Transformation Index BTI 2012: Regional Findings West and Central Africa

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Achieving the highest possible score in 13 out of 18 assessment areas, the island nation contrasts markedly with the authoritarian development model being applied on the Chinese mainland ibid, p. The Index shows that the quality of democracy in two important reference regions for Cuba—Eastern Europe and Latin America—has worsened considerably.

Progress at a snail’s pace

Fifteen of 38 states in these two regions exhibit a decline in the quality of democratic elections, and there are increasing restrictions on independent media. Agricultural Policies The opening up of agriculture to more private initiative has been seen as crucial, for several reasons. First, there is an acute shortage of food products in a country with vast potential for agricultural self-sufficiency and export, making food imports one of the heaviest burdens on the economy 1, million USD in This situation is simply unsustainable.

And second, there is an almost unanimous consensus that peasants and farmers will be far more efficient producers if they get more autonomy and better access to the means of production and to the market. The needed structural changes in agriculture include property or user rights, access to production implements and credit, transport, and, not least, freedom to sell the products on an open market—wholesale or directly to consumers. Even the possibility to enter into industrial processing of food products would give the peasants an important extra incentive.

We are therefore speaking about a dramatic shift from state control to market conditions, a shift that will also unavoidably have repercussions on the general balance between plan and market in the economy. We can also assume that such shift will also be politically very important. There is no doubt that a very significant shift towards more non-state production has taken place over the last years. Adding together private property and cooperatives where land is worked individually the socalled credit and service cooperatives—CCSs , their share of land holdings almost doubled from This change is partly explained by fall in the share of state holdings state farms, from What is particularly striking here is that CCSs and private property, at a time when they represented Some important steps have been taken towards more autonomy for agricultural producers.

But the evolution of policies has not been very clear. In the cited paper by Nova, he establishes the following five criteria for a more independent and effective farmer:. Cuba is still far away from meeting these market conditions in agriculture, and the latest statistical information confirms that the modest agricultural reforms have failed to boost production. The most important increase in non-state agricultural holdings takes place through lease-arrangements, the so-called usufructo, of state or semi-state land lying idle.

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Since this was legalized through a Decreto- Ley passed in , one million hectares of land have been distributed among , producers in this way. Until October , conditions imposed on those who gained access to land through this mechanism probably explain why this measure has had so limited impact on production output in addition to the general weaknesses mentioned above : the duration of the leasing contracts limited to ten years , the lack of access to pass the lease from one generation to the next, and the prohibition on building houses on the property.

New rules which will go into effect at the end of December partly meet the criticism by going a considerable way to follow the example of China and to stimulate this form of land tenure: private farmers will now be allowed to lease up to 67 hectares up from 40 , they will be allowed to build homes on the land, and lease rights may now be passed on from farmer to heir. Another complaint, about the limited length of the lease only 10 years opposed to 50 years in Vietnam and China has not been met, but leases may be renewed.

Production goods and implements are being sold and bought on the black market; food products are being increasingly sold outside of official state and other legal channels, e. But foot-dragging is dominating the official response, stopping peasants and farmers from really leaping wholeheartedly into a qualitatively different production mode. It is difficult to see any other reason for this political hesitance than a worry about the emergence of a too autonomous individual peasantry. One of the controversial issues about agriculture and cooperative policies is about access to so-called cooperatives of second degree, which would increase the economic and political strength and thereby also the potential political autonomy of the members.

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That has so far not been allowed. Generally, the Government seems to be very reluctant to allow more independent and autonomous forms of organization among peasants and farmers, still depending on a very centralized and strongly Party-loyal ANAP National Association of Small Farmers. Its purposes and objectives are to represent the interests of the communist party and the government in power. The question is whether the survival issue of enhanced food production will oblige the opening up of family agriculture with associated entrepreneurial functions.

The same hesitation described above regarding the opening for non-state agricultural producers, can be seen when it comes to small entrepreneurs and smallmedium enterprise. There is also a similar overwhelming demand for dramatic change: the state sector simply cannot afford to keep its present workforce, productivity is dismal, Cuba has a tremendous fiscal crisis, and alternative employment is very difficult to find. When the official labor reduction campaign was launched in late , the expressed objective was to lay off half a million employees during a few months.

The official plan was to offer those to be laid off to go into self-employment cuentapropistas or to get land leased and start agricultural production. It was hard to believe that a significant share of mostly urban and relatively well-educated dwellers would be willing to move back to the countryside. As far as urban self-employment is concerned there were many restrictions, both in terms of what services were legal productive activities were only exceptionally legal , heavy and normally flat tax burdens, no wholesale market to buy raw materials and implements, red tape, corruption etc.

There seems to be an endless innovation of measures to make life difficult for people who try to establish businesses, e. The self-employed, e. The basic problem for productive employment generation is clearly that it is politically unacceptable to let private entrepreneurs develop their businesses in a profitable way.

The large majority of legalized businesses, be it sidewalk cafeterias, carpentry, plumbing and other crafts, minor repair, etc. The legal maximum number of employees that can be hired is five. These small businesses are really changing the street life in Cuban cities. And there are businesses that do employ a certain number of people—cases of up to 40 employees have been cited. Private restaurants paladares now have a limit of 50 chairs, which of course means that a considerable workforce is required.

It is quite conspicuous that cuentapropismo is not allowed among academic professions. In this way, Cuba is blocking its highly educated population, its brain capital, from seeking more decent income opportunities than what they are presently offered by the State. The only partial exception may be a small mostly informal private market in the education sector. In an evident effort to stimulate non-state enterprises without nurturing private capitalism, there are signs that more opportunities will be offered to cooperatives, even outside agriculture.

Some of these will be converted state-run enterprises, and these co-ops will be given preference over private single-owner businesses. A budget support of million USD will also be set aside in order to stimulate this sector. A democratic cooperative movement in Cuba could be a very important building stone in a development towards more general liberal democracy in the country. It is difficult to observe signs in that direction so far. The pace of people receiving licenses for self-employment has apparently exploded over the last year. At this time October , the number of licenses granted is ,, an increase of , since the decree was issued.

What we see in practice is that the heavy restrictions on private business, in a situation where demand is booming, lead to the emergence of non-legal business practices. A typical case is a person I met in Havana who had accumulated a total of ten taxi licenses and had people working for him, or a construction entrepreneur who had been living for some years in Mexico and came back to set up a building rehabilitation business with a significant number of workers very much needed in most Cuban cities and towns, particularly after the opening up of a real estate market.

Such a class, unfortunately, is not yet politically accepted and even less promoted in Cuba. But a recent survey-based analysis shows that restrictions from both the U. The findings show that remittances continue to play an important role in the economic survival of Cubans, with money coming from the U. We find that an important proportion of recipients want to own a business and some already have established one.

The businesses that remittance recipients have established or aspire to establish are geared toward the service sector and led by micro-enterprises aimed at achieving self-subsistence rather than wealth generation. The legalization of property trade is probably already having important impacts: on the emergence of an investment capital market, on the expansion of domestic demand, on the creation of new entrepreneurial incentives risks and benefits. This may be an opportunity, but it also contains serious risks:. The central challenge for the government now is to create a system of contracts and institutions to tap this potential increase in productivity, while avoiding predatory and corrupt practices.

A corruption boom is a permanent threat to the transition to a mixed economy since the current Cuban power structure is filled with rent seeking opportunities and lacks supervisory capacity and transparency. Another economic reform with potential political impact is the launching of a credit system, but so far it has been limited to non-convertible currency and it has not been very easy to access for small businesses.

Most of the credit continues to go to state enterprises. One of the obvious political motives behind all these restrictions on private business is the worry that more independent-minded social structures will emerge, and that the Communist Party thus will lose political and social hegemony. It was interesting to see how the organizers of the May Day parade in Havana in made efforts to mobilize a section of cuentapropista marchers.

If business initiatives as such are being obstructed, this is even much more the case with any effort to organize independent unions or interest groups for the new economic actors. But this has also happened in China—you have capitalists joining the Communist Party and becoming a part of it. He could have added that the same pattern is seen in Vietnam.

Whether a similar trend will appear in Cuba is still impossible to predict—simply because we cannot yet speak about a capitalist class in Cuba. But it will be an important aspect to watch carefully. A very likely scenario—also when comparing to the rise of neo-capitalism in China and Vietnam—is that Diaspora investments could play an important role in kick-starting a market economy in Cuba.

There are increasingly strong signs that rich Cuban- Americans are getting ready to invest in Cuba, but many of them are concerned that also Cuban nationals be allowed to take part in common enterprise. One of the most vocal advocates of this vision is Carlos Saladrigas, an influential Cuban-American investor with strong links to the Catholic Church in Cuba:. The Cuban entrepreneur in exile has a lot to contribute in future Cuba. We are part of that enormous human capital of the Fatherland.

I know almost all big entrepreneurs in Miami […], I know well the interest they have in contributing their talent and their treasure to help a prospering and progressing Cuba… We also believe in the need to create a Creole, Cuban capital. We are worried about a Cuba where the capital once again becomes mostly foreign. After so many years struggling for sovereignty, it would be ironic to return to a Cuba dominated by foreign capital.

But so far, this window of opportunity does not seem to provoke much interest in Cuban power circles.

Transformation Index BTI - Understanding Transformation (with subtitles)

Samuel Farber leaves no doubt as to what he predicts:. A more likely scenario is that the heads of the Cuban army will welcome the investments of the Cuban- American capitalists with the clear understanding that the army will politically run the show. Of course, over the longer term, these two forces would tend to merge with each other. One way to try to understand the direction of political changes going on in Cuba in the wake of economic reforms is—as we have seen in other transition processes—to watch different key actor groups and their changing behavior.

The first group to watch would obviously be the new generation of state and party leaders. Are there identifiable tendencies, factions, ideological and political differences, or even more: is there a power struggle going on between such factions, preparing for the post-Castro era? The answer is simply that practically no such signs are visible either to external observers or even to party members and high-level officials outside of the absolute power elite Politburo and Central Committee.

Cuban top leaders are extremely tight-lipped and they maintain the appearance of absolute and monolithic unity, even in a situation where almost every aspect of Cuban society is under critical consideration. While there is a certain intellectual debate about socialist alternatives see later , people with leading positions in the party and state institutions hardly express any opinions or preferences.

But even if this were the case, one is left to wonder whether the new generation of leaders who very soon will have to take over the reins from the revolution generation now in their 80s, really have any strategic vision about the way ahead for this country. A second important group of actors to watch very carefully is the military, and particularly heads of the military corporations. Six out of 14 members of the Politburo are high military officers or have a militarytechnocratic background, adding to the three remaining historical leaders who also have military ranks meaning that two thirds of the Politburo are military men.

But even more strategically important may be the dominant role played by military corporations in the key areas of the Cuban economy, especially the most dynamic parts of it and those linked to foreign investments. There are two leading military conglomerates:. Leaders of these and other military corporations are clearly candidates to play a dominant economic as well as political role in post-Castro Cuba. What is the basis of this resistance? Is it simply foot-dragging based on fear for change?

Is it a consequence of the myriad of partly contradictory laws and regulations where the best protection for a bureaucrat afraid of committing errors is to put up a lot of red tape? Or is it more ideologically inspired, perhaps paying allegiance to the most prominent enemy of the market economy, Fidel Castro himself? While neo-Fidelismo is going to be an important political current resisting the neoliberal trend in Cuban politics during a post-Communist transition, it will do so in the only way it knows how: in a bureaucratic, authoritarian and paternalist manner unable to tap the democratic roots of the popular resistance to capitalist neo-liberalism.

Outside the party and state apparatus, there are many actors whose importance we are only beginning to see:. Some theoretical discussions are going on among a reduced group of intellectuals in magazines such as Temas, Espacio Laical and Palabra Nueva the first linked to the Ministry of Culture, the last two to the Catholic Church , also reflected in letters to the three Cuban dailies, and in some websites such as www. No liberal democratic alternative with promotion of personal freedoms is represented in these approaches, but they are to a certain extent present in the debates taking place within the Catholic magazines.

In this latter zone, we already find dozens of dissenter groups, which generally attract much more attention internationally than among Cubans, partly because they have very limited means to communicate within Cuba. The best known among these—who are all considered by the Cuban Government as pawns of the U. Probably much more important than these groups are the bloggers and other actors in new social media, and the independent journalists.

Although Cuba is among the countries in the world with most restrictions against the internet,41 the government and the security police find it very hard to stop their activities. It is difficult to judge how far they reach inside the Cuban society, but they probably have a significant audience among young people, mostly academics:.

Thanks to the new technologies for digital reproduction [in Cuba the memory sticks are clearly the most used tool in the absence of general internet access—comment added by the author] [civil society actors] have managed to articulate debate among certain public spheres. Via electronic mail and Internet, thousands of citizens, principally in the cities, have had access to political proposals and debates on the national reality, at the margin of the official circuits for the circulation of ideas.

Admittedly, the heavy internet restrictions in Cuba represent an effective brake on the proliferation of new social media, compared to almost any other country in the world. The security services have evidently decided to do their utmost to avoid a repetition of events like the Arab Spring where the social media played a crucial role.

Also, according to university professors, political apathy and a complete lack of ideological knowledge and debate seem to dominate among Cuban university students. One of the few arenas where young people can express and exchange frustrations and protest publicly is through music. The subcultures of hip-hop, rap and particularly Raggaeton are attracting tremendous interest among Cuban youth, and the texts are often extremely critical and directly confrontational, condemning and insulting about the Cuban system and its leaders, while also cheering capitalist and consumerism values. This subculture evidently represents a complicated challenge, but is generally tolerated although records are mostly produced and circulated unofficially bicycle taxis being one of the sales outlets in Havana, for instance.

The big question is whether this culture may lead young people into protest, social mobilization of some kind; whether it is a safety valve or a source of potential political mobilization. It is interesting to note that even the Communist Youth League UJC tries to attract people by organizing Raggaeton events, in a tough balancing act between staying in touch with youth trends and inspiring anti-regime sentiments. It is difficult to forecast how much tolerance there would be if the quite harmless protest and dissent that exists now turns into a more threatening confrontation, which quite likely could occur as more pluralist social structures and socio-economic differentiation emerge and social media become more generally available.

If we use China as an example, on average there are reportedly strikes, riots and confrontations with the police every day. That would be a really tough challenge to handle, and there would be an increasing dilemma between losing the political control and take very tough security measures which might risk propelling the confrontation and international protest even more.

Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa Transformation Index BTI 2012: Regional Findings West and Central Africa
Transformation Index BTI 2012: Regional Findings West and Central Africa

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