The Context of Cuba’s ‘Reforms’
April 30, 2008, 8:56 pm
Filed under: Economics, Latin America | Tags: , , , , ,

The Cuban economy is experiencing a slow transformation and many analysts credit Raul Castro for allowing such reform to take shape. Raul is certainly more open to allowing such measures than Fidel was, but it would be a mistake to assume that Cuba has not been transforming during the past two decades. The collapse of the Soviet Union in 1991 traumatized Cuba, which depended on Soviet economic assistance and the COMECON market for survival. Cuba’s economic collapse forced Fidel to call for a Período especial en tiempo de paz (Special Period in Peacetime) and all Cubans were asked to make considerable sacrifices inorder to deal with the attendant consequences of the disaster. Among the most devastated sectors was the sugar industry, an indelible component not only of the economy but of Cuban history and culture. In its preferential trade agreements with the Soviet Union, Cuba exported sugar in exchange for petroleum, which was used as an input in other sectors or exported by Cuba to bring in much needed foreign exchange.

While this relationship benefited the Cuban economy considerably, it also created dependence such that when the preferential rights ended and Cuba was forced to operate on the international market, much more than the subsidy was taken away. Cuba lacked the other inputs (fertilizers, tractors etc.) and the industry declined rapidly. Observing the falling international price of sugar, the Cuban government decided to restructure the sugar industry. First, huge state farms were broken up and smaller cooperatives were created. The government decided to keep 827,000 hectares of the most productive land in use. The rest would be used for other agricultural products, aquaculture and forestry. In keeping with its ethos, the government protected the workers who had lost their jobs and those who sought to gain education towards another field, specifically agronomy, continued to receive their salaries as they went to school. Furthermore, social services to the areas where sugar industry was impacted remained in tact.

Such changes were necessary as the government understood that if it wanted to maintain the system, it would have to make serious changes. The Council of State also legalized dollar holdings as a means of getting hands on vital foreign exchange and perhaps most importantly, eliminated state subsidies in agriculture. The agricultural sector was forced to stand on its own two feet and it did. The government created Unidades Básica de Producción Cooperativa (Basic Units of Cooperative Production-UBPC), which have had greater autonomy and introduced compensation based on efficiency. Furthermore, the state ended its monopoly on selling food and allowed free markets to operate. The combination of state control and reforms increased agricultural production, but because of the widening dual economy, most of the advancements made in this sector ultimately brought benefits to a few and misery for the majority of Cubans.

This was because of the newly legalized dollars. The black market for dollars had always existed and the government decided in the special period to not only legalize it but encourage remittances from exiles in the United States. Although it brought in much needed currency, the black market for goods expanded, as those with the means to pay could suddenly buy things beyond what was allowed in the libreta (ration card). Furthermore, dollarization led to speculation in real estate. Most importantly, the dollarization created two types of Cubans, those who had access to dollars and those who had to rely on the peso economy. It is in this context that Cuba under Raul Castro is ‘opening up.

Al-Jazeera’s Mariana Sanchez explores some of these contingencies in this segment.


What are these elections about?
April 29, 2008, 6:51 pm
Filed under: Politics | Tags: , , , ,

What is the most important election issue?

What should be the most important election issue?

Why do I know more about Jeremiah Wright’s life than about how the candidates intend to alleviate the consequences of the global food crisis?

In this excellent CounterPunch article, Chris Floyd explores this dynamic and writes that the election is really about one issue, torture.

As the presidential horse race grows more frenzied and absurd — Flag pins! Bowling! Obliteration!– it is important to keep in mind what the election is really about: torture.

Specifically, the use of torture as an openly admitted, formally recognized instrument of national policy, approved at the highest level of government. The Bush Administration has now dropped all pretense that it is not engaging in interrogation techniques and incarceration practices long recognized by both international and U.S. law as blatantly criminal. What’s more, the Administration boldly asserts that the president can simply ignore laws prohibiting torture if he feels that circumstances warrant the use of “interrogation methods that might otherwise be prohibited under international law,” the New York Times reported over the weekend.

(The Washington Post had a similar story — similarly buried deep inside the paper. A brazen declaration of presidential tyranny — in the service of torture, no less — was considered worth mentioning somewhere in the “papers of record,” but obviously not worth making a big fuss about.)

Torture is at the very heart of the Bush presidency, the most quintessential manifestation of its governing philosophy: a “Commander-in-Chief” state, where presidential directives can override any law in the name of “national security.” The use of torture demonstrates that not even the most heinous crimes — including techniques used by Nazi sadists and KGB brutes — are beyond the pale of the “unitary executive’s” arbitrary will. On the basis of this authoritarian power — established through a series of presidential orders and “legal” opinions by appointed lackeys — many other crimes can be “justified”: aggressive war; kidnapping and rendition; indefinite detention; secret prisons; warrantless surveillance; even the “extrajudicial killing” of people the president designates as terrorists or terrorist “suspects.”

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Rice Crisis in the Philippines
April 29, 2008, 3:07 am
Filed under: Food, Poverty | Tags: , , ,

I have been really busy with school recently so I have not been able to write much and yet, I have been keeping up the food crisis. In the Philippines, where state subsidization has kept the crisis at bay, there is little the government can do to keep up with the growing problem. Once a rise exporter, the Philippines now imports its agriculture, which invariably leaves the country and its poor to the whims of the international market. This Al-Jazeera clip and Associated Press article explain the most rudimentary steps that the government is taking to alleviate the strain on the poor. The real solution will be for the nation to start up its agricultural industry, something that will take time and resources and an abandonment of the neoliberal economic model that has encouraged countries like the Philippines to not grow rice and produce what it has a ‘comparative advantage’ in.

MANILA, Philippines: The Philippine government plans to introduce “rice access cards” for the poor to use to buy cheaper subsidized grain to help stave off a wider food crisis, officials said Monday.

The rice cards are supposed to benefit the bottom third of the poorest families in the capital, Manila. Outside the capital, the government said it will distribute separate bank cash cards to help families in the poorest 20 of the country’s 81 provinces with quick money transfers.

The measures came as President Gloria Macapagal Arroyo’s administration moved to cushion the impact of skyrocketing fuel and food prices. The Philippines has been paying record prices on international markets to make up for a 10 percent domestic shortfall in rice, the country’s staple.

Amid anxiety over adequate supplies of rice, the government said it has so far signed contracts for about half of the 2.1 million tons of rice it plans to import this year. The price of rice from Thailand, the world’s biggest exporter, topped US$1,000 (€640) per ton this month, up sharply from the start of the year.

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Jean Ziegler on Al-Jazeera
April 28, 2008, 10:56 am
Filed under: Food, Poverty | Tags: , , , ,

The UN’s Special Rapporteur on the Right to Food and obviously one of foremost experts on food security offers an impassioned explanation of the crisis!

Carter on Pariah Diplomacy
April 28, 2008, 2:20 am
Filed under: Politics | Tags: , , , , , , ,

Today’s New York Times includes a thoughtful and enlightening op-ed by President Jimmy Carter. The former president recently met Syrian President Bashar al-Assad as well as exiled Hamas leader Khaled Meshal and quite expectantly, he was attacked by both the U.S. and Israel governments for meeting with Meshal (here). Representative Sue Myrick (R – NC, 9th District) asked Secretary of State Condoleeza Rice to revoke Carter’s passport and more recently, Dan Gillerman, Israel’s ambassador to the United Nations called Carter a ‘bigot’.

Nevertheless, Carter’s international standing has increased and much to the chagrin of U.S. and Israeli officials, it seems that Carter’s trip was a success. Carter defends his trip and argues against what he calls ‘pariah diplomacy’, the Bush administration’s counterproductive policy that punishs political factions or governments that refuse to accept United States mandates. Indeed, as he notes, this sort of diplomacy makes it less likely that such factions or governments will work with the U.S. in the future. Jimmy Carter, always a class act!

A COUNTERPRODUCTIVE Washington policy in recent years has been to boycott and punish political factions or governments that refuse to accept United States mandates. This policy makes difficult the possibility that such leaders might moderate their policies.

Two notable examples are in Nepal and the Middle East. About 12 years ago, Maoist guerrillas took up arms in an effort to overthrow the monarchy and change the nation’s political and social life. Although the United States declared the revolutionaries to be terrorists, the Carter Center agreed to help mediate among the three major factions: the royal family, the old-line political parties and the Maoists.

In 2006, six months after the oppressive monarch was stripped of his powers, a cease-fire was signed. Maoist combatants laid down their arms and Nepalese troops agreed to remain in their barracks. Our center continued its involvement and nations – though not the United States – and international organizations began working with all parties to reconcile the dispute and organize elections.

The Maoists are succeeding in achieving their major goals: abolishing the monarchy, establishing a democratic republic and ending discrimination against untouchables and others whose citizenship rights were historically abridged. After a surprising victory in the April 10 election, Maoists will play a major role in writing a constitution and governing for about two years. To the United States, they are still terrorists.

On the way home from monitoring the Nepalese election, I, my wife and my son went to Israel. My goal was to learn as much as possible to assist in the faltering peace initiative endorsed by President Bush and Secretary of State Condoleezza Rice. Although I knew that official United States policy was to boycott the government of Syria and leaders of Hamas, I did not receive any negative or cautionary messages about the trip, except that it might be dangerous to visit Gaza.

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The Fall of the IMF
April 27, 2008, 9:43 pm
Filed under: Economics | Tags: , ,

The IMF was created in 1944 with the specific mandate of stabilizing the international monetary system. While in theory designed to bring stability, in practice, the IMF has done everything except follow its mandate. Critics argue that the IMF has only served the role of promoting the American and European model of economic development and in this regard, the most contentious issues have been with the IMF’s structural adjustment policies. These programs offer assistance that is contingent on economic restructuring and often times, this restructuring limits the ability of states to implement independent economic policy.

One would naturally expect that since the economic aid has always been conditional, the IMF would be able to withhold assistence from countries whose human rights records have been far from perfect. Quite the opposite in fact-the IMF has financed some of the world’s most brutal dictatorships in history. During the 1970’s and well into the 1980’s, the IMF propped up dictatorships around the world including Pinochet in Chile, Mengistu in Ethiopia, Suharto in Indonesia and Marcos in the Philippines, just to name a few.

Unfortunately for the IMF, they have recently fallen on bad times. While it encourages countries to run balanced budgets, it finds itself in a major deficit. Most countries have paid off their debts and there seems to be little room in today’s international financial system for an organization that many in the developing world blame for their misery and underdevelopment. In fact, earlier this month, Venezuelan President Hugo Chavez jokingly remarked that his government is willing to buy some of the IMF’s gold reserves in order to keep the struggling organization afloat.

Mark Weisbrot, Co-Director of the Center for Economic and Policy Research discusess the IMF’s bleak future in this opine originally published in the Los Angeles Times.

‘The IMF is back,” declared the International Monetary Fund’s managing director, Dominique Strauss-Kahn, at its annual spring meeting earlier this month in Washington. And not a moment too soon either. To hear the organization’s economists tell it (as they mingled in five-star hotels, long black limos and posh restaurants with bankers, businessmen and finance ministers from around the globe), they’ve arrived on the scene just in time to help solve the world’s financial crisis.

But despite the bravado, the reality is that today’s IMF is not what it once was. These days, the world’s most famous deficit police force is running a whopping small-country-size $400-million annual deficit of its own and is being forced into some of the same kinds of “structural adjustments” it used to impose on indebted Third World nations. In just the last four years, the IMF’s total loan portfolio has shrunk from $105 billion to less than $10 billion; over half of the current portfolio consists of loans to Turkey and Pakistan. To cut costs, the agency is reducing staff and closing offices.

The IMF’s loss of influence is probably the most important change in the international financial system in more than half a century. Until just a few years ago, the IMF — originally created at the Bretton Woods conference on international economic cooperation in 1944 — was one of the most powerful financial institutions in the world and the major avenue of influence for the United States in developing countries.

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Eat Locally, Survive Globally
April 27, 2008, 4:15 pm
Filed under: Food | Tags: , , ,

Professor Thomas S. Axworthy of Queen’s University in Ontario Canada, argues that what is needed to fight the food crisis is a return to buying locally instead of relying on big agribusiness. Here, he ties in the rising price of oil. According to him, 20% of American oil consumption is used to produce and transport food. Instead of relying on big producers, governments should encourage small farmers who produce for not only the domestic market, but for the local market. His policy prescription is intended for the Canadian government, but his ideas certainly have implications for economies around the world.

Throughout the developing world, countries are being forced to lower agricultural tariffs. While many are resisting and the current Doha Round impasse is testament to how developing countries are standing up to world powers, it should be a policy of all nations to encourage local production and consumption. Certainly big agribusiness will be hurt and they might even strike, but the survival of hundreds of millions of people in desperate poverty depends on this sort of agricultural policy.

His opine was published in the Toronto Star.

Our mothers always told us to eat our greens. Today, the injunction should be to eat green.

Eating is many things – a necessity, a pleasure, part of our culture – but it is also an environmental act.

Industrial agriculture, the current structure of the North American food system, is based on low prices to farmers, high usage of chemicals and copious amounts of oil. These factors must be altered if Canada is to have plentiful, safe and nutritious food in the future.

With oil now costing $120 (U.S.) a barrel, we are entering an era of peak oil prices. Gas is approaching the record of $1.26 (Canadian.) a litre in Ontario and many forecast it will reach $1.40 by the summer. This surge in the cost of fossil fuels will have profound impacts in a host of areas, not least in the way we organize our food supply.

Strawberries in December will soon become a luxury few can afford. It takes 35 gallons of oil, or the equivalent of a barrel, to raise a steer to go to market. Twenty per cent of American petroleum is consumed in the producing and moving of food.

Michael Pollan, an award-winning journalist for The New York Times, writes that America’s “food chain is powered by fossil fuel.”

Ingeborg Boyens’ book, Another Season’s Promise, makes a similar point about Canadian farming: “The amount of energy required to produce a calorie of food is constantly increasing. At issue is not just the food required to do all the mechanical work on the farm: energy is also needed to manufacture fertilizer and chemicals at the front end of the process and to transport and refrigerate food in the final stages of its delivery to the consumer.”

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