Abstract: Cuba is now facing serious economic difficulties, and if it is not alleviated in a timely manner, it may lead to a crisis of political impact on Cuba and indirectly endanger the mainland's global strategy and fundamental national interests. From the angles of bilateral relations, economic advantages, and especially geopolitics in the context of the great world dispute, the mainland should attach great importance to it and implement and implement support and assistance for its economic, trade, and investment as soon as possible.
In the past year, after conducting a more comprehensive survey of Cuba (including two field visits), the author has the following observations, reflections and suggestions.
1. The severe economic crisis and its deep impact on society
Cuba is experiencing a serious economic crisis after 65 years of severe sanctions, strict blockade and wanton repression by the United States, especially after three years of worsening the impact of the pandemic. This is the worst economic crisis since the collapse of the Soviet Union in the early 90s of the last century, and it has had a serious impact on the lives of ordinary Cubans:
1. The economic recovery after the coronavirus disease in 2019 has been significantly slow, and the production and supply of agricultural and industrial products have lagged behind significantly. After a 10.9% contraction in 2020, real GDP grew modestly by 1.3% in 2021 and 1.8% in 2022, but nowhere near the projected 4%.
2. Cuba's GDP level is significantly lower in Latin America. For example, Cuba's per capita GDP in 2021 is US$7,291, while Latin American countries generally have a per capita GDP of US$11,000 to US$15,000.
3. Inflation is severe. According to official data, year-on-year inflation in December 2021 and December 2022 was 77.3% and 39.1%, respectively.
4. Cuba's per capita GDP is seriously overestimated because Cuba's GDP is converted by the government at the exchange rate between the Cuban peso and the US dollar. In previous years, the Cuban peso was converted to the US dollar on a one-to-one basis, and after a series of inflations, now (December 2023) the government rate is 110 Cuban pesos per US dollar, but it can be exchanged for 170-260 pesos on the black market. This inflationary trend does not see any signs of slowing down in the short term.
The economic crisis has had a devastating impact on the lives of ordinary people. At present, the average Cuban person's monthly salary is between 1,500 Cuban pesos and 2,500 Cuban pesos, and the actual equivalent is about 350 to 750 yuan. Wages in Havana and surrounding areas are slightly higher, equivalent to about 30 yuan a day, but less than 1,000 yuan per month. Food and groceries are high and in short supply, and we visited a number of supermarkets in the area where the shelves were very homogeneous, with only a small amount of vegetables, meat, and a single brand of toiletries and beverages. Under the sanctions imposed by the United States, Cuba is extremely short of supplies, and often has to run several supermarkets to try their luck in order to buy necessary daily necessities. In stores that pay in dollars or Canadian dollars, a pound of sausage sells for $5-8, a plain white bathrobe costs $25, and a two-pound pack of ground coffee costs $26, and Cuba is a coffee-rich country. Parts and materials to repair a car need to be imported, and it costs $600 just to repair 4 tires. Milk, cheese and beer are all luxury goods that need to be imported. We visited the home of a Cuban cadre at the level of a department. When it came time to use the toilet, his wife (a university professor) took out a roll of paper that is common in North America, one Canadian dollar (five yuan), and took it out of a locked cabinet in the bedroom.
The economic crisis has had a deep and severe impact on Cuban society, mainly in the form of widespread discontent, public complaints and a massive exodus of the population. In the context of a dozen (blockades and sanctions) and a pull (United States citizenship for those who flee Cuba), more than 90,000 people (nearly 1 per cent of the Cuban population) have "left Cuba for the United States" last year alone, and most of these people are young people of high quality in all fields. Almost all of the Cubans I met expressed strong dissatisfaction, and their minor children all wanted to leave Cuba. Cuba is just over 100 kilometers away from the United States. Cubans who think of the United States mostly use homemade rafts, foreign smugglers, direct flights or forged visas to leave and enter the United States; In 1980, as a result of the temporary relaxation of exit controls by the Cuban government, 125,000 people arrived in Florida in the United States in just six months.
Cuba has begun to implement a cautious policy of opening up in recent years, including the short-term normalization of relations between the United States and Cuba at the end of 2014, which has led to great changes in the country's people's customs and political conditions. In July 2021, there were large-scale nationwide demonstrations and protests in Cuba that shocked the world, with demonstrators chanting slogans such as "freedom" and "Cuba is not yours" to express their dissatisfaction with the situation in Cuba under the pandemic......
As a result of factors such as long-term education and effective control in the ideological field, Cuban society and the country will not undergo a major political shift in the short term. But if there is no timely "blood transfusion" and "hematopoiesis" in the economy, everything is possible. The recent sudden emergence of a right-wing government in Argentina as a result of the economic crisis is a cause for alarm.
2. China should urgently provide assistance to Cuba
Entering the "world of great contention" with the United States, China must put an end to all possibilities for a political shift in Cuban society and government.
1. From the perspective of ideology and geographical location, Cuba is the most suitable frontier country on the mainland to confront and restrain the United States. Cuba is only 150 kilometres from its closest point in the United States. As the only communist country standing on the doorstep of the United States, Cuba has been sanctioned, blockaded and pressured by the United States for 65 years, and has experienced the longest confrontation with the United States in the history of the world. Cuba is therefore the most natural, reliable, resolute and indispensable all-weather strategic partner of the continent in the entire Americas, between the Pacific and the Atlantic. Our goal is not necessarily to deploy military bases or nuclear missiles in Cuba to create a military deterrent to the United States. As long as Cuba is strengthened economically and its development is successful, it will be a challenge to the hegemony and dominance of the United States and a direct and effective strategic balance to the United States.
2. Cuba is the largest island in the Caribbean Sea, the Gulf of Mexico and the western Atlantic, and is a geographical hub connecting North America and South America. In recent years, most countries in Latin America have "turned to the left" and left the United States and are pro-China, while the United States has been seriously constrained by the situation in Ukraine and the Middle East. At present, the mainland has not yet established a solid and reliable base country in this region, and timely economic assistance and investment in Cuba can not only help it recover, but also become a distribution and transit base and manufacturing center for goods and goods from the mainland to Latin America. Most Latin American countries use Spanish, and Cuba can become a center for exchange and training in Chinese and Spanish, radiating China's soft power such as culture and politics to Latin American countries. In this way, Cuba is the silkworm in the north, Honduras and Nicaragua in the west, Venezuela and Colombia in the south, the mouth of the Panama Canal in the south, and the Caribbean region can gradually create a ring of economic, political, and paramilitary integration of the anti-hegemonic strategic circle.
3. Cuba is one of the only five remaining socialist countries in the world, and the United States has never given up its subversive activities against Cuba. Politically, it has fostered the opposition inside Cuba, sabotaged and even assassinated Cuban leaders, and the number of attempted assassinations of former head of state Fidel Castro has reached 638, the highest number in the world. Militarily, Guantanamo, which it illegally occupied and used as a military base, has not been returned. This year, the United States still adheres to the economic blockade and sanctions against Cuba as a result of the high-ratio votes of 187 countries of the United Nations against the United States and Israel in order to cooperate with its conspiracy to carry out "peaceful evolution" against Cuba in the ideological field. The United States has also used a large number of Cuban-Americans to infiltrate and subvert Cuba. Its federal senator and former presidential candidate, Mark Rubio, is a common enemy of Cuba and the Chinese. Rubio, who was sanctioned by the Chinese government, not only vigorously attacked China on human rights issues, but was also a strong supporter and promoter of Taiwan independence and Hong Kong independence forces, and was described by the Washington Post as "one of the most noisy critics of China" by the US government. If the mainland can provide timely economic and construction assistance to Cuba, it will not only be able to thwart the conspiracy of the United States and consolidate and strengthen a solid fortress at the forefront of the struggle against the United States, but will also effectively defend and enhance the influence and reputation of the mainland among the oppressed nations and countries around the world, especially the socialist countries.
4. Cuba was the first country in Latin America and the whole of America to recognize the People's Republic of China. In 1971, at the 26th session of the United Nations General Assembly, Cuba was one of the 23 co-sponsors of the proposal to restore China's lawful seat in the United Nations. Cuba has long-term, consistently, resolutely and unconditionally supported China's position and safeguarded China's interests at the United Nations and other world forums. During my own experience in Cuba, I have heard, met and felt many times the goodwill, friendship and gratitude of the Cuban people to China and the Chinese. As far as morality is concerned, as far as the long-standing brotherhood between the two countries and the two peoples is concerned, China should and must also support and help Cuba.
5. Providing a large amount of economic aid to Cuba in a timely manner is an important strategic measure to adjust and stop the mainland's blind and "self-harming" policies in foreign loans, investment, and foreign aid construction. A clear analogy is India, which has always been hostile to the mainland and has a heart and mind to compete with the mainland on a global scale. In a short period of time, the mainland has provided a cumulative $4 billion in loans to India through the AIIB and other institutions, and invested $2.9 billion in 13 infrastructure projects. Tens of thousands of large and small Chinese enterprises have flocked to India for various joint ventures, technical assistance and training, so that its mobile phone and photovoltaic industries have developed strongly, and India has changed from a market completely dependent on the mainland to a country that is not only self-sufficient, but also competes with China for exports. India has also lost half of the continent's market by investing, joint ventures or helping in sectors such as electricity, fertilizers, automobiles and infrastructure machinery (such as shield machines). In contrast, Cuba, which is a strategic partner or even a community with a shared future of the mainland in almost all respects, has good conditions for investment, economy and trade in almost all aspects, and can benefit the mainland and its enterprises by investing in it in almost all aspects, has invested too little in the mainland.
3. Countries that have good conditions for investment, economy and trade in almost all respects
1. High safety factor. Cuba has one of the lowest crime rates in the world. It is safe for foreigners to travel, live and work in Cuba. This fact recognized by the United Nations is also experienced by the author and by all those who have been to Cuba. Second, the friendly relations and comradeship between the governments and peoples of China and Cuba are the most important foundation for China's investment and economic, trade, and technical cooperation. In November and December this year, the first secretary of the Central Committee of the Communist Party of Cuba and Cuban President Díaz-Canel and Cuban Prime Minister Marrero visited China and met cordially with General Secretary Xi and other Chinese leaders, which further strengthened this foundation. It can be concluded that it is difficult for Cuba to have a situation of hatred, suspicion, dishonesty, backtracking, or even hatred of China, as in India and Vietnam.
2. High-quality and low-cost labor. Cuba has the highest level of education in the world: 100 per cent of primary schools, 98 per cent of lower secondary schools, 95 per cent of upper secondary schools and nearly 60 per cent of universities. Cuba also has the highest level of health in the world, with an average life expectancy of 79.9 years. The price of labor is low, as mentioned above, and it enjoys free health care for all, without the need for additional health insurance. In addition, Cubans who have grown up under the socialist system are generally honest, kind, hardworking, and cooperative. Such a high-quality, low-cost, healthy, diligent and cooperative labor force is rare in the world.
3. Abundant but inexpensive natural resources and assets. Known as the "Pearl of the Caribbean", Cuba has a total area of 110,861 square kilometers, more than three times the size of Hainan Island, and an exclusive economic zone of 350,751 square kilometers. Cuba is the 17th largest island in the world, with only one-quarter of the island being mountainous, and 66,000 square kilometers of arable land. The land is fertile and the climate is humid, which is conducive to the development of large-scale mechanical agriculture for multiple cultivations. Cuba's mineral resources such as nickel, cobalt, manganese, chromium, iron and copper are among the best in the world. The recoverable oil reserves are about 20 billion barrels, and the natural gas reserves are 10~22 trillion cubic meters. Forests cover about 30 per cent of the country's area and produce valuable timber such as mahogany, sandalwood and Cuban pine. The sun is abundant and the fishery resources are abundant, with tuna, sea bream, sardines, lobsters, prawns and sea cucumbers. Its coastline is home to more than 5 million visitors from all over the world every year. In particular, it should be noted that the prices of existing assets such as land, sea, minerals, forests and real estate in Cuba are already at unbelievably low levels for the aforementioned reasons.
4. Preferential investment policies. Since 2013, the Cuban government has promulgated a series of legal documents, including the Foreign Investment Law No. 118, which sets out many preferential conditions for foreign companies and individuals to invest and do business in Cuba. For example, after the establishment of a foreign joint venture company or a contractor to an international economy, the Cuban government will exempt the company from income tax for eight consecutive years. In exceptional cases, the Executive Committee of the Council of Ministers may also authorize the extension of tax holidays and the provision of other additional preferential conditions. In view of the economic difficulties that Cuba is now facing and its special relationship with China, Cuba can only be more relaxed in terms of preferential conditions for China to provide supplements and modifications.
5. At present, there are few competitors. Due to the long-term blockade and suppression by the United States, there has been very little investment in Cuba so far. After the disintegration of the Soviet Union, Russia and the countries of Eastern Europe, which had previously vigorously supported Cuba economically, were too busy to take care of themselves, which objectively caused the Cuban economy to suffer a serious blow. Viet Nam is currently Asia's largest source of foreign investment in Cuba and has promised to double its investment to $500 million in joint ventures over the next five years. This year, India has seen a 25 to 30 percent increase in the number of tourists visiting Cuba and announced that it will give Cuba a $5 million credit to build a milk powder factory. From this point of view, sooner or later, Cuba will have to attract investment and entry from many countries.
6. Easy to see results. With a population of only 11 million and a small country, Cuba is therefore more concentrated and more effective in terms of financial and human resources than in large countries such as India and Brazil. Considering Cuba's special strategic value to the mainland, it can obtain four or two thousand catties of water and a spring of dripping water.
Fourth, invest in building countries that can benefit China in almost all aspects
Based on China's advantages in various aspects and Cuba's current situation, it can be said that investing in Cuba in any field could greatly benefit. I would like to introduce some of the key areas.
1. Tourism. Cuba's tourism resources are high-quality, abundant, safe and inexpensive. Due to the safety and pollution of places like Mexico (including Cancun), Cuba has become the top choice for travelers from Canada, Russia, and some European countries. Cuba's tourism industry has been hit hard by the pandemic, especially after Trump re-tightened Obama's easing policies towards Cuba after taking office. If we can use tourism to bring commerce and trade, as Cuban Prime Minister Marrero wished during his visit to China, open up direct flights between China and Cuba, and encourage and organize Chinese to go for tourism and inspection, we can not only directly and efficiently transfuse blood into the Cuban economy, but also understand and discover the potential and opportunities of Cuba's trade and investment on the spot.
2. Agriculture. Cuba is blessed with unique conditions for the development of agriculture, but only 6 percent of the population is engaged in farming, and it is not self-sufficient in food, and there is only one variety of crops. Cuba is in dire need of managerial experience and technical guidance, funds for the purchase of agricultural machinery and irrigation systems, an increase in the production and diversification of its agricultural products and the encouragement of confidence in employment in agriculture in order to fully meet the food needs of the 11 million Cubans and the 3 million to 5 million tourists per year.
3. Bioengineering and pharmaceutical. According to several U.S. publications, "Cuba has managed to build a strong health system and has made many significant medical advances, despite long-standing sanctions". In the fields of bioengineering, pharmaceutical manufacturing, and medical devices, Cuba has developed many new products with good results and low prices, such as interferon, streptokinase, epidermal growth, Japanese encephalitis vaccine, hepatitis B vaccine, PPG (cholesterol-lowering drug), EGF/R3 (treatment of skin tumor drugs), biological parameter monitors, electroencephalogram workstations, electromyography machines, etc. These drugs and medical devices produced in Cuba are very effective in diagnosing or treating hepatitis, meningitis, tumors, AIDS, etc., and many of them have reached the international advanced level.
4. Light industry. As mentioned earlier, Cuba is short and expensive of all kinds of daily necessities, but not many Chinese goods. If a large number of high-quality and low-cost goods and materials are sent to the mainland, it will not only greatly alleviate the tight needs and money bags of its people, but also help the mainland establish commodity distribution and transportation centers to other Caribbean and Latin American countries.
5. Capital construction. Transportation: The entire island of Cuba is small and narrow (1,225 kilometers long at the east and west ends), and a cost-effective and efficient highway could be built on its current basis (60 kilometers per hour). Electricity: Cuba is a tropical country with abundant sunshine, which is particularly suitable for the development of the photovoltaic industry. If the experience of the mainland is adopted, the upper part will be used to generate electricity, and the lower part will raise livestock and fertilize the fields, killing three birds with one stone. Cuba's largest river, the Coupto, is 370 kilometers long and has a short and fast upstream that allows for the construction of efficient hydroelectric power stations. About 110 kilometers in the middle and lower reaches are navigable and irrigate important agricultural areas. Shipping: Cuba has many natural deep-water ports, such as the ports of Havana and Mariel. The 465-square-kilometre Mariel Special Development Zone (ZEDM), which was approved at the end of 2013, is now managed by Singapore, and the mainland should vigorously help develop and take the lead. Venue construction: Most of the existing buildings in Cuba are left over from the 50s of the last century, and there are few modern buildings, especially those built with Chinese assistance. If the mainland can assist Cuba in building a number of decent venues, this will have great symbolic and propaganda significance.
6. High-tech communication. Due to Cuba's high-quality labor force and high political security, the mainland should consider setting up some industries with high technology content and high security requirements, such as mobile phones, communication equipment, and electric vehicles.
7. Aerospace and deep-sea activities. Due to Cuba's political security, geographical and geographical advantages (Western Hemisphere, low latitudes), the establishment of a Chinese space launch center there could be considered. The Cayman Trench is the longest (2,550 km), widest (69 km) and deepest (average depth of more than 5,000 meters, up to 7,680 meters) in the Caribbean Sea.
Scalable links in the image above:
https://lacgeo.com/sites/default/files/map_central_america_caribbean_cayman_trench_opt.jpg
(The author is a special researcher of Kunlunce Research Institute; source: Kunlunce Network [original] revised draft, authorized by the author for the first release)