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Global Affairs Blog

Cuba and Economic Reform

By: Claude Muhuza, LLM ’17

On 1 January 2017, Penn Law’s Global Research Seminar (GRS) class landed at José Martí international airport in Havana. The GRS class had spent the fall semester examining the treatment of civil and political rights and economic, social, and cultural rights in Cuba. We travelled to deepen our knowledge of these topics and to learn more about the distinctive nature of life on the Caribbean island.

The first part of our research week took place in Havana. We received presentations on a diverse range of topics including: hip-hop and art; urban renewal; LGBT rights; legal education at the University of Havana; and U.S.–Cuba relations. We subsequently spent a few days in the picturesque setting of Pinar Del Rio and engaged with members of the country’s rural population. The final part of the trip was spent in Vedado, which gave us the opportunity to visit a number of iconic cultural and historical sites.

The discussions with in-country experts and spontaneous interactions with Cubans enriched my understanding of the treatment of rights and the prospects for reform in Cuba. I was particularly struck by the complexity of the economic challenges facing the country. In 2011, the Cuban government issued 311 guidelines (referred to as Lineamientos) on reforms to the country’s economic model.[1] The Lineamientos included proposals relating to: currency reform (Cuba has two domestic currencies that operate side by side); updates to obsolete infrastructure; state sector reform; growth of the non-state sector and increases to FDI. Unsurprisingly, the Cuban government wants to implement these reforms within a socialist framework and in a manner that retains the centrality of the state to Cuba’s economic and political life. A few in-country experts noted that it will be difficult to reconcile the Cuban model of governance with some of the proposed economic reforms.

Furthermore, Cuba’s economy, since the 1959 Revolution, only works under unique international conditions. Prior to 1989, the economy worked due to strong trade relationships with members of the Soviet bloc.[2] In 1998, the election of Hugo Chávez in Venezuela led to the emergence of a new economic partnership. Venezuela supplied subsidised oil in exchange for healthcare, education, and other professional services from Cuba.[3] These economic partnerships with ideologically supportive countries have proved to be unsustainable. The fall of the Soviet Union led to a severe economic crisis in Cuba (referred to as the “Special Period”) and Venezuela’s recent economic problems have raised fears of another significant downturn, albeit on a smaller scale than the Special Period[4].

The Cuban government appears to be cognizant of the scale of the task that lies ahead. It is unclear whether they will be able to remain wedded to the current path of incremental reform or whether pressure, from domestic actors or through exogenous shocks, forces the government to increase the pace of reform.

 

[1] The Guidelines Of The Economic And Social Policy Of The Party And The Revolution (Apr. 18, 2011), http://www.cuba.cu/gobierno/documentos/2011/ing/l160711i.html

[2] Collin Laverty, Cuba’s New Resolve - Economic Reform and Its implications for U.S. Policy, Center for Democracy in the Americas (2011), available at http://thecubaneconomy.com/wp-content/uploads/2011/11/CDA_Cubas_New_Resolve21.pdf

[3] Id. at 13.

[4] Twelve news items that impacted Cuba and Cubans in 2016, Havana Times (Jan. 1, 2017), http://www.havanatimes.org/?p=122911

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