Stronger in the Fifth Year
AN_ ECONOMIST LOOKS AT CUBA
In an interview published in the January 9 France Observateur, Charles Bettelheim, who is widely considered to be one of the bes informed economists on Cuba, voiced some extremely interesting and informative observations on "tho shape of things there five years after the victory of the Revolution, His conclusions provide little comfort for the strategists in Washington who have been waiting for the economy to collapse from its own difficulties and those which the Pentagon and the State Department have added, What Bettleheim says should encourage every one who has cheered and supported the valiant Cubans in their heroic struggle...
‘The following is a translation of this interview which was con-= ducted by Gilles Martinet, the editor of France Sbservatour. (Subhead~ ings are the same as in the original, )
Gilles Martinet -~ The Cuban Revolution is five years old. But in 1959 It was not exactly the same NRevolution. There was an essenti-
_ democratic
Charles Bettelheim -- One could speak of a continuous or permanent revolution,
M. =-- Except that in 1959 the heads of this Revolution and Fidel castes Hin self BERLE: yet see clearly where they were going.
C.B, ~~ No doubt. The revolutionaries of 1959 were inspired by a great concern for social justice, by the desire to rapidly raise the standard of living of the masses and to destroy privileges, This was already a socialist ideal. For the rest they were not yet fully aware of all the implications involved in pursuing this ideal, They had in mind above all the agrarian reform and the elimination of foreign dome ination. Was the Second Revolution Inevitable?
GM, -- Was the second revolution, which occurred during the year 1960 & na which ended in the socialization of the Cuban economy as a
Le L say that C
really inevitable?. Not a few people toda ; astro went
too far, that he should have proceeded by stages and thus avoided differentiating his regime so strongly from the evolution of the rest of Latin America, ,
C.B. -- I don't see how it would have been possible to act differently. During the whole year of 1959, no important measure was taken ‘against the industrial and commercial bourgeoisie, But they were affected indirectly by the agrarian reform, Because the interests of this bourgeoisie and the big land holders were often closely linked,
Thus the bourgeoisie displayed a hostility toward the revolution which was rapidly translated into a slowing down of investments, of the flight of capital and permanent economic sabotage, This was the situation which gave rise to the necessity of going farther,
It was not possible, in fact, to reassure the bourgeoisie by mere words, They would have had to pe’ given a series of guarantees which would have put in question the first conquests of the Revolution, It would likewise have been necessary to include their representatives in the government.
GoM, mee Weren't some of them already there in the. first phase of the Revolution? oof
C. C.Be -~- That's right, but at the beginning of '603. that is, at the moment when the problem of the new stage was posed, these men had.. already left the government, And precisely because of the agrarian reform, The political battle that broke out within the government hinged on this problem, At the time a kind of modus vivendi was main= teined with regard to the urban economic structures,
It was not until the first months of 1960 that the disquieting situation visible in industry led “thé government to take in hand the management of certain enterprises, It was not yet a matter of nation~ alizations but of partial méasures taken in accordance with an act called 'tintervention! originating in Spanish law, The real nationalizations did not take place until October 1960. ~— | Increase of Wages, a. Revolutionary Necessity
G.M, -~- Isn't the attitude of the bourgeoisie likewise explainable By the considerable increases in ee that_were decreed following the Revo BELON © Januar 59?
GB. =~ This played an important role, naturally. These wage increases were politically necessary because they made it possible to fully show the popular character of the Revolution.
GM, -- But if justified from the political point of view, wasntt it dangerous from the economic oint of view?
C,B. -- Up to a certain moment that was my opinion. But, with the retreat, I believe that the strictly economic repercussions were of less importance than one could have feared, given the way the Revolution subsequently developed,
~ll~.
What was fundamental was to demonstrate that what had just happened in Cuba was profoundly different from the pseudo~revolutions which Latin America had experienced up to then and which had been characterized above all by a flood of phraseology.
In Cuba, to the contrary, the Revolution translated itself not _ only into a rise in wages but also by an immense effort in the domain of teaching, health and lodging. In five years the budget for national education has more than quadrupled; for health it has tripled; while the rate of construction (this time it means construction for the people), practically doubled, The struggle against illiteracy was brought to a good conclusion, the school system is now complete with regard to primary education and, in a’ country of seven million inhabitants, one hundred thousand pupils and students benefit from scholarships. The mortality rate, in addition, has been considerably lowered; it is significant that no typhus epidemic appeared after the big hurri-~ cane last summer -- they were able to vaccinate the whole population in the disaster zones in eight or ten. days,
It's for all these reasons that the government is popular, despite the difficulties and hardships that have been imposed on the country. There is a genuine identification between the masses and the political leadership of the Revolution. The Consequences of the Blockade
M, =~ But to return to the wage increases in 1959 it must be admites et that the ey piared certain role in the SESE peenomencn
now occurring, .
‘C.B. == That's certain. ‘I myself have emphasized this phenomenon, It's the role of economists to preoccupy themselves with the defense of money. That said, I don't know an instance in history of a revolution that was not accompanied by inflationary pressure, -
Taking everything into account after an experience of five years which brought about such profound overturns on the level of the econ= omic structures as well as on the level of the circuits of commercial exchange, I find that the.Cuban money has stood up well,
It is necessary to visualize the problems that could arise for a country that was a genuine American province and eighty per cent of whose exchanges were with the United States. The Havana businessmen telephoned to Miami and the merchandise was delivered forty-eight hours later, Thus. warehouse capacity varied for different products between two weeks and a month, Today the bulk of the supplies are brought fran five or six thousand kilometers away, Thus storage capacity has. to be up to six or eight months, This involves construction of many buildings and technical measures of all kinds,
G GoM. e-- In what year did the American blockade begin that caused this situation?
C.B. -~- It began at the. end of 1960. The Americans had already. ~
protested against the agrarian reform, But the real crisis broke out during the summer of 1960, The Cubans had just bought some Sovist oil, The refineries owned by the American companies refused to handle it. Castro answered by resorting to the famous law of intervention, The Americans replied in turn by suspending the sugar quota which had _ regulated their purchases in Cuba, Then came the massive nationaliza- -. tion on the one side and the blockade on the other. Since the affair of the rockets, the blockade has tended..to take an even worse form due to the pressure which the American authorities put on navigation com= ~~. peniocs able to supply Cuba, a
G. Ge Me ~- And the role of supplier which the United States former1, . held is now hold by the USSR? . .
C,B, ~~ It would be better -to say by the countries of castern | Europe, because the contribution of Czechoslovakia and the Democratic German Republic is important, -At present, trade with the socialist countries represents around three-fourths of Cuban imports,
- This complete reversal of the diréction of exchanges could not but bring about serious disturbances, I referred to the problem of storage, but there is also the one of renewing industrial equipment . and means of equipment which are completely of American origin, Hence. the economic difficulties which were apparent above all during the 1962-63 period,
The Problem of Sugar Cane. coed oe eae
G. GM, == Nevertheless ‘these difficulties a near to have. been less . prove - in the industrial area than the agricultural, Hor a Revolution at was born in the fields this seems rather paradoxal. i
C.B. ~~ This impression disappears as soon as you. look, at things in detail,
First of all there was a drop in sugar production. This drop was due in part to a very understandable reaction of the Cubans following — their Revolution, Sugar production is linked in their minds with the dependence of the country on foreign capital; and, in the first placé, . American capital, Thus they wished to reduce its’ importance, and they wished it all the more since, on the rupture of the former sugar agree~ ments, they doubted they would be able to find new markets,. The limi~ ~tation of arcas devoted to sugar was decided on by the government, but. _ locally the tendency was to go even further, They imagined, it is true, that this limitation would not modify the volume of production very much because of technical improvements which they expected to introduce, Unfortunately these improvements required considerable time ~- thus — they were not able to play a genuine role, -
The agrarian reform, in addition, posed a grave problem of labor supply for the sugar cane plantations, The harvest, which is called the "gafra," requires particularly heavy labor, Mon can be found for © it only to. the degree that a mass of poor peasants exists, ready to accept no matter what seasonal work, Now the agrarian reform had done
wlo-
away with tenant farming, gave ownership of the land to the sharecrop-~ pers and thus contributed to increasing the revenue of the small peas= ants. Thus fewer and fewer people could be found to go into the cane fields, The government had to devote enormous political propaganda to resolve, and still in an insufficient way, this problem of labor,
In relation to this I came to understand why the sugar companies bought so much more land. than they cared to cultivate. It was because by possessing the land themselves they prevented the poor peasants from acquiring it and forced them to hire out as agricultural laborers at the time of the "zafra." — .
Learning How to Grow Vegetables
GM, -- The Cuban agricultural problem, nevertheless, does not end with sugar cane.
C.B. -~ There is also: coffee growing, This is second in importance, It involves primarily small plantations held by poor or middle peasants. But they likewise need labor at the time of the harvest. We find here the same problem as with sugar cane, With this difference that the work is not so heavy and, because it comes during vacations, students can be mobilized for it,
G,.M, -- And food crops?
C.B. =~ Here the question is quite different, Extraordinary as it may seem, the Cuban peasants.were not accustomed to growing vege= tables, ‘Some fields were highly specialized to supply the cities, but the greater part of the products were imported from the United States,
‘This lack of tradition explains the mediocre results that heave. been obtained up to now. The National Institute of the Agrarian “Reform =~ the INRA -- was obliged to hand out pamphlets to. give the peasants the most elementary information, Thus they had to be shown that unlike sugar cane, most crops require a certain density in plante ing seeds and..that it is not necessary for a plant in developing to be very far from its neighbor] -
It seems to me, in addition, that it is impossible to disouss the difficulties in agriculture without taking into account the two years exceptional dryness (1961, 1962) and, of course, last year's hurricane, An Excessive Centralization
~ GM, -~ All this in fact explains the agricultural difficulties, But those in industry evidently have other causes. Didn't the excessive centralization which characterized the process Of socialization of the econo. lay a big role? .
C.B.e -~ This was without doubt an important element but not the most important. Moreover it is in process of changing. Here again agriculture set the example,
: INRA came to concede a relative autonomy in management "to ranks and~file groups" in the nationalized farms, These groups were to have their own accounts and organize their own production plans, They then submitted their projected plans, which had been discussed and polished up, to.a central body. ,
The former centralization did not correspond, it must be added, to a fully defined conception, It was necessary above all to face up ‘to the lack of cadres, There were only a few experts in agronomy and it was thought that in the absence of directives precisely elaborated. by these experts, people on the spot would not be able to do much,:
In practice it was seen that this system brought more trouble than advantages because technically the means of controlling and directing production as_a whole were lacking, .
GM. -- And on the industrial and commercial plane? >
C.B, -- For the time being centralization continues. The problem of: decenbraliza ation will however soon be posed through measures of Vadministrative restructurization" which are under wa. It is a ques-~ tion of bringing in authorities with power of decision in small enter-= prises of local interest. A test is under way in the province of. Havana and it seems to be giving good results,
But here, too, the lack of cadres is an obstacle.. In any case there are industries for which industrialization is required, -For the | rest, more flexible formulas must be found, . As for local trade, its situation is made difficult by the blows from distribution, due themselves to the necessity to stock up a great number of products from very long distances. 1968, Year of Equilibrium
GM. -~ Despite all these ‘difficulties, can Cuba hang on?
C,B, -~- Certainly. Many things depend on the rate of development which can be obtained,
During the first three years of the Revolution (1959-60-61) the over~all production increased thirty per cent. During the year 1962, the consequences of the cutting off of the former sources of supply and the reperoussions of the years of drouth made themselves felt, Matériel began to wear out, spare parts could not be obtained; repairs were not made. In the same period, agricultural production, dropped and - “the return per hectare was never so low, ..
” The results of 1963 will probably be ‘better -- they surely would | have been were it not for the hurricane, —_ 7
One can be much more optimistic about the year 1964, since most. of the, plants on which construction began fallowing the Revolution are’ just being completed or will be in the next months.
Lants be used for the export trade or for the
GoM, one Witt. these _ Local market? ,
CG. C.Be ~~ Essentially for the local market,
GM, «= But then how do the finally expect to ronostablish the e wil ibr tum of the balance o ayments? And If the “Americans Reverse Their Policy?
CB, ~~ It is necessary to give up the perspectives that were out- Lined bot fore. A drastic revision. is required and the Cuban leaders are fully aware of it. The export of sugar is again expected to play a very important role., For this, its cultivation and conditions of exploitation must be transformed, Since they can't return to the old = system of low-cost labor, they have to go ahead with wide mechanization. Three thousand cane-harvesting machines (most of them manufactured -in the USSR and a part in Cuba) will be placed at the disposition of agri-~ culture, Cutting machines are also visualized, But it is difficult to perfect the technical process and it will be necessary to plant new areas to permit utilization of these machines, _ G,M, -- How long will it be before Cuba can _ hope to achieve equilibr ‘ium in foreign trade trade
' CB. ~~ If everything goes well, the point of equilibrium should — be attained around 1968, It's ‘around that date that the” turning point “will come,
G,M, -- And what if the United States. between now and then revises its polic oy, lifts the blockade and proposes. an arrangement with Fidel Castro?
CoB. == This reversal of policy would be very well received by the Cubans, ‘The latest declarations of Fidel Castro leave no doubt on that subject, He wants to completely separate economic and political rela= tions,
The geographic situation naturally orients Cuba toward the American market, And if the socialist countries can continue to send Cuba ~ equipment goods, it goes without saying that the delivery of consumer goods (for which these countries are mediocre suppliers) would be assured by closer countries, ©
GeM,.~~ But in that case, the United States would once again be able to hold a club over Cuba, in case of a political crisis, they would be able to cut oft food. ;
'C.B. -~ That would actually occur if the eighty per cent of former times was resumed, But there is no question of the United States again having such a place in Cuban foreign trade, That is why Fidel Castro is likewise thinking about developing economic relations with Europe, What is going on with Spain could well cccur with other countries, The visit which Castro paid to the French embassy last July 14 constituted from this point of view a revealing gesture,
_. SUAN LECHIN IN