At 50, new life for Castro's Cuba?

January 1, 2009 marks 50 years since Fidel Castro, his brother Raul, Ernesto “Che” Guevara and a group of rebels took Havana in what they claimed was “a revolution for the people”.

The anniversary celebrations were sombre: Fidel Castro's declining health and the aftermath of three devastating hurricanes left few with reason to rejoice. The hurricanes are only the most recent tragedies, however. Fifty years of communism have systematically destroyed Cuba's livelihood.

When Fidel Castro's 26th of July Movement overthrew dictator Fulgencio Batista there were celebrations throughout Cuba. A small group of revolutionaries had defeated the national military and brought an end to Batista's tyrannical rule. Castro became prime minister of the revolutionary government in February 1959.

Within nine months, Castro passed 1,500 decrees, laws and edicts. He nationalised American-owned companies including petroleum and telephone services. Promising land to the rural poor, he created the Agrarian Reform Law, which gave government the power to confiscate and redistribute property holdings.

Although large-scale sugar cane and cattle farmers owned much of the agricultural land in 1959, some of the large farms, called latifundios, were being transformed to diversified agriculture and mixed farming. The 1946 National Agricultural Census states that 90% of farms were diversified. Together, these farms contributed 50% of the island's agricultural production.

Agrarian Reform Law reduced maximum land holdings to 400 hectares, and in 1963 a second land reform law further limited land holdings: with a cap of 67 hectares per person, the new law effectively eliminated middle class farmers.

These Agrarian Reform laws came at great cost. The Council for Mutual Economic Assistance (COMECON), an organisation of communist states, subsidised Cuba by purchasing exports (mostly sugar, tobacco, and citrus) at artificially high prices. The island now depended on imports of processed foods from Eastern Europe.

The government also dismantled private health care and education systems. Not coincidentally, government-released statistics showed improvements in life expectancy, infant mortality, and literacy. These statistics could not be substantiated by outside sources.

While instituting reforms, Castro eliminated political opposition. Early in the revolution cries of “Paredon!”, or “to the wall” were heard at political rallies (“to the wall” meaning the execution of opposition). Among those convicted of treason was Huber Matos, a political moderate and member of the 26th of July Movement. Castro grabbed more and more power: by the end of the first year, only nine out of twenty-one ministers of government remained.

In September 1960 Castro created neighbourhood committees to identify enemies of the revolution – precursors to the Committees for the Defence of the Revolution.

Castro said in 1987, “I love power, and I am the revolution.” Although Castro claimed that his revolution was for the people, he held absolute power.

Two years later, Castro was less jubilant. The collapse of the USSR, a valuable trading partner and source of $4 to $6 billion in subsidies annually, devastated the Cuban economy. Between 1989 and 1994, the economy declined by 40%. Castro instituted a “Special Period in a Time of Peace,” which included strict rationing, shortages, and required “voluntary” labour.

In poor health at age 81, Castro handed over power to his brother, Raul, in February 2008. It's unclear how much decision-making power Fidel Castro still holds.

Today Cuba's centrally planned economy is sputtering: there are chronic shortages of food, clothing, and every-day items. Economists estimate that 40% of the Cuban economy operates in the informal sector.

According to government statistics, 78% of the labour force is employed by the state. Independent sources estimate that the figure is over 90%.

Modest changes have occurred since Raul took office. The BBC reported in June 2008 that Cuba abandoned its system of equal pay for all. Under the old system doctors and farm labourers were paid the same, about US $20 per month.

Agricultural changes have also taken place. The government has started to accept applications from ordinary Cubans to lease superfluous state land. In addition, new policies allow Cuban farmers to sell directly to consumers rather than through government distribution centres.

Although Cuba's future is unknown, many are cautiously optimistic about further “freer” market reforms under Raul Castro. New US leadership may also help the people of Cuba. President-elect Barack Obama has said that he will talk directly with Raul Castro, which would be a significant departure from frigid US-Cuba relations.

This 50th anniversary should remind world governments -including South Africa's - of communism's failures and how such policies continue to impoverish millions around the world. In attempts to centrally plan an economy, government leaders give themselves absolute power. Nationalisation of private industry, redistribution and limits on private property, and expanded public services create an unsustainable economy.

SA cannot afford to emulate the failed policies of communist Cuba.

Author: Laura Grube, a graduate of Beloit College, is a Fulbright US Student Programme member who is studying and participating in Free Market Foundation projects. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the Foundation.

FMF Feature Article / 13 January 2009

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