Yoani Stumbles Upon an Important Contradiction

Thursday, May 29, 2014
Cuban blogger Yoani Sanchez has a great op-ed in The New York Times entitled, "The Castros in Their Labyrinth."

She's spot-on regarding the general premise -- that the Castros are quickly headed towards a dead end.

Yoani concludes:

"Castrismo is losing the battle. Biology is ending the historic generation, while the economic opening is creating a class that does not depend on government salaries, the growing dissident faction is slashing the regime’s international prestige, and the loss of control over information is reducing its leverage over people. All of these are, at the very least, death-threatening obstacles in its way."

Can't disagree with that.

However, she stumbles upon a contradiction in describing the "class that does not depend on government salaries," which she loosely labels the "private sector."

Yoani writes:

"In 1993, spurred by an economic crisis, Fidel Castro permitted the reopening of the private sector. This turned out to be Mr. Castro’s worst defeat — one he tried to mask as a victory, as he usually did whenever he stumbled... Since taking power in 2008, Raúl Castro has granted a series of concessions that spin the island’s compass toward a system without paternalism, but also without rights. Permission to set up small private companies coincided with the layoffs of hundreds of thousands of Cubans, who held government positions for decades and are now unemployed."

Once again, she's spot-on that the lack of rights of this so-called "private sector"

But therein lies her contradiction -- for there can be no private sector without rights.

A private sector requires a legal framework for its existence, including business structures, an independent judiciary, contractual sanctity and recourse.  In other words, a rule of law.

Moreover, a private sector requires physical and intellectual property rights.

None of this exists in Cuba. 

In 2011 (the last time Cuba's statistics agency released its "official" numbers), there were 11,857 registered "legal entities" in Cuba.

Ironically, that represented a 6% decline from 2005, when there were 12,614 registered entities.

What happened to the explosion of self-employment and entrepreneurial activity?

What about the 250,000 self-employment licensees that existed at the time?

Are they operating without legal recognition (in "illegality")?

Pretty much.

They simply have permission (or a "get out of jail free" card) to perform a limited service.

Permission that can be taken away at a blink of an eye (as Fidel did across the board in 2000 and Raul did for some services in 2013, e.g. clothing sales and home movie theaters).

Did the licensees have any rights or recourse?  Nope.

Why?  Because the state remains the underlying owner.

Why is this "important" (as we mention in the title)?  It's important because should call a "spade a spade."  

Otherwise, the Castros get a pass for their distorted economic models.

Let's remember (which Yoani eludes to, but not clearly enough):

Fidel was forced grant self-employment licenses in 1993 due to the collapse of the Soviet Union, but then reverted as soon as Venezuela's Hugo Chavez helped him stabilize the economy in 2000.

Raul was forced to ease it again in 2010 due to the imminent demise of Chavez.

They have been forced to make changes, they don't grant them out of "good-will."

Thus, the Castros need to be pressed to give Cubans the economic rights they deserve.

As we recently explained in The Huffington Post:

"[T]he historic lesson is clear: The Castro regime only responds when it is economically pressed. Once the Cuban economy stabilizes or begins to 'bounce back,' the Castro government reverses itself to freeze or revoke self-employment licenses. Lift U.S. sanctions and Cuba's government will solely focus on strengthening its state conglomerates and the repression required to suppress change. Thus, U.S. sanctions are the best friends that 'cuentapropistas' now have."