Analysis: Cuban Communists under pressure to accelerate economic reforms

RIO DE JANEIRO, BRAZIL – Retiring Cuban Communist Party leader Raul Castro promised a decade ago he would transform the Soviet-style command economy into a more mixed and market-driven one “without haste and without pause.”

Now, with the Caribbean country in crisis and even the most basic goods in short supply, the party is under pressure to act faster as it convenes this weekend for its eighth congress since the 1959 Revolution.

The April 16-19 congress comes as Cubans battle worsening shortages of basic goods, including food and medicine. An economic crisis has been exacerbated by a tightening of decades-old U.S. sanctions and the coronavirus pandemic.

“I hope that the congress will take a deep look at our internal problems, not to reiterate promises but to quickly solve them,” said Julian Valdes, a government accountant in Havana.

Most experts say reform has been undermined by vested bureaucratic interests and ideologues within the party. They will be reading the tea leaves as new leaders emerge in the all-powerful Politburo at the summit.

The congress will mark the end of the Castro era, as the 89-year-old Raul Castro – the brother of late revolutionary leader Fidel – resigns as party secretary, the most powerful position in Cuba.

President Miguel Diaz-Canel is widely expected to replace him.

“If President Miguel Diaz-Canel is given the post of party secretary, it would strengthen his ability to take decisions and it might augur well for more expansive reforms,” said Carlos Saladrigas, president of the Cuba Study Group, composed of Cuban-American business people in favor of engagement with their homeland.

“If, however, someone else is appointed, especially from the ‘old guard’, it would possibly indicate… continuing economic stagnation,” he added.

A long-time European investor in Cuba agreed, saying the government needed to push ahead with reforms to improve competitiveness, including further devaluation of the currency, liberalization of agriculture, and greater incorporation of small- and medium-sized companies into the economy.

The pace of that would be dictated by personnel changes announced at the congress, he said, requesting anonymity.

Diaz-Canel, 60, said at a meeting last week on agriculture that “everything that stimulates production, eliminates red tape and benefits producers is favorable.”

That captures the essence of reforms adopted by the party at its sixth congress in 2011 and again five years ago at the seventh congress, but which have stalled amid resistance from some party members and ideological infighting.

The party has previously pledged to regulate and tax, not administer state-owned businesses; allow markets more sway over the central planning system and agriculture; do more to attract foreign investment; and support private initiative.

PEOPLE DO NOT EAT PLANS

John Kirk, a Cuba expert at Dalhousie University in Nova Scotia, said there was much more to be done to free up the private sector, agriculture and foreign investment.

“The Cuban government has taken only baby steps in all of these areas, and needs to show greater initiative,” he said.

Over the last nine months, following four years of stagnation and in 2020 an 11% contraction of the economy, the government has made more forceful changes.

It has granted more autonomy to state businesses to earn and spend hard currency and loosened regulations on small private ones. It has also unified its two currencies and devalued the remaining peso, cut utility and other subsidies, and decentralized the pricing and sale of some farm products.

“People do not eat plans,” Prime Minister Manuel Marrero said this month, expressing the new sense of urgency. That will be the underlying theme of the economic debate at the congress, according to Cuban economist Omar Everleny.

Everleny said Cubans understood U.S. sanctions and the pandemic were partly to blame for the hardships they faced, but also were tired of excuses and foot-dragging by authorities.

“The people demand more concrete actions and results from the party,” he said, using agriculture as an example. “It is not enough to make an effort: there must be results. Thousands of measures have been taken in agriculture, but the results are not yet on the shelves of the average Cuban,” he said.