CubaBrief: The internal blockade tightens in Cuba while Latin America’s left wing presidents and dictators look the other way

Communist austerity plan in Cuba demonstrates the old guard is in control. From left to right: Former second secretary of the Communist Party José Ramón Machado Ventura (age 93); dictator Raúl Castro (age 92); Raul Castro’s appointed president, Miguel Díaz-Canel (age 63); architect of Cuba’s police state and current vice-prime minister Ramiro Valdés (age 91) . Estudios Revolución Granma.

Cuba’s internal blockade is being tightened by the Castro dictatorship, which is making it clear that maintaining a small number of people in absolute power is its priority. This means preventing Cubans from having the chance to take charge of their own lives and raising living standards through freedom and the rule of law.

Afro-Cuban American scholar, Amalia Dache, an associate professor in the Higher Education Division at the University of Pennsylvania who “engages in research within contested urban geographies, including Havana, Cuba; Cape Town, South Africa; and Ferguson, Missouri” explained in July 21, 2021 the reality of the US embargo and the Castro regime’s internal blockade.

“No. It’s very hard for me to say that as someone who still has family living in Cuba. But lifting the embargo would not magically improve their lives. Here’s why: To understand the US embargo, it’s important to know about the internal blockade the Cuban government imposes on its own people. For example, the US embargo does still allow for food and medicine sales to Cuba. The Cuban government buys $100 million worth of chicken from producers in the United States annually. It sells that chicken to the Cuban people at a marked-up rate, sometimes at double the cost, and uses the profit to fund the regime. Other countries trade freely with Cuba, but because the government is heavily involved, the internal blockade keeps those profits from reaching the Cuban people. Poor neighborhoods — Afro Cuban neighborhoods — get the worst of the shortages. The police and military get money for new cars and surveillance technology.”

On the evening of January 9, 2023 Cuban officials announced that next month in Cuba gas prices will be raised 528%, fares for trains and interprovincial buses  will increase in cost by 180%, This comes on top of Prime Minister Manuel Marrero’s announcement in December 2023 that the MIPYMES, an acronym for new private businesses, will be subjected to higher taxes, higher import fees, and a 25% increase in the electric bill. It had appeared that Havana was following a Russian “privatization” scheme to create regime connected oligarchs, but now the Cuban dictatorship seeks to maintain government control over these entities in mixed enterprises.

For the coup de grace Marrero announced, without giving details, that changes would be made “so more of the money Cubans abroad send to their relatives would go through the Cuban official financial system. If successful, those efforts could further damage the private sector, which has been tapping into remittances entering the country through alternative channels to finance their businesses”, and to eliminate the black market currency exchanges. This is another effort to centralize economic control and eliminate the black market in Cuba, and Cuban economists in and out of the island are predicting dire results, reported Nora Gamez Torres in the Miami Herald.

“No one should expect anything about the effectiveness of the measures… because they will continue to be based on the communist economic model,” Elias Amor, a Cuban economist based in Spain, wrote in his blog Cuba Economía. The generation of wealth, employment and productivity, he wrote, cannot be achieved by merely “making adjustments in the distribution of resources, but with a focus on production, private activity, human rights, property rights and the market as an instrument of resource allocation.” 

In a stark rebuke of the government’s plan, Juan Triana, an economist living on the island, wrote in the news site OnCuba on Wednesday that the measures would likely contribute to “the rise in inflation, the increase in dollarization and a greater devaluation of the Cuban peso”.  He also questioned the restrictions on the private sector and why the government did not include other needed corrective measures, like the reduction in the billions of dollars spent on building new hotels for tourists, many of which remain empty, or reducing the state bureaucracy. 

The answer to Triana’s question is an easy one, but could be dangerous to say aloud in Cuba. Hotel construction is run by the Cuban military, and there are kickbacks, and other benefits to be had by the regime’s nomenklatura in building luxury hotels that remain empty.

The last time something like this happened was during the Obama Administration.

President Obama’s opening to the dictatorship began in 2009 with sanctions repeatedly loosened and took off publicly in December 2014 through the end of his Administration. This coincided with the Cuban military’s take over of the Cuban economy. The Associated Press on September 9, 2016 published “Cuban military expands its economic empire under detente” by Andrea Rodriguez.

“Through its economic wing, the blandly named Business Administration Group, the Cuban armed forces have become the nation’s biggest retailer, importer and hotelier. The military corporation Cimex, created two decades ago, counts retail stories, auto-rental businesses and even a recording studio among its holdings. The military retail chain TRD has hundreds of shops across Cuba that sell everything from soap to home electronics at prices often several times those in nearby countries. Gaviota has 62 hotels with 26,752 rooms across Cuba, pulling in some $700 million a year from more than 40 percent of the tourists who visit Cuba.”

Paradoxically, during Obama’s detente there was an overall reduction in trade with the United States. This is reflected by the U.S. Census Bureau’s data on U.S. trade in goods with Cuba.

It also coincided with a rise in violence and deadly repression against Cuban dissidents. The assassination of pro-democracy leaders Oswaldo Payá and Harold Cepero by agents of the Cuban dictatorship was confirmed after a 10 year investigation on June 12, 2023.

The machete attack engineered by regime agents against Sirley Avila Leon on May 24, 2015 is well documented, and her testimony available online.

This is communist austerity: centralizing economic control, and outlawing private initiative. No complaints from Venezuela’s dictator, Mexico’s president about these draconian policies of the Castro dictatorship or the 528% rise in gas prices, but at the same time they are on the record criticizing Argentine President Javier Milei’s austerity measures that contain a 60% increase in gas prices. 8.8 times less than Cuba’s.

History has demonstrated that concessions to the dictatorship do not benefit the Cuban people. Policy makers should take note, and help to end the Cuban dictatorship’s internal blockade by denying the regime hard currency while seeking avenues to help Cubans directly.

Providing concessions to the Cuban dictatorship, as the Biden Administration has, is counter-productive both to U.S. national interests, and the interests of the Cuban people.

Old dictators prior to their departure from this mortal coil have a track record of doubling down on repression, and control. The Cuban dictatorship is repeating the pattern.

Miami Herald, January 10, 2024

Resisting reforms, Cuba announces price hikes and new restrictions on the private sector

By Nora Gámez Torres

Updated January 10, 2024 3:58 PM

Cubans will soon face another turn of the screw, this time at the pump: a gas price hike of 528% starting in February. 

At a crossroads between broadening market reforms that could imperil its grip on power or doubling down on efforts to salvage the centrally planned socialist economy that has impoverished Cuba for six decades, the Cuban government chose the most familiar script. 

Amid the worst economic crisis in several decades, the Cuban leadership has announced an austerity plan that includes cuts on ration card food subsidies and increases in the prices of fuel, transportation, electricity and cooking gas. The measures will be paired with further restrictions on small and medium private businesses, in the latest signal the government is resisting calls to open up the economy significantly. 

[ Full article ]

Miami Herald, January 11, 2024

Latin America’s left slams Argentina’s austerity plan, but remains mum about Cuba’s | Opinion

By Andres Oppenheimer

Updated January 11, 2024 2:33 AM

What irony! Venezuela’s dictator, Mexico’s president and other old-guard Latin American leftist leaders are lashing out against Argentina’s right-wing President Javier Milei’s sweeping austerity measures. But they’re remaining shamefully silent about Cuba’s newly-announced austerity package, which is much more drastic than Argentina’s. 

Indeed, Cuba’s dictatorship announced on Monday measures that included a 500% increase in gasoline prices to tackle the island’s economic crisis. Referring to the massive price increases, Cuban finance minister Vladimir Regueiro said on state television that “the measures are aimed at reviving our economy.” 

By comparison, Argentina’s Milei, a free-market zealot who took office a month ago and inherited an equally serious economic crisis, ordered stringent belt-tightening measures that led to a 60% rise in gasoline prices. That’s a small fraction of Cuba’s gasoline hikes, which makes Milei look like a champion of compassion for the poor next to Cuba’s communist leaders. 

[ Full article ]