APRIL 1989 - VOLUME 10 - NUMBER 4
E C O N O M I C S
Foreign Aid Cuban Style
by Susan Eckstein
Since the early 1970s Cuba has committed a small but significant share of its economic resources to the Third World. It is one of the few Third World countries to have a foreign assistance program. Despite both a severe debt crisis that has besieged its economy and heavy dependence on Soviet assistance, the Cuban aid program has survived and flourished.
To Washington, however, Cuban foreign assistance is highly suspect: it is aid that flows at the behest of the Soviet Union. But the Cuban Communist Party insists it is a commitment of scarce resources to "socialist solidarity." Neither interpretation adequately reveals a driving force behind the civil assistance program since the late 1970s. The program was designed to address Cuba's economic relations with Western countries. The Cuban government is increasingly trying to charge--in hard currency--for its assistance, to mitigate its skyrocketing Western debt.
The island's civilian assistance program expanded substantially in the 1970s, as did Cuba's more widely publicized military missions. The major component of the civilian aid is the overseas construction program. Cuba offers materials, organizational and planning advice, builders and topographic surveys. The program began modestly in the early 1970s, when island workers built six hospitals in Peru following an earthquake there. It expanded in 1974-1975 with the building of a hospital, highway, hotel, several poultry complexes and 13 milking barns in North Vietnam.
Construction assistance increased markedly in the latter 1970s, to the point where some 7,900 Cubans, making up 3 percent of the island's construction force, worked on overseas assignments. Between 1978 and 1979 alone the number of construction workers abroad more than doubled-Angola and Ethiopia received especially large contingents. Cubans have built housing in Angola and a cement plant and roads in Ethiopia. In Laos, Guinea, and Tanzania Cuban brigades have built roads, airports, schools, and other facilities.
Cuba expanded new projects in South Yemen, Algeria, Iraq, Libya, Nicaragua and Grenada. By the end of 1985, 35,000 Cuban workers had helped build projects in some 20 Asian, African and Latin American countries.
From the U.S. vantage point, Cuba's most controversial construction project was an airport on the island of Grenada. Cuba agreed to build the $50 million airport and to absorb half the cost. Although the Grenadian government claimed that the airport was intended to promote tourism and the English firm that supplied and installed the electrical and technical equipment for the project confirmed this, the United States thought otherwise. The Reagan administration, claiming that the airport was to be used for military purposes, sent in the U.S. Marines.
Cuba's second and third largest civilian assistance programs are educational and medical. By 1980 some 3,500 teachers were abroad, the equivalent of 2 percent of the island's stock of teachers. Since the Sandinista victory in Nicaragua, that country has received the largest contingent of teachers. By 1983 some 2,900 Cuban teachers were working in Nicaragua. Cubans helped in the Sandinista's initial mass literacy campaign (modeled, in part, on Cuba's) and afterwards in government efforts to expand formal schooling.
The island's foreign educational assistance program also involves training students from other countries in Cuba, on the Isle of Pines. In 1980, 9,000 foreign students were there; five years later there were some 22,000 scholarship students from more than 80 countries. Foreign students can receive training in medicine and engineering as well as other technical fields.
Cuba's medical aid program is also substantial. Castro is trying to establish the country as a "world medical power." The number of medical personnel--doctors, nurses, technicians, dentists and support staff--abroad rose from 700 in 1977 to some 2,000 three years later. By 1983, health missions involved an additional 1,000 people, in 26 countries on three continents; in 1987 the number dropped slightly, but personnel were stationed in no fewer countries. Cuba's program in Nicaragua involved about 600 health personnel and in Iraq nearly 400. Smaller missions have been sent to Jamaica under Michael Manley, to Guyana under Forbes Burnham, to Grenada under Maurice Bishop, and to Peru under Alan Garcia (to assist in earthquake relief in Cuzco in 1986).
Cuba's overseas economic programs offer specialists in agriculture, sugar cultivation and refining, mining, fishing, transportation, cattle raising, irrigation, economic and physical planning, and management. The island sends specialists abroad to help train local personnel. Cuba has sent technicians to Vietnam to train hotel and restaurant management, and to Guinea-Bissau, the Republic of Equitorial Guinea and Somalia to provide training in economics, education, and public health. Castro agreed in October 1978 to send hundreds of economic specialists to Ethiopia and two years later to send 700 technicians to Mozambique. In 1980 Cuba also sent livestock and dairy industry aid to the People's Republic of the Congo, 200 specimens of the best breed of cattle to Ethiopia, and internationalists to help reconstruct the sugar industry and get other industries into operation in Angola after the country gained independence from Portugal. That same year Cuba also sent technicians and specialists in livestock, poultry farming, mining, fishing, tobacco growing, education and sports, maritime trans-port and port and shipyard work to South Yemen.
Cuba expanded its civilian assistance to Ethiopia in the mid-1980s, at the same time that it contracted its military mission there. The Ethiopian aid program has centered on agriculture, the sugar industry and trade assistance, plus public health and educational aid. Castro agreed to pro-vide the additional civilian assistance when the Reagan administration halted all economic aid to the impoverished African country because the Ethiopian government had criticized the United States' South African policy.
Nicaragua has received the largest amount of civilian assistance. In 1982 Cuba pledged to provide $130 million worth of agricultural and industrial machinery and construction equipment, as well as 3,800 technicians, doctors, and teachers and food and medicine to the Sandinistas. That same year, approximately 1,200 Nicaraguans went to Cuba for technical training. As in Ethiopia, civilian assistance to Nicaragua increased as Cuba's military presence declined. Some 6,000 civilian aides were reportedly in the Central American country in 1985. Ambitious as Cuba's Nicaraguan program has been, Castro has been a restraining force on the Sandinistas. Castro has urged Managua to avoid alienating the private sector at home and the United States abroad.
Although Grenada was not Cuba's largest mission, Havana had a major presence there. In Grenada there were slightly less than 800 Cubans 11 when the U.S. invasion brought Castro's aid pro- gram there to an abrupt halt. Cubans assisted Maurice Bishop's New Jewel Move ment with a literacy campaign, health care programs, the fishing industry and road construction, as well as in the building of the ill-fated airport. Cuba provided one-fifth of all of Bishop's foreign A view from the Havana Libre aid, more than any other single country.
Cuba also assisted the Burnham government in Guyana. It offered to train technicians in health and education and to provide technology for the sugar industry and cattle to build up the local beef and dairy industry.
All told, the civilian program entails fewer Cubans than the military program, but more countries receive civilian than military assistance. In 1979 Cuba had some 14,000 economic and technical aid personnel overseas, and the following year the government announced that it had civilian missions in 37 countries on three continents. Africa has received the largest civilian as well as military contingents, but civilian and military aid were not always extended hand in hand.
The mix of civilian and military assistance varies considerably by region. Until the 1980s Cuba offered almost exclusively civilian aid to Latin America, military aid to the Middle East, and a combination of the two to Africa and Indochina. In the 1980s the civilian component became more important, and the military component less important in Africa, whereas military aid to sympathetic governments in Nicaragua and Grenada and to rebels in El Salvador increased. The Central American military missions remain much smaller than the civilian missions and smaller than the military missions sent to Angola and Ethiopia. Moreover, Cuba has never sent troops to regional allies.
U.S. officials and the U.S. press have depicted Cuba as a helpless pawn of Soviet imperialist interests or as a willing Soviet collaborator. U.S. Senator Daniel Moynihan, [D, N.Y.] referred to the Fidelistas as "Gurkhas of the Russian Empire," functioning as a vehicle for indirect Soviet subversion that sought the eventual domination of targeted developing countries.
Evidence suggests, however, that the Soviet Union disapproved of Cuba's overseas activities in the 1960s and that overseas civilian programs in subsequent decades rarely were coordinated with the superpower. Cuba's military program, on the other hand, has usually complemented the superpower's since the 1970s and the two countries often coordinated their activities.
Proponents of the Soviet surrogate thesis presume that Cuba carries out the superpower's global ambitions be-cause it is economically dependent on Moscow. Yet Cuba was at the peak of its economic dependence on the superpower for trade in the late 1960s, when the foreign policy of the two countries most diverged: Cuba was trying to foment revolution and the Soviet Union was emphasizing detente. Indeed, Cuba expanded its overseas cormmitments, both military and civilian, only after its economic relations with the West improved. In 1974 Western countries accounted for 41 percent of Cuba's trade, up from a low of 17 percent in 1962. Moreover, in the 1980s, when Western media and Western diplomatic circles highlighted Cuban-Soviet foreign and domestic policy friction, Cuba was once again heavily dependent on the Soviet Union for trade. Trade pi with market economies (as a percent of total trade) by co then had dropped to levels of the 1960s.
None of the Soviet surrogate discussions focus on
Cuba's civilian assistance program. There is little evidence that Cuba coordinates its education, construction, medicine and technical assistance programs with the Soviet Union. Since the Cuban government contracts civilian programs at its own initiative, the military and civilian components of Cuba's foreign aid program have different roots, or Cuba normally does not extend aid at the behest of the superpower.
The Cuban government and the Cuban Communist Party justify most of their aid programs, including missions coordinated with the Soviet Union, on moral grounds. Cuba has appealed to anti-imperialist, anti-colonial, anti- Zionist, Marxist-Leninist proletarian, racial, revolutionary and even nationalist sentiments to justify and promote internationalism. The ideological explanations, however, are no more convincing than the Soviet surrogate thesis. They cannot account for the dramatic increase in overseas activities in the mid-1970s. This growth was grounded in changing global and domestic opportunities, and changing domestic needs, not in a sudden surge of moral rage. The disintegration of the Portuguese colonial empire in Africa offered new opportunities for Cuba to aid national liberation struggles.
Castro expanded the civilian assistance program in the late 1970s for economic and not merely ideological reasons, the official policy rationale notwithstanding. While overseas activities did not immediately generate significant trade, by the 1980s aid seems to have opened new markets. In 1981 cement exports reached an undisclosed record volume, probably as a result of overseas construction ventures. Countries that Cuba provides with building aid may purchase cement from the island. Cuba's medical and educational assistance programs seem also to have opened markets. In the mid-1980s Cuba exported some 12 percent of its total pharmaceutical production, and later in the decade the island produced electronic medical equipment that the government sought to market abroad as well. About half of Cuba's paper production in 1985 was earmarked for export. And Cuba exports text-books to countries where it has educational and technical assistance missions.
Of greatest importance, the aid programs generate much-needed foreign exchange. The precise amount of revenue generated by the programs is not public knowledge; available data underestimates actual earnings. The island began charging wealthier countries for projects in 1977. That year the overseas program generated an estimated $50 million in hard currency, the equivalent of 9 percent of the value of Cuba's 1977 commodity exports to Western countries. Agreements in 1979 with Libya and Angola alone were worth $140 million, generating 18 percent of the value of Cuba's hard currency trade that year. U.S. sources estimate that in 1980, Cuba earned only $100 million in overseas activities. The following year, however, Cuba earned $250 million from its military and civilian operations in Angola, and by the late 1980s it reportedly received about $400 million a year for supporting Angolan forces, about 3 percent of the value earned from hard currency commodity exports.
Cuba needs foreign exchange to purchase goods from, and to repay debts to, Western countries. Western countries accounted for over 40 percent of Cuba's foreign trade in 1979, when world sugar market prices and Western bank loans provided a "window of opportunity." But Cuba's capacity to pay for Western imports with exports deteriorated in the late 1970s when world market sugar prices plunged. Cuba produces few goods that it can market in the West, other than sugar. Political rather than economic constraints limit its export options. The United States, the main Latin American Western bloc trade partner, continues to enforce a trade embargo on Cuba. Cuba's problems were also compounded in the late 1970s by soaring Western interest rates, which drove up the cost of servicing Western debts. As a consequence, the island's hard-currency debt rose from $660 million in 1974 to over $5 billion in 1987.
When the debt became problematic, Cuba expanded its civilian assistance program, and began to charge, in convertible currencies, for projects. The aid programs are not Cuba's main source of hard currency, but the island leadership would like very much to earn more from such programs.
The Soviet bloc does not provide all the goods and services that islanders want. Since Cuba earns rubles for most of its exports to the eastern superpower, the Carib-bean country needs to generate hard currency by other means to purchase items from the West. Cuba's foreign-exchange generating overseas programs are one such means.
Although the continued expansion of island higher education implies that Cuba can afford, more than most Third World countries, to export skilled laborers, the prospects for expanding money-making internationalist programs hinge more on global political events than on domestic capabilities.
The expansion of the foreign aid program requires friendly progressive governments in the Third World. Other governments are likely to feel politically threatened by at least certain of Cuba's programs, and capitalist countries in the Third World typically assign low priority to the very social services that Cuba can best provide.
Economics is another constraining factor. The world recession of the 1980s has undermined opportunities even in countries friendly to Cuba. Aid operations were cut back in Ethiopia and Angola, as elsewhere, because these impoverished nations had trouble making payments.
The United States has also forced cutbacks in Cuban aid. The U.S. invasion of Grenada in 1983 brought the 784-person operation there to a halt, and the Sandinistas soon after reduced the size of their Cuban mission, fearing a U.S. invasion. The Grenadian experience also prompted Suriname's president to suspend all educational and cultural agreements with Havana and to order all Cuban diplomats and advisers to leave. And the Reagan administration made support for Namibian independence and the establishment of diplomatic relations with Angola conditional on the withdrawal of Cuban troops from the former Portuguese colony.
Thus, a decade after they began, the prospects for the foreign exchange programs are not bright. But should Castro have his way, "international proletarianism" in the 1990s and beyond will improve, expanding Cuba's economic relations with the West. ^
Susan Eckstein is a Professor of Sociology at Boston University