Faced with the brutal imperialist offensive launched by Donald Trump against Cuba, the Díaz-Canel government responded by announcing a wide-ranging package of pro-market measures and adopting a policy that qualitatively deepens the process of capitalist restoration on the island. Far from appeasing the fury of Trump and Rubio or meeting the legitimate demands of a population that has made immense sacrifices, this policy only serves to undermine the foundations of resistance to imperialism, increase inequality, and further roll back the historic achievements of the Cuban revolution.
Just one week after its announcement by President Miguel Díaz-Canel on 18 June, the Cuban National Assembly approved a package of 176 measures grouped into 23 thematic areas, representing the most far-reaching structural change in the Cuban economy and society in recent history. Despite the official line that the changes aim to “do what is necessary to preserve what is essential”, once actually implemented, they will represent a significant step towards full-scale capitalist restoration.
The package of measures formalises the country’s full opening up to the market and big business, removing most of the restrictions that had remained in place even under previous reforms. The new economic policy extensively authorises the activities of large private companies and banks, as well as private agricultural and livestock operations; it transforms state-owned enterprises into joint-stock companies and paves the way for privatisations. In practice, the Cuban government’s new policy puts an end to the state monopoly on foreign trade and, once implemented, eliminates the foundations of a planned economy.
Whilst significantly decentralising and granting greater autonomy to local authorities in the management of economic activity, the new policy leaves the setting of prices and wages to the market, whilst also eliminating subsidies. This puts an end once and for all to the state’s responsibility for guaranteeing access to basic goods and services, and subjects the entire population to the logic of the market and the pursuit of profit. There is no way that this set of measures does not represent a deepening of social inequality in this country which, for decades, was the symbol of equality and solidarity.
It is not, therefore, a matter of further stimulating limited self-employment or the establishment of small and medium-sized enterprises, as was the case in previous reforms. It is now a matter of paving the way for large-scale national and foreign capital on the island with almost no restrictions. To attract this capital, every concession is deemed acceptable, including the removal of social and labour rights, the weakening of state regulation and the sacrifice of national sovereignty.
Whilst spokespeople for the Cuban regime deny that a full-scale capitalist restoration is under way, they continue to accelerate steps in that direction. The market has ceased to be a complement to the planned economy – as it was regarded in the reforms up to that point – and has instead become a fundamental pillar of the economy. In practice, and in a manner similar to what we see in countries such as China, the mention of ‘socialism’ serves merely to justify the retention of power in the hands of the Communist Party whilst the economic base of society is opened up to big business.
Pro-Capitalist Reforms Will Not Defend Cuba Against Imperialism
The idea that Cuba could replicate a Vietnamese or Chinese-style capitalist model (whilst retaining ‘socialist’ rhetoric), seen as successful examples, is nothing more than an illusion. The current international landscape and the specific reality of the island are very different from what happened in those cases, not to mention that the Chinese model of capitalism itself faces profound contradictions and is experiencing its worst crisis in many years.
Far from representing a way out of the current crisis in Cuba, the harsh pro-market measures adopted by the regime will only lead to more discontent, generate new contradictions and give big business and US imperialism and its allies greater scope to advance on the island.
Miguel Díaz-Canel and the Communist Party leadership at the helm of the Cuban state intend, through the measures adopted, to signal to imperialism that a regime change is not necessary for the interests of big capital to prevail in Cuba. However, the plan to transition to a market economy (even with supposedly ‘socialist’ rhetoric) kept under the strict control of the Communist Party bureaucracy may not be enough to satisfy Trump and US imperialism. Cuba remains at risk of external aggression beyond the energy blockade and the attacks currently underway.
Defending Cuba against imperialism does not mean defending the Cuban regime’s pro-capitalist policies. It does, however, mean rejecting capitalist restoration, prioritising the mobilisation of workers, relying on international solidarity and struggle, and putting forward an alternative of socialist economic planning under the democratic control of the workers – not of bureaucrats aspiring to become a new bourgeoisie.
The desire for change in Cuba is legitimate and just; profound changes are indeed necessary. But the question is in which direction these changes should go. The struggle cannot be reduced to limiting the pace and extent of concessions to the market and big capital. We must revive the revolutionary spirit that has mobilised the Cuban people on many occasions. The direction of change must be towards genuine workers’ and popular power and authentic socialism.
From Revolutionary Change to Pro-Capitalist Reforms
Unlike other Latin American revolutionary processes, which ended up falling by the wayside, the Cuban revolution of 1959 ultimately acquired a dynamic of breaking with capitalism and the bourgeois state, albeit without fully achieving socialism and workers’ democracy.
In the Cuban revolutionary process, the democratic, popular and anti-imperialist demands that drove the revolutionaries and broad sections of the population ended up transcending their own limits and taking on an anti-capitalist character as they came up against the aggressive reaction of imperialism and the structural barriers of a peripheral and dependent capitalism.
To put an end to autocracy and submission to imperialism, it was necessary to destroy the capitalist foundations of Cuban society, even if this was not exactly the original plan of the Sierra Maestra revolutionaries. The anti-capitalist tasks of the revolution, such as the expropriation of domestic and foreign capital and the establishment of a planned economy, proved indispensable for achieving national sovereignty and the most basic democratic and social rights.
This was also made possible within an international context characterised by the existence of workers’ states, albeit deformed or degenerated ones, in particular the Soviet Union. Furthermore, in addition to guerrilla action in rural areas, the mobilisation of the working class in the revolutionary process – albeit with its own specific characteristics and without the creation of workers’ organs of power as in Russia in 1917 – played an important role in the revolution’s anti-capitalist outcome.
The establishment of a planned economy in Cuba, despite lacking real workers’ democracy (a necessary prerequisite for a genuine socialist project), enabled the working class and the people to achieve countless historic gains. It also enabled the country, unlike many other examples, to withstand almost constant imperialist aggression.
The destruction of the foundations of the capitalist economy on the island and the resulting achievements in the areas of healthcare, education, social rights, etc., not only provided a base of support and authority for the regime led by Fidel Castro, but also transformed Cuba into a symbol and political reference point for all those fighting for justice, equality and against all forms of oppression.
At the same time, the absence of a genuine workers’ democracy and the constraints imposed by the bureaucracy entrenched within the Communist Party and the state – including its alignment with the Stalinist bureaucracy of the then Soviet Union – came to play an increasingly decisive role in shaping the course of post-capitalist Cuba, both internally and externally. Bureaucratisation, authoritarianism, corruption and the absence of the lifeblood of workers’ democracy – which is needed to make a planned economy function fully – all took their toll.
Under the economic, commercial and financial blockade imposed by US imperialism against the island since 1962, the Cuban economy became extremely dependent on the Soviet Union. With the collapse of Stalinism, the capitalist restoration across Eastern Europe and the end of the Soviet Union, the Cuban economy was plunged into a deep crisis. Having lost more than 80 per cent of its foreign trade and almost its entire oil supply, as well as external financing and previously guaranteed markets, the Cuban economy contracted by around 35 per cent between 1990 and 1993 – the worst years of the so-called ‘Special Period’, which lasted until the early 2000s.
Faced with this deep crisis, the Cuban regime, still under the leadership of Fidel Castro, opted to take measures such as legalising the use of the US dollar on the island, prioritising tourism and allowing private foreign investment in certain sectors (tourism, mining and oil). The result was a rise in social inequality within the context of a dual economy, where those with access to US dollars enjoyed a privileged position compared to the rest of the population.
It was in 1995, whilst the ‘Special Period’ was still underway, that GAESA (Grupo de Administración Empresarial S.A.) was formed, a conglomerate of companies across various sectors (tourism, hospitality, retail, telecommunications, logistics, ports, finance, remittances) which accounts for at least 40 per cent of the country’s economy. GAESA is controlled by the Cuban Armed Forces without any external oversight mechanisms and has come to concentrate enormous economic and political power in the hands of a key sector of the Cuban bureaucracy.
With Hugo Chávez’s rise to power in Venezuela, against a backdrop of growing mass struggles in Latin America, as well as a commodities boom on the world market, the external landscape changed significantly. Venezuela’s economic cooperation with Cuba, particularly with regard to oil, allowed the island to catch its breath once more. Against this backdrop, the momentum of pro-market reforms was curbed, relatively speaking.
Market Reforms Under Raúl Castro and the New Constitution
The situation began to change once again with Raúl Castro’s accession to the presidency from 2006/08. The Congress of the Cuban Communist Party (PCC), held in 2011, approved the so-called ‘Lineamientos’ (Economic and Social Guidelines of the Party and the Revolution), which were pro-market in nature, including the expansion of the private sector, incentives for foreign investment, greater autonomy for state-owned enterprises and a reduction in subsidies.
In this same context, shortly afterwards, in 2015–16, US imperialism under Obama, seeking to stimulate the process of capitalist restoration on the island, opted for a policy of easing the blockade and partially re-establishing relations with Cuba.
With Trump’s rise to power in the US in 2017, this process was reversed. The blockade was tightened, severely affecting tourism, remittances and foreign investment. The situation was also dramatically exacerbated by the deepening crisis in Venezuela, which affected oil supplies and the financing of economic activities on the island.
Miguel Díaz-Canel assumed the presidency of Cuba in 2018 following his nomination and endorsement by Raúl Castro, who remained a key figure in Cuban politics. The new government has furthered the policy of pro-market reforms. The new Constitution adopted in 2019 included private ownership of the means of production by Cubans or foreigners amongst the seven types of property permitted on the island, although this was regarded, according to the text, as playing a complementary role. Under the new Constitution, the State was required to promote, protect and provide guarantees for foreign investment in the country.
Whilst still making mention of ‘socialism’, the new constitutional text regards the market as an important part of economic coordination rather than a merely residual element. This brought the Cuban regime’s rhetoric closer to that used in countries such as China or Vietnam, and the ‘Chinese model’ became a point of reference for a significant section of the party and state leadership, even if that model was not explicitly espoused.
Within the Cuban state bureaucracy, there have always been debates and disputes over the pace and scope of the implementation of pro-market reforms. Many of the measures planned for years have encountered difficulties in implementation, either because part of the bureaucracy felt threatened, or because there was legitimate grassroots resistance – involving both young people and veterans – against the threat of a ‘Chinese-style’ capitalist restoration. Even so, the policy of pro-market reforms has been gaining ever more momentum.
Díaz-Canel – Reforms, Crisis and the Protests of 11 July 2021
A turning point in this process occurred from 2021 onwards, against a backdrop marked by continued imperialist aggression and the intensification of the blockade promoted by Trump and maintained by Joe Biden. The severe economic crisis in Venezuela also persisted, hampering oil supplies to Cuba. Alongside this, the island faced the terrible effects of the COVID-19 pandemic.
The human toll of the pandemic was mitigated by the revolution’s achievements in public health, such as the production of its own vaccines, but it was nonetheless severe. The pandemic had drastic economic consequences, with the near-collapse of tourism in the country and restrictions on Cuba’s exports of professional services, such as in the health sector, etc.
The drive for pro-market economic reforms was vigorously resumed by the Cuban regime in January 2021 with the so-called “Tarea Ordenamiento”. The dual currency system was abolished with the end of the so-called CUC (Cuban Convertible Peso, the currency pegged to the dollar and used in tourism, etc.), and efforts were made to implement reforms that had previously been proposed but not implemented. The exchange rate unification was partial in that the government retained the dollar-loaded debit cards for use by foreigners and families with relatives abroad – the so-called MLC (Freely Convertible Currency) – which continued discrimination against those without access to dollars.
With the devaluation of the exchange rate and the end of crucial subsidies, there was a surge in prices, a sharp rise in tariffs for electricity and other essential services, as well as for various food products. Increases in wages and pensions failed by a long way to keep pace with the hyperinflationary surge, provoking enormous popular discontent. Shortages of food, medicines and other products also worsened, as did power cuts.
It was against this backdrop of crisis, deteriorating living conditions, rising inequality, pro-capitalist reforms and the state’s continued repressive stance that the protests of 11 July 2021 erupted exactly five years ago.
The 11 July demonstrations began on the outskirts of Havana, in San Antonio de los Baños, and spread to several cities. The government itself was forced to acknowledge that there was legitimate discontent within society, but it essentially maintained its repressive apparatus against any popular demonstration that escaped the control of the state apparatus and the ruling party. Of the hundreds, or even more than a thousand, people detained during that episode, some remain in prison.
It is true that the pro-imperialist right wing strove to exploit these demonstrations, particularly in the period following 11 July. The regime was unable to respond to popular discontent or meet the people’s demands. Against this backdrop, and given the accumulated weariness within society, the right wing finds fertile ground to sow confusion in people’s minds and foster illusions in pro-market solutions. However, another significant factor is that the left-wing, socialist and revolutionary forces, which maintain a critical stance towards the Cuban regime, remain very weak, having also fallen victim to state repression and persecution.
A Socialist and Internationalist Solution Based on Workers’ Democracy
In early July, Cuba suffered another nationwide blackout, the third this year and the eighth in almost 24 months. In addition to the daily and routine power cuts, with the “total disconnection of the national electricity grid”, as the government describes it, the power cut affected the whole country simultaneously. The power cut lasted for 35 hours in Havana, whilst in other regions of the country it lasted around three days.
Alongside this, rubbish is piling up in the streets, medicines are unavailable, and there are shortages of food and basic goods. Protests of varying sizes continue to take place frequently on the streets of Havana and other regions, but without a clear direction or a defined plan.
The younger generations have never fully experienced the achievements of the 1959 revolution first-hand, whilst some of the older generations, for their part, feel weary and disillusioned with the direction the country is taking. The government is striving to convince the population that pro-market reforms are for real this time and that this is the way forward. In doing so, it is collaborating with the pro-capitalist and pro-imperialist right-wing opposition.
The only way to counter the attempts at manipulation of public consciousness promoted by imperialism is to guarantee the broadest possible democracy for workers, including the right to organise, to demonstrate and the possibility of fighting for an alternative plan to overcome the crisis – a plan that rejects the capitalist market-based “solution” that both the regime and imperialism are trying to force down the Cuban people’s throats.
That is why defending the Cuban revolution today does not mean defending the Cuban government, but rather building a left-wing, socialist, revolutionary and internationalist alternative.
