Jueves, 12 de Septiembre de 2019
Última actualización: 18:50 CEST
Economy

How much will Castroism cost Cuba?

Castro parade, with a replica of the Granma. (NEWS.COM.AU)

The validity of any project, theory or revolution, whether social or of any kind, is measured by its results. Therefore, as the "Cuban Revolution" turns 60, a key question begs for an answer: what have its results been?

To begin with, Cubans are today much poorer than before 1959, and have fewer freedoms than during el batistato (under Batista). When the Castros seized power Cubans, along with Uruguayans and Argentines, topped the list of living standards in Latin America. Per capita income was equal to that in Italy, and double that of Spain.

It is not illusory thinking to suppose that, without Castroism, Cuba would today be one of the most advanced nations in the America, its economy integrated into that of the United States, like those of Canada and Mexico.

The regression produced by Castroism is such that, when this nightmare ends, we will first have to rebuild the country and take it to 1958, to then build modern Cuba from there.

Poverty is decreasing around the world, but not in Cuba, where it is on the rise

After six decades of trying to prove that Marx and Lenin were two geniuses of social progress, it is all too obvious that this contention is false. To make matters even more insufferable, while Cubans are increasingly impoverished, in the rest of the world poverty is actually decreasing.

The British magazine The Economistrevealed that in 1981 42% of the world population was extremely poor, with a per capita income of less than $1.90 per day (extreme poverty according to the UN), and by 2015 that number dropped to 10.7%, and that the number of non-poor increased by some 4 billion people. The Brookings Institution, meanwhile, estimates that someone emerges from poverty every 1.2 seconds around the world.

But not in Cuba. There, the  average salary is around that 1.90 figure marking extreme poverty. The National Office of Statistics and Information (ONEI) reported that in 2017 the average salary was 767 Cuban pesos, that is, 30.68 dollars; this while groceries alone cost some $75 (1,800 pesos), according to the independent press. Thus, a salary does not even cover necessities, but just 42.6% of them.

The upward mobility that Fidel stopped in his tracks

79.4% of Cubans, or 8.9 million people on the island, are less than 60 years old today, according to the ONEI, such that none of them have experienced life in Cuba before Castroism.

In 1958, in Cuba, the average industrial wage was six dollars a day, the third highest in the Americas, and the eighth worldwide, behind the US (16.80), Canada (11.73), Sweden (8.10), Switzerland (8.00), New Zealand (6.72), Denmark (6.46) and Norway (6.10). The average Cuban agricultural wage was three dollars, the seventh highest in the world, after that of Canada (7.18), New Zealand (6.72), Australia (6.61), USA (6.80), Sweden (5.47), and Norway ( 4.38). All this data may be found at the International Labor Organization (ILO).

A Cuban industrial worker "exploited" by the bourgeoisie in 1958 received $130 per month, equivalent to $ 1,128 today. His grandson, "liberated" by socialism, today earns less than $31 a month doing the same job. His grandfather earned 37 times more.

Before 1959, Cuba was self-sufficient for its food, and even exported. Its consumption of beef per capita exceeded 50 kilograms, one of the highest in the world, and third in Latin America, after Argentina and Uruguay, according to the ECLAC and FAO. The Island was also self-sufficient in the production of milk, tropical fruit, pork, chicken, coffee, tobacco, vegetables and eggs. It was the Latin American country with the highest fish consumption, and third in calories, with 2,682 daily.

With one vehicle for every 40 inhabitants, Cuba ranked second in Latin America in the number of cars. It was a Latin American leader and third worldwide in televisions, with 28 inhabitants per TV; and had the most railroads (relative to it size) in Latin America, with one km of track for every eight square km.

But "llegó el Comandante y mandó a parar" (the Commander arrived and ordered them to stop); to stop the progress, that is, which the Stalinist Carlos Puebla did not mean to say in his catching song. El caudillo, advised by the iconoclastic "Che" Guevara, nationalized the entire economy of the country and almost 80% of its arable land. The production of everything collapsed, and the food rationing card was implemented, still in force today. If there were no famines, it was thanks to subsidies from Moscow. Today Cuba produces half the milk it did in 1958 (960 million liters).

From almost seven million heads of cattle in 1958 (one cow per inhabitant), there are now 3.6 million cattle (three inhabitants per cow). Cuba used to import 29% of the food it consumed, while it now imports 80%. The country exported more goods than those it imported, its infant mortality was the lowest in Latin America, and it dedicated the highest percentage of public funds to education in the entire region.

The private sector will lift Cuba from its ashes

Obviously, the protagonist of the post-Castro take-off will be the private sector. It was Europe's "self-employed" in the sixteenth to the eighteenth centuries who developed the system of free modern enterprise that built today's world. Cuban "self-employed" workers will reinvent capitalism with the help of foreign investments, including assistance from Cuban exiles, with their valuable know-how.

Of course, the post-Castro State will have to rehabilitate and modernize the country's devastated infrastructure: highways, railroads, ports, airports, telecommunications systems, sewerage systems, aqueducts, post offices, etc. In order to finance these works, it must privatize the state economic apparatus, borrow abroad, and initially go into debt. Then, with the ensuing economic boost, taxes should cover state expenses.

But the chicken in the rice with chicken will be provided by the private sector, which will build houses, factories, shopping centers, modern buildings and skyscrapers, technological services, restaurants, hotels, banks, media operations, schools, cabarets, movie theaters, theaters, museums, sports facilities, gas stations, pharmacies, insurance companies, etc.

On the island there are 556,064 self-employed workers, employing 12% of the Cuban workforce. By law, however, they cannot grow and become SMBs, even though it is Small and Medium-sized Business that drive the global economy. More than 90% of companies worldwide are SMBs, according to the UN. They generate between 60% and 70% of total employment, and 50% of global GDP, and emerging countries are the ones with the most SMBs of all, producing more than the so-called "First World".

Because the dictatorship does not allow entrepreneurs to expand in Cuba, in 2017 they took 2.39 billion out of the country and invested it abroad. With the country financially bankrupt, Castro II still prefers for this fortune to leave Cuba before seeing the private sector flourish. This is one of the "achievements of the Revolution".

SMBs are prohibited, but the self-employed are still the embryo, as they have a modicum of know-how. Their task at the head of the post-Castro renaissance, before becoming prosperous businessmen, will be a tribute to their parents and grandparents, described as "lazy" by Fidel Castro in 1968, when he banned the nation's 57,280 small businesses.

Finally, how much will it cost to rebuild Cuba? Nobody knows, but one example is enough: covering the deficit of one million homes, assuming a cost of $30,000 each, comes to 30 billion dollars. And that's just for the properties. To this must be added streets, sewers, electricity and gas infrastructures, schools, pharmacies, parks, shopping centers, garbage collection, etc.

What is already clear is that, the longer Castroism survives, the more costly and arduous the reconstruction will be, and what will raise Cuba from its ashes will be Adam Smith’s much-vilified "invisible hand."

¿A quién engorda la Revolución cubana?

Tras 60 años de castrismo, las desigualdades en la sociedad cubana son cada vez mayores. Este video te pone algunos ejemplos.