The Castro regime's stunning announcement that it is
planning to lay
off more than 500,000 state workers in the next six months, dropping fully
one-tenth of the country's labor force into a barely existent "private
sector" has sparked a flurry of commentary on just what the move portends
for the captive island's future.
Does it mean Cuba going capitalist? Are they importing the China model? Who's
really in charge, Fidel or brother Raul? And, of course, that hardy perennial,
whatever the announcement means, the U.S. should immediately lift the embargo
and restore full diplomatic relations with the Castro regime (see here,
here,
and here).
On the latter, it is a measure of the investment so many have made into their
opposition to U.S. policy that even as they cite the abysmal state of the Cuban
economy as the central factor in forcing the regime's decision, they cannot
recognize the significant role played by U.S. economic pressure in bringing
that situation about. The embargo has indeed been pocked with holes in recent
years, but two critical escape hatches for the Cuban economy -- U.S. tourist
travel to Cuba and the extension of trade credits -- remain beyond the regime's
grasp, and thankfully so.
In short, the decision on layoffs was dictated by the bankruptcy of the Cuban
economy and the lack of prospects it will improve anytime soon. Desperate times
call for desperate measures.
It thus defies logic to argue for any lessening of the pressure against a
regime that has fought tooth and nail against any liberalizing reforms since
the collapse of the USSR. Just as in the early 1990s, when the regime had its
first go around with limited self-employment, as soon as the economy ticked up
a few notches, the hammer came back down on those attempting to eke out an
existence beyond state control.
Easing pressure now will only serve to halt in their tracks whatever steps the
Castro brothers conjure next to try and reverse their declining fortunes.
Policymakers need to remember that what drives this regime is survival, not
appeasing the United States in the hopes of some policy concessions or
allowing, out of some sort of beneficence, more freedoms for the Cuban people
to better their lots.
So what do the layoffs mean, besides the fact that the regime is broke? The
simple fact is we don't know, because we don't have any insight into the ruling
clique's thoughts. It's probably safe to say they have no idea where they are
going either.
What we can say with some degree of assurance is that the regime is taking a
huge gamble in putting up to an eventual one million Cubans on the street to fend
for themselves -- a gamble that could have serious repercussions for the
regime's continued grip on power. That's because they are going to be extremely
hard pressed to create any semblance of conditions where half a million or more
Cuban workers are going to be able to find any employment on their own.
We need to remember that this regime consists of a dwindling cohort of dogmatic
revolutionaries whose only accomplishment in life was to shoot their way into
power fifty years ago and stay there. They no more understand market economics
than they do Einstein's quantum theory of light.
Also, an important clarification for much of recent news reporting -- which has
it that laid-off Cubans will be free to start "small businesses" --
is necessary. More accurately, they are micro-enterprises, an important
distinction in order of magnitude. And the relatively few micro-enterprises
that do exist -- a beautician here, a taxi driver there -- struggle to operate
under such a mountain of regulations as to who they can hire, what and where
they can sell, on how much they can earn (no one is allowed to become "too
rich") as to make the whole effort practically fruitless. Many Cubans
simply opt for the underground economy.
Be that as it may, the regime is going to have to figure out how it is going to
deal with the social impact of a large group of idle Cuban workers unable to
make a living honestly or dishonestly. It is a volatile mix that could lead to
an upsurge in crime or other social agitation that could challenge the regime's
internal security apparatus. Policy critics will likely argue just that point
to justify a U.S. rapprochement with the Castros: that we need to help the
regime achieve a "soft landing," as opposed to a descent into
instability on the island.
But decisions on a soft versus hard landing in Cuba won't be made in
Washington; they will be made in Havana. Those concerned about the latter ought
to focus their lobbying efforts on the ruling clique there, not on policymakers
in Washington. What is the appropriate role for Washington is to continue to
close off all economic escape hatches for this obsolete regime and let it
continue to face the consequences of its own misrule.
Read More
(11)
HIDE COMMENTS LOGIN OR REGISTER REPORT ABUSE