The Economic Record Of Socialism — Cuba And Latin America Francis Menton
https://us7.campaign-archive.com/?e=a9fdc67db9&u=9d011a88d8fe324cae8c084c5&id=f3d8e605f3
With a radical far-leftist in serious contention for the presidency in our upcoming election, it is worthwhile to check in on the record of leftism and socialism in other countries.
It so happens that pretty much every country to our South in the Western Hemisphere has a long history of some variety of leftist/socialist politics. With a few exceptions here and there, when there has been an election in Latin America in my lifetime, the winning strategy has been to run against the “Yanqui imperialists” and advance a program of “social justice” and redistribution. Particular policies vary from country to country, but the usual playbook includes such things as massive government intervention in the economy, government ownership of major companies (starting with the energy industry), central planning, requirements of multiple licenses and permits to start any business, and many more such.
Recent elections have continued or returned leftists to power in all but one of the most important countries — Brazil, Mexico, Colombia, Chile. (The exception is Argentina, which elected a non-leftist President in late 2023; it is too early there to see any meaningful economic results, so I will leave it out of this discussion.) The next tier of countries has it as bad or worse. In Venezuela the current head of a 25 year old socialist regime apparently just lost an election by a 2-1 margin, but he refuses to release the vote tallies, and hangs on to power while his opponent has fled into exile. In Bolivia a socialist party (MAS) has hung on since 2006 through a disputed election and getting the courts to abolish term limits. There are many other such examples from smaller countries. And then, of course, there is Cuba.
How has all of this worked out?
Overall, the countries of Latin America have a shockingly bad and indeed inexcusable record of economic failure. The best (admittedly flawed) measure we have to compare economic success among countries is per capita GDP. Three international organizations — the IMF, World Bank, and UN — put out lists of per capita GDP by country, and Wikipedia compiles those lists here. The most recent data cited to the UN are from 2021, and to the World Bank from 2023, so I’ll use the IMF numbers, which are from 2024, when available.
The IMF gives 2024 U.S. per capita GDP as $85,373, which is far and away the highest of any country in the world with population of 10 million or more. Here are the comparable 2024 IMF figures for the most important countries of Latin America, all currently run by leftist regimes: Brazil, $11,352; Mexico, $15,249; Colombia, $7,327; Chile, $16,616. But at least all of those have had some periods of non-leftist rule over the past several decades. Then there are the countries in the grip of the most serious socialism for the longest unbroken periods of time: Venezuela, $3,867; Nicaragua, $2,791; Bolivia, $4014.
And now let’s come to Cuba. Fidel Castro came to power in Cuba in 1959, and imposed a strict socialist regime. There hasn’t been a real election since. Castro’s successors remain in firm control. The latest guy, who succeeded Fidel brother Raul in 2018, is named Miguel Diaz-Canel.
Unfortunately, there are no credible economic statistics that come out of Cuba. Unlike for all the other countries cited above, the IMF does not provide a 2024 per capita GDP figure for Cuba. The World Bank and UN provide per capita GDP statistics for Cuba for, respectively, 2021 and 2020. Those figures are $9500 and $11,255. You can accept them if you wish, but I think they have no credibility at all.
Meanwhile, there is much qualitative information coming out of Cuba to indicate that its long-time terrible economy has recently become much worse and entered a crisis stage. The idea that there is a crisis comes not from the regime’s critics, but rather from the regime itself. Don’t expect to find this information in our mainstream press, but you can find it if you look around.
On July 2, the large Spanish newspaper El Pais had a piece with the headline, “The government of Cuba declares itself in a ‘war-time economy.’” Excerpt:
At a recent meeting of the Council of Ministers, Mildrey Granadillo de la Torre, First Deputy Minister of Economy and Planning, said that the measures seek to adjust the 2024 Plan and Budget to the conditions of a “war-time economy,” a term that is often used in extreme situations, and which the authorities now apply to a country that ended 2023 with an inflation of 30%, an economy contracted by 2% and a depreciation of the Cuban currency of more than 50% against the dollar and the euro in the informal market.
El Pais followed up with a further piece on July 8. Excerpt:
Cuba is living in a “war-time economy.” The island’s own authorities said it a week ago. That is to say, the food shortages that the population has been dealing with for years, the insufficient wages, the soaring prices — that whole bleak scenario resembles that of a country thrown into the battlefield. . . . Cubans have been suffering for years from a crisis that began in the 1990s with the loss of economic aid from the defunct Soviet Union and from which they never recovered. People have simply been told that the permanent scarcity in which they live has a new, more dramatic name.
The Economist weighed in on July 21. The article is behind paywall except for the first paragraph, from which this is taken:
Cubans used to look back at what Fidel Castro called the “special period” after the end of the Soviet Union and its largesse and think that was as bad as things could get. They were too optimistic. Today officials talk of a “war economy”. The consensus on the street in Havana, the capital, is that shortages are worse than in the early 1990s. Cuba produces little in sufficient quantity: not sugar, which it once supplied to the world; not eggs, which it recently imported from Colombia; not milk powder, which it gets from the un; not power, as worsening blackouts reveal. The government lacks foreign currency for imports.
Perhaps most revealing is an article by Jon Lee Anderson in the New Yorker of September 12. The article is titled “Lula, Maduro, and a New Cold War in Latin America,” and is mostly about how issues like the recent stolen election in Venezuela are causing rifts among Latin America’s current crop of leftist rulers. Anderson is clearly a man of the Left, among other things having written a biography of Che Guevara. But he reports, with evident sadness, that Latin American leftism appears to have come to a dead end. At the end of his piece, Anderson discusses Cuba:
Eight years after the death of Fidel Castro, and three years since the retirement of his younger brother, Raúl, who succeeded him in power, Cuba’s long-term leadership of the region’s political left is effectively no more. Under the uninspired leadership of the Castros’ successor, Miguel Díaz-Canel, a sixty-four-year-old Communist Party official, the island has suffered a precipitous economic decline. . . . What it all comes down to is the end of the revolutionary dream in Latin America. A generation ago, Chávez came to power and revived Fidel Castro’s hopes of keeping the revolutionary flame going—and effectively managed to do so for about a dozen years. But then oil prices dropped and Chávez died, followed by Castro, and the money that had flooded into Cuba to fund Revolution 2.0 was gone, largely misspent and stolen. . . . Maduro and Ortega and Díaz-Canel may still speak the old language of revolution and antiyanquismo, but their economies survive from remittances from their fleeing citizens, who have left in droves to seek employment wherever they can, ideally in the Empire itself.
And finally, this incredible statistic:
Since 2022, Cuba has seen the largest exodus of its citizens since the earliest days of the Revolution, with as many as 1.8 million people fleeing the island for better lives elsewhere, contributing to an eighteen-per-cent decrease of the population.
I can’t find confirmation of that number elsewhere, but the New Yorker is (supposedly) known for its fact-checking. And even if the loss of population were half what Anderson reports, 9% instead of 18% (in two years!), it would still be extraordinary.
Could U.S. voters really be stupid enough to elect someone cut from this cloth?
Comments are closed.
