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In recent weeks, and in connection with the national economic crisis aggravated by the global health and economic situation, the economic debate has intensified in institutional and non-institutional spaces. The Economic Commission for Latin America and the Caribbean (ECLAC) and other international organizations have predicted a deep contraction in the world and regional economy. For Cuba, the crisis is already acute and this has been recognized by the country’s leadership, and Cubans are living it.
In the topics under debate there has been a first plane: what should be the economic solutions to the crisis, what would they imply, in terms of economic growth, what place can and should the private sector of the economy occupy in the equation of the strategies to be designed and implemented, and what are the sectors that can and should be initially revitalized.
Other issues have been less debated: the relationship between growth and development, the consequences of the crisis for inequality, the strategies to face it, labor rights, and the different bases from which different social groups start to face the situation.
This dossier contributes to the open economic debate in Cuba, addressing both issues of its foreground and some of the least considered. Here, Cuban women economists reflect on the relationship between growth and development, on the need to think about inequalities as part, and not after, of the strategies to confront the crisis, on the regulation of labor rights in the non-state sector of the economy and on gender gaps in the Cuban worlds of work. Four questions, five voices in counterpoint and complementarity…. They put their fingers on old and new wounds of the Cuban economy and insist that, in order to heal them, no person can, in effect, be left unprotected.
A part of the economic debate that is taking place in Cuba raises as a persistent argument the need to ensure economic growth. Does economic growth imply development, or not necessarily? What are the consequences of focusing the proposals on economic growth?
Betsy Anaya: Several economists consider growth to be synonymous with development. However, since the middle of the last century, debates in the frameworks of ECLAC have pointed out that development is a broader concept than growth. The concept of development has been evolving over the years, as well as the instruments used to measure it. Other dimensions have been incorporated, such as the sustainability of development. And diverse alternative instruments have been proposed to the Gross Domestic Product, a measure par excellence of growth, which express measurements that are closer to development. Some examples are the Human Development Index, and others that measure happiness and well-being.
Another group of economists has pointed out that it is possible to develop without growing. I have a different point of view from the latter. In the specific case of Cuba, at the present time, I consider that growth is essential to achieve a path of development. I think that a debate on development also needs to discuss growth; otherwise, not necessarily. Growth, per se, does not guarantee development. Growth quality is required (in terms of, for example, its structure and how it is distributed) and that it be sustained over time.
The growth-development link will have a lot to do with the starting point of each country. Nations that have already reached high levels of development will not require high growth rates. Cuba needs to grow in key sectors, producers of goods that guarantee the population’s better access to basic supplies. Among these sectors is agriculture, essential to achieve a higher level of food self-reliance and security. For a better understanding of the above, I use this example: if growth in the agricultural sector implies greater use of inputs and equipment that cause environmental degradation, the use of precarious or child labor, and damage to human health, it does not contribute to development, although it translates into a greater supply of food.
Furthermore, for a growth path to be translated into a development path, it is necessary to guarantee inclusion in that process and an equitable redistribution, which guarantees that the entire population benefits from the results. Focusing the debate on growth and not on development is dangerous, because the policies being designed can contribute to widening equity gaps of various kinds, increasing the country’s foreign indebtedness and deteriorating national sovereignty, among other undesired effects.
Tamarys Lien Bahamonde: The debate on growth and development in Cuba predates 1959. In fact, in the 19th century, when development had not yet been defined, Martí already offered an integrative and humanistic vision of “growth.” For example, the 1950s was rich in that debate. Carlos Rafael Rodríguez has works on that, which are worth revisiting today.
There are multiple ways to measure or understand development, which is a more complex concept than growth. Growth is one-dimensional, while development is multidimensional. When we talk about growth, we generally refer to changes in the Gross Domestic Product over a period of time. It is the indicator used par excellence to anticipate recessions. But this indicator, in addition to being imperfect, is incomplete. For example, when measuring a country’s production of goods and services in a given time, the GDP also includes productions that are the result of Foreign Direct Investments and that do not revert to direct benefits in the country in question, with the exception of timid indicators like generating some jobs or the payment of taxes.
Development is an all-encompassing concept. The umbrella of development contemplates growth, but not only that, it is much more. An easy concept to understand is that of the UN Millennium Development Goals, which considers multiple dimensions and not just increases in economic indicators such as GDP. It also considers the elimination of poverty, the increase in living standards, access to education and health services, drinking water…. The emphasis is to speak of sustainable development. And when we say sustainable, we speak of the environment, but we also speak of equity, of social sustainability.
In the 21st century, separating growth from development is theoretically and empirically wrong. It is time to overcome the neoclassical vision of economic growth in the abstract and at any cost. The economy, and I can’t say it enough, cannot be seen as an entity outside society. Economy, politics and society are inseparable. Human beings and their aspiration and right to a full life must be placed at the center. Arguing for economic growth above and against the tide of human development or equity indicators is costlier than beneficial in the long term. You cannot grow at the cost of compromising the environmental future, for example.
Growing without considering how or where this growth will take us strips the indicator of all human and environmental substrates. To grow for what? For whom? It isn’t enough to grow. That growth has to have a positive effect on individuals and on nature, which is the source of the resources from which we feed on. It must be verified in economic and social benefits, in equity. If not, it is almost the same as not having grown.
Ileana Díaz: Growth and economic development is not the same. You can talk about growth without talking about development, but that’s a short-term vision. Not talking about development is not looking to the future, sustainability, futurology.
Blanca Munster: Growth is a necessary, but not sufficient, condition for development. In general, the debate on growth and development proposes a very “macro” and aggregated vision of reality, or sectoral approaches prevail that artificially divide the territory into sectors (education, health, agriculture, tourism, among others) using average indicators or mercantile/monetized indicators that often don’t give a perfect account of the structural heterogeneity of the reality to which they refer. The approach to a development theory must contemplate the economic, social and environmental dimensions, and consider that the development process is not neutral. It isn’t just a matter of making the “cake” grow and then “distributing it,” but of its quality, of how it grows and what opportunities are created for men and women, who are active, not passive actors in economic processes.
Development must be the bearer of an idea of a process of social change, construction of a collective project, promotion of endogenous capacities. As a unit of analysis, it means that we must approach the development objectives that must be resolved locally, in close and synergistic interaction with the national and the global. (How do we use the generated resources and benefits to improve the inhabitants’ quality of life, the for what?)
Anamary Maqueira Linares: I would dare to say that the growth equal to development formula has been practically surpassed from the theoretical point of view. Virtually every economist would answer no, that they are not the same, even if they were trained in the most conservative stream of economic thought, because they know that it is not politically correct. So, the question would be what is the relationship established between one and the other. For Cuba, economic growth is important, and how to grow is just as or more important.
The debate on growth must necessarily involve development and answering the questions of grow for what? and, for whom? The underdeveloped world’s efforts to grow, and in Cuba in particular, must be consistent with a long-term development strategy that is consensual, clear, invariant, but at the same time flexible, capable of adjusting to changing contexts. This strategy must also have a short-term expression. It is important that a conception of economic and social policy that treats its negative potential consequences based on the equity or well-being of vulnerable groups as “short-term sacrifices” does not prevail, but that, from its very design, these consequences be taken into account and how to correct them.
Placing development at the center implies producing policies and programs that guarantee the processes of production and reproduction of people’s lives and in harmony with the environment. That is, the reproduction of decent, daily and intergenerational life, which includes access to housing, food, consumer goods, health, education, culture, recreation, decent and equal work (paid and unpaid), rights…. It also implies recognizing the diversity of people, and ensuring inclusion for all.
If we focus proposals on growth, we consciously or “unconsciously” promote the program that growth comes first and then “everything else.” This erroneous subsidiarity premise should not have a place in the Cuban project.
On the contrary, we know that growth, although essential for Cuba, does not necessarily come with increases in the quality of life of the people. We can question, in fact, the way in which growth is measured: Gross Domestic Product. But that indicator leaves out, for example, the entire sphere of unpaid work and care, vital for the sustainability of the economy and life, and ignored by the more conventional view of the economy.
The current Constitution of the Republic of Cuba does not recognize other than paid work as work. However, the contribution of unpaid work was equivalent to around 20% of the GDP in 2002, when Teresa Lara Junco made the only estimate available in this regard. GDP also does not consider work in the non-formal sector of the economy, does not take into account the environmental consequences of predatory growth processes, and leaves out inequality issues. Therefore, it is important to take this indicator with caution and consider others that would send better signals about how economic policy impacts people’s lives.
Do you consider that it is necessary to think about inequalities for the design of economic solutions to the crisis in Cuba? What do you think about these two formulas: first grow economically and then redistribute or growth and decrease of inequalities as synchronized efforts?
Betsy Anaya: For years, it has been demonstrated that the “Drip Theory” or the “Spill” does not guarantee greater social equity. Despite this, many economists insist that you must grow first and then use the fruit of that growth to combat inequality. In Cuba, several economists have introduced this debate in important areas for decision-making, and we are working every day to change the perception of growth first and equity later.
Cuba is a perfect counter-example of the importance of political will and that policies be applied. In times of economic restriction, such as the triumph of the Revolution or the crisis of the 1990s, linked to the collapse of the socialist camp, many advances were made towards equity and universal social programs were maintained, respectively.
For years, Cuba applied universal social policies, however, the 1990s crisis and the reform applied to get out of the crisis resulted in a deterioration of social equity, which required a combination of this universal approach with more personalized policies, as of the first decade of this century.
Today’s Cuban society is even more heterogeneous. There are diverse kinds of gaps: economic, territorial, gender, race, generational, among others. Policies that are designed to achieve economic growth must have equity criteria incorporated. Otherwise, they may widen such gaps, considering that everyone is in the same starting condition. We cannot wait to have economic results to think about equity. Both purposes must be synchronized.
For example, countries like Uruguay evaluate investment projects using indicators such as the number of jobs that the project will generate and the beneficiaries of that job, the territory in which it will be located and the contribution to its development, etc. I repeat, the economic policies to be applied must incorporate equity criteria based on their design in order to reach a growth path that is conducive to the development of the country.
Tamarys Lien Bahamonde: This is one of the reasons why I don’t like to talk about growth, but about sustainable development. Inequities are having an impact on and transforming our economies, our sense of democracy and our societies, almost irreversibly. A country like Cuba cannot ignore inequalities in the design of public policies, even in times of crisis. The economic policy priority that is established will generate cultures, behaviors, attitudes and a design of society in the programmed sense.
If we abandon inequality as an economic and social priority, it will be very difficult to reintroduce it once the crisis is over, if it is overcome with a model that ignores equity. Because there is something important: the Cuban crisis is NOT temporary. It is a structural crisis and, from my perspective, it is also a chronic crisis. Solutions to the crisis have to be seen and designed at three time-based levels, ranging from the long term, through the medium, to the short. Not the other way around. In the third world and in Cuba, this involves a group of higher dimensions and challenges.
Financing for development has always been a serious problem in Cuba. Even Arango y Parreño theorized about sources to finance sugar growth in the 18th and 19th centuries. The dilemma in recent centuries has been between economic efficiency and social equity. We have based our technological development, as Jacques Ellul said, in the search for more and more efficiency, sacrificing the rest of the dimensions: environment, equity, individual. The human being is always sacrificed in pursuit of the economy, ignoring that it is the economy that must serve the human being and not vice versa.
To save humanity we need to reintroduce a different ethical model in the design of our policies. Cuba cannot emerge from the crisis with a model that does not contemplate development in all its dimensions, including equity. The emphasis cannot be on efficiency and economic growth, but on individuals and meeting their needs, in harmony with their environment. That has to be the priority in Cuba too.
Ileana Díaz: It is necessary in Cuba to consider inequalities in the economic design, which would suppose universal and focused policies, to solve or reduce inequalities. It isn’t possible to speak only of economic needs, without looking at social needs and vice versa. The expected is to find a balance between economic growth and social needs. The analysis is socio-economic; it isn’t possible to speak of development without considering the social.
Blanca Munster: The analysis of inequalities must be at the center of the debate on the national agenda for the design, not only of economic policies, but also of social policies themselves, which must respond to the changing scenario in the country. For this, the analyzes must be based on a broad concept of inequalities and not from a one-dimensional view, focused only on income. Along with socioeconomic inequalities there exist the gender, ethnic, racial and territorial inequalities and those related to the different stages of the life cycle of people. All of them form structuring axes of the inequality matrix.
Most economic studies focus on income inequality and are based on a single measurement instrument, the Gini coefficient. But that is insufficient. The gender approach, for example, has allowed the explanation of social inequalities to be enriched and complexed. However, there are difficulties in obtaining significant data (at the macro and territorial levels) on any aspect of women’s lives. On the other hand, the production of statistical information continues to focus on monetized activities and collects very little on unpaid activity, which is not considered an economic activity.
Anamary Maqueira Linares: It is a mistake to disregard inequalities in the designs of the economic solutions to the crisis. Inequalities are a problem in Cuba, and a serious one at that. Not everything is going to be solved at the same time and as if by magic, but it is essential to identify all the potential unwanted effects and include in the strategy actions that can avoid these effects. Then, during implementation, it is always possible for others to emerge. Then the strategies will have to be adjusted again. In other words, the main idea is that equity cannot be an assumed cost of economic policies. Nor can we think that the unequal negative consequences will correct themselves, if the measures are “successful” in terms of growth.
A political economy approach would ask who pays the consequences of the “first we grow, then we distribute” decision, who benefits from this decision and who made it. It is not about distributing poverty. It is about understanding the power relationships behind each of the answers to the previous questions. Efforts, then, must focus on a synchronized program where growth and diminishing inequalities of income, opportunity, gender, sexual orientation and identity, racialized groups and territory go hand in hand.
Coordinator of the dossier:
Ailynn Torres Santana
Postdoctoral researcher at the International Research Group on Authoritarianism and Counter-Strategies (IRGAC) of the Rosa Luxemburg Foundation, associate researcher of FLACSO Ecuador and part of the The Future is Feminist Network of the Friedrich Ebert Foundation. Graduated from FLACSO Ecuador (PhD) and from the University of Havana.
Participants:
Tamarys Lien Bahamonde
Candidate for a PhD in Public Policy and Urban Planning degree from the University of Delaware. Master in Local Development from the University of Camagüey and Bachelor of Economics from the University of Havana.
Blanca Munster
PhD in Economic Sciences. Senior researcher and Assistant Professor at the Center for Research on the World Economy (CIEM).
Ileana Díaz
PhD in Economic Sciences. Full Professor of the Center for Studies on the Cuban Economy. Coordinator of the Entrepreneurship Network of the University of Havana.
Betsy Anaya
PhD in Economic Sciences from the University of Havana. Full Professor and Director of the Center for Studies on the Cuban Economy at the University of Havana since 2017.
Anamary Maqueira Linares
Candidate for a PhD in Economics from the University of Massachusetts, Amherst. Master’s in Development Economics from FLACSO Ecuador and Bachelor of Economics from the University of Havana.
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Authors
Ailynn Torres Santana,
Ailynn TS
