The Eighth Congress of the Communist Party of Cuba (16-19 April 2021) coincided with the sixtieth anniversary of the Bay of Pigs invasion (1961) by the United States (US), but more importantly it marked a transition of power from former President Raul Castro to a new leadership. Former President Raul Castro stepped down as the First Secretary of the Communist Party of Cuba. This was the last senior position he held after he had relinquished the Presidency in 2018. This leaves Cubans without a Castro to lead them for the first time in over 60 years. The Castros, first Fidel Castro and then Raúl Castro- have shaped the political and economic life of the island nation and the transition is being viewed as an end of an era that has stood defiantly in the face of constant pressure from the US, during and after the end of the Cold War. Raúl Castro gave his farewell speech under the Congress’ theme of ‘Unity and Continuity’. It is however, unlikely that his influence will diminish in the near future, and President Miguel Díaz-Canel, who succeeds him as First Secretary of the party, has stated that he intends to continue to seek help from Raúl Castro. Nonetheless, for the first time, Cuba is being led by a President born after the Cuban revolution and not from the Castro family.
The Communist Party is also looking at a generational divide. While the older members and citizens remember the poverty and the inequality that led to the revolution, the younger generation which has grown up with the achievements of the revolution such as access to education and health cares wants economic development and political freedom. Change in some measure was brought about by former President Raúl Castro. He reformed the economy to allow growth of private enterprises and also held talks with the US in steps towards longer-term normalisation of relations. President Díaz-Canel has taken these reforms further. In August 2020, the government announced that it would open more industries to private enterprises in the national economy. The number of authorised industries has risen from 127 to close to 2000 open to private businesses with around 124 industries continuing to be held by the states. While the State has not declared what these industries would be they are likely to be the strategic sectors such as defence and health. Currently private enterprise is limited to small businesses and small farms along with the tourism sector. President Díaz-Canel has also stated that Cuba would be initiating reforms to increase exports, reduce the dependence on imports and stimulate domestic demand, in an effort to tide over the country’s economic challenges. The economic reforms may in the future also include lifting restrictions on investments by Cuban-Americans to bringing capital into the market to help sustain the reforms.
The COVID-19 pandemic has further accelerated the need for economic reforms. Cuba as on date has 1,17,097 positive cases and with 741 deaths. This indicates that it has managed to contain the spread of the virus. Nonetheless, the lockdown measures imposed along with the existing US sanctions have shrunk the economy by about 11 percent according to the government. Economy Minister Alejandro Gil in December 2020 stated that it will take close to two years for the economy to recover to pre-pandemic levels. Cuba imports nearly 50 percent of its fuel and food needs along with other vital inputs. Imports dropping have caused scarcity of goods.. To ease the pressure, the government has changed its decades old law that prohibited people from slaughtering their own cattle or selling beef and milk without state permission. Cuba has also ended its two-tier currency system in January 2021. Under this Cuba had introduced a second Cuban currency: convertible pesos (CUC). The government had implemented this system in order to counteract hyperinflation of its Cuban peso (CUP), protect the domestic economy, and regain monetary stability after the collapse of the Soviet Union. However, the prolonged simultaneous circulation of two different currencies hindered potential economic growth and produced unfavourable economic effects and incentives. It has also created social inequality.
A favourable sector for the country is the biopharmaceutical industry. Cuba is in the final stages of trials both at home and in Venezuela and Iran for its COVID vaccines. It intended to vaccinate its population before the end of the year and also export the vaccine to other countries. If successful, Cuba would be in a position to assist other nations in the region who are currently negotiating with manufacturers or receiving donations. The success and thereafter sale of the vaccine would provide much needed finance for the battered economy.
In the international arena, relations with the US continue to be suspended. While there was hope that the Biden administration would return to the détente of the Obama presidency, it has been made clear by the White House that Cuba is not a foreign policy priority. While the US will continue to engage with Cuba but a policy shift or additional steps is currently not among the President’s top foreign policy priorities. With the Castros no longer leading from the front, the next generation of leaders are charting the course. Younger leaders were elected to the politburo to replace the veterans of the revolution. As the revolution ages, the new leadership would have to find a balance between continuity from the past and change to address the present and future challenges.
*Dr. Stuti Banerjee, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
The Indian Express, “Explained: Why Cuba’s economic reforms are significant,” (10 February 2021), https://indianexpress.com/article/explained/explained-why-cubas-economic-reforms-are-significant-7178670/, Accessed on 04 May 2021.
Office of the Press Secretary, The White House, “Press Briefing by Press Secretary Jen Psaki, April 16, 2021,” https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/16/press-briefing-by-press-secretary-jen-psaki-april-16-2021/, Accessed on 05 May 2021.