An interesting and in-depth report from Tim Congdon on how Fidel Castro’s communism has left the Cuban people in misery and destitute.
Two Generations Lost to Communism
Old habits die hard. On April 29, Itar-Tass, the state-owned Russian news agency, issued a press release. Following talks between Russian foreign minister Sergei Lavrov and his Cuban counterpart, Bruno Rodriguez, Russia is keen to invest in Cuba. The two countries want to resolve tensions arising from a legacy of debt that has long plagued relations between them. In the 30 years before its break-up, the Soviet Union supplied Cuba with oil at beneath the world market price, and did not always demand full and immediate payment. Cuba sent the bulk of its sugar production to the Comecon countries in return, but the value of the sugar exported was much less than that of the oil imported. Over the years Cuba incurred a debt of about $35 billion.
Russia’s rulers, lonely in European diplomatic circles after their annexation of Crimea, have decided they need friends in the world. Cuba is being embraced as if the Cold War had never ended. So the recent talks have resulted in Russia writing off 90 per cent of the $35 billion owed by Cuba. This may sound drastic, but all is not lost. The two governments, no doubt with assorted cronies and hangers-on, can work together to profit from the remaining $3.5 billion. The Itar-Tass press release quotes Lavrov as saying that the $3.5 billion will be transformed into “investments” and, in his words, “we’re interested in making these investments productive to the maximum.”
In the geopolitical struggles between capitalism and Communism in the 20th century, Cuba had an importance out of all proportion to its size. When Fidel Castro overthrew the Batista dictatorship in 1959, many outsiders expected his government to be quickly replaced by one more friendly to American interests. But Cuba adopted a communist model devised by Che Guevara, the theoretician of the revolution, and received such massive help from the Soviet Union that the new regime became entrenched. Castro, 32 when he took control of Cuba, is now in his late eighties and not expected to live much longer. But the regime is still there.
Most people thought the rivalry between capitalism and Communism was over when Fukuyama announced “The End of History” in the summer 1989 issue of the National Interest. The Fukuyama article was beautifully timed just before the fall of the Berlin Wall. Given that Communism is generally believed to have collapsed in Europe 25 years ago, the Lavrov-Rodriguez pact must have caused a few chuckles in Western intelligence agencies. At any rate, the apparent new rapprochement between Russia and Cuba is a good moment to assess the long-run economic performance of one of the world’s two remaining Communist nations. (The other is North Korea.)
On a visit towards the end of last year, I expected to be unimpressed by Cuban living standards and economic infrastructure. Even so, the extent of the poverty, backwardness and decay came as a shock, and this article will argue that Cuba must have lower incomes per head now than 55 years ago, at the time of the Castro takeover. At the end I will offer brief remarks on Thomas Piketty’s Capital in the Twenty-First Century, a book that some see as wagging a finger at Fukuyama and “The End of History”, and re-igniting the Left-Right ideological debate.
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