Cuba:
Facing the Double Embargo

Feb 6, 1994

Cuba today is in the midst of the most serious crisis that it has suffered since the 1959 revolution. Oil imports have dropped from 13 million to 6 million tons, and overall imports are down 79 percent, from $8.1 billion in 1989 to a forecast of $1.7 billion in 1993. Over 50% of all industrial activity has been suspended or curtailed and public transportation has been reduced to 70 per cent. Havana has had to shut down power; in July, 1993, a bad month, it was out 10 hours a day. Water and gas distribution have been paralyzed because of lack of oil. Construction stopped on a nuclear power plant, which was designed to solve the island’s energy dependency. During what Castro has called a "special period in times of peace," Cuba imported bicycles from China to replace the use of buses, whose mileage is down by two-thirds. Oxen are used in the fields instead of tractors.

This crisis has led to real suffering for the Cuban people. Up through 1992, each family received thirty eggs a month; in 1993, this ration was reduced to four. Meat is almost nonexistent, fruits and vegetables are scarce, and stores are barely able to keep up with the monthly supply of basic goods allocated to each citizen in their ration book. Water in Havana is on only 5 hours a day, and each person is allowed one-half bar of soap a month. Fifty thousand people contracted optical neuritis, an eye and nervous disease caused in part by malnutrition. The Havana office of UNICEF said 50% of children from 6 months to one year have anemia due to lack of vitamins. There is a lack of 229 drugs and basic supplies such as sutures, x-ray plates, and surgical gloves.

A Century of Imperialist Exploitation and Oppression

In the U.S., the failure of communism is blamed for the crisis in Cuba. One more example coming on the heels of the USSR and Eastern Europe! Politicians and the news media claim that salvation rests in a quick return to capitalism and a return to the fold of the Western world... trying to obscure the fact that what U.S. imperialism has done to the island is responsible for the sad situation in Cuba.

This responsibility goes back long before the 1959 revolution to the U.S. conquest of Cuba at the end of the last century. The U.S., under the terms of the Platt Amendment, forced the Cuban government to accept U.S. intervention in the country. U.S. corporations quickly came to dominate the sugar industry, nickel and all the more industrial parts of the economy. The country was plundered. The Cuban workers and peasants were exploited, adding to the profits of U.S. corporations. And Cuba was left an underdeveloped country, which it still is today. Maybe Castroism wasn’t able to get Cuba out of this situation. But Cuba’s unfortunate links with imperialism put Cuba in the situation.

Actually the U.S. is doubly responsible, having first plundered the country, then opposed the revolution which sought to stop the plunder. The U.S. opposed the Cuban revolution from the beginning in 1959. When Castro nationalized U.S. companies and offered full compensation, the U.S. refused to accept it. It imposed a strict trade embargo, which the Castro regime estimates has cost it at least $9 billion over the past 30 years. The U.S. sponsored many attempts to assassinate Castro, and the CIA trained and supported various exile groups in attempts to invade the island, both at the Bay of Pigs in 1961 and afterwards. For more than thirty years now, U.S. policy has been to punish Cuba for its independence and unwillingness to knuckle under. This is the same policy U.S. imperialism has had toward every country, from China to Viet Nam, which tried to take an independence stance. But to punish Cuba was a bigger priority because it was in the U.S.’s own backyard, only 90 miles off the shore of Florida.

The "Double Embargo"

It is certainly true that the immediate cause of the current Cuban crisis was the collapse of the Soviet Union and Eastern Europe, which had been Cuba’s main trading partners for several decades. Cuba’s sugar sales to the former Soviet Union were 2.5 billion dollars less than they were in 1989. There have been no more subsidies from the Soviet Union, which had paid from five to ten times the world market price for sugar and allowed Cuba to reexport oil to Eastern Europe at prices higher than it paid for it. Up to 10 per cent of the Cuban economy consisted of Soviet aid. By 1992, Cuba’s trade with the former Soviet Union and Eastern Europe had fallen to about 7 per cent of its previous value. Before, one ton of sugar was equal to six or seven tons of oil; now a ton brings in only 1.3 tons of oil. With reason, Castro calls the U.S. embargo and the collapse of trade with the former Soviet Union and Eastern Europe, the "double embargo". But if this shows anything at all, it is that it is not "communism" which has aggravated the difficulties of Cuba but... the end of this "communism".

U.S. imperialism’s only goal is to destroy the Cuban regime, regardless of how much this worsens the situation of the Cuban people, for whom the U.S. pretends to be concerned. The proof is that the U.S. decided to tighten the embargo still further, exactly at the moment Cuba was beset by other difficulties. Right before the November 1992 U.S. Presidential election, Congress passed the Torricelli Act, the so-called Cuban Democracy Act, that toughened the embargo. The act forbids foreign-based U.S. subsidiaries from trading with the island. This trade amounted to about 250 million dollars a year. The act also bars ships that trade with Cuba from entering U.S. ports for six months. Further, it makes the penalty for U.S. citizens who travel to Cuba without State Department permission a fine of up to $250,000 or ten years in prison.

The Clinton Administration followed Bush and the Republicans in giving its full support to the Torricelli Bill. Assistant Secretary of State for Inter-American Affairs Alexander Watson said on October 26, 1993, "I would like to turn to a misconception that has emerged from time to time in the press and elsewhere, and that is that the Clinton Administration intends to soften its policy towards the Cuban regime. This is false."

The whole U.S. political establishment is therefore responsible for the situation in Cuba. This includes the unions, headed by the AFL-CIO, which far from supporting the Cuban working class in its fight against the U.S. corporations and U.S. domination, have been among the most rabid supporters of the attacks on Cuba. In this battle, the AFL-CIO incites any and every prejudice among U.S. workers. For example, it announced that some Mexican textile companies might enter into joint ventures in Cuba and import some Cuban products into the U.S. through NAFTA.

"The Liberals: A Different Policy for the Same Goal"

Today Clinton, with the support of the majority of the U.S. politicians, seems determined to continue the old policy towards Cuba. But we have seen U.S. imperialism reverse intransigent stands before, even against what seemed to be big enemies—first China, and just recently Viet nam. Although today the vast majority speak in favor of continuing the pressure on Cuba, a few liberals, both within and outside the Clinton administration, are urging a change of course.

Donald Schulz, a Professor at the Strategic Studies Institute of the U.S. Army War College, and Eliana Cordoso and Ann Helwege, both professors in Massachusetts, recommend a different policy. They say that U.S. foreign policy is held hostage to the Cuban exiles, who are a small group in U.S. society. They argue that the current embargo against Cuba is self-defeating because Castro uses it to justify his regime; and that the consequences of the current policy could be damaging, not only to Cuba, but also to the U.S.

For example, they say that the deterioration of the situation in Cuba might lead to mass demonstrations which the Cuban army would repress. The Cuban exiles might start small invasions, and campaign energetically for the U.S. Army to intervene to stop a "bloodbath". The State Department is already preparing for this contingency. But according to Schulz, Cordoso and Helwege, a U.S. invasion might meet determined opposition on the part of the well-trained Cuban Army leading to a lot of U.S. casualties; and the invasion might fail to defeat Castro, and that would lower the prestige of the United States in Latin American. But even following a successful invasion, the U.S. would face new problems. They point out that the Cuban exiles are 95% white, while the Cuban population is 58% black. It’s indicative of who the exiles are that the Miami Cubans have gotten into many racist scrapes with that city’s black population. Many Cubans on the island fear they will lose their homes and social benefits if the exiles return. Finally, the liberals say that violence and economic collapse would lead to a massive flood of refugees into the United States.

It is why, starting from the examples of the developments in Eastern Europe, they propose to replace the embargo and blockade, holding out the possibility to Cuba of a relationship with the West, with the final perspective of integration into the West. They maintain that to take down the barriers and let Cuba approach the United States would be a more effective way to accomplish the objective of getting rid of a regime inimical to imperialism.

To support their views, those liberals today find not only arguments, but also some allies, and first of all from among the pro-U.S. Cuban opposition to Castro, which once was considered totally right-wing—proponents of overthrowing Castro by force. Now there seems to be a minority which holds a different view.

Among the Cuban exiles in the United States themselves, there are moderates, based on the Yucas—Young, Upwardly Mobile Cuban-Americans, who are often liberal. Twenty-three percent of Cuban Americans describe themselves as liberal or very liberal in opinion polls. There is a mass base for those Cuban American moderates, like the Cuban Committee for Democracy, who are against the embargo and want to stop treating Castro as an enemy to be overthrown. They see this as the only way to push Cuba towards a multi-party system and move it towards capitalism.

Inside Cuba itself, there are small dissident groups who support a dialogue between the U.S. and Cuba, and a peaceful change in their relations. Elizardo Sanchez, who spent tens years in prison, is the leader of the Democratic Socialist Current in Cuba. Other prominent members include Vladimiro Roca—son of the founder of the old Communist Party, Blas Roca—and retired Colonel Alvaro Prendes, a military hero of the Cuban Revolution. They call for multi-party elections and democratic rights in Cuba, along with a mixed economy. They say they are for maintaining the health, child care and educational gains of the 1959 revolution. And they oppose the U.S. blockade. They think Cuba can pursue a course like that of Czechoslovakia or Poland, aiming at a multi-party bourgeois democracy.

Most importantly, there are signs today that some pillars of the regime are ready to move towards the West.

These signs come from the same sectors that in Eastern Europe and the Soviet Union were most interested in a change in their regimes—factory managers, bureaucrats and academics. Officials, technicians and physicians have cars or access to state cars. They have access to luxury restaurants, don’t have to wait in long lines, and get better and unrationed food. They have access to vacation resorts, their housing is better, they can go abroad, serve on diplomatic missions and be invited to diplomatic receptions. They get extra funds in foreign exchange. Many accumulated small fortunes and want to be able to employ their wealth and openly enjoy their privileges. In December 1991, then Politburo member Carlos Aldana attacked the "soft parts" of Cuban society, the "segment of our middle sectors", who he said had come under the influence of perestroika. He said it was, "an extremely difficult ideological moment ... at the level of most of the leading circles of our country." Obviously some in the Cuban "leading circles" were looking for a way to make peace with the capitalist world.

Looking for a Way Out

According to many declarations and statements of Castro himself or other Cuban leaders, it seems that the Cuban regime is holding fast to its old ways and rejecting the changes that led to the downfall of the Eastern European regimes. But a closer look shows that what is going on in Cuba today is similar to what happened in those countries.

Perhaps the changes in Cuba are tiny by comparison, but they are real nevertheless. 100 Sociedad Anónima companies have been set up recently in Cuba. This is the term used for a corporation in Spanish speaking countries. These SA companies are owned by "private Cuban shareholders". It is not clear if government officials or Army officers are using their own money or capital coming from different state institutions. But the Army has had ties with the market for a long time. Since the 1970s, Raul Castro, Fidel’s brother and head of the Army, has been known for his pro-market orientation. In a period of falling governmental income, the Army has gotten involved in various businesses of its own in order to support its operations and pay leading personnel.

In any case, the Cuban regime, in looking for a way out of the crisis stemming from the "double embargo," has been talking about developing a market economy. Castro told U.S. Senator Larry Pressler that Cuba was "socialism with joint ventures." Cuban Foreign Minister Roberto Robaina said, "We are now on track with our insertion into the world economy." Cuba has accepted the eventual introduction of a convertible currency for all transactions. Market logic prevails in transactions with the outside world. Hospitals attract health tourists, and academic centers promote dollar-earning conferences and visits. Octavio Castilla, the vice-president of the State Economic Collaboration Committee, said Cuba is interested in swapping its 6 billion dollar foreign debt to Western commercial banks for equity in Cuban industry. (This kind of deal was made recently by some of the big debtor countries in Latin America.) Castilla said Cuba is thinking of organizing a stock exchange to facilitate foreign investment. The Cuban government seems willing to sell off parts of the economy as a way out of the current crisis.

Cuba has a relatively well-educated work force which is paid some of the lowest wages in the world. Chilean businessman Cristián Morán took over a Cuban shoe factory. He says he pays the workers only $7 per month. The government allows profits and managers’ salaries to be sent out of the country for ten years without taxes being paid on them. This is one of the most generous situations in the world. The regime has also accepted joint ventures, for example in shipyards and cosmetics, that resulted in the dismissal of a good number of workers.

And then there is tourism. According to Castro, "If something plays a strategic role in getting us out of the special period, it is tourism." Spanish capitalists have been the most involved in revitalizing old hotels and building new ones. But, for every dollar a foreign tourist spends, Cuba has to buy, according to estimates of Cuban economists, 38 cents of foreign goods to outfit the tourist areas. But Cuba needs foreign currency too desperately to refuse to open the door to an industry and to foreign investments which increase the development of a private sector.

Late in 1993 the regime legalized holdings in dollars, which can be obtained from the tourist industry or from relatives in exile, who are allowed to send back $900 a year. Osvaldo Martinez, director of Cuba’s Center for Investigations on the World Economy, gave the reason: "Realistic exchange rates are necessary to stimulate tourism, capital investment, and foreign trade." Already some 10 per cent of all transactions for goods and services on the island are being conducted with the dollar. This leads to increasing inequality, since not everyone has access to dollars. At present, the average Cuban worker makes about 200 pesos per month, the equivalent of about $3 in the black market exchange. Someone with a relative in Miami who receives $300 every four months gets 100 times the monthly wage of a worker. With rationing, a large black market grew up, providing a wide range of goods, including soap, shampoo, meat, eggs, beer and rum. And generally speaking, only the newly legalized dollar is accepted as a means of payment by the black market. According to official estimates, up to 60 per cent of the produce on the black market is stolen from government stores. Theft and speculation lower the amount of rationed goods for the poorest people who don’t have dollars. Meanwhile others make big profits. And this growing illegal economy provides no job security or protective legislation.

The policy of the regime towards tourism and the dollarization of the economy have led to changes in Cuban society. There has grown up what Cubans call "tourism apartheid," that is, foreigners have access to special stores and beaches where Cubans are kept out. Prostitution has spread, as young women and men try to get dollars to buy goods that they’d have no other access to. Those with dollars can buy what they want, and those without are increasingly miserable. Society is becoming more stratified, the population more demoralized, and this facilitates the move towards integration in the world capitalist economy.

A Chinese Road?

The Castro regime has paid a lot of attention to China, and has openly discussed the question of a Chinese option. We can see why. While in Eastern Europe, the move towards the West was associated with a change in the regime, in China the same regime, which had been depicted as an intolerable Communist dictatorship, continues its political control, while imperialism invests more and more in the country with the blessing of the U.S. government.

Of course between China and Cuba there are differences which make it more difficult for Cuba to take the same road. First, there is the question of size, with China having 1.2 billion people and Cuba only 11 million. Their relative weight in the world is immensely different. The U.S. can still dream of invading Cuba, even though the fight would be difficult, but to think of invading China, at least in the present, is totally out of the question. Moreover, China can rely on Chinese abroad in Hong Kong, Singapore and Taiwan to bring in capital and expertise, while the Cuban regime has faced so far only unremitting opposition from its exiles. The big imperialist companies feel relatively comfortable with the prospects of political stability in China, while the U.S. embargo keeps the vast majority of them out of Cuba. Last, but not least, Cuba has the enormous disadvantage of being close to the United States, setting an example of defiance in the U.S.’s own backyard.

But the fact that the U.S. has accepted China despite Tien An-min Square, and Viet Nam despite the war, lets Castro hope... if he holds on. And it’s what he has done for 34 years, despite all the efforts of the U.S. It will be more difficult for U.S. imperialism to decide to reach an accommodation with Cuba than it did with China, but it’s not completely impossible.

Of course in the middle of the current test of forces between the U.S. and Cuba, nobody can predict the future. The current crisis may well deepen and the regime could finally collapse under blows coming from the U.S. and its allies inside and outside Cuba. Or Castro could resign and a compromise be struck, at least with some elements of the regime: or part of the regime, the Army, for example, might be tempted to seek a coalition with the opposition and move towards an accommodation with U.S. imperialism. In March 1993, Castro said it would be possible to negotiate his departure from power in return for the end of the U.S. embargo. Perhaps it was just rhetoric, but the full interview was broadcast on Cuban TV, and it can’t be ruled out.

But—with or without Castro—if the imperialist companies move back into Cuba and U.S. domination is reimposed over the island, this would only lead to more exploitation and suffering for the Cuban workers and peasants. The last 34 years have not been easy, but at least the Cuban people had gotten U.S. imperialism off their backs, even though the U.S. continued to dominate the world and pressure them.

Because Cuba set a "bad example", the U.S. has been unwilling to forgive Castro and his regime so far, even though the world has entered a new period. Cuba is the last state of the former Soviet camp with which the U.S. wants to make peace... just because for so long, the U.S. was afraid it would have to pay too big a cost to make war.