Party membership, social ties and upward mobility in Cuba

Abstract

In the 1990s, the collapse of the USSR and the consequent dissolution of the Council for Mutual Economic Assistance (COMECON) trading bloc contributed to the sudden shrinkage of Cuba's international trade (both in volume and in value terms), and thus Cuban economy itself. The crisis, exacerbated by the US government's blockade and the internal inefficiency of centralised Cuban economic system, hit rock bottom in 1993 and ended up damaging the social conditions of the population. The figures of the crisis are eloquent. During the first 4 years following 1989, there was a contraction of the GDP of about 35 per cent (Mesa-Lago 2007: 1), a 70 per cent decrease of imported foodstuffs, a 79.6 per cent contraction of exports (Gonzalez-Corzo 2007: 316), a 39 per cent decrease in private spending and the extinction of the state-run parallel market in which Cuban workers could buy non-rationed goods at subsidised prices (mainly, food and industrial products; Togores and Garcia 2004: 247). The Cuban government maintained the workers' nominal salaries, but nevertheless the purchasing power of wages decreased significantly. The rapid deterioration of social conditions prompted the government to implement a set of market-oriented reforms. From 1993 to the early 2000s, the Cuban government welcomed foreign direct investment, prioritised the reconstruction of the international tourism sector and the development of telecommunications services and mining, for example, nickel (Dominguez 2004: 31; Perez-Villanueva 2004). To this end, it enforced policies aimed at attracting foreign direct investment. At the same time, the Cuban government legalised new forms of selfemployment in order to boost production and incorporate a part of the growing informal economy into the formal economy (Ritter and Henken 2014: 80).Thus, as a result of the crisis and reforms, Cuban socio-economic structures have changed. Services and primary sectors have grown, while the secondary sectors have decayed (Espina-Prieto and Togores-Gonzalez 2012), but above all new, so-called 'emerging sectors' have appeared. In the literature on Cuba, the term 'emerging sectors' is used to refer to that part of the Cuban economy that distinguishes it from the so-called traditional sectors for being 'composed of jobs linked to foreign currency gains and remunerative benefits'1 (Barberia 2008: 21). Emerging sectors are mainly composed of mixed and Cuban companies which developed in relation to the tourism industry and/or the domestic markets for goods in hard currency; some firms also emerged in the export of high valueadded products (e.g., the pharmaceutical industry). The common aspect of enterprises belonging to this emerging sector is that they sell their output in hard currency (either to other firms, to the population, or abroad) and they purchase their material inputs (imported or domestically produced) or borrow funds from banks also in hard currency; only the wages are paid in Cuban pesos (with some bonuses in convertible currency). In this regard, it is useful to highlight that mixed enterprises cannot directly hire and pay their own Cuban workers, but they must contract Cuban workers through state employment agencies.2Under these circumstances, income inequality started to grow (Ranis and Kosak, 2004; Mesa-Lago 2004) and a process of social re-stratification occurred (Espina-Prieto 2004). Studies on inequality carried out in Cuba show that in the Cuban labour market, the emerging sectors offer more highly remunerated jobs (Espina-Prieto 2004, 2005, 2008, 2010; Espina-Prieto and Togores-Gonzalez 2012; Zabala 2010; Henken 2002, 2008; Corrales 2004) as well as the most desirable jobs (Espina-Prieto and Togores-Gonzalez 2012: 277). A study by the Centro de Investigaciones Psicologicas y Sociologicas (CIPS3 2009) notes that Cubans associate the attainment of jobs in emerging sectors to paths of upward mobility (ibid.). Therefore, in this article I will use the terms highly remunerated and desirable interchangeably when I refer to occupations in emerging sectors, and more specifically to indicate the privileged condition of being a worker employed in enterprises belonging to emerging sectors. …