Yash Tandon

The Association of Latin American and Caribbean economists held a weeklong conference on 24-28 January in Havana, Cuba, to discuss Globalization.  This was their second conference in Cuba. The first one took place in 1999.  Over 700 participants from 51 countries and 8 intergovernmental agencies participated in it.*  A total of 175 papers were tabled, and over 70 actually presented and debated at the Plenaries which ran from 10 in the morning to 10 in the evening.  With this kind of marathon, it was inevitable that often in-depth discussion had to be sacrificed to offering an opportunity to air a broad spectrum of views on the subject of globalisation.  The presence of  “Commandante Fidel” for the first day and his over two-hour extempore (very brief, by his standards) on the last day gave the Conference a political clout that is usually missing from similar academic conferences in other parts of the world.

Even before the Conference began, a human tragedy hung over it as a shadow.  The saga of the eight-year old Elian Gonzales, rescued from a shipwreck where his mother died on the way from Cuba to the US, clouded the air as the struggle between David and Goliath unfolded in its typical Latin American melodrama.  No nation in the world has been as battered emotionally and physically as Cuba by being “so near to USA and so far from God”. The US Government, pressurised by the voluble and loud Cuban exile community in Florida, presented the matter as “liberation” of little Elian from the clutches of communism.   The US Congress was being pushed to grant Elian instant citizenship to prevent him from being instantly shipped back to Cuba. (The last time the Congress conferred an honorary citizenship was to Winston Churchill in the aftermath of the Second World War).  Commandante Fidel castigated the US for wanting to rob Elian of his identity, and for preventing the return of the boy to his father in Cuba, which is what, he said, international law required. The US, in this instance, was acting as “kidnapper”.  At the Che Guevara Freedom Square young students from schools and colleges made emotional speeches berating the US for this illegal act, demanding the return of Elian to his legitimate home. At the Conference itself, members of the Latin American and the Caribbean academic community expressed solidarity with the people of Cuba, and supported demands for the boy’s instant return to his homeland.

On the substance of the Conference itself, a multiplicity of views were expressed on Globalization, some presenting it as a dangerous movement that would erode the sovereignty of nations and others offering a pragmatic counsel that it be taken as something “inevitable” that presented opportunities as well as risks.   A general consensus that seemed to emerge at the end of the gruelling five days of discussion was that globalization, seen in technological terms, was something that was indeed inevitable. However, whether it was on balance a positive or a negative force depended on who controlled the processes of globalization.  An overwhelming view held that it was a process controlled by the Western-based transnational corporations who are using the free market ideology and their ownership of capital and technology to pry open the rest of the world for access to their markets and resources.  This “neo-liberal globalization” or “corporate led globalization”, is thus not a neutral, or purely technical, phenomenon. It is part of the process of concentration and centralisation of capital.  It is an attempt to restructure the world, politically and economically, in the aftermath of the end of the cold war in order to redesign a new division of labour.  Several papers provided empirical evidence to show how this new division of labour is pushing developing countries back to the production of raw materials and are thus getting de-industrialised.  Where industries still exists these are largely in the nature of assembly plants, and are increasingly coming under the control of the multinationals.  In Argentina, for example, in 1993 foreign capital accounted for 67 per cent of added value; in 1998, it accounted for 80 per cent. 

Several papers underscored the human cost of this neo-liberal globalization.  In countries like Mexico and Argentina the middle classes have been destroyed almost overnight, like in Mexico following the financial crisis of 1994/95.  Social crises within the countries of Latin America and the Caribbean had sharpened.  In most countries the ruling oligarchies linked with foreign interests were paying enormous “neo-colonial” tributes to the West, especially the USA, to stay in power.  The formal sector employment was decreasing in most countries leading to fallback on  “soft employment” in the burgeoning informal sectors.  At the same time, at the global level, speculative capital was eroding the base of productive capital, as arbitrage dealings undermined the stability of international currencies and asset values.  The experience of East Asia was cited in many papers as evidence of the reversal of the gains the countries in the region had made during the 1980s and 90s.  The example of the social and political crisis in Ecuador was cited as an example, and how the dollarisation of its economy offered no solution to the crisis.

Some among the participants argued that the state as an institution was getting disempowered and marginalised as the market took over.  Others argued that the state was not disappearing but getting restructured, and in the case of the US and the EU even strengthened. The free market does not operate without the power of the state.  When vital supplies of oil or markets, or even the free market ideology, are threatened, the industrialised states do not hesitate to use the brutal force of their arms.

On the last day of the conference, President Fidel Castro spoke at length about the experience of Cuba in the so-called “special period” between the end of the cold war and the demise of the Soviet bloc in 1990 and about 1997.  During these seven years Cuba passed through a double bind.  There was on the one hand the continued tightening of the US embargo on Cuba (in legal terms, an act of war), and on the other hand the collapse of the support structure that the Soviet bloc had provided Cuba since 1959.  Over the previous forty years, Cuba was linked to the Soviet bloc economy such that it had a preferential access to Soviet market for its sugar and other products in return for precious oil, technology and other consumer products.  This collapsed overnight forcing Cuba to restructure its economy. But for the political will of the Party and the commitment and dedication of its people, the revolution nearly died, Castro said.  As happened with Eastern European countries, Cuba could have surrendered to the counter-revolutionary forces. But it didn’t.

Castro described in great detail the harrowing seven years.  With no oil, the transport system came virtually to a standstill.  With the end of preferential access to Soviet market and premium prices for sugar, export earning plummeted and the revenue base of the Government fell on its bottom.  With no spares or machinery, factories closed down.  With no more imported food and limited domestic production, food rationing had to be introduced.  But the Government refused to let the market determine the prices of food, transport and other basic essentials. Bread, rice, sugar, beans, eggs (sometimes), pasta, chicken (once a month), beef (every nine days per family for three meals) – these were provided at bare minimum prices.  Education remained free and so also medical services, even when medicines were not always available.  Cuba has continued to send its doctors to other developing countries, and provide scholarships to students from these countries.  At any one time, there were over 100,000 foreign students from other third world countries studying in Cuba and living like other Cubans lived.

People lived on hope from day to day that things would turn around.  But they refused to surrender to the USA.  Gradually, things began to turn around.  By 1997, food availability improved with diversification of production.  Factories re-started. Electricity is restored and there are fewer blackouts now. But Cuba has made some compromises. It entered into joint ventures with foreign companies which have brought machinery and equipment.  But these joint ventures are with the State, and small-scale private ventures are allowed, such as restaurants and laundries provided they are of limited size, and do not employ exploited labour.  Tourism is encouraged to earn the necessary foreign exchange, and this has made some inroads and has introduced certain corrupt elements in society.  This is the price that had to be paid for survival. With the exiled Cuban community from the US sending millions of dollars to their relatives in Cuba, a certain amount of dollarisation of the economy was unavoidable. The mighty dollar circulates freely in Cuba, and it has almost divided the society between those who have the dollars and those who do not. But unlike in Ecuador, the economy remains under the control and direction of the state.  The exchange rate between the dollar and the Cuban peso has fallen from 200 peso some time ago to 20 to the dollar, and it has remained more or less stable.

This writer was only a short-term observer of Cuba and is unable to make a careful and nuanced assessment of the situation.  But Cuba did appear to be offering a viable alternative to the neo-liberal paradigm.  For sure, there is a price to pay, especially when as a small economy, Cuba is surrounded by hostile forces and a powerful neighbour like the US.  But it is marvel that Cuba can survive at all.  The social, political and cultural price that larger economies like Brazil and Mexico pay for “integration” into the neo-liberalised global economy is much more onerous and risky for the bulk of their populations than what Cuba’s population is paying.  It is no wonder that the US cannot tolerate the living example of a country so close to its borders that daily defies the myth of TINA – the myth that “There Is No Alternative” to full integration into the US-led global economy.  If Cuba’s example spreads to other developing countries, it would pose a veritable threat to the capitalist system.