A new social and economic order is fast emerging and seems to be engulfing the entire planet. It is characterized by strong global demographic, environmental, economic, political, cultural, scientific and technological (S&T) trends and interdependencies. Together, these trends constitute what has come to be popularly known as the phenomenon (or process) of globalization--as opposed to the counter-trend of localization which emphasizes heterogeneous development and cultural exclusiveness. The most pervasive aspects of globalization include the global economy, a global science and technology system, and a global culture. These will be briefly discussed in this essay using the theoretical frameworks provided by the modernization theory and the world system theory. Implications of these aspects of globalization for developing countries, particularly Cuba, will be highlighted.1
There are several reasons for highlighting the case of Cuba in this study. Much of the western discourse on Cuba is ideological, focusing basically on the politics of communism in Cuba, Cuban-American, and Cuban-Soviet relations.2 American media coverage on Cuba has been greatly influenced by the Cuban exiles in Miami and the anti-Communist, anti-Castro policies of the American government currently led by political figures like Senators Jesse Helms and Dan Burton, powerful figures in the Senate Foreign Relations Committee.3 The following comments by a Cuban exile reflect the image of Cuba commonly held by an average American:
The events of Cuban history have continued through a path of poor policy-making and a divided people. Cubans have never united and agreed on anything. In the United States, we all value our right to freedom. That is what makes the United States strong and powerful. Cuba has succumbed to bad leadership because of its inability to set a vision for the country.4
What is generally ignored is the fact that Cuba is a dynamic not a static or closed society. It is highly organized but not a totalitarian police state. Whether one likes Cuba or not, it has had one of the most visionary and longest lasting leadership anywhere in the world. Cuba has been transforming its economy and society with a unique blend of freedoms and controls in the context of what may be described as “perpetual revolution” to overcome many odds, raise the standard of living of its people, and become fully integrated into the new global social and economic order. This study is an attempt to understand, and possibly forecast, some major implications of globalization for the developing countries in the twenty-first century using Cuba’s dramatic social and economic transformation from a relatively closed to an open society in recent years, as a case in point. As discussed in greater detail later in this study, Cuba’s entry into the global society and economy has followed a different and tortuous path than most other developing countries because of its history during the past one hundred years.
Two key assumptions underlie the theme of this essay: that the process of globalization in contemporary society is driven by forces other than those that gave rise to the empires and world economies of the past, and that the phenomena of globalization and localization may not necessarily contradict each other. These assumptions are highly relevant for the developing societies in general as they try to find their place in the global society.
The global economy is characterized by interconnected systems of resourcing, innovating, manufacturing, and marketing on a worldwide basis. Multinational corporations (MNCs), backed by their respective governments, and international financial organizations such as the World Bank, the International Monetary Fund (IMF), the World Trade Organization (WTO), the International Finance Corporation (IFC), and the Asian Development Bank are the key agents of global economy. An increasing number of small- and medium-sized enterprises are also getting indirectly involved in global business operations, and consequently, in the global economy, as partners of giant corporations. Currently, the global economy is strongly influenced by the industrialized countries where the MNCs and the international financial organizations are headquartered. This has sometimes produced negative consequences for less influential nations. But as the global economy expands, all nations big and small are beginning to play an increasingly significant role in it and are being affected by it, sometimes positively, sometimes negatively. This is particularly true for the newly industrialized or industrializing countries (NICs) in Asia, Africa, and Latin America, barring some like North Korea, Myanmar, and Afghanistan which have so far participated only marginally in the global economy for internal and external political reasons. If the present trends continue, as they most likely will, all national economies, including those currently external or marginal to it, will be ultimately integrated into the global economy in different ways and to varying degrees. Former U. S. Labor Secretary, Robert Reich put it eloquently:
We are living through a transformation that will rearrange the politics and economics of the coming century. There will be no national products or technologies, no national corporations, no national industries. There will no longer be national economies, at least as we have come to understand that concept. All that will remain rooted within national borders are the people who comprise a nation5 .
Scientific knowledge, in its long and varied history, is truly universal both in terms of its origins and applications. All cultures of the world have contributed to it, shared it, and been affected by it differently and in varying degrees over different time periods. Historically, international transfer of ideas, cultural elements, technical inventions, human capital, goods and services has been the most prominent aspect in the creation of what has now come to be called global society, or in Marshall McLuhan’s eloquent phraseology, the “global village.”6 Such transfer has been going on for centuries in certain quarters, except that now it is much more frequent, rapid, and widespread.
In contemporary society, three main characteristics of science and technology have made them evermore global. First is the large-scale innovation, production and dissemination of technologies in the fields of communication, transportation, energy, environment, genetics, medicine, manufacturing, agriculture, and systems design and engineering. These technologies are now being transferred across the world, from North to South and vice versa, and from West to East and vice versa regardless of their points of origin, unlike the unidirectional flows during the colonial and the early post-colonial periods7 . Even the ancient and hitherto culture-bound practices, such as acupuncture, yoga, and homeopathy are now globally available and practiced.
The second aspect is the shared nature of scientific discovery in two important ways. (A) Research and development (R&D) in the areas of global significance, such as those mentioned above, are becoming increasingly global involving institutions and personnel from different parts of the world. (B) The nature of scientific communities and communication is changing rapidly from being local to cosmopolitan or global. This transformation is most visible in international education, migration, and employment of scientists and engineers. It is equally visible in the composition of editorial boards of scientific journals, the number of joint publications, the multi-national funding and processing of large R&D projects (e.g. the Genome project, space exploration, AIDS research), and membership of and attendance at scientific associations and conferences.8
The third aspect, unfortunately, deals with the global misuse of science and technology. This involves research, development and trade (both legal and illegal) of military technology, including light weapons and weapons of mass destruction. It is now well-known that despite the efforts of major nuclear nations to remain exclusive, the so-called “Nuclear Club” is no longer all that exclusive any more as an increasing number of nations like India, North Korea, Israel, and Pakistan have achieved the distinction of possessing nuclear capability, including nuclear weapons. Ironically, it is the spread of nuclear technology that has also created an almost universal desire for nuclear non-proliferation and disarmament.9
The development and trade of light weapons is far more pervasive and insidious than the weapons of mass destruction. Approximately 40 nations manufacture and export some kind of light weaponry. Those who cannot manufacture them, get them through military aid programs of large nations or the international arms market that includes both large and small nations. The global arms business is estimated to run into billions of dollars annually.10 There is an unholy alliance among the developed and the developing countries in the arms trade, the United States being the world’s largest supplier of arms and the developing countries being their largest buyers.
Cuba’s situation in the global S&T system is unique in that while it may not have had a major advanced technology supplier since the collapse of the Soviet Union, it has also not wasted its meager resources on developing military technologies, nor has it engaged in and benefited from arms trade in any significant way. But Cuba’s civilian R&D capability is substantial despite its relative isolation from the global technology system.
The American S&T establishment has largely ignored Cuban science and scientists. For example, the 2000 edition of Science and Engineering Indicators has only one skimpy reference to Cuba, that it spends 0.7 percent of its GDP on R&D.11 A recent literature review, conducted by the author, of selected science and technology policy related journals covering a ten-year period produced only ten items about science and technology in Cuba. Most of these dealt with the development of biotechnology, a field in which Cuba seems to have made good progress. Three discussed some issues connected with the development of communication networks. The most interesting item was the one dealing with the visit of 21 U.S. neuroscientists to Havana in 1999 to discuss with their Cuban counterparts areas of mutual interest, “the first bilateral meeting in the life sciences since the imposition of the U.S. trade embargo 37 years ago.”12
Economy, technology, and culture are closely connected. It would be impossible to understand any of these in isolation from the others starting from the beginning of human societies to the present day sophistication of modern social systems. The great ancient civilizations of the world--Iraq, India, China, Egypt, the Greco-Romans, and the Aztec-Incas of South America are supposed to have developed largely independently of each other. It is hard to imagine such isolation in the modern world of jets and computers. The local integration of economy, technology, and culture is now accompanied by global integration of these in some very important ways. Such integration is visible in the organization and management of business enterprises, deregulation of economic activity, bureaucratization and standardization, a culture of consumerism, better understanding of universal human rights, environmental consciousness, democratization of the political process, cuisines, music, fashions and fads, and above all, an increasing awareness, and one may even venture to add, greater tolerance of the vast world out there beyond one’s own conventional boundaries. The development and expansion of global culture is occurring largely due to the pervasive influence of global economy and the global S&T system as discussed above. Today’s world traveler is often struck by the stale similarity of international airports, five-star hotels, super markets, modern architecture, consumer electronics, information technology systems, even modern hospitals wherever such may be available, whether that be in Melbourne, Montreal, Havana, Beijing, Karachi or New Delhi.
Globalization of human experience in terms of the three aspects discussed above is neither shared equally by all global communities nor is it a prerogative of a few ex-colonial empires or over-developed western countries only. Globalization also does not mean end of national cultures, a panacea for all, or an unmitigated disaster for the world, as proposed by opposing camps in the world development dialogue. This dialogue is generally influenced by two powerful paradigms, modernization theory and the world system or dependency theory. These paradigms are briefly discussed below in order to suggest a broader context for this contentious dialogue as it has taken shape in recent years. Interestingly, Cuba has not figured much in this debate, although the implications of globalization are as serious for it today as for any other developing country. This debate is initiated and carried on by opposing ideological camps in the West. Their vision of the “third world” does not seem to include Cuba, a small island merely 90 miles off the southeastern coast of the United States.
Globalization, according to some, involves modernization to the extent that the two processes are one and the same thing.13 Four facets of modernization are generally recognized: social (e.g. contractual relationships), economic (e.g. diverse, consumer oriented, free-market economies), political (e.g. development of democratic institutions) and cultural (e.g. movement from tradition to trends, i.e. trendiness) modernizations.14 According to this view, all contemporary societies are essentially modernizing societies progressing through similar, if not exactly the same, stages of development. Societies at a lesser stage of development could sooner or later reach the ideal stage, that is, industrialization, technological advancement, material prosperity, and happiness for all.15 This position is strongly held by development economists in the advanced industrial societies and by many among the modernizing elites in the developing countries as well. A key assumption of modernization theory, that of individual choice in a free society, is a correlate of the assumptions underlying the theories of capitalism and internal attribution where the actors, either individual or collective, are to be largely credited or debited for their own successes and failures.16 Actors external to the system under consideration may contribute to its success but cannot be blamed for its failure. Much of the development strategy and aid that flowed from the developed to the developing countries in the postcolonial period were influenced by these assumptions. Foreign aid as a source of modernization has been replaced in the global society by foreign domestic investment, international trade, and technology transfer.
An opposite viewpoint, presented by the world system theory (WST), sees both globalization and modernization as hidden formulas for westernization of the non-Western world (the periphery) by giant multinational corporations and international financial organizations headquartered in, and controlled by Europe and North America (the core countries). According to this viewpoint, globalization and westernization produce opposite effects in these two categories of societies: increasing the power and prosperity of the rich core nations at the expense of the poorer, peripheral ones17 . It is contended that globalization, if left unchecked, would ultimately destroy local economies, cultural diversity, and traditional eco-system maintenance mechanisms around the world. They would transform all modernizing societies into mere appendages of the core countries at the receiving end of a bad deal.18 The suggested antidote to globalization, modernization, westernization, or McDonaldization is localization by de-linking from the world techno-economic system.19 Islamic countries like Iran and Afghanistan and communist states of North Korea and Myanmar may be cited as followers of this approach, either by design or default.
From the vantage point of developing countries like Cuba at this juncture, the main questions to be considered include: Are these positions exclusive of each other? Are globalization, modernization, and localization defined similarly or differently in different parts of the world? To what extent, if at all, do globalization and modernization pose serious threats to the political sovereignty, cultural sanctity, and environmental integrity of the developing societies? Is it at all desirable, or even possible, for a developing country to remain isolated from the global society and economy? The discussion that follows will throw some light on these and other related issues, first generally then specifically for Cuba.
Both the modernization and world system theories view the global economy as a mechanism of integration of diverse societies into a large, and largely unified social, economic, and technological system. Such integration and unification is considered a positive outcome for the world by the adherents of the ideology of modernism.
As the end of the twentieth century approaches, the growing recognition, reinforced by satellite images from space, that planet earth is a single “place” has reawakened intellectual interest in Enlightenment notions of a universal community of humankind.20
The modernists believe in the logic of evolutionary societal development, analogous to the assumptions of evolutionary biology or developmental psychology, whereas societies, like the natural and human systems, transform through similar developmental stages from infancy to maturity. These stages have already been passed by the advanced industrial societies in Europe and America. It is now the time for the rest to become like the West by following the so-called western model of social and economic development, the end point of the modernization game, including democracy and free markets. For all modernizing societies, democracy, capitalist economy, and integration in the global society are suggested as the necessary conditions for their survival and continuous growth. The post-World War II reconstruction and recovery of Japan and South Korea as major industrial powers are cited as a proof of legitimacy of this logic. So are the collapse of the Soviet Union, ushering in of perestroika and glasnost in Russia, Chinese partnership in world economy, and the economic woes of North Korea, Vietnam and Cuba. There is indeed a hollow ring to this logic as it looks at development as a single path, purely from the western, materialistic point of view that ignores not only its dysfunctional aspects, such as environmental degradation, loss of community, social inequality and violence in the modern industrial societies, but also the possibility of multiple and eclectic approaches to societal development.21
The opposite is true for the world system theorists. They believe that the desired integration is neither through nor for the sake of interdependent development. It is desired for the sake of keeping the developing world in a state of perpetual dependency in a hegemonistic world order where the development of the core is contingent upon the underdevelopment of the periphery through the exploitation of the latter’s markets and resources. Thus, the political domination of world empires is now being replaced by global economies in charge of the industrialized West. Multinational corporations and the international financial organizations are seen as agents of global economy. Their main purpose is to serve the interests of the industrialized West although they claim to be the promoters of international trade and development. In a rare show of unity against this edifice of imperialism, “nervous trade unionists, NGO developmentalists, and environmentalists” joined hands with representatives of American Right and Left to launch an impressive protest rally against the IMF on the occasion of its annual meeting in Washington D.C. on April 16/17, 2000, following a similar protest against the WTO a year earlier in Seattle, Washington. Loud cries of “Break the Bank, Defund the Fund, Dump the Debt” were heard during these demonstrations. Patrick Bond eloquently summarized the sentiments of April 16/17 (2000) protest:
For socialists, defunding the Fund and breaking the Bank can dramatically improve global and local power balances, open up radical development finance alternatives, and contribute to an international solidarity unfettered by controversy over reform of imperialist institutions. April 16 gave thousands of activists an initial opportunity to run on the Bank and Fund. The follow up challenge is to keep the institutions running, until they drop of exhaustion.22
Similar sentiments were expressed in the 1998 Siena Declaration on the Crisis of Economic Globalization prepared by the Board of Directors of the International Forum on Globalization (IFG), an alliance of leading scholars, activists, economists, researchers, and writers, representing over 40 organizations in 20 countries. This strong-worded Declaration dramatizes the “crisis” engulfing the developing economies due to the actions of World Bank, WTO, IMF, GATT, NAFTA and “other global bureaucracies that currently discipline governments in the area of trade and financial investment.” It calls economic globalization an “inverted experimental system” that has caused havoc around the world:
Great expectations have led to despair. After 50 years of this experiment, it is breaking down. Rather than leading to economic benefits for all people, it has brought the planet to the brink of environmental catastrophe, social unrest that is unprecedented, economies of most countries in shambles, and increase in poverty, hunger, landlessness, migration and social dislocation. The experiment may now be called a failure.23
While the burden of blame is heavy, the Declaration fails to explain how exactly economic globalization is responsible for such massive ills. It is interesting that the Declaration pointedly talks about the “corrective actions recently taken by China, India, Hong Kong, Malaysia, Russia, and Chile, which by various means have tried to counter the destabilizing forces of unregulated private investment that has proved to benefit no one but the crony capitalists who advocate it.” First, none of the “corrective actions” have been identified. Second, it is notable that each and every one of the countries mentioned--as well as most others not mentioned, such as Cuba--has been trying, sometimes quite desperately, to follow the formulas prescribed by the likes of World Bank, WTO, and IMF, that is, liberalization and deregulation of their economies, borrowing through the Bank and the Fund, encouraging foreign domestic/direct investment (FDI), privatization of publicly owned enterprises, encouragement of entrepreneurship, technology transfer from abroad, and export promotion--each within its own national context, of course. I do not know what other “corrective actions” the signers of the Declaration had in mind, except perhaps to imply that it is the strength of their economic and political institutions that has allowed these countries to take advantage of economic globalization without being totally swamped by global bureaucracies or gobbled up by giant corporations. But it would be hard, for example, to consider China and India--with huge trade surpluses with the United States, large export markets elsewhere, planned strategies to increase foreign investment from every conceivable source, and a dogged determination to continue and strengthen their ties with the WTO--as appendages of the world economy dominated by the “Great Satan” and his ilk. When India and China criticize the international financial institutions, the agenda generally is to milk them further, or at best to reform them and make them more flexible and inclusive in their funding priorities.
Another interesting anomaly noticed in the Declaration is the composition of its signatories and the membership of the International Forum on Globalization that issued it. Five of the eleven IFG Board of Directors who signed the Declaration are Americans, two are Canadians, two are British, and the remaining two belong to the developing countries, one each from India and Malaysia--a poor representation of the community they are trying to patronize and protect, just like the April 16/17 (2000) young marchers in Washington. The same pattern is visible in the list of other signatories. Seventy-eight percent of the 145 are from the advanced industrial societies, 22 percent from the developing world, displaying once again the pattern of domination by the West the global economy is charged of promoting.
But in any case, anti-globalization demonstrations have been organized since 1999 at every important meeting of the Bank and the Fund anywhere in the world, in Australia, Japan, Germany, and Canada. Their intensity has declined considerably, though, as was most evident during the latest of these demonstrations in Washington, DC. It seems that the protests and the protesters, not the Bank and the Fund, are dropping due to exhaustion. But they certainly have raised the level of awareness about the seamy sides of globalization, including among the executive branches of the financial institutions that are supposed to be its avid promoters.
It would indeed be useful to have some workable “radical development finance alternatives” around. But none have been forthcoming, certainly none of the size and magnitudes of WB, IMF, or IFC. The marchers in Seattle and Quebec City have not offered any either. Interestingly, most of the anti-globalization marchers are young people driven by a combination of idealism, good intentions, affluence, and a dose of misinformation and self-righteousness--reminiscent of the young Americans of the 1960s. While their idealism and concern for the downtrodden of the world are well-taken, it is noteworthy that most of these young persons perhaps have never stepped out of their affluent surroundings, have not experienced poverty, have never seen a sweat shop or talked to the parents of the little kids who work in them. Being affluent, they are the product of a culture of consumerism that thrives on the labor of the poor they want to protect. Perhaps they have never renounced any material comfort for the welfare of the poor, the environment or anything like that. Their parents most likely work for and/or hold financial interests in one of the multinational corporations they demonize, and are, therefore, directly or indirectly responsible for the welfare of Wall Street and the global economy. Mahatma Gandhi renounced all material possessions, including his clothes, to make a point. When asked about the logic behind the gesture, he replied: “If I have to serve them, I must live like them,” referring to the millions of poor people in India and, by implications, the poor of the world. This may be an extreme example of renunciation, just to make another point.
The cause of world poverty, inequality and environmental degradation would be served well if, for example, the American critics of global economy renounce the culture of consumerism that feeds it. It boggles the mind to think that one can live in the fanciest of neighborhoods, drive the most powerful gas guzzlers, wear the shoes and clothes manufactured in the sweat shops of the world, use more of the world’s resources than perhaps the whole world combined, create more trash per capita than anyone on planet earth, and then go on to criticize the multinational corporations and international financial organizations for promoting a similar economic and cultural climate overseas. However, this commentary is by no means intended to downgrade the concern of the affluent for the poor of the world, or to blindly endorse the polices of the Bank, the Fund and the WTO, or to minimize the burdens of poverty, debt or environmental degradation that may have been exacerbated because of some of the decisions made by these organizations. It just exposes the weakness of the argument against the agents of global economy by those who are fed by it and feed on it.
Proponents of globalization and modernization assume the two processes to be good for world economy and society. But as discussed above, these claims and proposals have not been accepted universally or without serious reservations. Regardless, there is a universal desire to modernize business, industry, and agriculture using advanced technologies and systems, however one may think is the right way to do it. In addition to technology, other essential inputs in this process are capital and trained manpower. Globalization and localization may suggest different strategies for acquiring these inputs. The examples of India, China and Cuba may be instructive here. Throughout the decades of the 1950s, 1960s, and part of 1970s, India and China emphasized building techno-economic self-reliance largely through indigenous efforts in a fully or partially regulated environment. But even during these regulated periods, China received capital, technology, and training in heavy doses for nearly 12-15 years from the Soviet Union, as did Cuba from 1960 to 1988. India received similar inputs from multiple sources, including the United States, Canada, UK, France, Germany, and the Soviet Union, although not in such heavy doses as China and Cuba from a single source. The Chinese suffered a major setback after the Soviet assistance stopped in the early sixties, as did the Cubans in 1989. The situation in China began to ease a bit as Sino-American relations improved in 1972 during the Nixon administration. Western technology, capital, and education became gradually available to the Chinese. When China opened its doors further to the rest of the world after Chairman Mao’s death in 1976, full-scale globalization took hold there but without having to fully deregulate its economy. The rest is history. Today, China is an economic powerhouse and a major player in the world economy. Its recently acquired permanent membership in the WTO suggests that China will continue to be an even bigger player in it regardless of its relations with Washington or London.
India’s case is also highly instructive. In the mid 1980s, Prime Minister Rajiv Gandhi took an about turn from the restrictive policies of his mother and opened up India irrevocably to western technology and capital. Information technology, foreign capital, consumer goods, and the culture that goes with them are sweeping through the Indian sub-continent today, as they are through the Peoples Republic of China and the rest of Asia. Markets are still not entirely free either in India or China. But even a partially restricted entry of the MNCs is seen by many critics of economic globalization in both countries as having negative consequences for native cultures, nascent industries, national pride, and self-reliance. For its proponents, which include most business and government institutions today, the present strategy is the right one for building self-reliance. The alternative would be stagnation and an increasing gap between them and the advanced industrial societies.24
For both China and India, the major push now is to acquire more foreign capital and technology on reasonable and acceptable conditions. They have been quite successful in doing exactly that, China more so than India. On the social front, intellectual capital has been strengthened, incomes have risen, general standard of living has improved, and poverty has declined, more so in China than in India, generally speaking. On the negative side, environmental regulations are not strictly imposed causing serious problems in sewage disposal and air and water quality management. Economic inequality has also increased in both countries, relatively more so in China than in India because China up until recently was a highly egalitarian socialist society, unlike India where inequality has been a fact of life for centuries. Privatization of business and profits, particularly in the free trade zones, and repatriation by overseas Chinese are largely responsible for the problem of inequality in Communist China. The regime seems to accept it as an inevitable consequence of economic “progress” in the global society and is determined to further deregulate the economy by unfreezing the unprofitable public enterprises. As for India, reducing inequality or removing poverty has never been an avowed goal of developmental planning to be taken seriously. Only the most desirable fodder for political rhetoric. What is most important in the context of this discussion is the fact that these two rapidly advancing large and ancient social systems continue to hold on to their own without being dictated by the nations they trade with and/or borrow from. Chinese and Indian postures regarding Taiwan, international arms trade, Kashmir, Pakistan, and the nuclear politics in the two sub-continents testify to that, however unreasonable these postures might be. Traditions still hold strong while local and global cultures coexist, with or without tensions. Indian and Chinese music, food, and religious traditions are popular in many parts of the world. Young men and women in both countries have adopted many elements of western culture. Localization supplements globalization in countless ingenious, sometimes mysterious ways. China continues to be a communist state and India a socialist democracy, both as strong and firm as ever. Cuba, to which we now turn exclusively, is being rapidly integrated into the global society following exactly the same blend of globalization and localization.
Before 1959 and up until then Cuba was a fully integrated but highly dependent periphery of the core American, and consequently western, economy. American dollars flowed freely into the “Carnal Disneyland.” Cuba, particularly Havana, “became international symbols of decadent pleasure.”25 With the arrival of Fidel Castro and socialism, that relationship came to an end. Cuba tilted toward the Soviet Union.
The United States had initially supported Castro’s revolution due to its own disenchantment with the puppet Batista regime. But soon after, Castro abolished ownership of private property and nationalized Cuban industry and agriculture. Cuban-American relations deteriorated further. Following the Bay of Pigs invasion (1961) and the Cuban Missile Crisis (1962), President Kennedy invoked the U.S. Government’s Trading with the Enemy Act against Cuba (1963). Economic and social blockade followed. That pushed Cuba further into the Soviet camp. One form of dependency was replaced by another.
By the middle of 1960s, Cuba became an integral part of the Soviet dominated Council for Mutual Economic Assistance (CMEA), and traded exclusively with the other member countries on highly favorable terms as a form of indirect economic assistance. Coming out of the American hegemony to join a larger group of trading and ideological partners under CMEA may in some way be construed as the beginning of globalization of the Cuban economy and society, although in a very restricted sense. Those early decisions to de-link itself from the larger western, capitalist world were made by the Cuban leadership partly as a result of the American blockade and partly as a condition of the expansion and exclusiveness of communism.
While Cuba benefited from its most favored status in the CMEA, it became an appendage of the then communist world economy because of it. It was also deprived of much of the advanced western technology, particularly information technology, when it swept through large part of the so-called “free world” during the decade of the 1980’s.
With the collapse of the Communist Block, and the CMEA along with it, Mikhail Gorbachev decided that Russia could no longer continue to provide Cuba the economic and technical assistance it had been receiving from the Soviet Union. That decision had a dramatic impact on Cuban economy.
The Cuban economy suffered a 35% decline in gross domestic product between 1989 and 1993 because of the loss of Soviet subsidies...Economic growth resumed in the mid -1990s after the Cuban government launched a concerted program to attract foreign tourism and investment....Living conditions in 1998 are well below the 1990 level.26
After the Soviets departed, Cuba entered into what has come to be known as the “Special Period” (1989-93) denoting the hardships the country faced. During this period, Cuban imports were down by 70 percent; exports by 35 percent. Seventy five percent of the productive capacity lay idle. GDP declined considerably. Unemployment and rationing became a way of life. The Cuban people were asked to further tighten their belts that were already too tight. The American embargo began to really hurt Cuba for the first time. With the collapse of CMEA went the structure of foreign trade Cuba had built over the years for the export of its commodities like sugar, tobacco, and nickel, and import of oil, machinery, and consumer goods, both on subsidized terms.27
Gradually, Cuba began to restructure its economic policies and management. The year 1994 stands out as the watershed year for reform and recovery. That was the year when Cuba’s modernization as an independent nation in partnership with the global economy began to take shape. Foreign trade was decentralized at the governmental level and diversified at the international level. In 1989, 79 percent of foreign trade was with the eastern block countries and only 6 percent with the rest of Europe. In 1994, it declined to 12 percent with Eastern Europe and rose to 34 percent with other European countries. During 1994-1998, foreign direct investment through joint ventures rose to 40 percent of the national investment, totaling approximately $2.5 billion since 1990. As a measure of introducing self-employment schemes, more than “100 categories of professionals including mechanics, fishermen, farmers, taxi drivers, and hair dressers” were deregulated with no restrictions on profit or dealing with foreign currency.28 Other major reforms since 1994 to present that reflect global trends include: decriminalization of foreign currency, reorganization of many large state farms into producers’ cooperatives, private ownership and management of small-scale farms, limited free market for agricultural produce, crafts and manufactured goods, taxation of privately earned incomes, establishment of four free trade zones, consumer credits, and introduction of a decentralized and less bureaucratic management of local and international financing through the establishment of Banco Central de Cuba, in 1997. The bank has helped streamline lending in both domestic and foreign currencies, cut down red tape from foreign trade and investment, and reschedule its relationships with international financial institutions outside the direct American influence, such as the Paris Club of Creditor Nations and some regional Latin American trading groups (e.g. the Caribbean Community and the Southern Common Market which includes Argentina, Brazil, Paraguay, and Uruguay).29
When Cuba decided to go “global,” in 1994, it found many international partners and investors despite the American Helms-Burton Act of 1996 that not only tightened the embargo on Cuba but also threatens others who want to do business there. Trade relations with Latin countries, particularly Mexico, improved considerably. For example, the Mexican holding company Domos purchased a 49 percent interest in the publicly held Cuban telephone industry for a reported $1.5 billion.30 Canada, Italy, the United Kingdom, Mexico, Italy, Spain, France and other European countries have made investments in approximately 350 joint ventures and other types of partnerships, some of them with 100 percent equity, in fields as diverse as tourism, oil drilling, nickel mining, and telecommunications. Canada, Spain and Italy are currently the most frequent joint venture partners. The Economist’s 1996 Cuba Survey reported that “more than 650 foreign companies have some sort of presence in Cuba.”31 More recent data are not available, but that number is believed to have doubled in the following years. Regional foreign trade distribution in 1997 stood at 41.1 percent with Europe, 40.8 percent with American states (excluding the United States), 13.8 percent with Asia, and 3.7 percent with Africa.32 Cuba is currently trading goods with over 100 countries in these regions.33 Some very modest “illegal”trading activity also takes place with the United States via Mexico. For example, American cigarettes and cocoa cola can be bought in Cuba and Cuban cigars in America, at some shops.
Cuba continues to deregulate and liberalize its techno-economic system, although the politically correct term to define such reforms is “adjustment.” Foreign investment, international trade, cultural exchange, and technology transfer from abroad seem to have become the passion of Cuban development planners in recent years. For example, the 1978 Cuba-India Protocol for Cooperation in Science and Technology was revised in 1999 to include a much broader range of joint research and development activities in fields as diverse as biotechnology, plant breeding, and immunology.34 Credit arrangements with Japan and China have been established. Through a recently signed agreement, China will provide a $200 million loan for the purchase of advanced technology for modernizing the Cuban telecommunication network. Cuban and French business consortia have signed contracts worth millions of dollars for technology upgrade in transportation, oil exploration and refining, water and sewage system management, power generation, mining, and telecommunications. The Informatics 2000 Convention held in Havana during May 22-27, 2000 brought more than 500 delegates from 18 countries to discuss issues connected with collaborative information technology development, protection, and management.35 Once rather recluse Fidel Castro has now become the most gracious host to foreign delegations and a roving ambassador for building new cultural and economic relations with the outside world where he is warmly received as a revolutionary-turned politician and diplomat.36 During this author’s visit to Havana in early June, 2000 the first thing that stood out on landing was the newly constructed, ultra-modern international airport built through Canadian collaboration. The other sights that immediately caught the eye were those artistically designed posters welcoming delegates to the “Japan Week”. Such business delegations have also come from the United States, meeting mostly in a third country with whom both trade freely--Mexico. Their purpose has been to lay the groundwork for partnership as soon as the embargo is relaxed or removed. In anticipation of that day, a private, non-profit organization called the U.S.-Cuba Trade and Economic Council, Inc. was established as early as 1994 to help the American business community access vital economic, commercial, and political information on Cuba.37
According to the current Cuban policy, foreign investment is allowed and encouraged in most sectors except in agriculture, education, and health. A separate Ministry of Foreign Investment and Cooperation (Minvec) was created as early as 1995 to initiate and coordinate the search for capital, technology, and markets on a worldwide basis.38 Minvec and Banco Central together are the two key organs of international business management in Cuba today.
The pages of Cuban Review, a government sponsored business weekly, now read like the handouts for a dating agency. State-owned plants display their charms hoping for a foreign partner. A towel manufacturer offers its “western equipment”; a shoe factory vaunts its collection of Czech and Italian moulds. All claim a well-trained workforce, many years’ experience, and a fervent wish to produce for experts. All know precisely how much foreign capital they will need to set the enterprise humming again.39
These developments notwithstanding, it must be said that Cuba is still neither a free market economy nor a democracy according to western definitions. Almost all large industrial and public service sectors are still owned and controlled by the Cuban government, just like in China with whom the United States trades freely, or in North Korea and Vietnam with whom it might do so in the near future. Transfer of ownership of assets is extremely limited. And Cuba remains a one-party or no-party “representative democracy” that allows a measure of political participation in the selection and election of candidates for public offices, except the presidency. Although foreign firms can own up to 100 percent equity, such arrangements are made with due deliberation, caution, and restrictions. Setting up joint enterprises is not a breeze. The tourism industry, where the largest amount of foreign investment has been made in recent years, offers a good example. Hotels might be built entirely with foreign capital and technology with full repatriation allowed, but the Cuban government reserves the right to manage the facilities, recruit the entire workforce, and set their salaries and bonuses. These policies are being gradually liberalized, though. The Cuban government realizes their de-motivating impact on prospective foreign investors.
In light of the reforms discussed above, there is no doubt that Cuba is not only prepared but determined to turn the global techno-economic tide in its favor, although selectively and on its own terms, just like any other sovereign country where the state apparatus is strong and works in the national interest. But Cuba is only halfway home and a long way to go. The infrastructure of roads, communication systems, housing, power generation and distribution is in dire need of repair. The production apparatus and enterprise management need to be modernized in order to achieve full productive capacity. After the 1994-95 reforms, the GDP grew at approximately 4 percent but declined to less than 2 percent in 1998-99. The national budget still records a 33 percent deficit. The current public-sector external debt stands at $10.5 billion. Cuba does not belong to WTO of which it was initially a founding member. It cannot borrow from the World Bank, the IMF, the IFC, etc. It is excluded from the Organization of American States (OAS), the Inter-American Development Bank, and the Free Trade Areas of the Americas. It receives only meager UN assistance.40 Its credit comes from outside the international financing network, mainly from France, Japan, Argentina, and Canada.41 Cuba’s isolation from this network has been engineered and doggedly pursued by Washington for decades.
Every American president from JFK to George W. Bush has played the same tune to Cuba: No democracy, no trade--or any other kind of relations with anyone that Washington can influence. This posture still embodies the world system theory approach to a neighboring developing country that dictated Cuban-American relations up until 1959: either be like us and become an appendage of our gigantic business machine or we will keep you isolated and starved until you capitulate. The American embargo has indeed been a stumbling block in the modernization of Cuban economy and society, but it has not been able to stop it. What is most remarkable is the fact that as a nation Cuba remains intact. Its political and social institutions--government, family, community, and religion--are strong. Cuba is not rich or industrially advanced, but it has a solid educational, scientific and technological infrastructure to help build a moderately advanced society in the near future through internal efforts and external collaboration. Its social policies continue to serve the basic needs of people--education, health-care, housing, personal safety--better than in most developing countries and even in some of the most developed ones, for example, the United States, in some respects. Cubans’ own perception of their achievements and the freedoms they enjoy is either not known or is misunderstood or ignored by the outside world. But that is how one distinguished Cuban scholar sees it:
Fair distribution of social and financial assets in Cuba has been one of the great achievements of the Revolution, carried by the state through the application of progressive economic policies. Cuba made a great use of the so-called “social funds” for providing social services that people receive free of charge: education, health, social security and assistance, sports and popular culture, and others.42
Just like human beings everywhere, the Cuban people aspire to have a better life for themselves and their children--some even flee the country to find it elsewhere, most of them, ironically, across the shore to the United States. They may feel frustrated due to chronic shortages of essential goods and services. They may be jealous and resentful of the mindless waste and affluence 90 miles away. But the wishful thinkers of the world may be warned that despite these hardships and humiliations, despite the Helms-Burton Act, the present organization of Cuban society is unlikely to break apart in the near future under any foreseeable circumstances, including the inevitable passing away its leader sooner or later; unlike the situation in the Soviet style communism where unrest was rampant, corruption widespread, the bureaucracy heavy-handed, and the burdens of national and international security so enormous that the system fell asunder under its own weight.
According to the current direction of change, Cuba’s march to modernity and economic development seems to rest on the speed of internal reforms and integration into the world economic system as they are simultaneously undertaken. That will have both pitfalls and negative consequences as well as positive impacts. Sooner or later, Cuba will be trading freely even with the United States and benefiting more fully from western capital, technology, and education. American, European, and Asian multinational corporations, in their voracious appetite for global markets, will be setting up shops in Havana and other Cuban cities in ever increasing numbers in the coming years. Along with capital, technology and jobs, they will also bring in the global culture of consumerism, may increase inequality, and affect the environment. But these negative consequences of globalization are always exacerbated by the neglect and/or connivance of the local power structure. So far, Cuba has largely avoided these consequences, although inequality and consumerism are already entering into the system due to a dual economy created by decriminalization of possession and use of foreign currency by the Cuban people.
The Helms-Burton Act may still be there five years from now, but the will to impose it is already gone, not because of reason or generosity on the part of American lawmakers, but because the global economy makes it impossible for such embargoes to work even though they may cause momentary hardships to the embargoed economies. As the agents of economic globalization, the World Bank, IMF, IFC, etc. will rush to Cuba when it could welcome them, as it surely will, sooner or later. At that point, the Cuban people and leadership will have to decide how best they can avoid or minimize the pitfalls of global modernization--environmental degradation, inequality, moral corruption, violence--in light of similar experiences elsewhere, for avoidable or minimizable they certainly are. Cuba’s full partnership in the global economy and society, along with its possible consequences, is a matter of constant critical analysis by Cuban economists and social thinkers, contrary to the belief in certain western quarters that such matters are unilaterally decided by the state.43 Unfortunately, this kind of internal dialogue and analysis is not generally available outside Cuba, even when it is translated in English for international circulation.44
This analysis is about globalization as it affects the developing countries in terms of techno-economic and cultural trends. Much of the globalization debate concerning the developing countries is one-sided whereby the global economy is considered either a panacea for all or a medium for exploitation of weaker nations by giant multinational corporations and international financial organizations dominated by a handful of advanced industrial societies. This bipolar dialogue is generally influenced by the type of thinking involved in the traditional modernization theory or world system (or dependency) theory. It is suggested in this study that globalization is neither of these exclusively. It is now running on its own momentum. It cannot be turned off like a spigot, however much some children of the affluence may wish it. It may affect different nations differently depending more upon national politics and policies and interests and decisions of independent actors and organizations than the conspiratorial intentions of hegemonistic powers.
Cuba was chosen as the case in point for this analysis because it has not yet been fully engulfed by the current waves of globalization due to its internal policies as well as its special position in the Soviet and post-Soviet world and its relations with the United States. But the current wave of change in Cuba, along with the rest of the world, clearly indicates that all nations big and small are now connected with, and affected by the global techno-economic system in varying degrees according to their own national priorities and international circumstances. This trend is likely to continue regardless of the diversity of political, economic, and social institutions around the world.
It is further argued that the present-day global techno-economic system may be an offshoot of the colonial and early post-colonial world economies, but its character and operations are vastly different. This system is based on a network of interdependent financial institutions, markets, technologies, peoples, ideas, and cultures, although the playing field is far from being level for all the players in it. But the number of these players has increased enormously during the last half of the twentieth century, and so has their combined economic and political power. The communist block has crumbled. Super power rivalry and ideological camps have disappeared. The overall influence of the United States has been moderated by the emergence of other powerful centers of techno-economic activity in Europe and Asia as well as due to its own dependence upon international markets and resources, such as oil and a foreign trained work force in high-tech industries. Nations of the world today are far smarter in their international relations than in the earlier eras. They do not act as subject nations or ideological clones of super powers, as the cases of India, China, and Cuba clearly demonstrate. Exploitation of the weak by the powerful continues both nationally and internationally. But it is hard to find solid and consistent evidence that indicates a conspiracy of exploitation of weaker nations on the part of the powerful ones. This is not to say that such conspiracies have not existed in the past or that they do not exist now, but to suggest that in today’s climate they are not dictated by monolithic forces but by vested interests of individual nations, organizations, and corporations and their collaborators in the international arena.
Despite its pitfalls and failures, there is a universal desire among the nations of the world to participate in, contribute to, and be enriched by the global techno-economic system and the emerging global cultures. They are participating in the globalization process not necessarily because they love it but because it is here to stay despite the motley resistance by those who consider it truly evil. The oft-touted “alternatives to globalization” have proved to be illusory. It is because of these reasons that globalization is expected to expand and grow stronger in the foreseeable future. The issue, therefore, is not globalization versus localization but to make the global economy, technology, and culture more inclusive so that all nations can participate in it and benefit from it without losing their national sovereignty, character and culture--as they ought not and need not to. And so, let the age-old wisdom of modernizing societies itself, and not the patronizing crowds in Seattle, Washington and Washington, D.C. decide which way these great traditions would like to go, how they would like to interact with the new world order and help shape and reshape it. I expect Cuba and other developing countries to be playing a significant role in this transformation in the coming decades. It seems fitting to end this short note on Cuba by a prophetic declaration from the editorial offices of CubaNews:
Don’t be caught by surprise when dramatic change comes to Cuba. The next revolution in Cuba will be about profits and losses--not politics--and the companies that prepare for those changes now will prosper in the future.45
1. These implications are discussed in light of the author’s visit to Cuba to participate in an educational program and the Symposium on Social and Economic Thought: Marxist, Feminist, and Third World Perspectives, Havana, June 2-10, 2000.
2. For example, see L. A. Perez, Jr., Cuba Between Reform and Revolution, New York: Oxford University Press, 1995; and P. S. Foner, A History of Cuba and its Relations with the United States, New York: International Press, 1962
3. See, for example, “Helms Seizes Cuba Issue as His Own,” The News and Observer, Raleigh, North Carolina, May 23, 1995, page 6A; and “Questionable Content,” U.S. News and World Report, June 3, 1995, p. 36. As a postscript, one may wonder whether such postures would undergo any significant change now that Sen. Helms is no longer in the picture.
4. Quoted from a term paper submitted in the author’s Global Society course in the Department of Sociology at the University of North Carolina--Greensboro, Fall, 1999.
5. R. B. Reich, The Work of Nations, New York: Alfred A. Knopf, 1991, p. 3.
6. M. McLuhan, The Global Village: Transformations in World Life and Media in the 21st Century, London: Oxford University Press, 1989.
7. A. Ahmad, “Globalization of Technology: A New Paradigm in International Development,” Section on Science, Knowledge and Technology, American Sociological Association, Annual Meeting, Atlanta, GA, August 24-28, 1988.
8. Science and Engineering Indicators 1998, The National Science Foundation, Chapters 3 &4. See also, A. Wad, “Issues in Human Resources in Science and Engineering - India,” Workshop on Graduate Education Reform, National Science Foundation, Washington, D.C., November 17, 1998.
9. P. Bidwai and A. Vanaik, Testing Times: The Global Stake in a Nuclear Test Ban, Dag Hammarskjold Foundation, Uppasala, Sweden, 1996; and J. Hamill, “Nuclear Brinkmanship in South Asia,” Contemporary Review, September 1998, pp. 113-117.
10. For this information and further details on international arms trade, see M. T. Klare, “The New Arms Race: Light Weapons and International Security,” Current History, April 1997, pp. 173-178; R. D. Peterson, et al. and “War and Weapons of Mass Destruction,” Chapter 12, Social Problems: Globalization in the Twenty-First Century, Upper Saddle River, NJ: Prentice Hall, 1999, pp. 391-393.
11. NSF-National Science Board, Science and Engineering Indicators 2000, Vol. 2, p. 246.
12. M. M. Rasenick, et al. “U.S. and Cuban Scientific Exchange, Science, December 24, 1999, p. 2449.
13. Anthony Giddens, for example, is a strong proponent of this view. See A. Giddens, The Consequences of Modernity, Cambridge, U.K.: Polity Press, 1990.
14. For further discussion on these dimensions, see C. H. Harper, Exploring Social Change, Prentice Hall, 1993, pp. 244-249; and L. Sklair, Sociology of the Global System, The Johns Hopkins University Press, 1993.
15. W. W. Rostow, The Process of Economic Growth, New York: W. W. Norton, 1962.
16. This logic is implied, for example, in the works of D. Lerner, “Modernization, Social Aspects,” International Encyclopedia of the Social Sciences, New York: the Free Press, 10:387; J. A. Kahl, The Measurement of Modernism, Austin, TX: University of Texas Press, 1968; and R. H. Lauer, Perspectives on Social Change, Boston, MA: Allyn and Bacon, 1977.
17. I. Wallerstein, The Modern World System, New York: Academic Press, 1974; A. G. Frank, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, New York: Monthly Review Press, 1969; and S. Amin.
18. Unequal Development: An Essay on Social Formation of Peripheral Capitalism, New York: Monthly Review Press, 1976. For an implicit connection between the dependency of newly industrializing countries in the world economy, see F. Frobel, et al. The New International Division of Labor: Structural Unemployment in Industrialized Countries and Industrialization in Developing Countries, Cambridge, UK: Cambridge University Press, 1980; and D. Gordon, “The Global Economy: New Edifice or Crumbling Foundation,” New Left Review, 168, March-April, 1988, pp. 24-65.
19. For a detailed discussion of the interesting notion of McDonaldization, see G. Ritzer, The McDonaldization of Society, Thousand Oaks, CA: Pine Forge Press, 1996. The controversial concept of localization is discussed by J. N. Rosenau, in “The Complexities and Contradictions of Globalization,” Current History, November 1997.
20. A. McGrew, “A Global Society,” in S. Hall, et al. (Eds.), Modernity: An Introduction to Modern Societies, Oxford, U.K.: Blackwell Publishers Ltd., 1996, p. 467.
21. A. Toffler, Powershift: Knowledge, Wealth, and Violence at the Edge of the 21st Century, Bantam Books, 1990.
22. P. Bond, “A Socialist Case for Shutting the IMF and World Bank,” for the summer issue of Monthly Review, draft, April 22, 2000.
23. “The Siena Declaration on the Crisis of Economic Globalization,” p. 2, www.twnside.org.sg/title/siena-cn.htm
24. A. Ahmad, “India’s Search for Technological Self-reliance,” in Malik and Kapur (eds.), India: Fifty Years of Democracy and Development, APH Publishing Corporation, New Delhi, 1998, pp. 213-253. See also, A. Ahmad, “China’s Quest for Advanced Technology: Nagging Questions,” in Vajpeyi and Natarajan (eds.), Technology and Development: Public Policy and Managerial Issues, Rawat Publications, Jaipur, India, 1991, pp. 219-251.
25. T. Perrottet, “The Age of Decadence,” Insight Guides - Cuba, APA Publications, Houghton Mifflin, Boston, MA, 1995, p.35.
26. U.S. Department of State, Bureau of Inter-American Affairs, “Background Notes: Cuba,” April 1998, p. 5.
27. For some of this and related information on Cuban society and economy, the author is indebted to the deliberations in the Symposium on Social and Economic Thought: Marxian, Feminist, and Third World Perspectives, held in Havana, June 7-9 2000, particularly to the presentations made by the following Cuban scholars: Professors Vargas Hernandez and Jose Guadalupe, Universidad de Colima, Juan Luis Martin, Centro de Investigaciones Psicologicas y Sociales, Antonia Aja, Centro de Estudios de Alternative Politicas, and Frank Hidalgo Gato, Universidad de La Habana
28. J. Bionde, “Socialism or Death,” Insight Guides--Cuba, op.cit., p.62.
29. For further details on these and other reforms, see the “Country Profile-Cuba 1999/2000,” The Economist Intelligence Unit Ltd., London, U. K.; and “Economic Survey of Latin America and the Caribbean, 1998-1999--Cuba,” U.N. Economic Commission for Latin America and the Caribbean, Santiago, Chile, 1999. See also, “Cuban Economy: Foreign Trade and Aid,” cubafacts.com, p.1.
30. L. Press, “Cuban Telecommunication Infrastructure and Investment,” Conference for the Study of the Cuban Economy, Miami, Florida, August 1996.
31. “A Survey of Cuba,” The Economist, April 6-12, 1996, p. 12.
32. Refer to footnote 24 above as well as to the “Background Notes: Cuba,” op.cit.
33. Statistical Abstract of Latin America, University of California at Los Angeles, Latin American Center: Los Angeles, CA, 1999, Vol. 35, pp. 768-769.
34. Press Information Bureau, Release dated October 4, 1999.
35. This information is based on news items in Gumma International, Weekly on Cuba and Latin America, June 4, 2000.
36. See, for example, J. Hamid, “Cuba’s Castro Seeks Closer Ties with Malaysia,” Kaula Lumpur, Reuters, May 14, 2001; and A. Valinejad, “Castro in Iran,” Tehran, Associated Press, May 9, 2001.
37. www.cubatrade.org, p. 1
38. “Country Profile--Cuba,” op.cit.
39. The Economist, op.cit., p. 12.
40. “Cuban Economy: Foreign Trade and Aid,” op.cit. P. 1.
41. “Economic Survey of Latin America, 1998-99: Cuba,” op.cit.
42. D. L. Lopez Garcia, “Economic Crisis, Adjustments, and Democracy in Cuba,” in J. B. Lara (coordinator), Cuba in the 1990s, Instituto Cubano del Libro: Havana, Cuba, 1999, pp. 11-51.
43. One authoritative source of such analysis is found in the official journal of the Sociedad Economica de Amigos del Pais, established in 1793
44. For example, see E. S. Martinez, “The Cuban Economy in the 1990s: From Crisis to Recovery,” in Cuba in the 1990s, op.cit., pp. 73-108. Interested scholars and others may also find relevant information and opinions on Cuban affairs on the Internet and through an English language magazine, CubaNews, a monthly publication of the Miami Herald Publishing Company. These journalistic sources, however, do not provide critical scholarly analysis
Copyright remains exclusively with the author.