Its liberalising reforms largely reflect facts on the ground
CUBA is famous for being a place where time seems to stand still. Its cars and buildings look much the same as they did in 1959. Yet change has been afoot ever since Fidel Castro’s brother Raúl succeeded him in 2006. The first reforms were economic. The younger Mr Castro legalised self-employment, and let citizens sell their homes. Next came a thaw with the United States—only partly reversed by Donald Trump—in which the two re-established formal relations.
And what of political reform? In April Mr Castro handed the presidency to Miguel Díaz-Canel, a younger Communist Party official. Raúl has spent the past few months working on a revision to the constitution, passed in 1976 when Cuba was a Soviet satellite. The National Assembly approved the new text on July 22nd. It has not yet been released, but will be sent out for public consultation before being put to a referendum. It can be safely assumed that Yes will win.
To judge from excerpts published in Granma, the state newspaper, the revised constitution will write Raúl’s “updating” of the Cuban model into law. It will reorganise the national and local governments, legalise private property and pave the way for same-sex marriage. A clause labelling Cuba as progressing towards a “communist society” has been dropped.
Yet for all the headlines Raúl’s reforms have yielded, the twin pillars of Fidel Castro’s rule—the Communist Party’s monopoly on power, and the state’s domination of the economy—remain in place. Rather than scrapping the old ways, Mr Castro is trying to preserve as many as possible, given the constraints of an era when Cuba lacks the charismatic leader and foreign patronage (from the Soviet Union and then Venezuela) that sustained it for so long.
The new constitution is in one sense a fresh start. Of the current document’s 224 articles, 113 have been modified, with 87 added and 11 removed. But many changes merely grant retroactive sanction to facts on the ground. Some 600,000 Cubans already toil as cuentapropistas(self-employed workers). From January to October 2017, Cuba received over $2bn in foreign direct investment. In theory, all of this activity was illegal, since the constitution of 1976 banned private property.
The adjustments to the structure of the government are more substantive, but also reflect concessions to reality. Raúl had already announced a rule that future presidents must be between 35 and 60 when inaugurated, and can serve only two five-year terms. The president’s powers will be split with a prime minister, a new role. And provinces will get regional governments, with governors chosen by the National Assembly.
All of these changes decentralise and distribute power, reinforcing the transition from a dictatorship built around a strongman to one based on power-sharing among party officials. Raúl Castro himself ruled in a more consensual manner than Fidel did, mediating delicately between young reformers and recalcitrant fidelistas. The changes suggest that Mr Díaz-Canel will have little room for personal initiative. There is still no provision for Cuban citizens to vote for their leaders directly.
The most striking change is the redefinition of marriage to encompass any two people. This makes possible a future legalisation of same-sex marriage. Mr Castro’s daughter Mariela, who leads the national sex-education agency, asked for this clause. In a calibrated display of tolerance, the government let evangelical groups protest against the policy publicly—a courtesy withheld from demonstrators demanding political freedoms.
Cuba’s leaders appear comfortable with social liberalisation, because it does not threaten their power. However, they are backtracking on the economy. They are highly suspicious of the free market, which they associate with corruption, inequality and competition for state-owned firms.
Raúl’s economic reforms have encountered problems. Because of an underdeveloped banking system, most transactions are in cash, hindering tax collection. Entrepreneurs cannot raise capital, making those with access to remittances from abroad richer than the rest. And the state’s monopoly on wholesale markets obliges individuals and businesses to compete to buy a limited pool of goods. That stops firms from reaping economies of scale, and forces them onto the black market.
Rather than addressing these flaws, the government seems to be souring on its effort to unshackle the private sector. Just a week before the parliamentary vote on the constitution, it issued a fresh set of regulations on cuentapropistas. The new rules maintain prohibitions on selling services to foreigners—particularly galling for programmers and web designers—and on commercial imports. Entrepreneurs with means will have to keep visiting Miami, Mexico and Panama for provisions.
Some new regulations are even more restrictive than the old ones were. Cuentapropistas are now limited to one type of work, and some fields that were once open to them are now closed. The government has shut a loophole that let restaurants seat more than 50 patrons at once, and set up a tax scheme that makes hiring more than 20 workers prohibitively costly.
By keeping the private sector down, the government is protecting its own loss-making firms, which dominate the economy. During the legislative debate over the constitution, Oscar Luis Hung Pentón, an economist, vowed that “they will continue as the main source of funding upholding the revolution’s social advances.”
The real challenge for Cuba is how to sustain its grossly inefficient centrally planned economy in the absence of a foreign sponsor. At his speech in the assembly, Mr Díaz-Canel cited America’s trade embargo as a cause of Cuba’s economic struggles, likening it to “El Dinosaurio”, a one-line work of fiction by the writer Augusto Monterroso. “When he woke, the dinosaur was still there,” it reads. The same could be said of the Communist Party.