What is the verdict on Cuba’s economy, nearly a quarter of a century after the collapse of the Soviet bloc? The story generally told is a simple one, with a clear message. It describes a cyclical alternation of government policy between moments of pragmatic capitulation to market forces, which account for any progress, and periods of ideological rigidity and re-assertion of state control, which account for all economic difficulties.footnote1 After the dissolution of the Comecon trading bloc, us Cuba watchers were confident that the state-socialist economy faced imminent collapse. ‘Cuba needs shock therapy—a speedy shift to free markets’, they declared. The restoration of capitalism on the island was ‘inevitable’; delay would not only hamper economic performance but would inflict grave human costs and discredit Cuba’s social achievements. Given his stubborn refusal to embark on a course of liberalization and privatization, Fidel Castro’s ‘final hour’ had at last arrived.footnote2
The problem with this account is that reality has conspicuously failed to comply with its predictions. Although Cuba faced exceptionally severe conditions—it suffered the worst exogenous shock of any of the Soviet-bloc members and, thanks to the long-standing us trade embargo, has confronted a uniquely hostile international environment—its economy has performed in line with the other ex-Comecon countries, ranking thirteenth out of the 27 for which the World Bank has full data. As Figure 1 shows, its growth trajectory has followed the general trend for the ‘transition economies’: a deep recession in the early 1990s, followed by a recovery which took around a decade to restore real per capita national income to its 1990 level, rising roughly 40 per cent above it by 2013.footnote3
There is no doubt that Cubans have suffered severe hardship since 1990, but in terms of social outcomes, other ex-Comecon countries had it worse. As shown in Figure 2, Cuba’s infant-mortality rate in 1990 was 11 per thousand, already much better than the Comecon norm; by 2000 it was down to just 6 per thousand, a faster improvement than many of the Central European countries that had been taken under the eu’s wing. Today it is 5 per thousand—better than the us, according to the un’s estimate, and far above the Latin American average. Life-expectancy data, shown in Figure 3, give a similar picture: in Cuba, life-expectancy rose from 74 to 78 years in the course of the 1990s, despite a slight rise in mortality rates for vulnerable groups during the most difficult years.footnote4 In the other ex-Comecon countries, rising poverty contributed to an average decline from 69 to 68 years over the 1990s. Today, Cuba has one of the highest life-expectancy rates of the ex-Soviet bloc and among the highest in Latin America.
These outcomes have been largely overlooked by mainstream specialist commentary outside the island, a field that is largely us-based and funded, and overwhelmingly dominated by émigré ‘Cubanologists’, as they have styled themselves, deeply hostile to the Havana regime.footnote5 Leading figures since the 1970s have included Carmelo Mesa-Lago at the University of Pittsburgh, ‘the Dean of Cuba Studies’ and author of over thirty books; and his frequent co-author Jorge Pérez-López, director of international economic affairs for the us Department of Labor, a key nafta negotiator and long-serving head of the Association for the Study of the Cuban Economy. The asce’s annual publication Cuba in Transition, published from Miami, offered a series of blueprints for restructuring the island’s economy along capitalist lines. As their journal’s title suggests, the Cubanologists operated within the assumptions of ‘transition economics’, which emerged as a branch of development economics in the early 1990s to manage the opening of the former Comecon countries to Western capital. This model in turn drew on the Washington Consensus framework which had crystallized around the neoliberal reforms imposed on indebted Latin American countries by the imf and World Bank in the 1980s.footnote6 Its policy prescriptions centred on opening the economy to global capital flows, privatizing state assets, deregulating wages and prices and slashing social spending—the programme implemented across Central and Eastern Europe, as well as much of the former Soviet Union, by technocrats and advisors from the imf, World Bank, ebrd, usaid and other international institutions. Among the first in the field was János Kornai’s avowedly Hayekian The Road to a Free Economy (1990); within a few years a flourishing ‘transition’ industry had developed, which held as axiomatic that there was only one route to be followed—from planned state-socialist economy to free-market capitalism. Resistance was not only futile but costly, for partial reforms were ‘doomed to fail’.footnote7 When the ‘transition countries’ plunged into recession after 1990, their difficulties were blamed on the half-heartedness of their political elites: ‘speed and scale’ were of the essence; it was imperative to take advantage of the ‘extraordinary politics’ of the period.footnote8
By the late 1990s, several factors had led to a modification of the ‘transition’ orthodoxy. First, the stabilization of pro-Western regimes across most of the ex-Soviet bloc lessened the sense of political urgency. Second, the contrast between the severe contraction of the privatized ex-Comecon economies—and disappointing outcomes for Structural Adjustment programmes in Latin America and Africa—and booming state-led development in China and the newly industrializing countries of East Asia was too glaring to ignore. The emerging Post-Washington Consensus (pwc) put more emphasis on institutions and ‘good governance’. Transition economists lagged behind their development colleagues in making this shift, but by the turn of the millennium an influential textbook acknowledged the ‘humbling’ divergence between their predictions and actual outcomes; transition studies went on to develop its own pwc.footnote9 But if there was now less emphasis on the speed of reform, ‘progress in transition’ was still considered the main explanation for economic success and problems were routinely attributed to insufficient liberalization.
Mainstream Cubanology has largely adhered to the Washington Consensus model. It has held the ‘anti-market features’ of Cuban policy responsible for the deep recession of 1990–93 and the privations of the período especial; exogenous factors were given secondary significance. In line with the critique of partial reforms, Mesa-Lago attacked Cuba’s 1994 measures as ‘half-hearted’ and ‘half-baked’.footnote10 The usual explanation for Cuban policy is very simple: it is the result of the President’s ‘stubborn dogmatism’, his ‘aversion to market reform, his willingness to smash those who oppose him and to take the whole nation with him in his opposition’. A few commentators spread the blame a little more broadly: Rubén Berrios castigates an ageing leadership and rigid bureaucrats, clinging to old habits; Mauricio de Miranda Parrondo sees a resistance to reform on the part of the ruling layer as a whole.footnote11 Failure to pursue ‘transition’ policies has left the Cuban economy bankrupt or, more recently, rendered it a mere dependency of Venezuela.
The Pittsburgh–Miami axis tends to overlook two important respects in which Cubans’ experience has differed from those of the ex-Comecon populations in Central Europe. First, memories of the extreme poverty and deprivation associated with the pre-communist system, together with the relative strength of Cuba’s achievements in health and education before 1989, have left them with less appetite for radical free-market reform. Second, while nationalist sentiment in Central Europe could embrace ‘transition’ as liberation from Russian domination, in Cuba it is popularly perceived as a threat to national sovereignty emanating from the historical predator, the us. This is the outlook within which Cuban economists and policy-makers are working.footnote12 Advisors and officials do not talk in terms of ‘transition’ but rather of ‘adjustment’—responding to a radical change in external conditions, within parameters set by nationalist and socialist ideology. This implies a more flexible policy framework than the rigid, ideologically driven rejection of reform depicted by the Cubanologists. Economists and policy-makers alike expressed these parameters in terms of principios, rather than Marxist-Leninist dogma or a ‘party line’. These principles invariably included upholding national sovereignty, preserving los logros de la revolución—the gains or achievements in health, education, social equality and full employment; often referred to simply as los logros—and maintaining ‘revolutionary ethics’, which has involved a strong official stand against corruption and disapproval of ostentatious display.footnote13 These principles impose distinct constraints on policy choices.