A visit to a bodega and an economics lesson...

My friend Susan and I are laboriously cleaning rice. The smooth, black kitchen countertop is the perfect spot to pick out the tiny pebbles, bits of husk and dirt. We don’t bother with the microscopic white creatures which keep emerging during our work; they leave on their own, desperately scurrying away from our probing fingers.

We’ve just come back from her neighbourhood bodega, the state-run ration store which is a short five-minute walk away. Cubans have lived with food rationing since 1962 and the daily trip to the bodega is as much a part of life as rum and tobacco. In fact both are ‘on the libreta’, the ration book which must be presented to the bodega clerk. The young man who first serves us appears to be trying to arrange a date for Saturday night so we wait until his colleague fills the plastic bags we’ve brought. She pushes them back to us and then scratches in the libreta a record of what’s been purchased, at what price and on what date.

Today the pickings are meagre: 500 grams of beans, 500 grams of rice, two small buns, 500 grams of sugar and a litre of rum. The rice is Vietnamese and the quality abysmal. Rice and black beans are a staple and congris (a mixture of the two popularly known as ‘Moors and Christians’) is standard fare from one end of the country to the other. The island does grow rice but the projected harvest of 165,000 tons last year fell well short of the 600,000 tons necessary to satisfy current demand. Forty per cent of the nearly $700 million the country spent in 1996 to import food was used to buy rice. The irony is that high-quality Cuban rice is exported for hard currency and the cheaper, low-grade stuff imported. The Government is attempting to boost production by encouraging small farmers and co-operatives to adopt traditional (and less expensive) techniques of planting rice in small dry plots. But there’s a lot of lost production to make up. Harvests at the gigantic state farms fell by as much as 75 per cent after supplies of fuel, fertilizer and pesticides from the Soviet Bloc were cut off in the early l990s.

The same situation holds for coffee as for rice, a predicament which causes Cubans even more consternation. Coffee, an important social lubricant, is almost a sacrament. In the relentless search for foreign exchange, the best coffee from the Oriente (the eastern tip of the island) is exported, cheaper stuff imported and then mixed with chickpea flour. Everyone seems to know this but it still rankles.

The monthly rations from the State for a family of four cost around 50 pesos ($2.15), almost a quarter of the average salary of 214 pesos ($9.30). Food from the bodega is not enough to live on and no-one, neither the Government nor the people, pretends it is. It may take you halfway through the month, but no more.

But despite the shortages, people don’t seem to hold the Government responsible. Rationing has been around so long it’s an accepted part of daily life. And for the most part Cubans sympathize with the State’s efforts to distribute available food as fairly as possible. The last eight years, since the collapse of the Soviet Union, have been a time of belt-tightening and suffering. But the consensus is that the problem is a national one, which all Cubans need to work on together to solve.

In order to understand why the disintegration of the Soviet Bloc was such a hammer blow to the economy I visit George Carriazo, the Director of CIEM (the Centre for the Investigation of the Global Economy), one of a number of quasi-autonomous think-tanks whose job is to analyze and consult on Government economic policy. His modest office is on the second floor of a crumbling mansion on Avenida Cinco. The paint is faded and the ceiling plaster flaking but Carriazo himself is gracious and welcoming. He is a patient fellow with impeccable English and a clear fix on his country’s economic problems.

‘We lost 85 per cent of our foreign trade with the breakdown of the Soviet Union,’ he tells me. I knew that Cuba had been dependent on exports to the Soviets but I hadn’t realized just how dependent. Almost all Cuban sugar went to the Communist Bloc and in return the island imported two-thirds of its food, nearly all its oil and 80 per cent of its machinery and spare parts from the same countries.] ‘Suddenly eight billion dollars in trade with the Soviet Bloc vanished. You can imagine the crisis we faced.’

BODEGA BLACKBOARD Monthly ration per person at subsidized prices. Supplies vary regionally. Meat is rare and in some areas comes only once or twice a year. Advert 3 kgs of rice 3 kgs of sugar 500 g of beans 200 g salt 1 kg fish 400 g (chicken or beef) 14 eggs 1 tube toothpaste (per family of 4) 1 bar hand soap, 1 bar laundry soap every two months Limited quantities of tobacco, rum and coffee

With the benefit of hindsight I ask him whether it was not just a tad naive to put all your eggs in one basket. ‘You have to consider the historical moment,’ he explains. ‘The Americans were refusing to trade with us, we desperately needed stable economic relations and that’s what the Soviets offered. With their huge market they could take everything we could produce. But it was not just an economic decision, it was a political, military and strategic decision too. And now that it’s ended we must move forward.’

When the Soviets pulled the plug the Cuban economy went into free fall. From 1989 to 1993, the island’s gross domestic product (GDP) fell by half, from $19.3 to $10 billion. When Moscow scrapped its oil-for-sugar barter deal with Castro, the country lost most of its petroleum supplies overnight. Imports fell by a devastating 75 per cent – much of that was food, spare parts, agro-chemicals and industrial equipment.

The impact on living standards was crippling. Without oil the economy fizzled. Industrial production fell to just 15 per cent of capacity. Factories closed, public transport collapsed, the oil-fired plants which supply electricity operated sporadically. Power cuts of up to ten hours a day, which Cubans call apagones, became commonplace and even the supply of fresh water was disrupted. Agriculture and food production were paralyzed. Without transport, produce rotted in the fields. Tractors and mechanical harvesters broke down and couldn’t be repaired. The sugar harvest (then Cuba’s top foreign-exchange earner) plummeted from 8.4 million tons in 1990 to 4.2 million tons in 1993. In the same year, at the height of the crisis, Cuba was spending 60 per cent of its import bill on food and oil.

The years since 1989 are known as the ‘special period’, a time when the Cuban people have had to figure out a way of coping with this massive economic dislocation. The State moved dramatically to restructure the economy. In essence it adopted its own, self-imposed structural-adjustment program – without prodding from the International Monetary Fund or the World Bank. (Cuba is not a member of either organization so there wouldn’t have been much chance of that anyway.)

The chill winds of economic globalization are blowing across the last redoubt of the Soviet-style command economy. The burning question is whether Cuba can change quickly enough to survive or whether it will see the achievements of the Revolution eroded by the cut-throat global economy.

‘The Cuban Economy in the 1990s: From Crisis to Recovery’ by Eugenio Espinosa Martinez, Carta Cuba, Facultad Latino Americana de Ciencias Sociales, University of Havana, 1997.

 

The US blockade The Americans saw the withdrawal of Soviet subsidies in 1989 as an opportunity to administer a coup de grâce to the Castro regime. US Trade Embargo: Launched in 1960 when the US first moved to punish Cuba economically for its socialist policies. Two years later Washington stopped all trade in food and medicine and prohibited aid to any country which traded with Cuba. Cuban Democracy Act (CDA): Introduced by Senator Robert Torricelli in 1992, this bill extended the trade ban to overseas subsidiaries of US companies. Any ship landing in Cuba is barred from docking in US ports for six months. Cuba had $800 million in trade (mostly in food and medicine) with American-owned firms outside the US. That trade has disappeared and transport costs have jumped by 40 per cent since 1992. Cuba is spending $100 million more to get goods through alternative channels. Cuba Liberty and Democratic Solidarity Act (Helms-Burton Law): Bill passed in March, 1996 which pleased the right-wing, anti-Castro Cuban exile community in Florida and led to charges of extra-territorial meddling from US allies. The law aims to staunch foreign investment in Cuba by threatening to take to court in the US companies that ‘traffic’ in property nationalized by the Castro government that was previously owned by anyone who is now a citizen of the US. Helms-Burton has outraged Canada and the European Union (EU), both of whom seek stronger trade links and investment opportunities in Cuba. The EU has threatened to take the bill to the World Trade Organization unless Washington softens its approach.