The Challenges of the Twenty-first Century

The timing of these changes has been forced on Cuban leaders by circumstances; they faced urgent problems at the turn of the century that could not be ignored. Although the regime survived the terrible depression following the Soviet collapse (the ‘Special Period’), it emerged significantly weakened, both economically and politically. Production in many sectors and real wages were still below 1989 levels. For both individuals and enterprises, weak or perverse incentives crippled productivity. Attempts by other socialist countries to address these economic contradictions of central planning led to two distinct outcomes: the European path, in which the advent of market socialism weakened the political coherence of the party and state, leading to eventual regime demise; and the Asian path, in which the political effects of market expansion were contained and managed by existing institutions.Footnote ⁷

On the political front, a decade of deep austerity had taken a toll on the regime's legitimacy. ‘The crisis affected not only the general functioning of the economy and daily subsistence, but also ideology, values, social psychology, and political culture’, wrote Cuban political scientist Rafael Hernández.

Young people who came of age during the Special Period did not remember the hardships of pre-revolutionary Cuba or the relatively good years of the 1970s and early 1980s. To them, the Revolution meant privation. Deprived of so much during the 1990s, they were unusually intent on obtaining material things, and large numbers yearned to leave the island, seeing no hope for a prosperous future at home.Footnote ⁹

Cubans of African descent, once core supporters of the Revolution because it did away with juridical discrimination and provided them with unprecedented upward mobility, suffered disproportionately during the Special Period. Few Afro-Cubans had family abroad to send them remittances. Because they lived in poor neighbourhoods, they had fewer opportunities to earn hard currency by opening paladares (private restaurants) or casas particulares (rented rooms) for tourists. And because of lingering racism, they were less likely to be employed in the tourist industry where workers received hard currency tips. To get by (resolver), some young Afro-Cubans turned to hustling and the ‘informal economy’, thereby reinforcing the worst stereotypes associating race with crime. The alienation of Afro-Cuban youth was apparent in the caustically critical lyrics of popular rap and hip-hop music.Footnote ¹⁰

The regime's political infrastructure also suffered. Cubans spent hours getting to work because the public transportation system, never good, deteriorated for lack of fuel and spare parts. They spent hours more searching for food and other staples. People had no time for political meetings and little patience for revolutionary exhortations in the face of such material hardship. The Committees for the Defence of the Revolution (CDR), charged with ‘revolutionary vigilance’ against counter-revolution and crime, largely ceased to function. Otherwise law-abiding citizens had no alternative but to deal in the black market to make ends meet, and CDR block captains were no exception. ‘The militants are too busy trying to keep themselves alive like everybody else to bother much with denouncing anyone’, one Cuban explained.Footnote ¹¹

Although Communist Party membership grew to some 820,000, it faced similar problems. Leadership at the provincial level struggled, not always effectively, to cope with the political strains of the Special Period. In 1995 alone, six of the 14 party first secretaries in the provinces were replaced.Footnote ¹² With economic recovery key to regime stability, the party gave in to the temptation to usurp management responsibilities from provincial and local government – ‘bossiness’, Raúl Castro called it at the Party's First National Conference in 2012. In so doing, it neglected its political task of cultivating regime support at the grassroots.Footnote ¹³

Another vulnerability that plagued the Communist Party was Fidel Castro's style of governance. From the earliest days of the Revolution, Castro harboured a deep distrust of institutions. During the Special Period, he came to rely more and more on his personal staff, the Equipo de Coordinación y Apoyo al Comandante en Jefe (also known as el Grupo de Apoyo), comprised by young acolytes Fidel had plucked from the ranks of the Union of Young Communists. The Grupo evolved into a kind of shadow cabinet, operating at Fidel's behest outside the normal lines of authority of party and state. The Grupo had a reputation for fanaticism – being more Fidelista than Fidel – and Cubans dubbed them ‘los talibanes’ for their rigid ideological orthodoxy.Footnote ¹⁴ Meanwhile, the formal party languished; although its statutes stipulated that a Congress be held every five years to set policy and renovate the leadership, the 2002 deadline came and went with no new Congress.

The erosion of the regime's capacity for social and political control contributed to the spread of corruption. Corruption was not a new problem, but it was exacerbated during the Special Period by economic hardship. To supplement inadequate state salaries, workers stole goods from work and sold them on the black market. A three-part investigative report by the Cuban newspaper Juventude Rebelde, entitled ‘The Big Old Swindle’, found that half the state-run retail enterprises visited by reporters were cheating customers by short-weighting purchases.Footnote ¹⁵ At the highest levels, some managers of import/export businesses and joint enterprises were corrupted by the easy availability of hard currency through expense accounts and bribes by foreigners seeking preferred access to the Cuban market.

The government launched a crackdown against crime and corruption in early 2003, when nationwide audits discovered irregularities in the accounts of 36 per cent of the 5,917 state enterprises examined. In 2004, Political Bureau members visited local party organisations around the country to press the campaign. ‘Raúl was adamant that the revolution is threatened not just by the United States, but by corruption and liberal attitudes that give space for it to grow’, according to a mid-level party official.Footnote ¹⁶ On 1 April, control over hard currency accounts was taken away from individual enterprises and executive expense accounts were abolished.Footnote ¹⁷ In September, the armed forces took over management of the Port of Havana to halt pilferage by dock workers who were diverting resources from the ports by the ton-load.Footnote ¹⁸ On 15 October, thousands of young social workers occupied gas stations all over Havana in a campaign to combat the theft of gasoline, half of which was being diverted into the black market.Footnote ¹⁹

A few weeks later, speaking at the University of Havana, Fidel Castro gave a four-hour speech that has come to be regarded as something of a political testament.Footnote ²⁰ It was a cri de coeur, warning that the Revolution was in peril, not from the United States, but from its own internal weaknesses. ‘This country can self-destruct; this Revolution can destroy itself’, he said, ‘We can destroy ourselves, and it would be our fault’. He began by praising the social workers for their contribution to the ongoing ‘war against corruption’. He railed against theft in all its many forms, from pilfering on the shop floor to embezzlement in high office. ‘Just how many ways of stealing do we have in this country?’, he asked plaintively. But his fears reached well beyond corruption. He worried about the hand-off of power from the Revolution's founding generation to its successors. He worried about the inequality created during the Special Period, and he railed against the ‘new rich’, including not only small businessmen, but also recipients of remittances. Most of all, he worried that concessions to the market were corroding revolutionary values.

Castro's rhetoric harkened back to the Revolutionary Offensive of 1968, when the state nationalised all the small urban shops in the country (during which Fidel famously declared, ‘We did not make a revolution to guarantee the right to trade’),Footnote ²¹ and to the Rectification campaign of the late 1980s. Now, Fidel seemed to be promising a new counter-offensive against creeping capitalism, with 27,000 young social workers in the vanguard. Soon, social workers were monitoring refineries, riding along on tanker trucks, refurbishing schools and hospitals, going door-to-door handing out energy efficient light bulbs – taking on whatever task their commander-in-chief asked of them.

Historically, mobilisation campaigns like this were carried out by Cuba's mass organisations, foremost among them the CDRs. But their deterioration during the Special Period left them unequal to the task. As Marifeli Pérez-Stable has written, in the Cuba of the twenty-first century, the old style of mobilisational politics had lost its effectiveness.Footnote ²² Instead, Castro created the cadre of social workers as a new instrument of mobilisation. Some observers compared the youth army to Mao Zedong's Red Guards during the Cultural Revolution.Footnote ²³ In truth, there were important parallels. In both cases, aging leaders, worried about the future of their revolutions, sought to mobilise a new generation to uphold revolutionary ideals. In both cases, leaders deeply committed to socialist ideology worried that their regimes’ concessions to the market were fostering new class divisions and incipient capitalism. And in both cases, the leaders circumvented existing institutions to foster a new ideological fervour; in Cuba, because those institutions were so atrophied; in China, because Mao had lost control of them to his adversaries in the party leadership. But the differences were nevertheless profound. Because Cuba did not suffer from a deep split in the party's leadership, Cuba's social workers, unlike China's Red Guards, did not attack Cuban institutions and leaders. Their purpose was not to ‘bombard the headquarters’, but to protect the revolutionary regime from the corrosion of corruption.

The Transition in Elite Decision-making

Inevitably, the departure of a charismatic leader like Fidel Castro reverberates throughout the political system. At the highest echelons of the political elite, the charismatic leader's heirs have to settle on new rules of the game. The new leadership is usually more collective, not only because no one can fill the departed leader's boots, but because surviving elites generally prefer a process that is more rule-guided and hence less arbitrary than in the past. This, at least, has been the experience of communist successions from countries as diverse as the Soviet Union (Stalin), China (Mao Zedong) and Vietnam (Ho Chi Minh).Footnote ²⁴

Raúl Castro himself anticipated as much. ‘Many other comrades and I will have authority’ he remarked in a 2001 interview, long before taking the reins of power. ‘However, we want the party to have it, which is the only thing which can guarantee continuity, the unity of the nation. Within that unity we can have differences and everything we might want to air’. Moreover, according to one former Cuban official, Raúl was always more willing to entertain debate. ‘Fidel is a god, and he [Raúl Castro] is a human being’ the official said. ‘You can't argue with Fidel, you can't contradict him. You can with Raúl.’Footnote ²⁵

Collective leadership typically means that intra-elite debates, at least within the Political Bureau of the party, become more meaningful. Leadership politics shifts from everyone lobbying the founding father to coalitions lobbying one another, and paying special attention to the undecided. Political resources like bureaucratic position take on new importance.

A succession's impact reverberates into lower party echelons as well. New leaders naturally seek to bring in their own team of advisers and upper-level managers. These personnel changes, especially when they involve some degree of generational turnover, are bound to have policy consequences. Studies of leadership succession in Eastern European communist regimes have found that succession almost always initiated significant changes in the operation of the regime.Footnote ²⁶

These sorts of changes in elite decision-making became apparent in Cuba almost as soon as Fidel Castro surrendered power. For two weeks after Fidel's 31 July proclama, Raúl Castro did not appear in public or issue any statement about his new role. On 4 August, however, the daily newspaper Granma ran a story about Raúl's bravery during the 1953 attack on Moncada barracks that began the Revolution – lest anyone doubt that his revolutionary heritage gave him the credentials to lead the country. The story ended, ‘This is a story that should not be ignored in the context of today's events’.Footnote ²⁷

Finally, on 18 August, Granma published an interview with Cuba's new leader, who reassured everyone that the government was functioning smoothly.Footnote ²⁸ From the outset, it was clear that Raúl's leadership style would be very different. Asked why he had taken so long to make a public appearance, he replied, ‘I am not used to making frequent appearances in public … that is my way, and I am thinking of continuing in that way.’Footnote ²⁹ He had no intention of trying to imitate his brother, he explained a few months later: ‘Those who imitate fail.’ He would not be making all the speeches on major occasions, but instead would share the opportunities with other leaders, a signal of his commitment to collective leadership.Footnote ³⁰ When Raúl did give speeches, most often to the semi-annual meetings of the National Assembly or major Communist Party conferences, they were short and to the point, not the long, rambling, didactic excursions for which his brother was famous.

During the first year or so, Raúl was careful to always quote Fidel, thereby emphasising the continuity of policy and invoking his brother's legitimacy. Even when Fidel formally bowed out of the presidency in 2008 and the National Assembly elected Raúl, in his inaugural speech, the younger Castro asked the Assembly's permission to consult Fidel on ‘decisions of special transcendence for the future of our nation’. No one person could replace the maximum leader. ‘The Communist Party, a sure guarantee of the unity of the Cuban nation, is the sole worthy heir to our people's confidence in its leader’, Raúl affirmed.Footnote ³¹

This emphasis on the importance of institutions would prove to be a hallmark of Raúl Castro's presidency. Within a year of taking office, he quietly ended the social worker campaign, sending the youngsters back to their communities. ‘Institutionalization is … one of the pillars of the Revolution's invulnerability in the political field’, Raúl said in his inaugural speech to the National Assembly in 2008. He went on, ‘We should be aware that the functioning of the State and Government institutions is not yet as effective as our people rightfully demand.’Footnote ³² Two months later he repeated this message to the party's Central Committee, saying, ‘It is vitally necessary to reinforce the country's institutions.’ Strengthening the party in particular, he reminded them, was essential ‘to ensure the continuity of the Revolution when its historic leaders are gone’.Footnote ³³

Unlike Fidel, who worried that institutions might constrain his freedom of action, Raúl was the quintessential organisation man, valuing careful management, sound administrative processes and institution-building.Footnote ³⁴ Under his leadership, the Revolutionary Armed Forces became the most organised, efficient and respected institution in the country. Over the years, a great many senior officers were exported to the civilian sector to bring some semblance of order to the relative chaos of the government bureaucracy. It came as no surprise, then, that as president, Raúl sought to imbue the rest of the government with the same managerial principles that worked so well in the armed forces. ‘Improvisation’, he explained on more than one occasion, had led to ‘expensive irrationalities’.Footnote ³⁵

Raúl Castro's faith in institutions was also reflected in his belief that people ought to work their way up through established career paths, gaining experience along the way. He was no fan of Fidel's practice of plucking promising youth from the Union of Young Communists (UJC) to serve on his personal staff, and then appointing them to top positions in the national government and provincial party apparatus. Many of these appointees fell into disgrace and obscurity as quickly as they rose. The first was ‘Landy’ – Luis Orlando Domínguez, a rising star in his forties whose power derived from his leadership of the Equipo de Coordinación y Apoyo. He was arrested in 1987 for embezzlement and sentenced to 20 years in prison. The next was Roberto Robaina, the charismatic pony-tailed head of the UJC. In 1993, Fidel appointed ‘Robertico’ foreign minister at the age of 36, then sacked him six years later for being too friendly with foreign businessmen and officials. In 2006, Juan Carlos Robinson, one of the Political Bureau's youngest members, was arrested for influence peddling and sentenced to 12 years in prison.Footnote ³⁶

All these early heirs owed their ascent to their personal relationships with Fidel. Before his illness, the elder Castro was a ‘minimum winning coalition’ all by himself. Although senior leaders would debate key policy issues, when Fidel decided on a direction, the rest of the leadership dutifully fell into line. Political influence was therefore closely correlated with proximity to Fidel, so it was no accident that the principal path to power for an aspiring young politician led through Castro's personal staff. But the meteoric rise of the protégés deprived them the political savvy only experience could provide and imbued them with the hubris of Icarus.

Not surprisingly, the role of the Grupo de Apoyo diminished dramatically under Raúl. Fidel's chief of staff, Carlos Valenciaga, was removed in 2008, and Cubans began referring to the Grupo as ‘los huerfanitos’ – the little orphans.Footnote ³⁷ In 2007, the UJC instituted a new policy requiring members to spend five years in their chosen profession before assuming positions of political leadership. Speaking to the UJC Plenary that adopted the new policy, Raúl pointedly singled out Political Bureau members Carlos Lage and Felipe Pérez-Roque as people who had jumped immediately into positions of leadership. While praising their work, Raúl noted that Lage, a paediatrician, had never practised medicine, and Pérez-Roque, an electrical engineer, had never worked as one. ‘I would not send him to work in a thermoelectric plant’, Raúl joked, ‘because he could cause a meltdown’. Then Castro became serious: If someone's only experience was in student organisations, he asked, ‘What do they know? How to give good speeches? It is our duty to open up room for new generations … but not for test tube leaders … rather, for those brought up on their own efforts’.Footnote ³⁸

When the National Assembly elected Raúl president in 2008, his choice for vice-president was not Carlos Lage as many people expected, but José Machado Ventura, a member of the old guard, whose chief responsibility since the 1970s had been building the organisational apparatus of the Communist Party.Footnote ³⁹ Choosing him underscored Raúl's determination to strengthen Cuba's political institutions, the party first among them.

In March 2009, Raúl abruptly fired Lage and Pérez-Roque, both of whom were frequently mentioned as possible successors to the Castro brothers. Pérez-Roque had served as Fidel's personal assistant for a decade before being appointed, aged 34, to succeed Roberto Robaina at the Foreign Ministry. Lage, a former member of the Grupo de Apoyo, served as Fidel's economic adviser during the Special Period, becoming executive secretary to the Council of Ministers – the closest thing Cuba had to a prime minister. Both were removed for criticising los históricos behind their backs and being too eager to push the older generation off stage.Footnote ⁴⁰ At the same time, Raúl announced a sweeping reorganisation of the government bureaucracy, and replaced nine veteran ministers.Footnote ⁴¹ By 2012, across 26 ministries, only three of Fidel's appointees were still in office. The new ministers tended to come from the ranks of experienced professionals, especially the armed forces.

Eight years after Fidel stepped down, Cuba appeared to have successfully navigated the leadership transition and the adoption of a new model of elite decision-making. That model is more pragmatic, more collective, more routinised and more focused on delegation than micromanagement. Most importantly, it is far more respectful of and reliant upon institutions than ever before. Raúl's longstanding role as the regime's number two leader and designated successor, and his own revolutionary background, have given him predominant influence within the political elite, thereby avoiding the sorts of intra-elite conflicts that plagued the successions from Stalin and Mao Zedong. His consolidation of authority set the stage for a profound, difficult and potentially divisive economic transition.

Updating the Economic Model: The Transition from Central Planning to Market Socialism

When Raúl Castro became interim president, the Cuban economy had yet to fully recover from the Special Period. Although it had grown gradually since the mid-1990s, the gains were concentrated in tourism and medical services for export. The actual production of goods in the island still lagged behind 1989 levels, and many state enterprises operated at a loss. Agricultural production was so poor that this fertile island had to import 70 per cent of its food at a cost of US$2 billion per year.Footnote ⁴² The central problem, Raúl bluntly pointed out in 2010, was low productivity; ‘We have to erase forever the notion that Cuba is the only country in the world in which people can live without working.’Footnote ⁴³

Raúl Castro was a communist before his brother, but he was always more pragmatic. Even before the collapse of European communism, Raúl pushed Cuba's defence industries to adopt Western management techniques to improve productivity. During the Special Period, he convinced a reluctant Fidel to utilise market mechanisms to restart the economy, opening free farmers markets and legalising small business. But with Fidel in charge, such reforms were strictly limited.

As soon as Raúl assumed the presidency, he unleashed a barrage of candid criticism, blaming the economy's failures on Cuba's own policies rather than the US embargo. In a speech to a closed session of the National Assembly in December 2006, just five months after taking office, he was blunt. Public transport was ‘on the verge of total collapse’ after years of neglect. The state was Cuban $550 million in arrears on its payments to small farmers, and Raúl found it ‘inexplicable’ that ‘bureaucratic red tape’ was holding up these payments when small farmers provided 65 per cent of the nation's domestic food production. ‘We are tired of excuses in this Revolution’ he declared.Footnote ⁴⁴

Seven months later, on 26 July 2007, Raúl extended his criticism, acknowledging that state sector salaries were not adequate to cover basic consumption, and that this shortfall was at the root of corruption. The only way to raise the standard of living was to raise productivity. ‘No one, no individual or country, can afford to spend more than what they have’, he reminded his audience. ‘It seems elementary, but we do not always think and act in accordance with this inescapable reality.’ Over the next several years Raúl introduced a sweeping programme of economic reform – or ‘updating’ of the economic model, as the Cubans preferred to call it – including a wider use of market mechanisms to boost Cuba's anaemic productivity.

To Fidel, corruption and low productivity resulted from the people's character defects, exacerbated by the material incentives of the market. The solution was to increase social control, decrease the scope of market activity, and exhort people to work harder for the social good. To Raúl, Cuba's problems originated with defects in the model of socialism they had been pursuing. The solution was to dispassionately re-examine that model, making ‘the needed structural and conceptual changes’. He closed his 26 July speech by reiterating his earlier calls for more open debate. ‘We are duty-bound to question everything we do as we strive to materialise our will more and more perfectly, to change concepts and methods which were appropriate at one point but have been surpassed by life itself.’Footnote ⁴⁵

Following Raúl's speech, the party organised nationwide grassroots discussions to identify obstacles to raising economic productivity and offer suggestions on how to overcome them. Some 5 million people participated in almost a quarter of a million meetings.Footnote ⁴⁶ Raúl's frank criticism raised popular expectations that the state was finally prepared to address the nation's manifest economic problems. Aware of the political risks involved, Raúl tried to lower people's expectations for quick fixes. ‘We would all like to move faster, but that is not always possible’, he told the National Assembly in December 2007. ‘Nobody here is a magician or can pull resources out of a hat.’Footnote ⁴⁷

In February 2008, Fidel Castro formally surrendered his position as president when he declined to stand for re-election. He would continue to serve, he said, as a ‘soldier in the Battle of Ideas’, commenting on current events through his occasional editorial ‘Reflections’.Footnote ⁴⁸ Fidel began writing his reflections in March 2007, immediately establishing himself as Cuba's pundit-it-chief. Every few days, a new reflection appeared on the front page of Granma. Cubans and foreigners alike eagerly plumbed the texts for any hint of disagreement between the Castro brothers. As Raúl's critique of Cuba's economic model intensified and he replaced top officials appointed by Fidel, speculation was rife that Fidel must be unhappy, and that the slow, deliberate pace of change must be a result of Fidel leaning on the brakes. The elder Castro's presence hung ‘like a Sword of Damocles’ over his successors, according to the BBC. That brought forth a scathing reply from Fidel, who insisted that Raúl was fully in charge.Footnote ⁴⁹ If there were disagreements, the two brothers kept them to themselves. But in the face of the obvious problems facing the Cuban economy, in 2010 even Fidel was moved to admit, ‘The Cuban model doesn't even work for us anymore.’Footnote ⁵⁰

Raúl's grand strategy for the economy was unveiled in conjunction with the Sixth Congress of the Communist Party in April 2011, 14 years after the Fifth Congress and nine years behind schedule. The Congress would ‘concentrate on the solution of problems in the economy and on the fundamental decisions for updating the Cuban economic model’, Raúl declared in November 2010. Other issues would be taken up later at a National Conference of the Party.Footnote ⁵¹ In the months preceding the Congress, local party branches convened more than 163,000 meetings of members and non-members alike, with almost 9 million participants, to discuss the leadership's strategy for economic renovation, embodied in the ‘Guidelines of the Economic and Social Policy of the Party and the Revolution’. Of the 291 proposals for ‘updating’ the economy, the most frequently discussed – and most controversial – dealt with things affecting people's everyday life – the proposals to phase out the ration book, to eliminate the dual currency and to improve basic services like transportation, healthcare and education.Footnote ⁵² A revised version of the guidelines was approved at the April 2011 Communist Party Congress.Footnote ⁵³

The guidelines presented the basic framework of an economic model in which the state plays a much less dominant role. This new model was less centralised, more reliant on market mechanisms to boost productivity, and envisioned a greater role for both foreign direct investment and the domestic private enterprise. The ‘non-state sector’– private enterprises and cooperatives – were treated as a permanent and dynamic part of the economy, not just a barely tolerated appendage. Before the reform process began, only 15 per cent of the labour force was employed in the non-state sector, almost exclusively by private farms; by the end of 2012, that had risen to 23 per cent, and Cuban economists predict that by 2016, it will be as much as 40 per cent.Footnote ⁵⁴ In preparing its political strategy to sell the guidelines, the party emphasised, ‘leaving behind prejudices against non-state sectors of the economy’– an imperative aimed as much at its own cadre as at the general population.Footnote ⁵⁵

In addition, the state would no longer serve as the paternalistic provider of all forms of consumption. ‘People cannot expect that “Papa State” is going to solve their problems for them’, declared Comandante Ramiro Valdés, Minister of Information and Communication.Footnote ⁵⁶ The ration card, which since 1962 had subsidised basic goods for everyone, whether they needed it or not, would be replaced by income support for the poor. Cuba could no longer afford to provide goods at what Raúl called ‘ridiculous prices’. Rationing had become ‘an intolerable burden on the economy and discouraged work’, not to mention fuelling the black market.Footnote ⁵⁷ The state also would eliminate a broad range of other ‘unwarranted handouts and excessive subsidies’, of which there were so many that in 2008 Raúl complained he could not even get a complete inventory.Footnote ⁵⁸ Although health care and education would remain free, even these crown jewels of the Revolution would have to be subject to the state's ability to pay.

In short, the new model aimed to reconnect people's standard of living to their productivity. ‘Socialism means social justice and equality but equality of rights and opportunities, not salaries’, Raúl told the National Assembly in July 2008. ‘Equality does not mean egalitarianism’.Footnote ⁵⁹ At the same time, Raúl repeatedly reassured people that no one would be left behind. ‘In Cuba, under socialism, there will never be space for ‘shock therapies’ that go against the neediest, who have traditionally been the staunchest supporters of the Revolution … The Revolution will not leave any Cuban helpless.’ Instead, help would be provided ‘to those who really need it’.Footnote ⁶⁰

As a package, these reforms look very much like the early stages of Vietnam's Doi Moi (‘renovation’) reforms, begun in 1986, aimed at creating a ‘socialist-oriented market economy’, and Deng Xiaoping's 1978 reforms aimed at building ‘socialism with Chinese characteristics’.Footnote ⁶¹ With a smile, a retired Cuban official described the Cuban model as ‘socialism with Cuban characteristics’. Indeed, the parallels to China's path to market socialism are substantial. Agriculture has undergone de facto privatisation, with state farms turned into cooperatives and most cooperatives divided into family plots. Small businesses are expanding rapidly in the retail and services sector. A new foreign direct investment law and special free trade zones offer competitive terms in hopes of attracting up to US$2 billion annually. Most importantly, state enterprises are facing the stark choice of becoming efficient (i.e. profitable) or closing their doors. As in China, many of the new initiatives have been preceded by pilot projects to test their viability, both economic and political.Footnote ⁶²

However, the Cubans intend to maintain state ownership of the largest enterprises and continue to direct national development by allocating investment through the economic plan. And unlike China, they are determined to maintain the achievements of the Revolution – free health care, education and social security – and to limit the extent to which economic restructuring produces extreme inequality. ‘I was not elected president to restore capitalism in Cuba nor to surrender the Revolution’, Raúl reminded the National Assembly in 2010, rather, ‘I was elected to defend, maintain and continue improving socialism, not to destroy it.’Footnote ⁶³

The Political Challenge of Economic Transformation

Raúl's ambitious economic policy generated new hope among many Cubans, as well as some anxiety. If it stalls or fails, popular disillusionment will be enormous, dealing a severe blow to the regime's legitimacy just as new, untested leaders are taking over. The greatest threat to the economic reforms comes from within the regime itself. The economic guidelines face significant opposition from entrenched bureaucrats in the government and party whose privileges are at risk.Footnote ⁶⁴ Some are resisting out of an ideological commitment and a fear that reliance on the market is a step down the slippery slope toward restoring capitalism.Footnote ⁶⁵ As Fidel said in his speech at the University of Havana, the idea ‘that socialism could be constructed with capitalist methods … is one of the great historical errors’. Bureaucrats, however, are defending their self-interest; along with administrative power over the economy comes access to various privileges, both legal and illegal.Footnote ⁶⁶

The ability of bureaucrats to resist change by slow-walking reforms is nothing new. A programme to rationalise state enterprises introduced in 1998 had reached fewer than one-third by the time Raúl became president in 2006. In the countryside, bureaucrats in charge of the state's agricultural procurement system sabotaged the market-oriented reforms Raúl introduced after he became acting president. ‘[They] think that if they apply these reforms, they will lose their position and power, and the advantages and privileges they now enjoy’, a member of an agricultural co-op told journalist Marc Frank.Footnote ⁶⁷ In 2011, Raúl warned recalcitrant bureaucrats that he would not tolerate inaction: ‘We shall be patient but also persevering in the face of resistance to change, whether conscious or unconscious. I warn that any bureaucratic resistance to the strict fulfillment of the [economic guidelines], massively supported by the people, is useless.’Footnote ⁶⁸

To assure that the new policies would not become a dead letter like so many earlier ones, Raúl created the Council of State's standing commission on implementation of the guidelines (Comisión Permanente para la Implementación y Desarrollo), headed by Vice-President Marino Murillo. At every semi-annual session, the National Assembly reviewed implementation progress, and the party's Central Committee did the same at its semi-annual plenaries. Even the party's Political Bureau established a commission that met weekly to track progress on the guidelines.Footnote ⁶⁹ Raúl did not hesitate to demonstrate that he was serious about accountability. In September 2014, with the economic reform process lagging and economic growth falling below targets, Raúl demoted the Minister of Economy and Planning, and gave Vice-President Murillo that portfolio as well, a move widely seen as an attempt to overcome bureaucratic resistance.Footnote ⁷⁰ As noted by Rafael Hernández, ‘The bureaucracy opposes reforms … in its slowness to implement the measures already adopted. This inertia … in which the bureaucracy drags its feet … is perhaps the most difficult thing to change.’Footnote ⁷¹

Failure of the new economic policy to raise productivity and incomes could deal a serious blow to regime legitimacy. But even the success will bring new political challenges. In an economy driven as much by the market's demand for efficiency as by the ideals of the Revolution's founders, can Cuba maintain the values of social justice that motivated the Revolution in 1959 and have been at its ideological core ever since – values that have been a key component of regime legitimacy? A number of the proposed economic reforms put vulnerable populations at risk. Despite Raúl's promise not to subject Cuba to ‘shock therapy’, if market forces are given freer rein, Cuba's income disparities are sure to increase, as they noticeably have already.Footnote ⁷² There are winners and losers. Those who are well-educated, live in cities where economic development is more dynamic, and have access to hard currency are well-positioned to thrive in a freer economic environment. Those who are low-skilled or elderly, have no relatives abroad to send remittances, or suffer from racial discrimination are all at risk. The government has pledged to maintain the collective welfare system of which the Revolution was most proud, including free health care, free education and social security. But other state subsidies for consumers have begun to be phased out.

Demanding efficiency of state enterprises meant that as many as a million state sector workers – 20 per cent of the labour force – will be laid off. Few of them had the skills or capital to launch a small business. Implementation of a plan in 2010 to lay off 500,000 in just six months was slowed because there was no place for them to go. Concern about the social dislocation that will inevitably accompany such a radical economic shift is clearly on the minds of Cuba's leaders. The pace of change will be slow and steady, ‘in order not to err’ Raúl explained in 2013. ‘To those [who] are encouraging us to move faster, we say that we will continue without haste, but in a measured way, with our feet planted firmly on the ground.’Footnote ⁷³

The ‘evolutionary strategy’ Cuba's leaders have adopted means that the economic transformation will take years to complete.Footnote ⁷⁴ Thus far, the political system seems to have managed the political fallout among the population effectively. There have been no street protests and no noticeable increase is support for dissident organisations. People's hope that the changes will improve their living standard still outweighs their fears.Footnote ⁷⁵ Going forward, the government needs to deliver on that promise, lest raised expectations turn into disappointment and resentment.

Social and Political Decompression

In Eastern European communist regimes, the successors to regime founders sought to meet the challenge of sustaining regime legitimacy by appealing to culturally resonant themes, especially nationalism, and allowing modest political and cultural liberalisation.Footnote ⁷⁶ A similar trend toward social and political decompression is already visible in Cuba.

A number of the early reforms instituted by Raúl Castro involved simply repealing unnecessary regulations that ordinary Cubans found especially exasperating. In 2008, the government legalised the sale of computers and cell phones, and eliminated rules against Cubans staying in tourist hotels or renting cars. In 2011, it legalised private real estate and automobile markets, allowing Cubans to buy and sell directly to one another. In 2013, it eliminated the carta blanca, the exit permit required for travel abroad, allowing Cubans with a valid passport to travel whenever and wherever they liked. The government was getting out of the business of trying to manage every social interaction between its citizens.

In one of his first speeches as acting president, in December 2006, Raúl argued for more open, democratic debate. ‘Argue, analyse, disagree’, he urged, ‘because the more you argue, the more you disagree … out of these disagreements will always come the best solutions’.Footnote ⁷⁷ He made the same point two years later to the National Assembly. Disagreement was far better than ‘false unanimity based on pretence and opportunism’ he said, adding that the right to disagree was ‘a right nobody should be deprived of’.Footnote ⁷⁸

Cuba's intelligentsia took full advantage of the new openness. Fidel had famously defined revolution as, ‘changing everything that needs to be changed’ – a phrase frequently invoked by Raúl and others to justify the sweeping changes implied in the Economic and Social guidelines.Footnote ⁷⁹ Writers, artists, academics and an incipient community of bloggers launched a freewheeling debate about just exactly what needed to be changed.Footnote ⁸⁰ Periodicals like Témas and Espacio Laical, along with dozens of blogs, provided the venues, sometimes even publishing the views of Cuban-American exiles.

In 2007, the government got an inkling of how hard it would be to put this genie back in the bottle. Cuban television featured interviews with three cultural officials who were notorious for enforcing ideological orthodoxy during the ‘Grey Years’ of 1971–6, a time when a number of leading artists and writers were censored and persecuted. Fearing that the reappearance of these apparatchiks foreshadowed a new crackdown, Cuban intellectuals launched an ‘email war’ of protest.Footnote ⁸¹ Their response was so intense that Minister of Culture Abel Prieto (generally regarded as responsible for expanding the space for cultural criticism over the preceding decade) met with many of them privately to provide reassurance. In public he called the television interviews ‘a mistake’ and reaffirmed that the leadership still regarded the Grey Years ‘with great disapproval’.Footnote ⁸²

Improved relations with the Catholic Church also signalled the regime's greater tolerance for civil society institutions outside its control. Although the government's rapprochement with the Church began in the 1980s, it reached a high point in 2010 when Raúl Castro and Cardinal Jaime Ortega entered into discussions about the treatment of the dissident group, Ladies in White, and about the release of political prisoners. On 7 July, the Cardinal's office announced that the government would release 52 political prisoners, including all those who were still imprisoned as a result of the 2003 crackdown on dissidents.Footnote ⁸³ Over the course of the next few weeks, the government agreed to release even more prisoners, with the total eventually reaching 127. The Cuban government's willingness to treat the Catholic Church as a legitimate counter-party in a dialogue on human rights was unprecedented. As Ortega said, the government had ‘recognized the role of the Church as an interlocutor’ with civil society in a way that it had never done previously.Footnote ⁸⁴

‘We did it in the framework of a dialogue based on mutual respect, loyalty and transparency with the senior leadership of the Catholic Church’, Raúl said, explaining this dialogue to the 2011 Party Congress. ‘With this action, we have favoured the consolidation of the most precious legacy of our history and the revolutionary process: the unity of our nation.’Footnote ⁸⁵ The theme of national unity appeared frequently in Raúl's public statements, indicating a recognition that the economic changes upon which they were embarking held the potential to generate division and opposition. To reinforce regime legitimacy, Raúl focused first and foremost on improving economic performance, but at the same time he appealed to culturally resonant themes, especially nationalism. As Raúl told the National Party Conference in 2012, the political requisite for economic success was ‘to strengthen national unity around the Party and the Revolution … and to consolidate the conviction of preserving the Cuban nation and socioeconomic achievements, on the basis of the idea that homeland, revolution and socialism are indissolubly fused’.Footnote ⁸⁶

The state's reaction to the emergence of Cuba's online community of bloggers and their intense – not always civil – debates, was more ambivalent than its attitude toward the Church. With a highly educated labour force, Cuba has regarded information technology as an area of potential economic growth and international competitiveness. In 2002, it opened the University of Information Sciences, enrolling some 10,000 students and over 1 million young people participate in over 600 Computer Youth Clubs.Footnote ⁸⁷ From this investment, a robust and growing community of bloggers has emerged, including, most famously, Yoani Sánchez. Her ‘Generación Y’ blog offers an acerbic look at daily life in Cuba, winning Sánchez international acclaim – and the hostility of Cuban officialdom (which she regularly lampoons). But the cyber-terrain of Cuban politics covers the gamut from adamant supporters of the regime to adamant opponents.Footnote ⁸⁸

Cuban authorities recognised the power of the Internet. In 2006, Raúl Castro named Ramiro Valdés, former Minister of the Interior, as Cuba's new Minister of Communications and Information. While acknowledging that digital technology was essential for Cuba to ‘continue to advance down the path of development’, Valdés warned that it also provided the United States with powerful new tools to ‘bring the destabilizing power of the empire to threatening new levels’. Cyberspace, he argued, had to be understood as a ‘battlefield’ in the struggle against imperialism; the Internet, ‘the wild colt of new technologies, can and must be controlled’.Footnote ⁸⁹ The government blocked certain sites and cut off Internet access to certain bloggers when their commentary ran afoul of the authorities' sense of propriety. But the parameters of what was acceptable were unclear and shifting.Footnote ⁹⁰

In 2013, amidst a controversy about the censorship of an independent yet generally pro-government blog, La Joven Cuba, at the University of Matanzas, Cuba's new First Vice-President, Miguel Díaz-Canel, weighed in on the side of allowing open debate online, for the simple reason that in the long run, the state could not control it anyway.Footnote ⁹¹ ‘Today, with the development of information technology, social networking, computing, and the Internet, banning something is almost an impossible illusion. It makes no sense’, he explained. ‘Today, the news from all sides, good and bad, manipulated and true, and half-true, circulates on the networks, reaches people, people are aware of it.’Footnote ⁹²

No one should mistake this limited social and political decompression for democratisation. There is no prospect in the near future for a move away from a one party system. As Raúl told the Communist Party 2012 National Conference, ‘Renouncing the principle of one sole party would simply be the equivalent of legalizing the party or parties of imperialism in our homeland’.Footnote ⁹³ Yet the flood-gates of criticism opened by Raúl's own critique of the government's past practices, combined with the leadership's desire for national consensus around the economic reform process, has already produced more political space ‘within the revolution’ than ever before.Footnote ⁹⁴

Generational Transition

How would the Cuban regime fare when the founding revolutionary generation (los históricos) finally left the political stage? The puzzle of generational succession was a common one in communist systems – one that China finally solved and the Soviet Union did not.Footnote ⁹⁵ Cuba's leaders had been talking about the need to plan for this succession for a long time. As early as 1986, Fidel Castro highlighted the issue in his closing speech to the Third Congress of the Communist Party.Footnote ⁹⁶ Yet little was done to effectively prepare a new generation of leaders. Fidel's strategy of elevating his favourite young cadres to positions of national authority without giving them the experience they needed repeatedly ended in failure.

In January 2012, nine months after the Sixth Party Congress adjourned, 811 of the Congress delegates reconvened for the First National Party Conference. Their purpose was, first and foremost, to develop a plan of political work to support implementation of the new economic guidelines. Additionally, the leadership sought to revitalise the party by repairing the weaknesses that had developed over the preceding decade in order to prepare for the inevitable generational succession.

The basic document informing the conference's work laid out a number of these shortcomings: the party had been drawn into the administration of state agencies, thereby neglecting its political work. Its endless meetings had degenerated into ‘formalism’, in which no real criticism was ever voiced and little was accomplished, thereby ‘spreading dissatisfaction and apathy’ among the membership. Its cadres too often lacked creativity, failed to take the initiative in problem-solving, took a lax attitude toward ‘violations and indiscipline’ and sometimes fell prey to corruption themselves. The party's ‘rapid promotion of immature and inexperienced cadres’ had produced serious policy errors and failures.Footnote ⁹⁷ Finally, the party had ‘lacked the political will’ to promote women, Afro-Cubans and youth into leadership positions based on their merits. ‘It's really embarrassing that we have not solved this problem in more than half a century’, Raúl reported to the Sixth Party Congress.Footnote ⁹⁸

For all the talk about the need to replace los históricos with a new generation of leaders, the new Political Bureau elected at the Sixth Congress was not very different. Among its 15 members were only one woman, two Afro-Cubans and only two people under the age of 60. Clearly the veterans were not quite ready to leave the barricades. Speaking for his generation, Raúl said, ‘We strongly believe that we have the elemental duty to correct the mistakes that we have made all along these five decades during which we have [been] building socialism in Cuba.’Footnote ⁹⁹

The new Central Committee, however, was significantly more diverse. Among its 115 members, 48 were women (42 per cent, up from 13 per cent previously) and 36 were of African descendant (31 per cent, up from 10 per cent). Although no data on the Committee's average age was released, Castro noted that a large number of young professionals had been added to its ranks.Footnote ¹⁰⁰ The National Assembly and Council of State elected in 2013 saw similar changes. Women members comprised 49 per cent of the Assembly, up from 43 per cent, and Afro-Cubans comprised 38 per cent, up from 35 per cent. The average age of delegates was 48. Of the Council of State's 31 members, 42 per cent were women, 39 Afro-Cuban and 61 were born after the triumph of the Revolution.Footnote ¹⁰¹

To hasten the transition to a new generation of leaders, the party adopted term limits reminiscent of those in China: senior leaders could serve no more than two consecutive five-year terms. In his speech to the National Assembly on 24 February 2013, Raúl Castro formally announced that he would retire in 2018 at the end of his second presidential term. He also announced the retirement of several elderly comrades-in-arms, including First Vice-President José Machado Ventura. In his place, the Assembly elected 52-year-old Miguel Díaz-Canel, putting a leader born after the Revolution in the direct line of political succession for the first time.Footnote ¹⁰²

As Cuba's revolutionary generation passes from the scene, the idealists who fought against Fulgencio Batista's dictatorship are being replaced by bureaucrats whose claim on the heroic past is tenuous. Fewer and fewer people even remember the hardships of pre-revolutionary society. As managers replace visionaries, ideological ardour cools and the young take the Revolution's accomplishments for granted, seeing only its failures. In this, Cuba's Revolution is no different from those in Russia, China and Vietnam.

The political risk inherent in generational succession and its linkage to the regime's economic performance was summed up by Francisco Soberón, the president of Cuba's National Bank, in 2005. Noting that the ‘poor functioning of the economy’ was a major cause of the collapse of European communism, he warned of the need to reform the economy sooner rather than later.