On July 27, at the mass rally commemorating the 56th anniversary of the attack on the Moncada barracks, Raúl Castro announced that the Cuban government will implement a new "unavoidable adjustment" of the economy, the second adjustment of public expenditures this year. In his speech, for the first time he did not refer to the weight of the economic blockade maintained by US imperialism against Cuba, except to call it an excuse to feel sad. He demanded from the population "less complaints and more work", calling for an increase in food production.

The speech was followed by important meetings of the key institutions of the regime in which these announcements took shape and became somewhat more concrete. The plan was finally announced in a session of the National Assembly on August 1.

Although no details were given, the Council of State (the executive branch) resolved to decentralize the production and service sectors that bring in the most revenue and reduce social spending in different areas. In the words of Raul, "other decisions will be adopted about education, public health and the rest of the budgeted sector, aimed at reducing costs which are simply unsustainable, which have been growing from year to year and, moreover, are ineffective or worse still make some people feel no need to work" (Cadena Global EFE 1/8/09).

The plan is to reduce all expenditures that do not generate revenue in dollars or replace imports, benefitting the large joint ventures and the holding companies controlled by the Revolutionary Armed Forces, the FAR (which account for more than 40% of GDP). This will favor decentralization and seriously undermine the planning of the economy, encouraging the sector of the economy subject to "market rules".

The economic crisis

The Cuban economy is in the worst crisis since the time of the "special period". The GDP, which in 2006 surprised with a growth rate of 12.5%, reduced its growth to less than 8% in 2007, 4.3% in 2008 and this year is on the verge of an economic recession. Indeed, in April growth predictions for 2009 were reduced from 6% to 2.5%, and recently to 1.7%. This is combined with the effects of three hurricanes that hit the island in 2008, mainly affecting agriculture and infrastructure (about 500,000 homes were destroyed). The damage cost nearly 10 billion dollars, 20% of GDP, and there were major food shortages.

The two most dynamic sectors of the economy – bringing in foreign currency with tourism and nickel exports – are suffering major setbacks, and it has become difficult to find financing from external sources. The dollar remittances sent by relatives living in the U.S., estimated at 1 billion dollars per year, have dropped significantly and this has had a double effect: for state finances (the state charges a tax of 10%) but particularly for the almost one fourth of the population living off the remittances. Moreover, agriculture is a weak point because Cuba produces just 20% of its needs and spends about 2 billion dollars annually to import the rest.

Against this background, the policy of Castro and the Communist Party is to demand greater sacrifices from working people and peasants while maintaining the privileges of sectors of the population we might call the "nouveau riche", linked to joint ventures, foreign capital and areas of the economy that bring in foreign currency. This includes an important part of the state bureaucracy, such as the directors of state enterprises, and of the Cuban armed forces.

Meanwhile, US imperialism continues to maintain the criminal blockade that has been choking Cuba for nearly 50 years. The Obama administration changed its tactics towards Cuba but maintains the same strategy as the Bush administration: although the bellicose rhetoric has subsided and Obama has said he is willing to negotiate with the Cuban regime and even make certain gestures, such as accepting the readmission of Cuba to the OAS, the goal remains moving towards the restoration of capitalism and the re-recolonization of Cuba. The umbrella policy of the Obama administration is a "democratic opening" of the regime. This policy finds expression in the offers for dialogue which, as explained by US Secretary of State Hillary Clinton, are conditioned on the implementation of "fundamental changes" in Cuba, i.e. making some anti-Cuba measures more flexible in exchange for the Cuban regime making concessions. For its part, the strategy of the Cuban bureaucracy is to win acceptance from imperialism as a valid interlocutor. Raúl Castro has been working with this strategy since taking office in 2006, when he announced he was willing to open a dialogue with the US. Against the backdrop of economic crisis and the possibility to negotiate more openly with the United States after the inauguration of the Obama administration, the 7th Plenum of the Central Committee of the Communist Party decided to postpone the convening of the 6th Congress indefinitely, which was originally supposed to take place in 2008. Castro justified the postponement by saying that "it can’t just be another event" and that the congress would be decisive since it would probably be the last one involving the generation that made the revolution.

The real reasons for the suspension of the congress are probably that the ruling bureaucracy is divided and that Raul’s wing is trying to first secure the party leadership (to this end there will be a national conference). We recall that a few months ago there was a major purge of the government with the ousting of Carlos Lage and Felipe Perez Roque, representatives of the younger wing of the Communist Party and close to Fidel Castro, the first of whom was responsible for the policies of the "special period". These measures and the subsequent defenestration of the two leaders at meetings of activists were a key step in removing other factions and consolidating the current leadership.

Castro and the PCC say they are carrying out a "perfection of socialism". However, the measures that have been implemented since the ’90s and are now being made more profound, such as the decentralization of foreign trade, the proliferation of joint ventures and free trade zones, and the promotion of private exploitation of land, deepen social inequalities and strengthen pro-capitalist sectors.

The political project of the ruling bureaucracy is to gradually advance with reforms and open of the economy, negotiating its terms with imperialism and maintaining the rule of the PCC. This would follow the Chinese or Vietnamese model that Castro has referred to very positively on other occasions, so the threat of the restoration of capitalism on the island is increasingly real.

Down with the blockade! For the defense of the gains of the revolution!

The restoration of capitalism in Cuba would be a major defeat for the Cuban people and for workers and the masses of all of Latin America. The policy of American imperialism – and the European imperialist powers – whether in the hard-line form of the blockade or in the form of "negotiations" and "democratic opening", is to restore capitalist relations of production, pushing Cuba back to the status of a semi-colony as it was prior to the 1959 revolution. The economic blockade imposed by the US on the island not only causes enormous suffering to the Cuban people but is also a weapon of blackmail to demand pro-capitalist reforms. Therefore, to defend the remaining gains of the revolution of 1959 it is essential to fight against imperialism and the blockade. The plan of the bureaucracy of Raúl Castro and the PCC is to gradually introduce market reforms, which will create a social basis favorable to the restoration while maintaining the one-party regime, thus guaranteeing the maintenance of their privileges. They want to retain power so they will be the ones who negotiate the terms of opening the economy to imperialism.

The only way to defeat this perspective is through a political revolution led by the workers and poor peasants, which – beginning with the defense of the conquests of the revolution that still remain – would have the objective to end the privileges of the ruling bureaucracy and the reactionary one-party regime imposed by the Cuban Communist Party. This revolution would lay the foundations for a revolutionary workers’ state based on councils of workers, peasants and soldiers and the general arming of the population, in which all parties that defend the revolution would be legal. In this way, Cuba could once again be an engine of revolutionary struggle in all of Latin America.

Translation: Wladek Flakin, independent youth organization REVOLUTION (www.onesolutionrevolution.org)