Cuba Does Not Need US Investment To Develop Its Economy / 14ymedio,
14ymedio, Pedro Campos, Miami, 2 February 2017 – A previous article
addressed the economic policy of the current Cuban government to hinder
the private economy – forbidding investment from Cubans on the island
and abroad – and favoring foreign investment, mainly from the United
States, which could lead Cuba to a situation of virtual annexation to
the United States. Meanwhile it appears that allowing free investment,
and allowing employers to hire workers directly, versus requiring them
to contract only through the state, is something that the
state-socialist system is not willing to accept.
But, does it have to be like this to develop the country? Does Cuba have
to depend on US and foreign investment in general?
My clear answer is no. Cuba does need investment and the international
market for its development, but it does not have to rely on US
investments or foreign capital to develop its economy.
An analysis of four basic elements suggests that Cuba could solve its
investment needs without having to turn to US or foreign capital in
general, as the government, official Cuban economists and others
suggest, who do not imagine the island anything but subject to the US.
1. Due to the lack of transparency in the government's economic data
it is unknown what is or could be invested, how much is squandered in
the bureaucratic treasury at all levels, how much is wasted in the bad
paternalistic-populist democracy, or where that money goes. There is
such a lack of transparency about the investments and payments of the
nation, no one explains what so much money from taxes of all kinds,
remittances, the sale of medical and professional services abroad, or
tourism, is spent on, and the national investment is so low.
A change from the current hyper-centralization to democratic control of
revenues and budgets should shed light on the existence of the enormous
amount of capital currently wasted that could increase the amount to be
invested from the nation's own resources. We are thinking about the
necessary reduction in the Armed Forces, the apparatus of State
Security, the enormous services abroad, the big bureaucracy lazing
around in all the ministries and their provincial and municipal
branches, the outreach and propaganda apparatus, and the costs of the
system of organizations of the "dictatorship of the proletariat." How
much money could be freed up for investments through these reductions?
2. There are enormous fortunes within Cuba that do not display their
possibilities due to the current limitations and their fears of being
audited. If the inviolability of private capital and property were
guaranteed by law and clear relations of free trade were established,
this internal capital could be developed, private banks could be
generated to facilitate loans to private entrepreneurs and associates,
to import the means and resources necessary for internal development and
economic movements and associations could strengthen their
opportunities. There are imprecise calculations of the thousands of
millions of dollars, Cuban convertible pesos, Cuban pesos, stored in
banks and mattresses awaiting changes in Cuba.
3. According to different sources, Cuba is receiving between three and
five billion dollars a year from remittances, sent back to the island by
Cubans abroad. Much of that revenue is being invested in private
businesses and another part in using the services they generate. So
there is a positive predisposition in the diaspora to support
micro-enterprises with micro-investments. If conditions were established
in Cuba for the development of free enterprise, this small capital could
grow enormously, multiply and expand in a few years.
4. There is a great deal of capital in the hands of Cuban Americans in
the United States, a part of which they would be willing to invest in
Cuba if a new system of laws, in a State of law, guaranteed private
property and free markets, independent of a future analysis of
nationalization and compensation*. Because of their Cuban origin, and
for some because of their historic ties with specific production sectors
on the island, they would be in better conditions than any foreign
capital to engage in the Cuban economy and push its development. They
bring capital, techniques, knowledge, markets and transportation systems.
Thus, by simply facilitating the internally accumulated Cuban capital,
reorganizing that of the government, and favoring that of emigrants –
large, medium and small – with full guarantees, Cuba could receive a
large injection of capital of national origin, capable of changing the
economic landscape in a few years.
It would not be necessary to have investment from the United States or
from other foreign countries. There would be no dependence on American
capital. It would not be necessary to be virtually annexed to the United
States. Cuba would trade with the United States like the rest of the
Caribbean, the American continent and the world.
The interaction of these four factors would enable a self-sufficient
economy, capable of generating, itself, the means and resources to
resolve the needs of the population with domestic products, exchanged or
acquired in the international market. This should not be confused with
the absurdity of an autarchic economy that tries to survive without an
How to do this will be the subject of another article.
*Translator's note: "Nationalization and compensation" refers to the
nationalization of private businesses and property in the early days of
the Revolution, and the demands on the part of some for compensation for
what was taken from them.
Source: Cuba Does Not Need US Investment To Develop Its Economy /
14ymedio, Pedro Campos – Translating Cuba -