What about co-ops in Cuba?

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Cuba is planning to use co-operatives to help its weak economy. But will government give co-ops the political space to develop their own independent goals? John Restakis looks at Cuba’s plans to renew its socialist model.


Eyes left: private business has reappeared in Cuba with the OK from the state. A man buys a snack from a private stall in downtown Havana.

' Public protest in Havana'

On 5 August 1994, residents of Havana crowded on to the famous Malecon, the wide street between the city and the sea. They made the biggest public protest against Cuba’s government since the revolution. The ‘Maleconazo Uprising’ as it was then known, was a result of many things. The day before there were terrible reports that about 40 people were left to drown by security forces. This happened when a small leaking boat carrying refugees on their way to the US sank seven miles off the Cuban coast. The government said the reports were certainly not true. But finally these reports made public a feeling that people wanted something better. It was very unusual to hear people call for an end to Fidel Castro’s rule. But with the protest people felt they wanted to take risks to change the situation.

After the Soviet Union

After the end of the Soviet Union, Cuba’s economy suffered badly. Without the Soviet Union, its most important trading partner, 80 per cent of Cuba’s trade came to an end. The billions in Soviet economic help also came to an end. Suddenly the situation in Cuba was so bad that there were stories of people eating the animals at the Havana zoo. Typically the state called it the ‘Special Period in the Time of Peace’. That was 22 years ago, and the ‘Special Period’ is there today. The protests on the Malecon were short but the leaders in Cuba took them seriously.

Today, Cuba must make a choice. It needs to survive economically and at the same time support its socialist revolutionary ideas. The country is starting a process that will save its socialist ideals or give Cuba over to those waiting to destroy those ideals.

Cuba like a number of socialist countries was protected for so long by the Soviet Union, Now like the other socialist countries it must decide how to deal with a new capitalist age. But Cuba is absolutely sure it does not want to become part of the free-market that created so many problems in Russia and in all the other former Eastern Bloc countries that tried a capitalist approach.

Cuba is doing things differently. It is trying to put socialist ideals and private business ideas together. Slowly and without wanting to, Cuba’s leaders, led by Fidel’s brother, Raúl Castro, are trying things out with the market. They are relaxing state control on the private economy. They are changing the structure of large parts of Cuba’s agriculture. They are giving some economic planning and control to city governments. They are allowing private business to exist – although this is limited. But most interesting of all, they are paying serious attention to the role of co-operatives in completely changing the Cuban economy.

Co-op independence is most important

I was in Cuba as part of a Canadian team of co-operators. We had come to learn about this change to a co-op economy and to offer support. It was my second trip to the country and I could immediately see the differences. There were cafés, restaurants and small businesses everywhere. There were lots of fruit stalls and craft markets. But, my own feelings about this new direction were mixed. I very much agreed with the goals of the effort but I was unsure if Cuba’s particular kind of socialist ideas were opposed to it.

Can co-operatives save socialism in Cuba? Or will they be like the co-ops in other countries where they were used to help the state rather than the people? This was my question. Always when governments have wanted co-operatives to help state interests, there have been the following results: • a weakening of co-op principles • co-ops becoming only extensions of the government • final failure • a dependence on the state • a change in the view of the co-op model which came to be seen as a means of state control

In the countries of the former Soviet Bloc, co-operatives have yet to get their good reputation back. Will this happen in Cuba?

After the revolution and state control of agriculture, co-operatives were seen in a Soviet way, as a way to achieve large-scale production through state control. As a result both the people and the state did not really understand co-operation as a form of self-help independent from the state. Co-operatives are still seen as a way of helping the government solve the failures of a state controlled economy. But the questions of co-op autonomy and open markets will decide whether co-ops will play the role that is hoped for them, or whether they will survive at all.

It is easy to understand why Cuba now likes co-operatives. The leaders understand that something must change. There are problems everywhere. In a country where they must feed the people, 50 per cent of state-owned agricultural land is not farmed and produces nothing. Only 18 per cent of the land is supplied with water. Since 1989, agricultural exports have gone down from 80 per cent to 18 per cent of the national economy. Agriculture is very big issue in Cuba and that is where much of the interest is in co-operatives.

In 2008 the government tried to improve agricultural production by turning state farms into co-operatives. These co-ops were given to the farm workers to own and operate under a lease arrangement with the state. But unlike co-ops that had been organized by independent farmers to share land, farm equipment and labour, many of these state co-ops failed. There was no effort to teach former state employees how to run a co-op, no experience in managing an independent business, no choice over where co-ops could buy supplies, or what they could produce, or to whom they could sell their produce. Supplies were bought from state departments, quotas still had to be sold to state agents. And if a co-op wanted to start a new business that was not already permitted, it could not do so. In short, the co-ops were restricted by a closed market system run by the state.

But lessons are being learned. Restrictions are being lifted and a more open system may allow co-ops to get supplies and sell produce independently. Comprehensive co-op training is underway across the country.

Housing is another area in deep trouble. When the ‘Special Period’ came, 80 per cent of skilled workers left the farms and went to the cities. A major housing crisis followed. In Havana today, 11,000 people are living in shelters. Almost 120,000 people are on waiting lists for housing. In all cases, including those who own their homes, people live in housing that is falling down. This is why a visit to Havana can be such a heartbreaking experience. The old buildings are elegant but falling down, In Havana, an average of 3.1 buildings fall down every day.

Housing is clearly one area where co-operatives could play a very important role. Others include the provision of much-needed social services – like childcare and services to the elderly and the disabled. But what is still needed is for the law to allow for such collective and civic forms of property. There are rumours that co-op legislation will be introduced in 2013. But these co-ops need independent access to workers, capital and supplies. This is even truer in light industry where the government hopes co-ops can start new businesses.

Cuba must combine the market freedom that is necessary for co-operative enterprises with the control of an anxious state. The anxiety is real. The problems for Cuba are very real and very obvious. US aggression continues. Cubans who moved to Florida still want revenge. And there are other, more subtle dangers.

The ‘Special Period’ now comprises 40 per cent of the time since the 1959 revolution. An entire generation has grown up knowing nothing else. There is now a survival way of thinking which is really a war economy with few products and little food. It is a difficult situation which encourages people to think about themselves and not the social values that are really what the revolution is about.

The introduction of tourism and the adoption of a parallel dollar currency in the 1990s created new class divisions. There were those who had dollars and those who did not. And, years and years of state control have made socialism a philosophy which comes from above. One Cuban economist told me that socialism always came from the top. It never developed as a change in the relationship between people at the level of community. Co-ops are a key to making this possible. Cuba’s leaders

Raúl Castro and his political friends know that if the revolution is to last, change must come and that they are its protectors. There are problems and discontent but the old revolutionaries are still liked by the people. The ideals of the revolution are still alive. But there are fears that new leaders will not be strong enough make the changes that a new age needs. They are profound and mark a turning point for the country.


Cuba’s President Raúl Castro is hoping new co-ops will help the country’s economy. But will the government allow them to be truly independent?

The social equality is gone that Raúl Castro now says created a laziness that is clearly unrevolutionary. The big financial support for state enterprises is gone. They must earn their way or fail. The easy government jobs are gone too. They gave work to those who lost jobs. The state plans to dismiss 1.3 million workers in a system where the government, directly or indirectly, employs 85 per cent of the population. Where will these people go?

Cuba’s leaders hope that a combination of co-operative restructuring and independent business will create new jobs. Without more ways to free the economy from state controls this is not likely. But perhaps the single greatest threat to change in Cuba is the state bureaucracy. For the thousands of workers that run the state machine change can only mean losing their own powers ad their own jobs. They will resist change when they can. Cuba’s future

Finally the future of socialism in Cuba means its leaders accepting that society is not the state and that the interests of the two are not the same. The survival of socialism depends on finding economic models that combine the ideals of solidarity and equality and social justice with that of open markets and free people. Co-operatives are a natural choice but it will take extra risks from its leaders and a trust in their people to make this bold experiment work.

Cubans are survivors. They are creative and they are among the most educated people in Latin America. They have created thousands of enterprises everywhere where there are new freedoms. And if Cuba’s leaders can trust their people and their ideals, the co-operative economy they hope to build might yet create a new kind of socialism for a world which really needs new ideas.

John Restakis is Executive Director of the BC Co-operative Association in Vancouver and has been active in the co-op movement as a researcher, educator, writer and advocate for 20 years. His most recent book is ‘Humanizing the Economy – Co-operatives in the Age of Capital’ (New Society, 2010). Permalink | Published on July 19, 2012 by John Restakis | 2