Regarding the constitutional reform: Income and poverty in Cuba

Cuba’s social differences are back in focus now that the nation analyzes reforming the 1976 Constitution. 

What is the concern with the concentration of wealth, income, or both?

In accordance with the new formulation of Article 22 of the Constitution, the Cuban State will prevent the concentration of property from occurring. However, during the parliamentary debates some deputies seemed confused. “We are worried about the cost of concentrating wealth in society,” said deputy Alicia Alonso Becerra.

“In the approved norms and others that we must approve it is feasible from the legal point of view to regulate property, (…) but in terms of wealth (…) regulation is much more difficult, because it would take quantitative limits that are difficult to establish and that differ from the different income that people can have,” argued Johana Odriozola Guitart, head of the Legal Department of the Ministry of Economy and Planning, and of the Commission that drafted the reform.

It seems that the proposed changes to the Cuban Law of Laws would not try, initially, to limit the ability of people to legitimately increase their income but to control the possession of the means of production, which is much more than property.

“We can not allow people to live beyond their means,” says Facundo; “Sure, but when are we gonna address those of us who live below our means?,” answers Panfilo in one of the many exchanges that characterizes Cuba’s most popular comedy TV show, Vivir del Cuento (roughly translated: Live by One’s Wits).

But in spite of that … How do you distribute wealth and income in the country?

The question seemed hard to answer even by someone like Marino Murillo Jorge, who heads the Implementation and Development Committee of the Guidelines approved at the VI Congress of the Communist Party of Cuba, and who has access to the latest statistical information. He said that the duality of the monetary and exchange rates muddies the matter’s clarity. The available data only gives an approximate idea of how the possession and “dispossession” of wealth in the country has changed.

Murillo said that “in the 80’s, Cuba was a very equitable society.” He backed his statement by way of the Gini coefficient that measures equity on the scale of 0 to 1, whereby 0 signifies a more equitable society. As the number tends toward 1, the opposite is true. In 1989, he said, the index in Cuba stood between 0.22 and 0.27.

By the year 2000 — after the crisis of the 90s — the Gini had risen to 0.38. “The latest data calculated on the fly now gives us upwards of 0.45,” said José Luis Rodríguez, former Minister of Finance and Prices and Economy.

A group of experts gathered at the request of Temas magazine agreed that presently it is extremely difficult to gage Cuba’s dividing line between poverty and wealth strictly from the monetary angle. Firstly because the salary paid by the State ceased to be the primordial source of income, and not all money moves through mechanisms that allow it to be accounted for, such as banks.

Even with these indicators, the distances are palpable. Currently “one percent of workers receive salaries that average two thousand pesos (CUP) per month [and] 85 percent of what is deposited in the bank corresponds to 13 percent of the population,” said Carlos Albizu-Campos Espiñeira, a researcher at the Center for Demographic Studies of the University of Havana, during the aforementioned forum. Surveys cited in the forum and conducted in Havana indicated that the highest individual income would be around 20,000 convertible pesos (CUC, a CUC equals 25 CUP pesos)) which would be going to medium-sized private entrepreneurs involved in tourism, commerce, gastronomy, as well as in the industry of reconstruction and maintenance of luxury cars. To these you can add farmers from the western part of the country or from other regions specialized in raising pigs or rice whose annual profits are close to one million pesos (CUP).

At the other extreme are those who barely make 10 CUC per month, or about 250 CUP.

These would be considered the poor in Cuba. Professor Mayra Paula Espina Prieto said that they “enjoy high quality public services. Services that are exactly the same as those available to all income groups and that include university studies, organ transplants, and a variety of vaccines.” The Cuban sociologist, who specializes in the issue of inequalities, insisted that the difference with the rest of the population on the archipelago lies in the fact that “they find it very difficult to meet their demands for food and other basic needs for the home, in the markets. To this you must add the difficulty in accessing adequate housing. It is a situation where the scope of autonomous generation of one’s own means to satisfy needs and choose their satisfiers is seriously damaged.”

Territorial dynamics also tend to be determinant in this sense. In fact, a 1999 study classified the Cuban provinces according to their degree of incorporation to the economic changes promoted by the first reform package. This led to the initial chapter of the expansion of the emerging sector of the economy, combining them with human development reached that includes life expectancy, average education, percentage of population below the poverty line and various indicators of general economic provisioning.

At the time, it was concluded, for example, that the provinces of Havana and Matanzas had the highest human development and the best insertion into the changes occurring. At the other extreme: Las Tunas, Granma and Guantanamo showed the lowest rate of human development and lagged in their insertion into the transformations. Others, such as Holguín and Ciego de Ávila, although in the middle range of human development, had managed, comparatively, to take better advantage of the economic changes of the 1990s, especially regarding investments in areas of development that generate employment.

The Constitution may have accepted the obvious and undeniable, the existence of a group of people in an economically unfavorable situation who would qualify as poor and others as rich. However, as Professor Mayra Paula Espina Prieto warns, this does not imply the acceptance of the idea of a supposed “naturalness” of poverty, or that “such diversity is determined by personal qualities, decisions made individually, efficient or inefficient choices which lead to a given socio-structural class that may be advantageous or disadvantageous.”

The point, correctly points out Espina Prieto, is to recognize “the determining weight of the socio-structural constraints in the unequal connection that different social groups have in relation to their access to the satisfiers of their needs, and in the inclusion / exclusion nexus, as well as the inefficiency of the market as an instrument of equitable distribution of goods. 

“The policies [then] would have to be oriented towards the alteration of those constraints in the social sphere,” she said. It is something the Revolution has done from the beginning. It should remain among its most relevant priorities for the future, even beyond the Constitution.