Vicinity Matters: Cuba's Reforms in Comparative Perspective

Abstract

IntroductionIt is well known that from the second half of the 19th century, the United States, then an emerging industrial power, became the economic metropolis of Cuba. This relationship grew much stronger after the US intervention in 1898, which was followed by the formation of a broad legal basis since the founding of the Republic that strengthened the economic ties and spread them to the political, military and cultural fields.1 The sharp break after 1959 eliminated in a few years what had been a long-standing close relationship. However, this relationship had been very asymmetric and in many cases limited the real possibilities of an indigenous Cuban economic development, due to the privileges large US corporations enjoyed in the Cuban domestic market. Now a moment of cautious rapprochement has arrived between two states that once shared a deep relationship which was interrupted abruptly and who have remained distant for over half a century. In addition, this is taking place in the midst of the most extensive transformation of the Cuban economic model in half a century. This crucial moment is giving rise to a vast literature that explores the synergies that could result from the Cuban reform, the peculiarities of the Cuban case and the expected lifting of economic sanctions from the United States.In that vein, this work contains three interrelated objectives. Firstly, it analyses the formation of the Cuban economic model as the result of the interaction between the US blockade and the common characteristics of the Soviet-style central planning model.2 It then tries to establish parallels and differences between Cuba and Vietnam and China, two countries that have also opted for gradual adjustments in their models, taking into account a peculiar domestic context and geopolitics. Finally, it examines the potential effects on Cuba's recent rapprochement with the United States, mainly in relation to Cuba's economic reform. The article is divided into five sections. After the introduction, the effect of the US embargo of the island and its interaction with the weaknesses of the Cuban economic model is analysed. In the third section, the current process of economic reform is examined through the comparative study of the experiences of China and Vietnam. Next, details of the current Cuban reform and the expected impact of the normalisation of ties with the United States are discussed. Finally, some thoughts are proposed that draw together the central logic of the argument.The Formation of the Cuban Economic Model in Light of US SanctionsThe US embargo has been the subject of much controversy both inside and outside Cuba. Within the Northern power, there were always voices that opposed these measures from various positions, and these currents have strengthened significantly since the mid-1990s. Hardly any sovereign state defends these sanctions, and even fewer do anything to adhere to them (Leogrande 2015). In the case of Latin America, they have become a permanent source of misunderstandings and headaches for an already beleaguered US policy towards the region. These differences threatened to completely derail the Summit of the Americas in Panama in 2015, a forum for consultation which is considered one of the greatest achievements of US diplomacy in the area.However, it seems undeniable that the highest price has been paid by the Cuban people, through its perverse effects on the economy, which in many cases has amplified the deficiencies of its own model of central planning.3 At this point, it is worth noting how the embargo has interacted with the shortcomings of the Cuban model, since the latter is undergoing the biggest transformation in half a century and the sanctions regime now seems destined to disappear sooner rather than later.The literature on centrally planned economies (CPEs) refers to some specific features that are of great interest given the great diversity of countries that have adopted this model during the 20th century. …