Berkeley Forum

By Jacinda Chan
UC Berkeley


Raul Castro has officially taken office as the new leader of Cuba. Some media experts expect a change, economically, but they are wrong. No change will occur. They say Raul intends to implement a Chinese economic model of state-led capitalism like Deng Xiaoping, but Raul is missing two of the three necessary requirements needed for a growing economy.

For starters, for Cuba’s economy to really develop, Raul Castro will need to allow more privatization. Right now a barber earns as much as a street vendor and people working for foreign company’s must pay huge amounts of taxes to redistribute the money evenly. The way China’s economy started growing was by allowing economic disparities. Deng Xiaoping believed that people worked best when they were able to keep their earnings. Raul’s Cuba does not allow the people to thrive the way Deng Xaioping believes is needed for a growing economy, and wanting to continue rule with an iron fist will not allow privatization.

More importantly, reporters have stated that Raul will open Cuba up to foreign investment, but for this is to work, Raul will have to be selective about which imports he allows to choose one’s that will not outdo local businesses.

Currently, a main importer, the U.S., has an embargo on Cuba, and in a recent debate, Clinton has refused to negotiate with Raul until he has implemented reforms, and Obama would meet with Raul only to discuss human rights issues. Because Raul does not intend to change much, he can expect little help from the U.S. if a democrat is elected.

Even if the U.S. decides to lift the embargo, they would probably not let him choose the imports or buy out U.S. businesses once they are established, another criteria for successful foreign investments according to Deng Xiaoping. The U.S. does not trust Cuba. So giving Cuba choices and the option to buy out business would give them more power, scaring the U.S.

Unless Raul Castro’s plans to improve Cuba’s human rights record and the economy involve drastic privatization, and the U.S. changes its stance on how to treat Cuba, Cubans can expect to be stuck in a drudge forever. Not only will this embargo severely limit economic growth, but who know where Raul will go for foreign investment, possibly aligning himself with even more oppressive governments, and the U.S. will have no say because Cuba will not be dependent on it.