On Cuba's Economic Restructuring

While the Cuban government prepares to lay off 10 percent of its public sector workforce – some 500,000 individuals – analysts of the region are discussing what may be next for the island. In the Washington Post this morning, Wayne Smith, former chief of the US Interests Section in Havana and now senior fellow at the Center for International Policy, calls the recently announced changes “a major step forward,” but one which the government had little choice in making due to the failing state of its economy. Here’s the paper’s take on the country’s current economic woes:

“The island is suffering a brutal economy crisis in which its official gross national product has plummeted from 12 percent growth to 1 percent, as nickel prices, tourism and international investment all slump. The Cubans were so desperate that they froze the accounts of foreign investors on the island earlier this year. Independent economists say that without subsidies of Venezuelan oil from Hugo Chavez, the Cuban economy would flat-line.”

And the first steps toward a resolution, according to a government PowerPoint presentation, originally obtained by the AP: initial layoffs of the “least productive, least disciplined workers,” followed by others who perform “unnecessary jobs.” By March 2011 the government expects all 500,000 of its public sector job cuts to have been completed, with Cuban officials hoping the private sector can pick up the slack. The latter half of the proposed project is a really big deal, says the Lexington Institute’s Philip Peters. It’s a “breakthrough,” in the words of Peters, “because for the first time the government acknowledges that the private sector, the small-business operators, are not bit players but a strategic part of the Cuban economy.” [Currently some 823,000 Cubans work in the private sector, the majority in government-sanctioned cooperatives]. However, the Post suggests laid off workers may largely be on their own when it comes to looking for new work. While the government’s agenda includes promoting new cooperative enterprises, the restructuring project indicates no plans as of yet for “capital injections, small business loans, retraining or more opportunities for foreign investment.”

The Council on Foreign Relations’ Julia Sweig and the Atlantic’s Jeffrey Goldberg have more on the Cuban economy, speaking with Margaret Warner on last night’s PBS Newshour. The two were recently with Fidel Castro in Havana – meetings which have garnered significant attention because of the former Cuban leader’s words about a now non-functioning Cuban communist economic model. On this week’s announcements, here’s Sweig:

“This is about changing the relationship between the state and the individual, so that the government can grab rents and use taxes to fund entitlements. Kind of sounds familiar, but it's a deep change in the political culture.”

Meanwhile, on the US side of things, the Miami Herald suggests this morning that the long-anticipated extension of US travel rights to Cuba may not happen until after November’s mid-term elections. That according to staunchly pro-embargo Florida congresswoman, Ileana Ros-Lehtinen, who met with the Cuban affairs coordinator at the State Dept. this week. She says DOS indicated to her that “no policy decisions are ready to be announced,” but Ros-Lehtinen added “we know those changes are coming.” Various media outlets have reported that the White House had decided to ease restrictions on educational and cultural travel to Cuba shortly but no official announcements have yet been made by the Obama administration. In Congress, the Herald adds, “a bill that would lift all restrictions on U.S. travel to Cuba remained in limbo, with House Foreign Affairs Committee Chairman Howard Berman, D-Calif., telling reporters earlier this month that he's five short of the votes needed to send it to the full House.”

In other news today:

· The LA Times reports on more violence against journalists in Mexico. Two newspaper photographers from the Juarez-based Diario de Juarez were attacked by gunmen Thursday. One of the two was killed. The other remains in critical condition. According to the Times report, “several Mexican newspapers have stopped reporting on drug-gang violence after their journalists have been attacked. However, the Diario de Juarez, the city’s principal paper, has continued. Meanwhile, at a ranch in Tamaulipas a gunfight between the military and suspected traffickers appears to have left 22 dead. And in Nuevo Leon on Wednesday soldiers are reported to have killed 19 cartel gunmen.

· On Colombia, the Latin America News Dispatch has a great report on the Department of Administrative Security (DAS) and the “political warfare” it coordinated against government critics, particularly journalists, under the Uribe administration. The piece begins with the story of threats made against journalist Claudia Duque, mentioned here recently after the UK denied her an entry visa. The piece also recaps threats made against journalist Hollman Morris and others. LAND:

“It is possible that the agency’s criminal behavior is rooted in the actions of a few renegade administrators, such as Jorge Noguera, who approached their mission to snuff the guerrilla insurgency with excessive enthusiasm. But as the investigation continues, it appears that the executive may have played a greater role than it admits.”

· Also on Colombia, this week’s Economist examines Juan Manuel Santos’s proposal for agrarian reform – an initiative the magazine says would be nothing short of “revolutionary” if it succeeds in returning land to those have had it confiscated by drug traffickers and paramilitaries. The Economist:

“On September 7th Mr Santos’s administration published a bill to create special courts to oversee land restitution. It would also reverse the burden of proof, requiring owners to show they acquired land legally and without violence or threats. The aim is to restore 2m hectares to the dispossessed over the next four years.”

· The New York Times reports on new clashes over natural resources in Peru. One demonstrator opposing a new irrigation project was killed by security forces in the town of Espinar, Thursday – the latest conflict between the government’s devleopmentalist agenda and local environmental concerns.

· In Honduras, Wednesday demonstrations in the city of San Pedro Sula left at least one dead. According to the AP, the government suggested the clashes pitted pro and anti-government groups against each other. Protestors disagree, saying the police attacked without provocation.” More from Honduras Culture and Politics.

· The New York Times says Lula da Silva’s chief of staff, Ernice Guerra, has resigned under allegations she received kickbacks for various public works projects. Former chief of staff and presidential front-runner, Dilma Rouseff, however, seems unaffected by the ethics scandal thus far, and continues to pull away from her closest contender, José Serra.

· From BBC Mundo, news that former Guatemalan military man Gilberto Jordan has been sentenced to 10 years in prison by a US court for trying to mask his role in the massacre of some 251 Guatemalans at Dos Erres in 1982. Guatemala had asked that Jordan be extradited and tried in Guatemala.

· And finally, George W. Bush’s former UN ambassador, John Bolton, tried his hand at Latin American affairs this week with an opinion in the LA Times on Venezuela’s upcoming legislative elections. Bolton begins with this quite provocative (and evidence-free) eyebrow-raiser: “The stakes are especially high in light of evidence consistent with an emerging Venezuelan nuclear weapons program.”