By Roberto Jorquera
In the mid-1980s, the objective political and economic situation began to pose major challenges for the Cuban Revolution. The economy was starting to show signs of stagnation and increased bureaucratic practices. The gains that it had made since 1959 were in jeopardy. The economic and political challenge for Cuba was to survive while maintaining the principles of the revolution.
Cuba's crisis deepened with the collapse of the Soviet bloc in the late-1980s and Washington's tightening of the economic blockade by passing the misnamed Democracy Act (known as the Torricelli bill) in 1992 and the Cuban Liberty and Solidarity Act in 1996 (known as the Helms-Burton bill).
The United States government hoped the crisis would lead to the collapse of the Cuban government and the revolution's socialist example. The right-wing, Miami-based Cuban National Federation even appointed a "transitional government" (with US endorsement) in anticipation.
However, the ingenuity of the Cuban people and their ability to adapt has resulted in the revolution surviving for 10 years after the collapse of the Eastern bloc. The Cuban government secured more than 80% of popular support in the last national election.
Rectification period
In 1986, the Cuban government launched the "Campaign of Rectification of Errors and Negative Tendencies". It aimed to increase people's participation in the economic and political structures and was a return to the ideas of Che Guevara: relying on heightened political consciousness rather than material incentives and bureaucratic control to run the economy.
In 1987, President Fidel Castro noted: "The most serious error of economic policy between 1975 and 1985 was undoubtedly the reliance upon economic mechanisms to resolve all the problems faced by the new society, ignoring the role assigned to political factors in the construction of socialism".
In 1991, at the fourth party congress, Castro explained that the "rectification process constituted the revolution's strategic counter-offensive ... which provoked an extraordinary turnabout in our society, facilitating the revival of the roots, principles and genuinely humane, ideological and ethical values that gave breath and life to our own kind of socialism."
The campaign also anticipated the economic and/or political collapse of the Soviet Union. By the mid-1980s, the Cuban leadership was aware of the problems that the Soviet Union was facing and Cuba was ready to deal with its collapse.
The rectification campaign's main purpose was to reverse negative tendencies which had crept into economic practice, rather than fundamentally change economic policy. It did this through improving political motivation and accountability of industry managers, further democratising workplaces, removing material incentives, improving work norms, increasing investment in key industries, raising the minimum wage and introducing some unavoidable austerity measures.
Frank Fitzgerald, a US-based sociology professor, writes in his book The Cuban Revolution in Crisis: From Managing Socialism to Managing Survival: "By December 1986, more than 400 administrators in Havana, including 120 enterprises and work centre managers, had been removed from their posts, as had 85 grassroots party leaders, because of their unwillingness or inability to change their behaviour".
While overall living standards dropped slightly for most Cubans, the national economy was stabilised and there was more popular participation in politics. Its success reflected the Cuban leadership's awareness of and willingness to address the problems in a way that the Stalinist Soviet bureaucracy was incapable of doing.
Most importantly, the campaign was a test of the health and popularity of the socialist character of the revolution — a test that was passed with flying colours.
Special period
In September 1990, in response to the deteriorating economic relations with the Soviet Union, increased political and economic pressure from the US and tougher relations with the rest of the capitalist world, Castro announced that the country had entered a "special period in a time of peace".
Economic relations with the rest of the capitalist world were made more difficult by the worsening terms of trade and Cuba's unilateral moratorium on the payment of its foreign debt to capitalist institutions, which meant it was unable to receive long-term loans from these institutions.
At the October 1991 fourth congress of the Cuban Communist Party, Castro outlined some of the difficulties: "Up to the end of September, the Soviets had delivered all the fuel but only 26% of the total goods that they had promised. Almost no foodstuffs had arrived in the first five months of the year, and deliveries had not yet caught up by the end of September: Cuba had received only half of the promised split peas, 7% of the lard, 16% of the vegetable oil, 11% of the condensed milk, 47% of the butter, 18% of the canned meat, 22% of the powered milk, 11% of fresh and canned fish." As well, Cuba had received no detergent, less than 5% of the expected supplies of soap and just over 1% of the spare parts needed to repair Soviet-made television sets and refrigerators.
Cuba faced what became known as "the second blockade". If the revolution was to survive, it needed to become more self-sufficient in basic foodstuffs and products, and find the money to keep its basic industries running.
The Cuban leadership opened a discussion before the fourth party congress that led to an opening up of the economy to foreign investment to stimulate domestic productivity and increase funds available to the government.
The "organs of people's power" were strengthened and workers' parliaments were introduced to rejuvenate the local councils set up since 1961. These parliaments were given more responsibility for developing economic policy and implementing it in local areas.
In the national and provincial assemblies, direct election of delegates was introduced. Previously, national delegates were elected from delegates to the provincial assemblies, and delegates to the provincial assembles were elected from delegates to the municipal assemblies. Delegates could be nominated by the mass organisations.
According to Fitzgerald: "About one-third of those nominated and ... elected to the provincial and national assemblies were not members of the party or of its youth organisation. Party members still predominated in these assemblies, but the new nominating process opened them to greater numbers of non-party members."
Economic changes
In 1993, Castro noted: "The essential thing isn't just to survive but also to develop ... As a matter of principle ... resources must be shared amongst us all ... [if workers are unemployed] we will guarantee a large part of their wage. Nobody will be left without support ... [Cuba has been] deprived of more resources than any Latin American country, but we haven't closed any schools, hospitals, clinics or medical services at all, and we haven't thrown anybody out of work with no pay."
In 1993, after much discussion, the government established Unidades Basicas de Produccion Cooperativa (UBPC — Basic Units of Cooperative Production). As a result, the state's share of total agricultural land fell in 1994 from 75% to 34%, while its share of cultivated land fell from 80% to 25%.
The purpose of the UBPCs was to allow more self-management in the agricultural sector by permitting cooperatives to sell more produce directly to the market. A set percentage still had to be sold to the state.
Other measures included the legalisation of the US dollar to increase the exchange value with the peso and so that the government could receive hard currency to buy imports. Self-financing of industries was increased, forcing enterprises to pay the full price for imported goods. This made industries more accountable.
More resources were pumped into the biotechnology industry, resulting in the value of its exports jumping to US$800 million in 1990 from zero in 1988.
Foreign investment was encouraged to provide the resources and funding needed to keep some industries functioning. Foreign investment was permitted in all sectors except health care, education and arms-related institutions.
The 1995 Foreign Investment Law allowed some profits to be tax free and profits could be repatriated in convertible currency. Investments were guaranteed against nationalisation and free-trade zones were allowed, although the ministry of labour has the right to set the minimum wage in the zones.
Ben Cole, in his book Cuba: From Revolution to Development, observed: "The more Cuba enters the international economy, and the more dependent it becomes on international markets to rebuild its economy, the more control these market actors will have on the nature of Cuban development.
"As these actors tend to harbor an underlying bias against socialist economic designs, and they have a fairly narrow (and short-term) conception of what constitutes 'healthy economic fundamentals', this market control will be in sharp contrast to the ambitions of Cuba's current policy makers."
Many concessions and changes have had to be made by the Cuban revolution in order to survive — and it has. What is positive is that these change have not been imposed from on high but have been made with the involvement and participation of the majority of the Cuban people.