Cuba updates its economic model Print

by Julio Garmendía Peña, Ambassador of Cuba to Canada

June 23, 2015, Diplomatic & International Canada

The blockade by the United States on Cuba has negatively affected progress in my country. Although some do not want to admit it, the blockade has limited access to financing, technology, systems, infrastructure, software and applications. This was acknowledged by U.S. President Barack Obama’s announcement of investments in the telecommunications sector. That announcement alone illustrated the fact that internet access has been limited by the high cost of technology and the U.S.’s policy.

Nevertheless, improvements have been made in recent years in the quality of and access to ICT and technological infrastructure and training. There has been increased investment in telecommunications infrastructure projects and fibre optic and cellphone networks since 2009.

There are now 154 public Internet rooms on the island and there are plans to commercialize wideband access. Internet surfing and all of its services cost 4.50 Cuban pesos ($4.88 Cdn) an hour, which is still expensive for the average Cuban citizen. However, in late December, Cuban telecommunications company ETECSA announced the expansion of internet access in 2015 at those internet rooms, and it is setting up WiFi services.

The Cuban government has stated several times that widespread access to information technology by Cuban society is a priority and has expressed its willingness to work to make this resource available, accessible and affordable for everyone. To that end, the government recently announced its intention to provide the largest possible number of teachers with access to the Internet. A total of 26,650 teachers will be able to access the web from their schools by May 2016, to support their research and academic work. All high schools and polytechnic institutes in Cuba will be connected to the Internet in the coming year. By 2017, the Cuban

Ministry of Education expects to have all middle schools, daycare centres and special education centres connected, in a process set to conclude with elementary schools in 2018. The ministry also plans to distribute tablets to  students, since, at present, the student/computer ratio is about 30:1. The Cuban university education system will benefit as well in the near future from a substantial improvement in infrastructure needed for its computerization and connectivity.

Cuba is also opening up its markets. As part of that process, which began in April 2011, Cuba has expanded the ability of Cubans to become self-employed, as initially approved in the 1990s when we opened the market to foreign investment. By December 2014, more than 477,000 Cubans identified themselves as self-employed. Changes have also allowed the sale of real estate and vehicles between individuals, the creation of non-agricultural co-operatives, the possibility for farmers to sell their products directly to hotels, the use of otherwise idle lands for farming, the adoption of a new foreign investment law, with the development of a portfolio of business opportunities, including 246 projects worth $8.7 billion. All of this was complemented by the launch of the Special Development Zone of Mariel, which offers more favourable conditions for foreign investors. These measures are helping to stimulate the economy.

The thawing of relations between Cuba and the United States has allowed us to advance communication between the two, through an agreement between ETECSA and the American company IDT Domestic Telecom. This is a first step that, presumably, will be the prelude to new agreements in this strategic sector. Apple and Netflix already have released the sale of their services to the island and we expect similar companies will follow suit.

The economic, commercial and financial blockade imposed by the United States against Cuba for more than 50 years has been the main obstacle to the development of our country. Despite this policy’s negative impact on the economy and quality of life of our population, Cuba has reached high levels of development that place it among the top countries in the region in terms of infant mortality and life expectancy at birth. We are also taking important steps in meeting our UN Millennium Development Goals (MDGs). Such results are a reflection of social policy in the last 50 years, which has kept the concept of equitable and sustainable human development at the centre of its national development strategy.

Given this, the restoration of relations with the United States will undoubtedly offer business opportunities with major U.S. companies. Moreover, economic ties with the U.S. will be a challenge of significant importance in a number of areas that are important to my country’s development strategy. Those include telecommunications, biotechnology and tourism, among others.

The restoration of relations will undoubtedly also benefit Cubans who have relatives living in the United States. Among the first measures announced by Obama was authorization to raise the limit on remittances to Cuba from $2,000 per year per person to $8,000. He also eased  travel restrictions and granted permission for charter flights to Cuba.

Although these measures directly benefit Cuban families on both sides, the Cuban government considers them insufficient and limited as Cuba aspires to maintain a normal relationship with the U.S. in the area of ??migration. The United States maintains the Cuban Adjustment Act and the policy of “dry feet, wet feet” (Cubans picked up at sea are sent back to Cuba, while those who reach U.S. soil are permitted to stay.) These are the main stimuli for illegal emigration from Cuba to the U.S. and irregular entries to that country. This is a policy and a law conferred only on Cuban citizens and is, therefore, the fundamental element that continues to encourage these illegal departures.

Regarding tourism, of 12 categories of travellers currently authorized to enter Cuba from the U.S., academic and business visits are expected to increase significantly. Some experts estimate that this would mean an increase of 50,000 visitors per year, a number that, according to those sources, would inject between US $50 million and $100 million to the country’s economy.

Sales of tobacco, rum, pharmaceuticals, biotechnology, telecommunications and agricultural products are estimated to grow, especially when the United States removes the remaining restrictions on trade with Cuba. However, our country has opted to diversify its commercial and financial relations and maintain relations with our traditional partners. Those include Venezuela, China, Canada, Spain and Brazil.

Finally, the restoration of relations, announced in December 2014, has received the almost-unanimous support of the Cuban people and the rest of the world. This support was recently ratified by all governments at the Summit of the Americas, held in Panama in April 2015. It also came from the European Union and from the heads of state or governments of many other countries.

- Julio Garmendía Peña is the ambassador of Cuba to Canada -