Three challenges for the new president Miguel Diaz-Canel
April 2018 represents a historical date for Cuba: for the first time since 1959, the presidency of the country will not be held by a Castro-family member. On April 19, the National Cuban Assembly elected almost by unanimity (603 out of 604 votes) Miguel Diaz-Canel - 58 years old – as the new president of Cuba. Diaz-Canel replaced Raul Castro (87 years old), who is expected to remain the head of the Communist Party.
Who is Miguel Diaz-Canel?
He is the first Cuban leader who wasn’t present during the Revolution. Therefore, he represents the final stage of a transfer of power away from the historic generation that promoted Cuba’s 1959 revolution. Diaz-Canel started his political career in the 1990s as communist official in his home province of Villa Clara and later he became First Secretary of the Provincial Party Committee. In May 2009 he was elected Minister of Higher Education. Finally, he was the First Vice President of Cuba from 2013 to early 2018.
Which is the current situation of Cuba?
Despite the pressures and economic crises that Cuba faces, it still maintains a planned (socialist) economy. Most industries are owned by the government, and most of the labor force is employed by the state. After the fall of the Soviet Union, a severe crisis hit Cuba. Its GDP declined by 33 percent between 1990 and 1993, partially due to the loss of Soviet subsidies and a crash of sugar prices in the early 1990s. The Communist Party encouraged the formation of worker co-operatives and self-employment. After Raul Castro took over the presidency in 2006, several attempts were made to open up more sections of the economy to the private sector. An example is the creation of non-agricultural cooperatives with the aim of freeing the state of responsibility for economic activities that are not essential to the country’s development.
Three challenges
The most important challenges which Diaz-Canel will have to face during his government are the currency unification, the relation with Venezuela, which implies the energy self-sufficiency and the political situation.
The trickiest problem for Diaz-Canel is probably the currency unification. In this moment, in Cuba there are two main currencies: the national peso (CUP) and the convertible peso (CUC). Most of the state workers get their wages in national peso while the CUC is used in the tourism industry. Although the currency unification – which means the elimination of the CUCs – seems a priority since Raul Castro’s regime, nothing has still happened. Indeed, its social consequences represent a fear especially for state enterprises. Currency unification could be a problem for enterprises with multiple bookkeeping entries. This is one of the most evident contradiction of the Cuban system. The solution could be to expand the private sector, which could be more efficient and could also provide much-needed tax revenues to the state. This is a perennial dilemma for the regime, which promotes changes in the Cuban economy but is simultaneously afraid of them.
Another concern for Diaz-Canel government is the relationship with Venezuela. Indeed, since the 1990s, Venezuela provides to Cuba subsidiaries oil in exchange of intelligence services. Such profitable relation began after the Soviet crisis which led Cuba to a destructing energy crisis. In that moment, the Venezuela government of Hugo Chavez helped Cuba to overcome the crisis, furnishing about 90.000 oil barrels per day. Today, the cooperation between the two countries is still active, even though Venezuela and the president Maduro are facing a difficult economic moment. On 20th May, the national elections in Venezuela will be carefully followed by Cuba, as in the case of a loss of Maduro party, Cuba could face another devastating energy crisis. Diaz-Canel could get profit from other strategic allies, such as China and Russia. These two countries have an economic model similar to the Cuba’s one, then they should be willing to help Diaz-Canel.
Finally, the Communist Party is the only legal political party in Cuba. The immediate consequence is that the elections do not represent the real will of the population as there are no independent parties. As for instance, some years ago, 170 independent candidates were not allowed to the elections at the National Assembly. The Cuban political model has always been founded just on the Communist Party; Diaz-Canel will have to decide whether continuing toward this direction or changing the political model toward a more global and open approach creating a sort of political parties market.
To sum up, it is clear that the new government will have to opt the kind of strategy to pursue: a more traditional approach, in the continuity with Castro-dynasty, with the strong presence of the state in the national economy or a new approach open to global markets and to the rise of the private sector.
Michele Impagnatiello
Who is Miguel Diaz-Canel?
He is the first Cuban leader who wasn’t present during the Revolution. Therefore, he represents the final stage of a transfer of power away from the historic generation that promoted Cuba’s 1959 revolution. Diaz-Canel started his political career in the 1990s as communist official in his home province of Villa Clara and later he became First Secretary of the Provincial Party Committee. In May 2009 he was elected Minister of Higher Education. Finally, he was the First Vice President of Cuba from 2013 to early 2018.
Which is the current situation of Cuba?
Despite the pressures and economic crises that Cuba faces, it still maintains a planned (socialist) economy. Most industries are owned by the government, and most of the labor force is employed by the state. After the fall of the Soviet Union, a severe crisis hit Cuba. Its GDP declined by 33 percent between 1990 and 1993, partially due to the loss of Soviet subsidies and a crash of sugar prices in the early 1990s. The Communist Party encouraged the formation of worker co-operatives and self-employment. After Raul Castro took over the presidency in 2006, several attempts were made to open up more sections of the economy to the private sector. An example is the creation of non-agricultural cooperatives with the aim of freeing the state of responsibility for economic activities that are not essential to the country’s development.
Three challenges
The most important challenges which Diaz-Canel will have to face during his government are the currency unification, the relation with Venezuela, which implies the energy self-sufficiency and the political situation.
The trickiest problem for Diaz-Canel is probably the currency unification. In this moment, in Cuba there are two main currencies: the national peso (CUP) and the convertible peso (CUC). Most of the state workers get their wages in national peso while the CUC is used in the tourism industry. Although the currency unification – which means the elimination of the CUCs – seems a priority since Raul Castro’s regime, nothing has still happened. Indeed, its social consequences represent a fear especially for state enterprises. Currency unification could be a problem for enterprises with multiple bookkeeping entries. This is one of the most evident contradiction of the Cuban system. The solution could be to expand the private sector, which could be more efficient and could also provide much-needed tax revenues to the state. This is a perennial dilemma for the regime, which promotes changes in the Cuban economy but is simultaneously afraid of them.
Another concern for Diaz-Canel government is the relationship with Venezuela. Indeed, since the 1990s, Venezuela provides to Cuba subsidiaries oil in exchange of intelligence services. Such profitable relation began after the Soviet crisis which led Cuba to a destructing energy crisis. In that moment, the Venezuela government of Hugo Chavez helped Cuba to overcome the crisis, furnishing about 90.000 oil barrels per day. Today, the cooperation between the two countries is still active, even though Venezuela and the president Maduro are facing a difficult economic moment. On 20th May, the national elections in Venezuela will be carefully followed by Cuba, as in the case of a loss of Maduro party, Cuba could face another devastating energy crisis. Diaz-Canel could get profit from other strategic allies, such as China and Russia. These two countries have an economic model similar to the Cuba’s one, then they should be willing to help Diaz-Canel.
Finally, the Communist Party is the only legal political party in Cuba. The immediate consequence is that the elections do not represent the real will of the population as there are no independent parties. As for instance, some years ago, 170 independent candidates were not allowed to the elections at the National Assembly. The Cuban political model has always been founded just on the Communist Party; Diaz-Canel will have to decide whether continuing toward this direction or changing the political model toward a more global and open approach creating a sort of political parties market.
To sum up, it is clear that the new government will have to opt the kind of strategy to pursue: a more traditional approach, in the continuity with Castro-dynasty, with the strong presence of the state in the national economy or a new approach open to global markets and to the rise of the private sector.
Michele Impagnatiello