Cuba's path out of underdevelopment
By Roberto Jorquera
Since 1959, the Cuban revolution has been an inspiration to millions around the world. A small underdeveloped nation, Cuba has been able to demonstrate what is feasible with a democratically controlled and planned economy, and to dramatically improve the living conditions of the majority of Cubans. Its successes have been in spite of an economic blockade by the United States since 1961 and the collapse of 80% of its trade (with the Eastern bloc) in 1991.
In its effort to remain loyal to its socialist principles while also relating to the capitalist world economic order, Cuba's economic and political development has gone through various stages. Studying these gives us a better understanding of the challenges now facing the revolution.
Economic principles
The first decade of economic development after 1959 was dominated by the agrarian reform law of 1962, which converted 40% of landed property into state property, distributed a further 40% to small rural producers and left the remaining 20% in the hands of medium and large landowners. The redistribution immediately ended much of the rural unemployment that had plagued Cuba for centuries.
The main industries and the banking sector were also nationalised and a democratic system of workers' participation was introduced.
In his roles as head of the National Bank and chief of industry, Che Guevara was a central figure in debates, throughout the early 1960s, over what sort of economic structure was needed to begin Cuba's socialist transition.
These debates on economic policy reflected a wider political debate about the alliance with the Soviet Union. The old guard of the Popular Socialist Party was in favour of copying the Soviet economic system, but Che and others in the July 26 Movement were critical of Soviet bureaucratic practices, including in the economy.
For Che, the success of the economy had to be measured by more than just statistics. In 1964, in an interview with an Argentinian journalist, Che stated: " A socialist economy without communist moral values does not interest me. We fight poverty but we also fight alienation. One of the fundamental aims of Marxism is to eliminate material interest, the factor of 'individual self-interest' and profit from humans' psychological motivations.
"Marx was concerned with both economic facts and their reflection in the mind, which he called 'facts of consciousness'. If communism neglects facts of consciousness, it can serve as a method of distribution but it will no longer express revolutionary moral values."
Thus, the new socialist economy had to not only encompass new organisational principles that allowed workers to participate in its functioning, but also needed to enhance workers' socialist consciousness and build the "new socialist person". In the view of Che and his co-thinkers, this was vital if the revolution was not to degenerate, as the Soviet Union had.
Cuba's economy throughout the 1960s was based on Che's budgetary finance system, which stressed moral and material incentives, volunteer work and efforts to promote workers' consciousness.
At the first congress of the Communist Party of Cuba, held in 1965, Fidel Castro argued, "Socialism means not only material enrichment but also the opportunity to create an extraordinary cultural and spiritual wealth among the people and to create an individual with deep feelings of human solidarity, free from the selfishness and meanness that degrade and oppress the individual under capitalism".
By the early 1970s, however, Cuba's economy had been forced by the US-imposed blockade to tie itself to the Soviet bloc; Cuba joined COMECON in 1972. Although the economic relationship was generally beneficial for the Cuban economy, it did create political distortions within the economic structures which were not recognised until the 1980s.
Socialist consolidation
In the 1970s and early 1980s, Cuba consolidated its economic development and introduced the Organs of People's Power, which substantially democratised decision-making.
Economic observer Carlos Tablada noted, "Between 1960-70 and 1981-85 average annual national economic growth rose from 3.6% to 6.7%. Over the same period the value of gross investment doubled and annual labour productivity growth rose from 0.4% to 5.2%. The growth rate of industrial output [rose from] 4.8% in 1962-70 to 8.8% in 1981-85."
Tablada also noted, "Between 1958 and 1989 life expectancy rose from 62 to 74 years ... The number of inhabitants per doctor fell from 1832 to 303 over the same period, reaching 274 in 1990 ... Infant mortality stood at 10.2 per thousand births in 1990 as against 15 for the developed world, 52 for Latin America and 76 in the underdeveloped world ...
"The illiteracy rate was reduced from 23.6% to 1.9% between 1958 and 1989. Over the same period the number of children attending secondary school multiplied 12.2 times, the number of university students 9.2 times. The percentage of the population covered by social security rose from 53% to 100%."
Further achievements include the only heart transplant program in the underdeveloped world, which, by 1996, had carried out more than 90 operations, free of charge. By 1991, there were 300,000 teachers in the country, giving Cuba the highest per capita rate of teachers in the world. By 1989, Cuba's aid donations to developing nations had reached $1.5 billion.
By 1990, 30,000 medical personnel had worked in more than 20 countries and treated more than 60 million people. At the time, Cuba had more doctors abroad than the World Health Organisation. Furthermore, between 1982 and 1985, for every 625 Cubans there was one civilian aid worker overseas; in the United States the ratio was one aid worker per 34,704 inhabitants.
By the 1980s, Cuba's economic achievements were second to none in the underdeveloped world, and in many areas its achievements had surpassed those of the developed world. Its success was in large part due to the democratically planned and socially owned economic system that it had introduced following the victory of the July 26 Movement in 1959. In the following two decades, however, this success faced a stern test.
[This is the first of a two-part series on Cuba's economy. The next part will deal with the "rectification campaign" of the late 1980s and the "special period" since 1991.]