin American cities throughout the decade.

The capital’s rate of growth increased over the period 1980-1990 while expansion in other areas of Latin America was beginning to slow during the same period.

Population shifts impacted Havana differentially.

At the municipio level, those areas of the city most affected by population growth were Diez de Octobre, Playa, Centro Havana, Arroyo Naranjo, and Playa. These areas contained more than 50% of all the capital’s inhabitants.

The most densely populated municipios were those located in the center of the city — Centro Havana, Old Havana, Diez de Octobre, Cerro, and Plaza. These areas had density levels as high as 10,000 inhabitants per square kilometer.

The municipios with the lowest density levels were those on the periphery of the city — Guanabacoa, Habana del Este, Cororro, Boyeros, and Arroyo.

After 1970, however, the municipios that made up the urban core of the capital — Old Havana, Centro Havana, Regla, Diez de Octobre, and Cerro — began to grow more slowly as areas on the periphery having more free space began to attract residents.

Also, the capital began to reflect the effects of differential migration, with a lower percentage of male residents (91.6 males for every 100 females) than elsewhere in Cuba, and a higher proportion of residents over 60 years of age (14.7% of all residents as compared to 11.7% for the rest of the country). Once again, these factors were both cause and effect of Havana’s lowered fertility rate.

Over much of the period, growth due to in-migration was higher — and in all cases was proportionally greater — than growth due to natural increase. Nevertheless, the proportion of the capital’s growth attributable to in-migration continued to remain low over the course of the 1970s and 1980s, particularly in comparison to pre-1958 levels when Havana was the destination of 45% of the country’s migrants.

Over the entire period 1970-1981, the capital absorbed only 12.9% of the country’s migrants, while Havana absorbed 25.8% of all Cuba’s internal migrants from 1976-1981.

These figures can be compared to other areas of Latin America. For example, Santiago de Chile, Lima, and Caracas received 34.2%, 40%, and 34.2% of their countries migrants respectively during this approximate time frame.

In sum, since in-migration was balanced by emigration and low fertility, Havana exhibited slow growth over the entire period when that capital could be called a Cold War City.

Filed Under: Cuba

The Triumph of the Revolution Sixty Years On

January 8, 2019 by Lisa Reynolds Wolfe

Fidel Castro — popularly named “Savior of the Fatherland” and “Maximum Leader” — reached Havana sixty years ago today, on January 8, 1959, a day after the US extended diplomatic recognition to his revolutionary government.

In their book, The Cuban Insurrection 1952-1959, Ramon L. Bonachea and Marta San Martin make a surprising claim. They say that believers in santeria saw in Fidel the reincarnation of previous leaders like the great nationalist Jose Marti who had been sent to save the nation and the people at a time of crisis. These devotees placed their special ‘protections’ along “the leader’s” path, and banners and flags hung from almost every building in Havana.

The guerillas accompanying Castro marched to waving crowds, their uniforms decorated with religious medals and santeria bead collars of various colors.

Fidel stopped at the Presidential Palace on the eastern side of the Almendares River and then crossed the river, marching toward Marinao and Camp Columbia. While the guerilla leader addressed the nation, several white pigeons, symbols of peace, were let loose. One of them circled above Castro’s head and gently landed on his shoulder.

Very few people in attendance doubted that Fidel Castro was, indeed, a man with a mission.

None the less, Havana, relatively untouched by the Cold War and anxious to shed the trappings of violence and conflict, could not envision the path that the regime would ultimately pursue.

The Capitalist Legacy 1945-1959

Havana, in 1959, reflected excesses and inequalities that were a consequence of the American business presence as well as foreign investment.  

During the early Cold War period, Havana’s loyalty to the US had been taken for granted, and the government was considered a staunch ally in the fight against communism. From 1945-1959, Cuba could even be defined as a client of the United States if by cliency one refers to

a mutually beneficial, security-oriented relationship between the governments of two countries that differ greatly in size, wealth, and military political power. Clients reciprocate for the delivery of goods and services by either participating in . . . regional security plans or by accommodating to . . . desires on questions of international diplomacy and economic policy-making.

While one might debate the primacy of a Cuban-American ‘security oriented’ relationship during these early postwar years, it is hard to argue the issue of economic accommodation. Nevertheless, it is a strain to assert that the city was locked into a pattern of classic dependency in its association with the United States. It was clear, though, that to move forward Cuba needed to redefine its relationship with the superpower.

Still, the United States insisted on her unique relationship with Cuba, and the more privileged inhabitants of Havana were resistant to any reform that would threaten their many links to the American economy. For most ordinary habaneros, however, the situation was dismal.

Havana real estate had become a major investment arena, characterized by rampant real estate speculation in the post World War II period. As a consequence, at the time of the revolution, between 650,000 and 750,000 housing units were considered substandard, about one-half of the total stock of 1.4 million units. Six percent of Havana’s population lived in squatter settlements.  Much of the problem was linked to the shift to condominium construction financed by  the American business community.

Migrants Exacerbate Havana’s Problems

Havana’s problems were exacerbated by the arrival of approximately 25,000 migrants per year who were relocating to the capital from less urbanized sections of the country.

Until the revolution, the City of Havana was the destination of about 45% of all internal migrants and, with a shortage of housing and with decent paying jobs in short supply, this group placed a disproportionate strain on the city.

Even though Havana’s growth rate during the 1950s was only two percent above that for Cuba as a whole, much lower than the same figure for most capital cities in Latin America, the city’s population density was 2,200 inhabitants per square meter. Not surprisingly, the capital showed little enthusiasm for the new arrivals.

Migrants named a variety of reasons for moving to Havana.  Many (32.4%) mentioned that they were in search of new jobs. Of this group, 36.1% had low levels of schooling, 26.8% had attended some high school, and 13.7% had some college.

So long as the construction sector continued to expand, it is probable that the poorly educated, primarily white male migrants could find employment. However, only 5% of the inadequately skilled new arrivals wanted to work in construction, the sector which offered the most jobs. Thus, those moving to Havana in search of work were the least prepared or willing to take advantage of the opportunities of the labor market.

As an aside, Havana had three fourths of all Cuba’s construction jobs. The capital employed 20% of the country’s active population: 41.9% of those employed worked in the service sector, 17.9% worked in commerce, and 6.2% held jobs in industry. Interestingly, until, 1960, almost all migrants to Havana who were active in the labor force were seeking agricultural work.

Interestingly, new migrants with professional or technical training were not seeking employment. Rather, they had come seeking a better quality of life. Still, housing was scarce and few migrants were able to fulfill their expectations.

The Vedado Section of Havana

As previously mentioned, most available housing consisted of pricey new condominiums, a form of shelter that few newcomers were able to afford. The condominiums were concentrated in the Vedado section of Havana where construction activities related to hotels and high rises were transformative from 1945-1959.

American investment in the Vedado area was not only focused on condominium and hotel development, it was also linked to a proliferation of underworld operations.  To this day Cubans living in the area can point out mob-associated structures and recount anecdotes about the mafia notables who hung out in the area.

 Hotels constructed in the area between 1953 and 1958 include the Havana Hilton, Habana Riviera, Capri, Vedado, Flamingo, and others.

The Hotel Capri was a favorite haunt of Lucky Luciano and Meyer Lanski. This Mafia group is said to have supplied financing for the Riviera.

A 1958 law facilitated international transactions by Cuban banks and is said to have supported a growing drug trade and banking sector.  In any event, the city was a center of commercialized vice, much of it underwritten by US organized crime.  

Havana was famous for its glitzy, Las Vegas style atmosphere, and American businessmen were attracted by illegal drugs, prostitution and the gambling casinos which were the city’s major industry.  Not surprisingly, there was a relatively high crime rate.  A vast informal economy centered on beggars and prostitution.

American Financed Projects

 American financed projects in Havana’s built environment did not revolve around Cold War militarism.  Rather, they reflected the imperatives of capitalism.  These included high rise apartment buildings with water views designed to  house American businessmen and wealthy habaneros, and 3 tunnels to facilitate automobile travel in the city.  

One of the tunnels, built between 1955 and 1958, was 735 meters long and was drilled between Old Havana and Havana del Este under the harbor mouth to facilitate travel to the beaches east of the city.  Another tunnel connected the luxury hotel area of Vedado with the high income housing community of Miramar to the west.  Additional public works projects were associated with highway improvement, public buildings, water supply, and airports.

Capitalism, rather than militarism, was the driving factor in the city’s relationship with external actors.  On the domestic scene, however, the situation was different.

The urban underground centered at the University of Havana organized opposition forces in the city and eventually confronted the Cuban regular military, supplied, in part, by the American superpower. Through this vehicle, Havana had a primary role in the insurrectionary struggle which was identified at this time primarily with Cuban nationalism.  

Havna’s built environment became a symbol of the conflict when, in January 1959, Fidel Castro arrived from the Sierra Maestra and set up headquarters on the 22nd floor of the 25-story Havana Hilton dislodging both reputable American businessmen and mafia associates.  The hotel became a symbol of the fight for cuba libre, was renamed the Havana Libre, and is an emblem of the revolutionary struggle to this day.

___________________________________________________________

Sources:

Enrique A. Baloyra and Roberto Lozano, “Soviet-Cuban Relations: The New Environment and Its Impact,” in Conflict and Change in Cuba, ed. Enrique A. Baloyra and James A. Morris (Albuquerque: University of New Mexico Press, 1993), 267.

Ramon L. Bonachea and Marta San Martin, The Cuban Insurrection 1952-1959 (New Brunswick: Transaction Books, 1974), 74 and 329.

Jill Hamburg, “The Dynamics of Cuban Housing Policy” (Ph.D. diss., Columbia University, 1994), 588.

Grupo de Trabajo Nacional de la Encuesta de Migraciones Internas, Resultados de la Encuesta Nacional de Migraciones Internas según Niveles del Sistema de Asentamientos: El caso de Ciudad de La Havana (Havana: Centro de Estudios DEMograficos, 1996), 7.

 

Filed Under: Cuba

Cold War Cuba: Labor Migration

November 27, 2018 by Lisa Reynolds Wolfe

Export of Labor Flows

The outflow of Cuban labor associated with the country’s military activity overseas is well documented. However, Cuba’s export of labor flows for revenue and training purposes is less discussed. Still, these programs affected Havana during the 1970s and 1980s because they targeted the most desirable members of the city’s labor force, young men loyal to the revolution.

Most of the workers selected were at the lower end of the 18 to 27 age bracket. They were required to be single, have completed elementary school, have a “revolutionary record” and good moral character, and pass a physical examination. Twenty percent of the workers were female, and a high percentage (50 percent or more) were members of the Union of Communist Youth (UJC). The tour of duty was generally four years, with the first six months devoted to training. At mid- assignment, the workers were given an all expense paid home leave.

Cuba’s Labor Challenges

In conjunction with Cuba’s international military activities and civilian assistance programs, migration exacerbated the labor challenges that Havana was facing. Now the city was increasingly required to solve problems encompassing revolutionary promises of full employment in the context of its expanding unskilled and unmotivated labor supply.

During the decade of the 1970s, the economically active population in Cuba — those employed, unemployed or first-time job seekers — was increasing at an annual rate of over three percent a year. This growth was expected to continue at the rate of two percent per year over the decade of the 1980s after which it was expected to drop substantially. Exporting labor was one way to deal with the expanding supply of workers.

Cuban Guest Workers Abroad

By the second half of the 1970s, Cuba was supplying unskilled labor to factories in East Germany and Czechoslovakia and, in the early 1980s, Cuban workers were also sent to Hungary.

The number of Cuban guest workers abroad grew from 12,000 in mid-1981 to approximately 15,000 in early 1983, and the number was anticipated to climb to 50,000 by the end of 1995. By that time, Bulgaria was also expected to host Cuban workers. Cubans began to work in the Soviet Union in the mid-1980s and, in 1989, Cuban construction workers were sent to Armenia to assist in construction after a major earthquake. These workers filled the need for labor in the most developed communist countries.

The Government’s Rationale

While labor migration is thought to be a phenomenon associated primarily with capitalism, several explanations have been given for the shortage of workers in centrally planned economies. These include a tendency for enterprises to overestimate the number of workers they actually need, a demand for additional labor resources to meet quantitative output goals and, conversely, a tendency to underestimate costs, resulting in a systematic understatement of labor requirements.

Two explanations were used to justify sending temporary migrant workers to other socialist countries.

  • First, migrant sending countries were able to temporarily deal with labor surplus problems.
  • Second, migrant workers were perceived to be participants in co-operative training programs.

The Cuban government used both of these reasons in presenting its rationale to the Cuban people. The government argued that through 1975 employment had outstripped supply. However, since that time:

. . . the troubles that arise from the [US economic] blockade and the very nature of underdevelopment, have not permitted the balanced growth between labor supply and demand, so that there has been a slight imbalance in favor of those entering the labor force during the five-year period 1976-1980.

Moreover:

. . . since Cuba would need skilled workers to operate the new industries already invested in or planned, sending young workers to Eastern Europe to receive training was seen as being beneficial to Cuba in the medium and long term.

The majority of workers assigned to Eastern Europe were first time entrants into the labor force who had been recruited by local organs of People’s Power. These workers signed an employment agreement with CUBATECHNICA, an enterprise within Cuba’s State Committee for Economic Cooperation.

Working Conditions and Benefits

After a six-month training period, Cubans were said to receive the same salary and be subject to the same work rules and working conditions as other workers in the host country. They were also eligible for productivity bonuses and fringe benefits — paid holidays, medical services, and social security.

CUBATECHNICA acted as an intermediary in the payment of wages. Domestic currency accounts were opened in Cuban banks under the workers’ names. From these accounts, the Cuban government deducted expenses for clothing, lodging, and transportation. The balance of the account was turned over to the worker upon his or her final return. In the interim, relatives or other individuals in Cuba (authorized by the worker) had access to the account. Returning Cuban workers were permitted to import duty-free the goods they had purchased while abroad. Some workers who had “excelled in their work in East Germany were allowed to import a motorcycle upon their final return.”

Problems

Interestingly, guest workers from Cuba employed in other socialist countries faced problems similar to those encountered by the same type of workers in Western Europe. They were accused by permanent residents of criminal activity — black market activities, drug trafficking, capital crimes, and prostitution — and they were sometimes involved in disturbances with locals. One such event was described as follows:

The incident reportedly began when a German blocked the entrance of a Cuban guest worker to a discotheque. During the fight that ensued, a German citizen was knifed to death. Subsequently, a group of Germans approached the area where the Cuban guest workers lived, seeking revenge, and defaced the Cuban flag. The near-riot ended when the police intervened.

Similar  happenings occurred occasionally despite the knowledge that any guest worker engaged in antisocial or disruptive behavior would be deported immediately.

___________________________________________________________________

Source:

Jorge Perez-Lopez and Sergio Diaz-Briquets, “Labor Migration and Offshore Assembly in the Socialist World: The Cuban Experience,” Population and Development Review, Volume 16 Issue 2 (June 1990).

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Photograph by Jean S (Flickr: Creative Commons)

Filed Under: Cuba

Cuban Internationalism

June 27, 2018 by Lisa Reynolds Wolfe

During the 1970s, Cuba expanded its involvement overseas, initially volunteering, but soon selling its military and civilian services to other nations of the Third World.

Some argue that Cuba was merely a puppet with the Soviet Union pulling the strings. However, many believe that Cuba had its own reasons for international opportunism. In fact, as can be deduced from discussions on housing and consumer goods, it is certainly plausible for Cuba to have adopted its 1970s outreach policy largely because of domestic economic considerations.

As a consequence of Soviet trade bloc deficiencies, the Cubans continued to approach capitalist countries for needed items, and this activity, in turn, resulted in a cumulative deficit with Western industrial countries totaling $2.6 billion for the years 1975-1978. At the same time, the regime began providing both military and civilian assistance worldwide. These commitments expanded over time and Cuba was eventually paid on a contract by contract basis.

By 1977, Cuba had about 5,400 workers in Africa. By 1978, there were close to 39,000 military advisors and troops in Africa, and by 1980 the government was involved in civilian assistance programs in thirty-seven countries. These outreach efforts served as a pressure valve for the urban labor market and provided a variety of material perks for participants. Benefits included a 20 percent raise in salary, special pension benefits, priority access to housing and other scarce consumer goods, prestige, and access to party membership.

Construction was the principal component of the civilian aid program and, by the late 1970s, about three percent of Cuba’s construction workers were involved in overseas projects. They built hospitals, highways, hotels, poultry complexes, milking barns, airports, and schools in a variety of locations such as Peru, North Vietnam, Laos, Guinea, and Tanzania.

The number of construction workers overseas rose from 4,500 in 1978 to 7,900 a year later, and it was estimated that 25,000 would be assigned overseas jobs in the “near future.” Meanwhile, medical and education projects were also common.

In 1979, at least 2,300 Cuban teachers were abroad (about two percent of Cuba’s total), while 9,000 students, mostly African, studied in Cuba.

The medical program involved 700 personnel in 1977, almost 1,200 in 1979, and about 2,000 in 1980. The 1980 program “employed somewhere between seven and thirteen percent of Cuba’s stock of doctors” along with dentists, nurses, and technicians.

Many other specialists also ended up overseas, including experts in such diverse activities as agriculture, sugar cultivation and refining, fishing, transportation, cattle raising, irrigation, industry, economic and physical planning, and management.

Certainly this was a loss for Havana and other places of origin within Cuba. At the the same time, there were clearly economic gains for the workers, as we have seen, as well as benefits and advantages for the society as a whole.

The overseas assistance programs provided a reasonable amount of hard currency, about $50 million in 1977. Two years later only two contracts (those with Libya and Angola) generated 18 percent of the value of Cuba’s hard currency trade. The country also benefited by establishing relationships with potential suppliers for key import needs and by opening up investment opportunities. For example, Cuba was granted permission to operate within Angola’s fishing zones and also received permission to operate fishing vessels off the West African coast, a boon for one of Cuba’s key economic sectors.

Despite their benefits, the aid programs had several negative consequences at home. Since seventy percent of those fighting in Angola were reservists, Havana lost civilian personnel. Many employers became increasingly reluctant to release workers for active duty because overseas programs deleted the domestic labor force of skilled personnel at a time when unskilled laborers were flooding the streets of Havana. Those available for work in the capital lacked the skills required by many of the vacancies. At the same time, the unemployed received 70 percent of their prospective wages while waiting for a job to materialize.

Aid programs were highly dependent on construction workers and, as can be deduced from the state of Havana’s housing, this was the employment sector that the city could least afford to lose.

Construction contracts were highly competitive and the best workers and craftsmen were sent abroad in an effort to avoid losing the projects. Not surprisingly, the number of housing units declined as the number of construction workers sent overseas expanded.

Scarce building supplies were diverted to the export economy. For example, cement, an item always in short supply, was exported in 1975 for foreign exchange. Similarly, opportunity costs could be cited for the loss of teachers and medical personnel.

Despite some drawbacks for society as a whole, workers were quite eager to volunteer for overseas assignments. “When Castro called for volunteers to serve in Nicaragua . . . 29,500 teachers offered to go.” Their willingness can be interpreted in several ways. First, the effort might be seen as a way to serve the revolution. On the other hand, given the scarcity and cost of consumer goods, volunteering might be seen as an opportunity to gain economically.

Whatever the reason, as a variety of overseas opportunities developed, many habaneros, along with other Cubans, made themselves available for the type of overseas work more usually associated with capitalist workers.

 

 

Filed Under: Cuba

Cuba Without the Castros: What’s Next?

April 19, 2018 by Lisa Reynolds Wolfe

Havana: A Cold War City?

In today’s environment, the fact that Havana was once a Cold War city is important only in terms of the Cold War’s legacy which is quite clear. In the Cuban case, large infusions of Soviet military and economic assistance, weapons, and technology ensured the continuance of the Cuban Revolution of 1959. And, in reality, it was the Revolution and its associated policies which had the most transformative influence on Cuba’s urban environment.

Absent rapprochement with the United States, and without the sustaining resources of the Soviet Union, the goals and objectives of the revolutionary government would clearly have been compromised. Today, it is increasingly unclear as to whether Cuba will be able to hold on to the gains of the Revolution which are its Cold War heritage.

Current Trends

Many trends indicate that Havana is beginning to reflect its pre-revolutionary identity. Two of these trends — the growth in tourism and the impact of internal migration on the city’s neighborhoods, social fabric, and economy —  are particularly important.

Havana continues to face challenges as severe as those of 1959 without the prospect of a strong and willing sponsor, and it is questionable whether there is sufficient domestic will, given a choice, to put up with the continuing hardships necessary to sustain the achievements of the Revolution. Still, the Castros have incorporated  many ‘relief valves’ into everyday life, so there is at least the possibility of success.

External Actors

An important question centers on the policies of external actors like the United States. Will Cuba be able to make its way as a socialist remnant in today’s world capitalist system?  Under the Trump administration, this possibility seems increasingly doubtful.

Cuba reasons that their case is not comparable to that of Eastern Europe. They argue that their grandfathers were capitalists and that they are familiar with — and ready to play by — the rules of the game. They go on to express their understanding that the global environment has changed since 1960 and to assert their recognition that they must now compete within the dominant, capitalist framework. Moreover, they believe that they can function and succeed in a capitalist world if they are granted free entry to markets.

The influence of American domestic politics on United States policy toward Cuba, however, hinders that possibility..

In actuality, despite American statements regarding the importance of economic liberalism, the one remaining superpower is reluctant to allow Cuba equal access to capitalist markets unless and until the country holds free and fair elections resulting in a democratically elected government. Under Raul Castro’s successor, that happening remains unlikely.

Cuban Exceptionalism

The United States does not recognize the exceptionalism with which some Cubans regard their concept of ‘democracy’. And it is not at all clear that Cuba will move toward a multiparty system in the immediate future even with the Raul Castro in a more diminished role.

In fact, American preparations for a democratic Cuba are reminiscent in some ways of US ignorance regarding the possible absence of Cuban ‘on the ground’ support, a factor contributing to the Bay of Pigs fiasco.

While there is certainly a great deal of opposition to the current regime in Cuba, there remains substantial support for the revolutionary objectives which many equate not with Soviet socialism, but with Cuban nationalism.

Recently announced changes in US policy may or may not facilitate change in Cuba, especially in light of the Trump administration’s walk back of Obama era overtures.

A Mixed Economy

The US seems content to reason that a mixed economy may in time liberalize the politics of a country like China while it will not do the same in Cuba.

In the postwar New World Order, therefore, Cuba’s choices continue to be Cold War choices. It seems impossible for Havana to effect a compromise between the Marxist and capitalist theories of economic progress which divided the global landscape over the last half of the twentieth century. Still, In the end, it is probable that capitalism will win out, even if not in the immediate future.

The conflict between capitalism and socialism which is shaping Havana’s future identity  is increasingly reflected in the struggle to preserve the country’s historical heritage.

In present day Havana, the successes of the Revolution are no longer drawing people away from the city toward the possibility of a better life in the countryside financed, in part , by the Soviet Union. Instead, the Cuban legacy from the Cold War — the absence of Soviet patronage and the American embargo — are luring people back from rural areas, small towns, and secondary cities to the capital where migrants hope that they can hold on to some of the redistribution gains of the last half century which they now perceive as their entitlement.

Many wish to benefit from the increasing capitalist presence within Cuba, even though there is also a desire to continue to reap the revolutionary rewards that were largely financed by the Soviet Union.

What About the Cold War?

Importantly,  any continuing revolutionary benefits may be much divorced from the Cold War reality or legacy. It is unlikely that these advances will be financed  by  foreign exchange and joint partnerships which reflect the forces of US investment. In fact, regardingCuba’s neighbor to the north, global investment in Havana is now so widespread that given Trump’s polices, some argue that “U.S. firms should not expect that not much of the economic pie will be left for them five years from now — or even two.”

It is probable that neither of the Cold War superpowers will dominate Havana’s landscape. Instead, the expectation of many habaneros is that the Revolution, Cold War patronage, and Cold War enmity may have been unintentional facilitators for a nationalist, yet capitalist, Cuba. We will just have to wait and see.

Filed Under: Cuba

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