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Dollar checks progress of Cuba's poor

By Richard Derecki, Guardian (London), 10 August 1998

Because the "real" value of what Cuba produces is not clear in dollar terms, the UN devised a Human Development Index.

I wonder if that Index is usable to quantify the "results" on Human Development of the various treaties and agreement designed for corporate development, like Gatt, Nafta etc.

Any ideas (or academic references) out there ?

MichaelP

Forty years ago Fidel Castro's small band of revolutionaries were facing a concerted onslaught by the Cuban dictator Fulgenco Batista to oust them from their stronghold in the Sierra Maestra, the mountain range in the south-east of the island. The war of "national liberation" was into its second year and, given Batista's superiority in terms of arms and men, the chances of Castro lasting the year, let alone going on to capture Havana, seemed very small.

But Castro's nerve held. Batista's offensive was repelled and six months later, on December 31, 1958, he fled Havana with his inner circle of ministers, police officers, and mafiosi casino owners. Che Guevara took control of Havana and Castro of Santiago, the second city.

The guiding principle behind the revolt had been the need for social justice. Castro's "revolutionary laws", elucidated in speeches and pamphlets in the early 1950s called for agricultural reform, educational and housing reform. Leaving aside the vexed issue of political reforms, 40 years on has the revolution made a difference to the social conditions and living standards of the poor and of working class Cubans?

Assessing the performance of the Cuban economy relative to other developing countries is always difficult because in an economy where prices and quantities to be produced are set centrally by the state, output is measured in a different way than in more "capitalist" economies. These data can be converted for comparative purposes but a major drawback is that of valuing Cuban output in a common currency, say dollars, when the exchange rate has, to all intents and purposes been fixed for 40 years so that the "real" value of Cuban produce is unclear.

Rather than look to compare monetary values for certain outputs the United Nations has devised a Human Development Index.

The HDI uses indicators of the most basic dimensions of deprivation: a short life (the percentage of people expected to die before 40), lack of education (the percentage of adults who are illiterate) and lack of access to public and private resources (the percentage of people without access to health services and safe water and the percentage of underweight children under five), to assess a country's standing in basic human development and its progress in human development over time.

In terms of accessing those basic attributes of a humane society Cuba scores very highly. In the most recent index set out in the 1997 Human Development Report, Cuba is in the top group of five developing countries which have reduced human poverty to the point at which it affects less than 10 per cent of the population. Cuba's performance is above Costa Rica, and way above that of Jamaica, El Salvador and Haiti.

The delivery of a better relative living standard for Cuba's poor was achieved in a crude and utilitarian fashion by guaranteeing a minimum subsistence level and making access to education and health services free at the point of delivery. The ration card, introduced in 1962, still plays a central part in determining what will be on the dining table for the majority of Cubans, and it is a powerful symbol both of the Cuban state's commitment to an equitable distribution of the economy's resources and of its inability to create sufficient growth to float the bulk of the Cuban people off dependence on the state.

Universal access to basic foods and services has, however, been undermined following the legalisation of the use of the US dollar in 1993. This is creating in an arbitrary fashion a sharply divided two-tier society with those having access to dollars (say through having a relative in the US) being able to buy better food and foreign medicines. Widespread use of the dollar has also distorted the wage structure so that waiters in a tourist restaurant can earn more in tips than a qualified lawyer, teacher or doctor.

With the economy still struggling to adjust to the collapse of export markets in Eastern Europe and with no sign of a let-up in the US embargo, there is an uncanny reflection of the economy of 40 years ago - stagnant, still dependent on sugar as its main export and reliant on tourism as the main motor for economic activity.

The new struggle for the leaders who will follow Castro is likely to take place in boardrooms and conference centres across the world as they make their appeals for foreign investment and debt restructuring. Whether Castro's "revolutionary laws" are part of their sales pitch or are quietly abandoned as a hindrance will determine whether, over the longer term, the revolution will have made a difference.