Soviet bloc's lessons for change in Cuba

Soviet bloc's lessons for change in Cuba
Doug Stanglin, USA TODAY 2:52 p.m. EDT April 26, 2015

The sidewalk kiosks that began popping up across the street from my
Moscow office in the early 1990s looked at first like a makeshift
carnival midway, destined to be torn down when the circus moved on.

These makeshift structures — selling everything from ballpoint pens to
soft drinks — were the most visible concession by the authorities that
the hidebound state-run shops and stores were a dismal failure.

Mikhail Gorbachev's tepid perestroika campaign was the first attempt to
tinker with the economy, but eventually triggered a hard-line backlash —
and almost comical coup — that collapsed four days later in a heap,
along with the Soviet empire.

Next up — a bare two years later — was Boris Yeltsin, whose brain trust
brought tremendous dislocation with "shock therapy" that knocked the
props from the old communist economic model, leaving average Russians
reeling from rising unemployment, soaring prices, heavy taxes and the
gradual disappearance of subsidies on everything from food to energy.

Eventually, the economic reforms did begin to break the state's formal
ownership of big industry, but also ushered in the era of oligarchs — as
local and regional party bosses "appropriated" major industry they once
ran and ushered in the era of Kremlin-protected billionaires.

Much of this unfolded against a backdrop of China's experience at
Tiananmen Square, where Beijing's Communist leaders used brute force
against protesters to put the political cork back in the bottle that
economic reform had removed. Over the years, Poland, Estonia, Hungary,
and other East bloc nations shed their socialist straitjackets.

Now it's Cuba's turn.

Can the last Soviet-style economy learn anything from the agonies of its
one-time Marxist-Leninist brethren?

It is a question just about everybody but Cuba is asking out loud. The
Americans certainly are. I attended a seminar on "Cuba in Transition"
last week — not in Havana but in Washington. It was (notably) sponsored
in part by the U.S. Chamber of Commerce.

Participants pointed out that Cuban officials bristle at the term
"transitioning." Cuban authorities may concede a need for change, but
they aren't transitioning away from anything, most certainly not to a
capitalist system.

Or as Cuban President Raúl Castro says in his take on economic change:
sin prisa pero sin pausa (Slow but steady.)

But change has a habit of slipping the grasp of even the tightest fist.

In the early '90s, I watched the Gorbachev team try and fail to shore up
the Marxist-Leninist economy. Like Castro's, the mantra was to "improve"
the system not replace it.

Instead, tinkering bred dissent on the right and the left — and led to
the collapse of the entire structure, taking Gorbachev with it. In
China, there may still be an entity called the Communist Party, but communis

Cuba is taking it slow, opening up the small entrepreneurial sector, but
not exactly greasing it.

But the same forces that may prompt Cuban officials to look the other
way at a thriving black market (how else can you buy a tire?) will be
hard-pressed to stop the expansion of the private economy as more and
more people become dependent on — or beholden to — it. If workers flood
the private sector, who will work the state firms at subpar wages?

Worse, from the viewpoint of the ruling party, economic change
inevitably brings political reform, or an end to the experiment altogether.

Cuba, long ago weaned from Moscow's largesse, is now struggling with the
loss of aid and cheap oil from Venezuela with the worldwide collapse of
oil prices. That leaves little maneuvering room.

Vadim Grishin, an International Monetary Fund senior adviser who teaches
a course on the Economics of Transition at Georgetown, University,
watched the borscht being made close up in Moscow during the early '90s
when he served with the Yeltsin administration as it struggled with
economic reform.

Cuba's current economic model, he says flatly, "is not sustainable."

"This is not a random phenomenon," Grishin says. "Shortages and delays
in development are not due to some mistakes in policy or to some fatal
coincidence of circumstances, but rather to deeply rooted properties of
socialism."

As economic pressure mounts, change in Cuba seems inevitable. But as
ambitious politicians, the Cuban diaspora, U.S. companies and a tiny
population of 11 million people jockey for change, Cuba may be able to
avoid the wrenching excesses that brought down the Soviet behemoth. As
one seminar participant noted, Cuba is "too small to fail."

USA TODAY reporter Stanglin covered the Cold War from Russia and Poland
for Newsweek, U.S. News & World Report and UPI

Source: Voices: Soviet bloc's lessons for change in Cuba -
http://www.usatoday.com/story/news/world/2015/04/26/cuba-soviet-economy-transition-reform--voices/26314531/