Cuba without Castro

Kai Ryssdal Aug 1, 2006

KAI RYSSDAL: January 1st, 1959, was a Thursday, as it happens. Also happens to be the last time Fidel Castro wasn’t in power in Cuba. As you’ve heard by now, I’m sure, the Cuban leader has put his brother Raul in charge while he’s in the hospital.

That’s sparked speculation today about what happens when Castro dies. Dan Erickson specializes in the Cuban economy at the Inter-American Dialogue in Washington. I asked him whether American investors are waiting in the wings.

DAN ERIKSON: In the short-term, I think the Raul Castro government would be extremely reluctant to accept or encourage such a large amount of money flowing in from a group of people who are perceived to be politically hostile to him. And also the Cuban government has very stringent investment rules. Most foreign investors have to enter into joint ventures with Cuban state enterprises where the Cuban state controls 51 percent of the venture. And so I’m sure that people from Miami would chafe at those types of restrictions.

RYSSDAL: The Latin Americans are already invested in Cuba, the Europeans are, the Canadians are. Do you think there’s a chance the US could be shut out?

ERIKSON: Well the US already has been shut out to a large degree. You forgot to mention the Chinese, which are now the No. 2 investor in Cuba. And I think that while there is an economic logic between the US and Cuba, which is undeniable based on proximity and in some ways a great deal of economic complementarity between the two countries, the reality is that a lot of other foreign investors are there. And they know the game very well, they know the rules well, and at this point they’d probably receive preferred treatment.

RYSSDAL: Tell me about the economic picture in Cuba. What’s it like today for the average person?

ERIKSON: Well, the average person lives on about $8-$10 a month. They receive a diminishing supply of food rations from the government. There’s still free health care, but many of the Cuban doctors are actually deployed overseas these days. And I think what the island tends to be characterized by is not necessarily poverty so much as scarcity. That you have a group of relatively well-educated, relatively healthy individuals who simply can’t get the basic necessities they need to get by in life. And, as a result, there’s a great deal of dependence on both the tourist industry and on remittances from overseas to help boost the livelihoods of ordinary Cubans.

RYSSDAL: Has Castro made himself rich in the past 40 years of this embargo?

ERIKSON: I mean, you have to imagine that any dictator in the modern age is going to have a rainy day fund. But when you go to Cuba you certainly don’t see the types of extravagant wealth or ostentatious displays that characterized, for example, Saddam Hussein’s regime in Iraq.

One thing that Castro and some others have been actually fighting against in Cuba, ironically enough, is corruption at the lower level. Because there has been a lot of corruption within the state-owned enterprises, among middle and senior management.

RYSSDAL: You know, the US trade embargo against Cuba is now 43 years old. We’ve been banking on the fact that we’d be able to starve the Cuban government into submission. But, somehow, it keeps holding on.

ERIKSON: Well, that’s right. The Cuban government has a certain revolutionary legitimacy in the sense that you still have the same founding fathers of the current regime, who emerged through a domestic revolution that was widely supported. In addition, Cuba has been very lucky – or Castro, I should say, has been very lucky in his enemies. And the fact is the US has taken a number of steps to tighten the embargo and otherwise isolate Cuba, which has actually enabled the government to maintain control over its people.

RYSSDAL: Dan Erikson studies Cuba and the Cuban economy for the Inter-American Dialogue in Washington. Dan, thanks a lot for your time.

ERIKSON: Thank you, very much.

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