Business | Features
As Castro walks out, in come reforms
But the kind of democratic transformation that Cuba desperately needs seems unlikely to happen at least in the near future
- Financial Times & Reuters
- Published: 23:29 February 24, 2008
Fidel Castro's resignation as president raises the prospect that Cuba can become a more open and dynamic society. For the foreseeable future, change may fall well short of the kind of democratic transformation that Cuba needs to fully achieve its potential, but even limited reforms would be welcome. The United States, Europe and other world powers can help by seeking to engage with Cuba's government. Now more than ever it is time for the US to abandon its four-decade-old economic embargo.
For decades, US policy towards Cuba has been based on the premise that Castro's departure would trigger wholesale change and pave the way for a restoration of democracy. The events of the past few days suggest that this is highly unlikely to occur.
With the freshly-elected legislature that has designated new government leaders, including Fidel Castro's replacement, Cuba seems to be successfully negotiating a political transition begun in the summer of 2006, when a seriously ill Castro temporarily handed over executive responsibility to his younger brother, Raul.
Under Raul Castro government has become more pragmatic. And with macro-economic stability reinforced by Cuba's close relationships with Venezuela and China, as well as rising commodity prices, the younger Castro has encouraged a more open debate about the shortcomings of day-to-day life in Cuba. He has supported modest reforms in the countryside, creating incentives for smaller farmers to produce more food and ease pressing shortages.
Fidel Castro, who has generally opposed market-oriented change because it encourages anti-socialist individualism, will retain some influence as an elder statesman. But his departure from the frontline of government should clear the way for more experimentation. The US and Europe need to encourage those Cubans who want to be bold.
Europe has become more engaged with Cuba in recent years, partly because of the efforts of the centre-left Spanish government. But there is now a crying need for an overhaul of US policy. Continued efforts to isolate Cuba will only help hard-liners to mobilise support.
As an interim measure, the US should relax its travel ban, encouraging the people-to-people contacts that can help to stimulate the development of a more open society. Restrictions on travel by US-based Cubans introduced in 2004 should be reversed. None of this seems remotely likely under the Bush administration. But a more effective Cuba policy should figure high on the agenda of the next US president.
Ethanol boom doubtful
Cuba will only jump on the ethanol bandwagon if it can produce the biofuel from sugar cane as a by-product that does not affect its sugar output, experts said.
Fidel Castro's retirement has fuelled speculation that ethanol could become a billion-dollar export industry for the cash-strapped communist country under his brother Raul Castro.
The younger Castro is considered less ideological and more pragmatic than his brother, and has indicated an interest in drawing more foreign investment in recent speeches.
But Fidel Castro is expected to retain huge influence in Cuba and he has repeatedly branded the use of food crops to produce fuel as a crime against humanity because rising prices will increase hunger.
A Cuban economist with ties to the sugar industry said Cuba is working to develop technology to produce fuel from milled sugar cane bagasse. If successful, Cuba could become more interested in making ethanol, he said.
"It is inconceivable while Fidel is still alive that his brother Raúl, or anyone else, would convert a significant proportion of our sugar crop or vacant land to ethanol," the economist said, asking not to be identified. "Even after Fidel dies, I can't imagine that happening for quite some time," he said.
Currently, ethanol is obtained from sugar cane juice and cannot be made from bagasse, but new research is focusing on cellulose technology that could make this possible.
Cuba was once the world's largest sugar exporter. In 1990, it produced eight million tonnes of raw sugar. But the fall of the Soviet Union, low prices and bad management left the industry in ruins. The 2006-07 harvest was just 1.2 million tonnes.
Sugar is no longer a major export earner and Cuba, in fact, has been importing about 200,000 tonnes a year of low grade whites to cover domestic consumption.
Ronald Soligo, an energy economist at Rice University in Houston, said Cuba could produce about 1.6 billion gallons of ethanol annually if it returned to sugar cane yields prevalent when the Soviet Union was buying its sugar at inflated prices.
At that time, in the 1980s, yields were 55 tonnes per hectare, but have fallen to 22 tonnes, he said in Miami at a Florida International University conference on Cuba.
"It appears that sugar cane ethanol really is an opportunity for Cuba to supplement, replace some of its imported fuel and maybe even to export ethanol," he said.
Some experts believe Cuba could become the world's third ethanol producer after the United States and Brazil, but that would require huge investments, not just to improve its cane harvests, but also to finance the research and construction of distilleries.
The government, however, has been reluctant to allow foreign companies to administer farms, a precondition for any business wanting to invest in agriculture in Cuba.
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