As 2020 has come to a close, many countries anxiously await what the new year will bring. Cuba is no exception to this. On January 1, or as Cuban officials refer to the date, “Day Zero,” the country will embark on the long-overdue process of currency unification. While this last year has brought the island the COVID-19 pandemic, tightened U.S. sanctions, and an unprecedented protest movement, 2021 represents no sigh of relief for the average Cuban.
On December 18, I was fortunate enough to have a conversation with Ed Augustin, a journalist living in Havana who has had works published in The Guardian, The New York Times, Al Jazeera, and other outlets. He describes himself as a libertarian socialist who values the Cuban Revolution though he believes the country could be more democratic. We discussed many issues present in Cuba today and prophesized to some extent the possible changes that could come from the current crises.
Currency Unification, Economic Challenges and Changes
In 1993, Cuba made the decision to decriminalize the U.S. dollar in order to stabilize national finances during the Special Period. The Special Period refers to the years of economic crisis following the collapse of the USSR, then Cuba’s largest subsidiary and ally. By 2004, the Cuban government began distributing the Convertible Cuban Peso (CUC), which was to be used as a secondary currency to the lesser valued Cuban Peso (CUP). Officially, the CUC is tied to the dollar, which assists the government in conducting dollar-dominated international trade. However, its value varies depending on its use. There are at least six official exchange rates for the CUC and CUP, though Augustin says that number is informally nine. While intended to be a part-time alleviation for economic challenges incurred by the Helms-Burton Act (introduced in 1996 during the height of the Special Period by the U.S.), the government has wavered in their pledges to eliminate the CUC. This has resulted in difficulties balancing financials as the currencies have different exchange rates and values determined by economic transactions, making precise state accounting nearly impossible.
The Special Period continues to loom over the national psyche as a time of struggle and resistance. Though not as devastating, the 2020 economic crisis resulting from new sanctions, restrictions on remittances and COVID-19 is reminiscent of such difficult times. With relatively stagnant economic growth over the last decade, the Diaz-Canel Administration has been tasked with forcing the unification of the CUC and CUP, which is expected to cause inflation while decreasing the purchasing power of the population (PPP). If conducted successfully, the CUC will cease to exist by June 2021 and the CUP will be devalued to a fixed rate of .24:1 USD. This will expectedly result in the devaluation of state businesses, coinciding with a retreat from state-sponsored subsidization, which will likely increase export value and returns for the island. In turn, production costs and the monetary value of imported goods will also rise. It is important for the state to be proactive during this transition so as to cull any serious economic damages brought on by the change.
Augustin explained that both reformists and hardline revolutionaries agree that the currency unification should have been conducted years ago and that the protraction has placed Cuba in a precarious and uncertain position. This aversion to risk during stable times has resulted in the necessity of conducting these changes during relative turbulence, thus compounding economic vulnerability with social insecurities.
The Cuban government has promised to offset this reduction in PPP and expected triple-digit inflation with a five-fold increase in public sector wages and pensions, accounting for some 60% of the Cuban workforce. Still, many worry about their savings being devastated during the transition. In recognition of a potential “wage-price spiral”, which incurs when store owners unnecessarily increase the price of goods to match the increase in wages, Diaz-Canel has promised “severe sanctions” against such actors. This is in part, also because those workers operating within the private sector will not be afforded the same wage increases as they are employed in the non-state sector.
The necessity of the elimination of the CUC has been accelerated by the acceptance of a small private sector, as much of the industry revolves around tourism. A taxi-driver in Cuba can make an upward of 10-20 times the amount of money a surgeon makes due to their increased access to the CUC. This has created an issue of growing economic inequality, which the government must halt. In our conversation about the currency transition, Augustin mentioned other reforms taking place that further reshape the island’s economic foundation. Historically, Cuba has retained ownership of enterprise to the state. In the last decade, moderate reforms have taken place to open the economy on the micro-level and encourage the development of a small-scale private sector to encourage economic activity. Coming reforms include allowing foreign actors to hold more than 49% of an enterprise, and in some instances even 100%. Cuban farmers are also slowly being permitted to independently import and export goods, which was solely conducted by the state until recently.
“The leadership is not captured by capitalism,” Augustin said, “but there is a begrudging acceptance of the state of the Cuban project.” With an expected 8% reduction in GDP for 2020, Augustin explained that it is a necessary evil that is slowly being incorporated into daily Cuban life from the perspective of Cuban officials. As it stands, this is the only way Cuba can build the infrastructure for further foreign investment. This should not be understood as a welcoming of multinational corporations or vulture capitalism, but rather a controlled introduction of market reforms meant to stir economic activity during the worst financial crisis since the mid-1990’s.
COVID-19, Queues, Quality of Life
Cuba is in a state of respective dismay due to the economic complications related to COVID-19 as well as the public health crisis itself. Augustin made notice of the protracted queues that until recently were not a norm in Cuban society. He expanded on this point by explaining that the queues are not for vital necessities but basic goods. This difference is essential. Vital necessities, such as those found in state-subsidized bodegas (where Cubans receive modest monthly rations of rice, beans, cooking fuels, and more), hospitals, ventilators, health clinics and running water, these goods are present at relative demand for Cubans. What is not readily available are the commodities found in stores (where goods are purchased with the CUC and U.S. dollars), such as toothbrushes, soap, conditioners, chicken breasts, et cetera. These goods, already in short supply due to the 60 years of the embargo imposed by the U.S., are increasingly difficult to accrue for the nation’s populace.
Augustin sees that demand is much greater than that which the state can provide. Beyond queues, the result of this imbalance can be found in the growing presence of Resellers, who will arrive at the time of a store’s opening to purchase goods which they then proceed to sell at inflated prices on the street. This practice of individualized price-gouging is something that the government has attempted to crack down on, but the activity has popularized as a growing number of people recognize the benefits of paying more for a commodity rather than waiting in line for hours at a time. Similarly, a new social class of Cubans is developing as people are able to earn more money than the average state worker by participating in the practice of reselling.
Needless to say, the quality of life for the average Cuban has decreased due to the pandemic and the illegal U.S. blockade. While spirits were high after the swearing-in of President Miguel Diaz-Canel and the subsequent democratic construction of the 2019 Constitution, the new series of crises brought upon the nation has demonstrably harmed the lives of every Cuban. Alongside other changes, daily life is growingly uncertain and anxiety-ridden for the inhabitants of the island.
Movimiento San Isidro, Social Unrest, and Cuban Socialism
I reached out to Augustin after reading his article in The Guardian titled, “Havana’s artists find their voice is a call to defend creative freedom”. In his piece, Augustin details the extent to which activists within the “Movimiento San Isidro” (MSI) are under state surveillance after Cuban rapper Dennis Solis was arrested and sentenced to eight months in jail for insulting a police officer. The arrest provoked an alleged hunger strike by some artists in MSI, which took place at their headquarters in Havana, eventually culminating in the police entering the building, detaining the collective for breaking social distancing regulations and administering COVID-19 tests. The following day artists, activists, and sympathizers gathered at the Ministry of Culture in Havana to protest the arrest.
The encounter was live-streamed to Facebook on November 6 by Solis and took place in the corridor of a building (which Solis says is his home), where police were attempting to serve him a summons for an interview with state security officers. In the video, Solis can be heard declaring, “Trump 2020! That is my President,” as well as launching various homophobic slurs against government officials. It is important to recognize that property relations are less defined in Cuba, where the government retains general ownership of most housing. This is meant to ensure that every Cuban has access to a home, but opens questions about the right to privacy in situations such as this. Augustin also mentioned that “insulting a police officer” is against the law in Cuba. While human rights organizations have criticized the government in this regard, it is nonetheless something a sovereign nation has the right to do. This is not a defense of such arbitrary repression but a clarification of the events that transpired.
On November 27, the day after police stormed MSI headquarters, hundreds of protesters met at the Ministry of Culture and held an hours-long demonstration where they read poetry and sang the national anthem. While the event was sparked by the arrest of Solis, the movement has gained traction as a response to the repression of creative freedom and free speech. A group of activists were later invited into the Ministry to speak with Vice Minister Fernando Rojas. After five hours, government officials granted safe passage home to the protestors and a further commitment to dialogue.
However, negotiations have since stalled as the Ministry of Culture backpedaled on the agreement after receiving an email sent on December 3, which contained a list of demands by MSI and 27N (a front-group of MSI-affiliated protesters) to be met before negotiations are held. These demands included requests for safe passage to-and-from the meeting; the non-negotiability of 27N representatives; the presence of independent legal counsel; President Diaz-Canel’s presence at the meeting; the presence of independent press; and the issuing of a joint public statement once discussions are completed. In response, the government refused further talks while launching accusations that members of MSI are receiving funds from the U.S.
In Augustin’s The Guardian article, it is reported that video of the interrogation of Solis had been released in which he says a Cuban-American had offered him $200 to carry out political work. Augustin noted that of the two protestors he was able to get in contact with, each of them mentioned in some way being financed by actors in the U.S. This is not too dissimilar from Yudy Castro Morales’ report in Granma regarding a man who tried to set fire to a gas station with a molotov cocktail and a vandal who damaged the glass door of a Banco de Credito y Comercial. Both actions occurred in November, weeks following the U.S. election, with the motive being financial payment for propagande par le fiat of 200-500 CUC.
The government has refrained from dismissing the protest altogether, with state outlets calling some protestors patriots (revolutionaries) and others mercenaries (counter-revolutionaries) receiving support from Cuba’s Northern aggressor. There is evidence that U.S. Embassy Chargé d’Affaires Timothy Zúñiga-Brown acted as a chauffeur for protestors and was present on several occasions at MSI headquarters. Zúñiga-Brown’s predecessor, Mara Tekach, had also met with MSI members and offered her support to the group in the past.
On journalist Tracey Eaton’s blog Cuba Money Project, it is shown that since 2017, the Cuba “democracy promotion” industry has invested $16,569,889 in at least 54 human rights, civil society, independent media and artistic and cultural organizations. As an example, in 2017 Cuban Soul Foundation, Inc. was awarded $381,928 to support OMNI Zona Franca “for the organization of publiccultural/musical/art events and support of 6 recording studios in Cuba where independent artists and civic activists can freely express their art and opinions and their support for human rights“. OMNI’s website includes an essay by Zoya Kocur which refers to the group as occupying a space belonging to “a history of disruptive artistic interventions and alternative cultural movements in Revolutionary Cuba” which “often contests the status quo in an implied critique of the government and direct references to shortcomings”.
Thus, it is evident through this example that there is a political angle to those groups which are supported by U.S. finances. As an extension of capitalism’s ideological hegemony, the interests of the U.S. are not in supporting the human rights of the citizens of Cuba but rather the right of Capital to penetrate the socialist nation. A review of similar soft power operations taken on by the U.S. in Latin American and beyond can be found in William I. Robinson’s book Promoting Polyarchy.
Commentary and Conclusions
Despite the information he has collected through interviews regarding U.S. involvement, Augustin believes the Cuban government has fumbled in its disparaging of protesters. “Some of them may be on U.S. payroll, but that does not make them mercenaries… The government should hold a fair trial and let an independent judge make the decisions. With evidence, this case could be made. But where is the evidence?”
This point has been made by many who view the government’s response as a disinformation campaign aimed to disillusion supporters of the overall goals of the protests. “The [protestors’] complaints are real, not counter-revolutionary… Most people want more freedom of expression here, not an overthrow of the government,” Augustin says. Nonetheless, he agrees there is reason to be skeptical of the financial support given to the protests.
2021 represents a reckoning of the revolutionary Cuban project. Almost four years ago, I spent some time in Cuba, traveling to the middle of the island on a study abroad trip with Onondaga Community College. In my conversations, it was clear there was a generational divide of supporters of the government. Older people were more likely to call themselves Fidelistas and speak fondly of the government, having witnessed the country’s transition from a capitalist casino to a socialist society. Younger people were more likely to be disgruntled with the island’s static situation and the retreat of state-sponsored social securities. Regardless of age, there was a near-unanimous consensus that a change was needed. The election of Diaz-Canel represents the shifting political arrangements headed by the government, as his Administration has proceeded to carry out reforms first introduced by President Raul Castro. However, with the Trump Administration complicating the process of normalization between the U.S. and Cuba, there is great difficulty in remaining hopeful for a serious change on the island.
The most pressing tasks for the government in this new year will be negating the adverse effects of currency unification, retaining control of the social order while continuing to liberalize civil society and the normalization of relations with the incoming Biden Administration. If these projects are handled successfully, it can mean sincere advancements for the Cuban populace. If not, there is no telling what 2021 holds for the island. Still, we know the revolutionary peoples of Cuba will preserve, just as they have since 1959.
For use in the U.S., it is necessary to continue to agitate for dialogue with the nation and the end of the embargo imposed against Cuba. Such hostilities only damage the living standards of the average Cuban and suppress their ‘human rights’. Solidarity with socialist nations like Cuba means standing up against the imperialist nation that is the U.S. and demanding recognition of Cuba’s right to sovereignty while also recognizing the validity of civil society’s complaints. A socialist government is an adaptive government that listens to its people’s needs and represents them at all costs. We in the imperial core must stand with the Cuban people, and the first step in this process is combating the murderous illegal blockade that has caused so much pain and suffering.
Canyon Ryan has been a member of the Socialist Party for several years and is active in his local chapter. He is also the Mid Atlantic Regional Coordinator and a member of the Socialist Party National Committee.