Observations From an Unofficial Visit to Cuba

Mark W. Erwin (Ambassador to Mauritius, Seychelles and Comoros, 1999-2001)

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In 2012, the Council of American Ambassadors arranged an unofficial visit to Cuba for twenty-nine retired US Ambassadors, as part of an effort to continue to improve relations with our neighbor to the South. The following are some observations from the trip.

After the collapse of the Soviet Union in 1991, Cuba entered into a major economic depression from which they have never recovered.  The average per capita income in Cuba is currently the equivalent of approximately $25 US dollars per month. State salaries are failing to meet personal needs under the state rationing system. The variety and quantity of available rationed goods has declined. Education and health care are free but there is no economic growth and few jobs. Food is subsidized and rationed. The sale of computer equipment is strictly regulated. Internet access is controlled, and e-mail is closely monitored. Cuba’s leadership is working hard to avoid a “Cuban Spring” uprising of its people.

The Cuban government has been slowly adapting to a world without major sponsorship from a world power in several ways.

In order to make up for the loss of support from the USSR, Cuba has been exchanging doctors and teachers in return for up to 80,000 barrels of oil per day from Venezuela.

Foreign investment in the Cuba has increased steadily. This has been made possible due to constitutional changes to Cuba’s socialist command economy to allow for the recognition of foreign held capital. Just offshore, China is drilling exploratory oil wells in a joint venture with Cuban Oil. The results may be a game changer for the Cuba we know today. In addition, Brazil has entered into a joint venture with Cuba to rebuild the ancient sugar mill and restart the dormant sugar industry. The sugar will be used to create ethanol.

Housing is government owned for the most part and extremely cheap to rent at five or ten dollars per month. The housing stock is generally in poor condition. Occupants have no pride of ownership and the government does not provide maintenance or repairs. Building supplies are almost completely unavailable. The government has just recently agreed to permit citizens to own up to two houses per family. This will unleash hidden wealth for the economy and have a huge impact as Cuba moves toward a more open economy.

Since the revolution, the people of Cuba have not been allowed to buy or sell cars to each other. If you were lucky enough to own a car when Castro took over in 1959, you could either keep it or pass it on to a family member.  There are thousands of 1950s American cars on the island. A new policy permits the individual purchase and sale of cars for the first time in fifty years. This will create individual wealth through a limited free enterprise system.

Since the revolution, farmers were told what and how much to produce by the government, which provided the seed and took the crops. Farmers were not allowed to profit from their labor so as a consequence they only produced the allotment required. The government now permits farmers to sell any surplus food they can produce.

The government recently lifted the restrictions on private business ownership. Today, small businesses are cropping up and there are some great restaurants and paladars in Havana.

Cuba is by necessity, moving toward an economic and governance model similar to the command controlled, market based system operating in China. The changes taking place in Cuba signal a great opportunity for America. If we are not willing to loosen our grip on the past, we will be inviting other nations, less like us, to have a stronghold just ninety miles off our shore. Hopefully our leadership will take the necessary steps to move toward a new and closer relationship.

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