December 4, 2023

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Cuba.  Thirty years after the most important moment of the Special Period (First)

Cuba. Thirty years after the most important moment of the Special Period (First)

Written by Jose Luis Rodriguez. Latin America Digest, September 4, 2023.

In these months, 30 years have passed since the summer of 1993, the moment that marked the point of greatest economic and social impact of the Special Period crisis in Cuba, but also at that time the recovery from the crisis that seemed intractable began. For our country, if we take into account that the impact of the Special Period, three years after its beginning, on August 29, 1990, was enormous for Cuban society.

To get an idea of ​​the scale of the crisis we faced, it is enough to remember that the gross domestic product fell by 34.8% between 1989 and 1993, and fell in that year to the level of 1981. Imports decreased by 75.3%; Investments decreased by 61.8%; Agriculture lost 47.3% of the value of its production, and labor productivity decreased by 33.7%.

In addition, massive inflationary pressures increased dramatically as a result of the sudden decline in the supply of goods and services, compared to the relative increase in liquidity in the hands of the population, which exceeded 66% of GDP. Inflation was also evident in the devaluation of the Cuban peso, priced in the informal economy, to between 120 and 150 pesos per US dollar in the first quarter of 1994, compared to 7 pesos in 1990. Likewise, the budget deficit reached 33% of GDP . GDPR appeared in 1993 and the demonization of society was already strong, when barter began to spread widely among the population due to the loss of functions of the national currency.

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On the other hand, despite the policy implemented to protect the population, household consumption per capita decreased by 34.6% from 1989 to 1993, with calorie inputs decreasing by 34.5% and protein inputs decreasing by 37.7%. This means that, on average, in 1993 the Cuban population consumed only 1,863 calories per day, out of a vital minimum of 2,100 calories, and 46 grams of protein, out of a minimum of 56 calories. These low consumption levels will remain below the desired level until 1993. 1996-1997. This reduction in diet has been estimated as one of the possible causes of the emergence of diseases such as the outbreak of toxic food neuropathy detected in 1993, the incidence of which would reach 493.3 per 100,000 population between 1992 and 1996.

Likewise, basic services such as electricity supply were severely affected, with the generation rate compared to installed capacity falling by as much as 38% in 1994, leading to scheduled blackouts starting in July 1992. Oil availability decreased by the equivalent of about 6.5 million tons per year, reducing The minimum requirement is 8.5 million tons, which represents a 50% decrease compared to 1989 levels.

Added to the above consequences is the increase in social tensions caused by a crisis situation such as the one described. These tensions would have their most acute expression in the social unrest that broke out in August 1994 and the so-called rafter crisis that occurred in the second half of that year. However, a broader and more far-reaching impact will be recorded over time as a result of a deterioration in the population’s standard of living, which will be manifested – among other indicators – by an estimated 56% decline in real wages in four years. ., although other authors believe that the decrease reached 80%.

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Likewise, during these years, there was a downward distribution of income, in the midst of current inflationary pressures, which would inevitably worsen with the approval of foreign currency transfers, which a part of the population began to receive since August 1993.

The Gini coefficient showed a value of 0.25 around 1989, indicating a fair distribution of income. However, the estimates available for the 1990s show that the value of this coefficient rose to a figure ranging between 0.38 and 0.40, which reflects the deterioration it is suffering from, although the index remains, nevertheless, lower than its counterpart in the most important Latin American countries. Which reached 0.63 in Brazil; 0.52 in Argentina, Chile and Mexico; 0.44 in Uruguay and 0.42 in Costa Rica.

It was also not possible to prevent the beginning of the process of social reclassification in these years. According to sociologist Mayra Espina, this process led to the rate of the population at risk of not meeting its basic needs rising from 6.3% in 1986 to 14.7% in 1995.

The downward distribution of income was based on the diversification of its sources due to the financial transfers mentioned previously, but it was also due to the expansion of the underground economy and non-governmental work, as well as the creation of sources of differential income in currency for a portion of the workers.

This social polarization, in turn, created favorable conditions for the increase in anti-social behavior, with the emergence of phenomena such as prostitution, corruption, and crime, behaviors in which a segment of the population also expressed a loss of moral values.

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He follows

[1] This work is inspired by the author’s book entitled “Cuba’s Special Period: The Economic Battle” in publication.

Source: Cubaperiodistas