Cuba’s two conundrums

Cuba’s new president, Miguel Diaz-Canel, has two problems to fix. First, the country’s increasingly youthful population demands the goods and services they know are available elsewhere. Second, Cuba has lost most of the international support system that propped up its socialist welfare state.

Cuban President Miguel Diaz-Canel and former President Raul Castro wave flags at a Workers’ Day rally
Cuban President Miguel Diaz-Canel (2L) will have to take his country down a more modern path, but the old guard like Raul Castro (2R) will put up resistance. © dpa

In a nutshell

  • Cuba’s young population wants better goods and services
  • The country has lost its international patrons
  • Opening up the economy could help solve both problems
  • Miguel Diaz-Canel will likely do so, but at a high political cost

At the end of April, Cuba’s parliament, the National Assembly of Popular Power (ANPP), elected Miguel Diaz-Canel president, to succeed Raul Castro. Although Raul remains first secretary of the country’s Communist Party (PCC) and de facto chief of the armed forces, much is being made of a generational shift in the country’s leadership. The shift is apparent even among the younger leaders, with Raul’s son, Alejandro, advancing to the chief of intelligence, responsible for internal security – now one of the army’s responsibilities.

Socialist ‘evolution’

The new president faces two conundrums which he must solve to keep himself in power and his country stable. The first regards the economy, which is stagnant and cannot come close to satisfying the needs of an increasingly young and internet-savvy population. Now that Cuba’s former patrons, the Soviet Union and Venezuela, no longer provide support, the country must attract foreign capital to revive economic growth.

Raul’s vision of this process was through joint ventures, and he put military officers in charge of industrial and service activities to attract foreign investment. He also made some moves to expand the private sector and give greater space to the self-employed. The result has been a slow-moving, heavily bureaucratized management structure that has given many potential investors pause. The evolution of the private sector has been stunted. The deepwater port at Mariel, highly touted just a few years ago, has been put on hold by the collapse of the giant Brazilian construction firm Odebrecht, which was going to build it.

It may seem curious to outsiders, but most Cubans, while not necessarily content with their one-party dictatorship, are willing to go along with the restrictions on expressing their opinions, provided the state-controlled economy can produce the goods and services they know are readily available in other parts of the world.

This presents the government with a dilemma: it has the leeway to run an authoritarian state so long as that state can produce, relatively soon, the goods and services the population thinks it deserves. The younger the age group, the stronger this drive for material satisfaction and the less value the revolution’s mystique holds.

President Diaz-Canel must decide how much to open the economy without losing control.

The difficulty facing President Diaz-Canel is deciding how much opening and change is necessary to stimulate the economy, without alienating his colleagues in the PCC and losing control over society.

Cuban analysts on the island refer to the hybrid economy and the changes the government is trying to make as the “evolution of Cuban Socialism.” A key element in this “evolution,” they suggest, is the generational shift in the new leadership. The “historic generation” – those old enough to have lived through the revolution – no longer dominates government institutions. The ANPP and the PCC are younger than they were before the recent elections. The ANPP, especially, has become more inclusive of women and the Afro-Cuban minority. Local elections, while not contested in the typical meaning of that word in a democratic polity, do offer opportunities for younger people and Afro-Cubans to become active in their own government.

These changes were designed to ease Cuba’s reentry into the hemispheric community and to prepare the way for the island to play a constructive role there. Cuba has been invited to rejoin the OAS, it attended the recent Summit of the Americas in Lima and it now has unilateral access to funds from multilateral development agencies such as the Andean Development Corporation – Development Bank of Latin America (CAF). But then, Donald Trump was elected president of the United States.

A young Cuban in tattered clothes stands next to a run-down building with the Cuban flag painted on it Cuba’s population
Cuba’s youth know there are better goods and services in other parts of the world, and are increasingly demanding them. © dpa

Lost leverage

The second conundrum facing President Diaz-Canel is that just when he thought Cuba would be welcomed back into the hemispheric community, Cuba lost its geopolitical leverage. The shift to the right in most of South America means that Cuba’s absence of democracy is more important outside the island than it was just five years ago. The so-called Bolivarian Alliance, created by late Venezuelan President Hugo Chavez, a strong protector of Cuba, has breathed its last. Today Venezuela has its own troubles, Nicaragua under the Ortega family looks as if it might come apart and Ecuador no longer supports Cuba.

To make things even harder, Mr. Diaz-Canel now faces a government in the United States whose Cuba policy (indeed its entire Latin America policy) is dominated by hardliners bent on regime change in Havana. Led by Senator Marco Rubio, this group, including National Security Advisor John Bolton and Secretary of State Mike Pompeo, is doing all it can to stop the normalization of relations.

For 50 years, Cuba won support in Latin America and from progressive groups in Europe by standing up to U.S. imperialism. That defiance served the regime as a powerful instrument to rally ordinary Cubans, too. However, using anti-imperialism to bolster popular support today would undermine the government’s reform push. So, while it is true that Cuban leaders have had more experience dealing with U.S. administrations like Mr. Trump’s than with those like Mr. Obama’s (who tried to be friendly), using U.S. animosity as a policy tool is less attractive to President Diaz-Canel than it was to Raul or Fidel Castro.

Havana has tried to play the old geopolitical card by turning to Beijing and Moscow, but the card no longer works.

Furthermore, changes in the hemisphere have robbed Cuba of its privileged role as anti-imperialist martyr. Havana has tried to play the old geopolitical card by turning to Beijing and Moscow, but the card no longer works. The Chinese want nothing to do with Cuban debt because of the dual-currency regime, and they are uncomfortable with the terms of the joint ventures proposed by the Cuban military entrepreneurs. The Russians have their own economic problems but have indicated they might provide some cheap oil if the Cubans would allow them to use the listening post they established during the Cold War. That would drive the Rubio-Bolton-Pompeo axis crazy and turn Cuba back into a Cold War pawn, precisely what the new government does not want.

How important China and Russia become in these calculations will depend more on the evolution of U.S.-Russia and U.S.-China relations than on anything the Cuban government might do. The same will be true of Cuban relations with the European Union. As President Trump alienates U.S. allies in Europe, those allies may be more willing to extend a hand to the new government in Havana.

In my view, the current global scenario will likely push President Diaz-Canel to speed up some of the economic reforms Raul was unwilling to force through. That will increase the leverage of the PCC and the internal intelligence community over the government. In other words, Mr. Diaz-Canel may have to weaken his government in the short run to strengthen it in the longer term.

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