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Notes on a Visit to Cuba

Tuesday, May 6th: This morning I spent four hours with the Input Output team of the secretariat of Carlos Rafael Rodriguez. The group consists of eleven statisticians and economists, headed by Dr. Raoul Sandoval. They have just completed the compilation of an input output table of the Cuban economy for the year 1965. The worksheets deal with some 600 industries combined into a balanced table consisting of 171 sectors in addition to several columns of final demand. For certain working purposes this table was aggregated further into a smaller table containing ninety-seven sectors.

Several neatly mimeographed industry reports gave me the impression that the work was carefully, systematically done, with great attention to detail. The classifications and definitions reflected good fundamental understanding of the entire subject.

The coefficient matrix derived from that table was inverted with the help of an English Electric computer, and used to determine the direct and indirect input requirements corresponding to different levels of sugar production. One of the principal weaknesses of the present matrix is the absence of adequate labor input data: as in its US counterpart the household row shows only the total wage bills of all the sectors.

A considerable amount of field work was apparently involved in collecting the original data. The table covers only the industrial, manufacturing sectors. Agriculture and other service industries are relegated in it to the final bill of goods. I was told, however, that, in the near future, the compilation will be extended to cover sugar cultivation and all other agricultural products.

We later discussed the problem of price relationships, the use of physical units in measuring input and output, the treatments of joint products and the methodology to be used in projecting changes in technical coefficients. I was told that a senior Russian economist who came to Cuba as an adviser limited his advice to quotations from Marx, Engels, and Lenin, and thus was of very little use.

In the afternoon I spent one more hour in the Institute of Economic Research. The special subject of discussion was the use of Input Output method in planning the overall economic development of the Isle of Pines, a large agricultural youth commune. Here the emphasis would not have to be on describing the existing situation, but establishing new Input Output coefficients and constructing an Input Output table to describe the future state of that regional economy under conditions of balanced or unbalanced growth, as the case may be. The compilation and use of incremental capital coefficients was naturally also discussed in greater detail. I was sorry to discover in the course of this discussion that Cuba does not yet possess a well-articulated budgeting system. When I mentioned overall investment and credit planning, I was told that such a thing does not exist: “the state of our economy today is similar to that of the Russian economy in the year 1921.”

Wednesday, May 7th: In the morning I was taken by the Director of the Agronomic Institute on a tour of the so-called Greenbelt of Havana. First, we drove out to an experimental dairy farm. Such farms are usually displayed as favored showplaces to foreign visitors in all developing agricultural countries. This one was obviously considered to be one of the seven wonders of the world, or at least of new Cuba. Covering an area of several square miles with paved roads, well-irrigated fields, and innumerable tractors, it now houses three or four hundred cows. Next year their number will exceed a thousand. The experimentation consists primarily in cross-breeding imported Jerseys, Guernseys, and Holsteins with the well-acclimatized Cebu and in varying the conditions of their housing and feeding in order to study the effect of these variations on the yield of milk. Sixty of the luxuriously housed red and black spotted ladies were being treated as though they were prominent foreign guests in the Habana Libre hotel. One large white-washed concrete barn is fully air-conditioned. The floors are spotlessly clean, and soft music emanating from evenly distributed loud speakers gently soothes the flapping ears.

All jokes aside, the technical perfection and attention to details of the operation is indeed impressive, particularly when compared to the cattle farm in Rumania we visited a year ago, where the poor animals were standing side by side without partitions, three inches deep in manure, their heads and backs covered with flies. The resident farm economist indicated by his questions to me that the costing and accounting aspects of that experiment are much more primitive than its technical, agronomic side.

We next inspected an experimental pineapple plantation and a coffee growing farm. The tour appropriately terminated in a pleasant suburban restaurant placed in the middle of a luxurious tropical garden with well-groomed lawns, gigantic palm trees and bamboo clumps half-encircled by a picturesque stream with a waterfall. Before the Revolution, so I was told, only the upper classes could enjoy it. Now “well-dressed” guests could be seen only at a few tables; the rest were occupied by men and women in work clothes eating shrimp and drinking beer, and having a good time.

On my return, I was met at the door of my hotel by the Head Planning Officer of the Cuban Electricity Board and several members of his staff. While waiting for me they had set up a conference room on the mezzanine floor with blackboard and recording equipment. I spent an hour and a half with them discussing methods to be used in projecting the demand for electric power, and determining an optimal mix of alternative sources of supply. With Soviet oil, the principal source of energy, coming from many thousands of miles away, sugar cane “straw,” used up to now to fuel the sugar mills, is increasingly absorbed in manufacturing building materials. There is some hope that the Rumanians’ exploratory drilling on the north shore might provide a domestic oil supply.

By now I was able to form a preliminary notion of the general economic situation of the country and the more important problems confronting it. One’s first question about the present state of the Cuban economy, after one has seen the innumerable public posters, read the long articles in the daily press, and heard the interminable exhortations on the radio urging every inhabitant of the city—whether waiter in the restaurant or an important official in the Ministry or an SDS “escapee” living in the Habana Libre—to grasp a machete, and to go to the country to cut sugar cane, is: Why all this fuss? Why ten years after the glorious revolution? Why does Cuba have great and increasing difficulties in cutting six million tons of sugar now, when before it was able to harvest more than seven million apparently without much trouble and without extracurricular assistance from people living in the cities?

The answer seems to be that the principal cause of the present labor shortage is the improvement in the standard of living of the campesinos, the rural population. Before the revolution, the land was in the hands of large owners and the peasants had to eke out their meager existence either as hired hands or badly exploited sharecroppers. To keep body and soul together they had to work very hard, particularly at harvest time. In two successive land reforms following the revolution most of them came into possession of substantial, if not large, plots of land, although the large sugar plantations were taken over by the state.2 These provide them with secure and satisfactory livelihoods. The pressure is off and so is the necessity and willingness to engage in the backbreaking work of cutting cane sixteen hours a day without let up. The supply of experienced, agricultural labor decreased and the government had no other choice than to try to replace it by sometimes enthusiastic, sometimes grumbling, but always relatively unskilled urban “volunteers.”

In the long run full or at least partial mechanization of harvesting operations should ease the pressure; in the short run, however, not only the sugar crop, but many other crops, such as potatoes and citrus fruit, cannot and will not be brought in in time. In Russia a similar impasse was met by forced collectivization; in Cuba such use of force is out of the question. Harvesting not only of sugar cane but of all other crops as well can be expected to be for some time the principal bottleneck limiting the rate of agricultural expansion and consequently of general economic growth.

According to official figures, the rate of saving and investment has now reached the unprecedented, and, in comparison with other countries, unequaled figure of 30 or possibly even 35 percent. Most of it is allocated to agriculture and the supporting industries: Irrigation, road building, fertilizer plant construction, and importing tractors and other agricultural machinery. Soviet Russia and other socialist countries absorb the bulk of Cuban sugar output, Japan takes a substantial and gradually increasing amount. While oil and certain other staples are supplied by Soviet Russia, much of the mechanical equipment and supplies come from other countries. English buses, Italian and Canadian tractors arrive by ship, not to speak of Canadian livestock imported for breeding purposes as well as corn and other specialized poultry feed absorbed by the fast growing, large-scale Cuban poultry industry.

The US government attempts, from time to time, to discourage European and Canadian firms from trading with Cuba, by threatening what might be called a secondary boycott of their products. Such moves do not contribute to our popularity in Latin America or even in Western European countries, while their effect on Cuban trade is marginal at best. The economic impact of the direct US boycott is very great indeed. There can be hardly any doubt that it cuts down the standard of living of the Cuban population and slows down to some degree the rate of economic growth.

Thursday, May 8th: This morning again a visit to the Institute of Economic Research; this time the subject of discussion was the program of the Institute’s own work. To judge by the annual report which was handed to me at the end of the previous meeting, that program is characterized by the lack of any central core. Without exception each of the 150 subjects listed represents essentially a brief report written in reponse to an official request from this or that Ministry—be it the outlook for next year on the English citrus fruit market or cost comparison between two agricultural machines. In view of the shortage of professionally trained economists, this is not surprising. Nevertheless, I tried to impress on my hosts the importance of devoting at least a fraction of their efforts to long-run projects suggested by the Senior Research staff itself.

I was invited to lunch by Oscar Garcia Fernandez, the Vice-Rector of the University, at the luxurious “1830” restaurant—a converted seashore mansion of an obviously very opulent revolutionary hero. In his middle thirties, the Vice-Rector is by profession a surgeon; lively, intelligent, speaking perfect English, he has been to the United States many times and now travels frequently to Europe. In addition to the University of Havana, Cuba has two or three other universities. The University of Havana has some 35,000 students; their number increases, of course, very quickly. In 1972 thousands of youngsters who enrolled in primary schools after the revolution will be completing high school; the University authorities are already preparing for that wave of new students. High school kids from the backward rural regions spend a year in a special preparatory department.

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    Somewhere around 30 percent of all land and 40 percent of arable land are now held by individual campesinos; the rest is controlled and cultivated by the government.

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