Cuba Addresses Its Aging and Declining Population

Granma, the official newspaper of the Communist Party of Cuba, has published an article describing how Cuba is seeking to meet the needs of its aging population.[1]

The country’s Older Adult Attention program focuses on specialized care with medical coverage provided in hospitals, seniors’ community circles, older adult centers, and retirement homes, which aim to strengthen links between this demographic and the rest of the population, while promoting the role of the family as key to their longevity.

The 274 Older Adult Centers with capacity for 9,393 people, as well as 3,310 daily spots offered in retirement homes, are open daily from 8am to 5pm, to individuals whose families are unable to take care of them during the day, returning to their homes in the evening. These people are responsible for themselves and carrying out their usual daily activities.

The 148 retirement homes with capacity for 11, 771 provide full-time care with subsidized food and medicine; physiotherapy and rehabilitation services; periodic specialized consultations to treat various pathologies; plus nightwear, clothing, and footwear.

The program also has 250 Caregivers Training Centers which prepare those responsible for helping and supporting older adults in need of personalized care, due to some kind of impairment.

Now an estimated 19% of the population is age 60 or older. This is due to Cuba’s good health care, declining birth rate and emigration, resulting in a shrinking work force. This article, however, did not address the economic challenges of these phenomena.

President Obama’s Presidential Policy Directive—United States-Cuba Normalization mentioned Cuba’s aging and declining population due, in part, to emigration.

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[1 Barbosa, Healthy longevity for Cuba’s older adults, Granma (Oct. 13, 2016).

Reactions to New Presidential Policy Directive on U.S.-Cuba Normalization

As replicated in a prior post, on October 14, President Barack Obama issued a Presidential Policy Directive on U.S.-Cuba Normalization.

This Directive, to my knowledge, has no special U.S. legal status and instead is a roadmap for the next administration on the multiple ways the complex U.S. government is implementing such normalization. President Obama in a statement about the Directive said, “This Directive takes a comprehensive and whole-of-government approach to promote engagement with the Cuban government and people, and make our opening to Cuba irreversible. . . . [It] consolidates and builds upon the changes we’ve already made, promotes transparency by being clear about our policy and intentions, and encourages further engagement between our countries and our people.”[1]

Here are comments on some of the key unresolved issues in that process.

  1. Ending the U.S. Embargo of Cuba

 Cuba repeatedly has called for ending the U.S. embargo, and on October 27 it will present its annual resolution condemning the embargo (blockade) to the U.N. General Assembly, which undoubtedly again will overwhelmingly approve the resolution.

The Presidential Directive correctly notes that the Obama Administration repeatedly has asked Congress to end the embargo and states that the U.S. Mission to the United Nations “will participate in discussions regarding the annual Cuban embargo resolution at the [U.N.], as our bilateral relationship continues to develop in a positive trajectory.”[2]

  1. Expanding U.S.-Cuba Trade

The Directive correctly includes a “prosperous and stable Cuba” and expanded U.S.-Cuba trade as parts of its vision for normalization, and the Directive correctly reported that the Obama Administration has adopted regulations relaxing some of the restrictions on U.S. trade with Cuba.[3]

In addition, President Obama’s statement about the Directive noted that on the same day, “The Departments of Treasury and Commerce issued further regulatory changes . . . to continue to facilitate more interaction between the Cuban and American people, including through travel and commercial opportunities, and more access to information.”[4]

According to the two departments’ press release, these new changes will enable “more scientific collaboration, grants and scholarships, people-to-people contact, and private sector growth.” More specifically, the changes “are intended to expand opportunities for scientific collaboration by authorizing certain transactions related to Cuban-origin pharmaceuticals and joint medical research; improve living conditions for Cubans by expanding existing authorizations for grants and humanitarian-related services; increase people-to-people contact in Cuba by facilitating authorized travel and commerce; facilitate safe travel between the United States and Cuba by authorizing civil aviation safety-related services; and bolster trade and commercial opportunities by expanding and streamlining authorizations relating to trade and commerce.”[5]

There is also “a new authorization that will allow persons subject to U.S. jurisdiction to provide services to Cuba or Cuban nationals related to developing, repairing, maintaining, and enhancing certain Cuban infrastructure in order to directly benefit the Cuban people.” Other new rules permit certain foreign ships carrying certain cargo to travel directly to U.S. ports after docking in Cuba, the export of U.S. pesticides or tractors to Cuba without advance payment in cash and U.S. businesses to enter into binding contracts with Cubans that are contingent on the lifting of the U.S. embargo.

  1. U.S. Promotion of Economic Change in Cuba

The Directive states the U.S. “will not pursue regime change in Cuba. We will continue to make clear that the [U.S.] cannot impose a different model on Cuba because the future of Cuba is up to the Cuban people.”

Nevertheless the Directive recognizes as does the Communist Party of Cuba (CPC) that “Due to Cuba’s legal, political, and regulatory constraints, its economy is not generating adequate foreign exchange to purchase U.S. exports that could flow from the easing of the embargo.” Helping to meet this economic problem, both the U.S. and the CPC also recognize, “With an estimated 1 in 4 working Cubans engaged in entrepreneurship, a dynamic, independent private sector is emerging. Expansion of the private sector has increased resources for individual Cubans and created nascent openings for Cuban entrepreneurs to engage with U.S. firms and nongovernmental organizations. We take note of the Cuban government’s limited, but meaningful steps to expand legal protections and opportunities for small- and medium-sized businesses, which, if expanded and sustained, will improve the investment climate.” While the Cuban government pursues its economic goals based on its national priorities, we will utilize our expanded cooperation to support further economic reforms by the Cuban government.”[6]

The Directive makes clear that the U.S. seeks and promotes Cuban economic reform that includes “the development of a private sector that provides greater economic opportunities for the Cuban people.”

  1. U.S. Promotion of Human Rights in Cuba

According to the Directive, Cuba continues with “repression of civil and political liberties.” As a result, the U.S. “will utilize engagement to urge Cuba to make demonstrable progress on human rights and religious freedom” and “continue to speak out in support of human rights, including the rights to freedoms of expression, religion, association, and peaceful assembly as we do around the world. Our policy is designed to support Cubans’ ability to exercise their universal human rights and fundamental freedoms. . . . In pursuit of these objectives, we are not seeking to impose regime change on Cuba; we are, instead, promoting values that we support around the world while respecting that it is up to the Cuban people to make their own choices about their future.”

  1. U,S. Democracy Promotion Programs in Cuba

The U.S. through private contractors with the U.S. Agency for International Development (USAID), the U.S. State Department and other U.S. government agencies surreptitiously has been conducting what the U.S. calls “democracy promotion” programs in Cuba. Cuba rightfully and consistently has objected to such programs.[7]

Nevertheless, the Directive asserts the U.S. “will not pursue regime change in Cuba. We will continue to make clear that the [U.S.] cannot impose a different model on Cuba because the future of Cuba is up to the Cuban people.”

“While remaining committed to supporting democratic activists as we do around the world, we will also engage community leaders, bloggers, activists, and other social issue leaders who can contribute to Cuba’s internal dialogue on civic participation. We will continue to pursue engagements with civil society through the U.S. Embassy in Havana and during official [U.S.] Government visits to Cuba.”

“We will pursue democracy programming that is transparent and consistent with programming in other similarly situated societies around the world.” (Emphasis added.) The State Department will continue to be responsible for “coordination of democracy programs” and “will continue to co-lead efforts with the U.S. Agency for International Development to ensure democracy programming is transparent and consistent with programming in other similarly situated societies. (Emphasis added.)

The Directive correctly anticipates that “the Cuban government will continue to object to U.S. democracy programs, [and] Radio and TV Marti.” This blog has consistently agreed with the Cubans on this issue because the so-called democracy programs are carried out surreptitiously by the U.S. How can they be promoting democracy if they are undercover? If indeed the U.S. wants to do so transparently, then they should only be done with the knowledge and consent of the Cuban government.

Is the statement that such programs in Cuba are to be “consistent with programming in other similarly situated societies” supposed to be the purported justification for conducting such programs in Cuba secretly from its government?

  1. U.S. Special Immigration Rules for Cubans

Cuba repeatedly has called for the U.S. to end its special immigration benefits to Cubans: (a) the U.S. dry feet/wet feet policy that allows any Cubans who arrive on land at a U.S. point of entry to be admitted into the U.S.; and (b) the U.S. Cuban Medical Professional Parole Policy that allows such Cubans to gain entry to the U.S. as parolees from other countries. Therefore, the Directive correctly anticipates “the Cuban government will continue to object to U.S. migration policies and operations.”

This blog has concurred with Cuba’s objections to these policies.[8]

The Directive correctly recognizes that “significant emigration of working-age Cubans further exacerbates Cuba’s demographic problem of a rapidly aging population.” Yet the Directive fails to discuss either the specific U.S. immigration rules for Cubans themselves or their being one of the causes of this societal and economic problem for the island. This, in my opinion, is a major failing of the Directive.

Instead, the Directive merely states that the DHS “will safeguard the integrity of the U.S. immigration system, to include the facilitation of lawful immigration and ensure protection of refugees. The Secretary of Homeland Security (the United States Government lead for a maritime migration or mass migration) with support from the Secretaries of State and Defense, will address a maritime migration or mass migration pursuant to Executive Orders 12807 and 13276 and consistent with applicable interagency guidance and strategy.”

  1. U.S. Lease of Guantanamo Bay from Cuba

Cuba repeatedly has alleged that the U.S. use of Guantanamo Bay for a naval base is “illegal” and that the U.S. should return this territory to Cuba while the U.S. consistently has rejected such allegations and demands. The Directive maintains this U.S. position; it states, “The [U.S.] Government has no intention to alter the existing lease treaty and other arrangements related to the Guantanamo Bay Naval Station, which enables the [U.S.] to enhance and preserve regional security.”

This blog has analyzed this dispute, rejected Cuba’s unsupported allegation that the U.S. use of this territory is illegal and suggested that the dispute over Guantanamo be submitted to an international arbitration panel for resolution. A better solution, as this blog also has recommended, would be a renegotiation of the lease with a much larger annual rent to be paid by the U.S. Such a change, in my opinion, would provide Cuba with much-needed foreign exchange to pay its foreign obligations, including the undoubted obligation to pay U.S. nationals for expropriation of property at the start of the Cuban Revolution in the early 1960’s. Returning the territory to Cuba, while it would probably provide an emotional boost to its pride, would which not add to its economy. In the background is the larger geopolitical threat to the U.S. if Russia (or China) and Cuba agree to the installation of Russian (or Chinese) military bases on the island.[9]

  1. Other Issues

Although the Directive is stated to be “comprehensive,” it does not mention at least the following serious unresolved issues that have arisen in the two countries’ discussions since December 17, 2014:

  • Cuba’s claims for over $ 300 billion of alleged damages resulting from the embargo and certain other U.S. actions;
  • Cuba’s claim against U.S.for unpaid rent for Guantanamo Bay, 1960 to date;
  • The U.S. claims for nearly $8 billion (including interest) for property owned by U.S. nationals that was expropriated by the Cuban government in the early days of the Cuban Revolution in the early 1960’s;
  • Mutual return of fugitives from the other’s criminal justice system.[10]

Conclusion

There are many reasons why a supporter of U.S.-Cuba normalization like this blogger should be happy over this Directive. It provides a roadmap for the complex U.S. governmental pursuit of normalization that should be helpful to a new U.S. president who wants to continue that pursuit. Moreover, many of the specifics are laudable, in this blogger’s opinion.

However, the Directive has failed to announce cessation of secretive “democracy promotion” programs for Cuba and special immigration benefits for Cubans, as urged by this blogger and others. In addition, as just noted, the Directive fails to cover some of the serious, unresolved issues between the two countries. All of these points, in this blogger’s opinions, are serious deficiencies.

Cuba immediately responded to this Directive.[11] Josefina Vidal, Cuba’s Foreign Ministry’s Director General of the United States, said the Directive “is a significant step in the process towards lifting the blockade and to the improvement of relations between the two countries. We consider it important that the Directive recognizes the independence, sovereignty and self-determination of Cuba, which should continue to be essential in relations between the two countries.” On the other hand, she noted, the Directive “does not hide the [U.S.] purpose of promoting changes in the economic, political and social system of Cuba.”

Yes, as President Obama recently said to the author of an article in The New Yorker, the President and many Americans, including this blogger, believe that changes in Cuban human rights and economy would be beneficial to the Cubans and the hemisphere. So long as the U.S. seeks these objectives above-board and with the knowledge and consent of the Cuban government, both governments and peoples should be pleased.

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 [1] White House, Statement by the President on the Presidential Policy Directive on Cuba (Oct. 14, 2016); Davis, Obama, Cementing New Ties With Cuba, Lifts Limits on Cigars and Rum, N.Y. Times (Oct. 14, 2016).

[2] This blog also repeatedly has pleaded with Congress to end the embargo. (See posts listed in “U.S. Embargo of Cuba” in List of Posts to dwkcommentaries—Topical: CUBA).

[3] This blog has applauded these relaxations of restrictions. (See posts listed in “U.S. & Cuba Normalization, 2014-2015,” and “U.S. & Cuba Normalization, 2015-2016” in List of Posts to dwkcommentaries—Topical: CUBA).

[4] Reuters, Obama Eases Restrictions on Cuba, Lifts Limits on Rum and Cigars, N.Y. times (Oct. 14, 2016); Schwartz, U.S. Takes Additional Steps to Ease Restrictions on Trade, Ties with Cuba, W.S.J. (Oct. 14, 2016); Whitefield, Obama moves to make Cuba policies ‘irreversible,’ InCubaToday (Oct. 14, 2016).

[5] U.S. Treasury Dep’t, Treasury and Commerce Announce Further Amendments to Cuba Sanctions Regulations (Oct. 14, 2016).

[6] Raúl Castro as First Secretary of the Communist Party of Cuba at its April 2016 Congress bluntly laid out Cuba’s economic problems, including state-owned enterprises’ inefficiencies, and the need to facilitate the growth and prosperity of private-owned businesses. (See Raúl Castro Discusses Socio-Economic Issues in Report to Seventh Congress of Communist Party of Cuba (April 19, 2016).) See also, e.g., Other Signs of Cuban Regime’s Distress Over Economy (April 21, 2016); Cuban Press Offers Positive Articles About the Island’s Private Enterprise Sector (June 1, 2016).

[7] This blog repeatedly has objected to these “democracy promotion” programs and called for any such programs to be conducted with the cooperation of Cuban authorities. (See posts listed in “U.S. Democracy Promotion in Cuba” in List of Posts to dwkcommentaries—Topical: CUBA.)

[8] See posts listed in “Cuban Medical Personnel & U.S.” and “Cuban Migration to U.S., 2015-2016” in List of Posts to dwkcommentaries—Topical: CUBA).

[9] This blog has discussed various issues relating to Guantanamo Bay. (See posts listed in “U.S. & Cuba Damage Claims” in List of Posts to dwkcommentaries—Topical: CUBA).

[10] These issues have been discussed in posts listed in “U.S. & Cuba Damage Claims” and “U.S. Embargo of Cuba” in List of Posts to dwkcommentaries—Topical: CUBA  and in and in Issues Regarding Cuba and U.S. Extradition of the Other’s Fugitives (Feb. 24, 2015).

[11] Ellizalde, Obama presidential directive is a significant step: Josefina Vidal, CubaDebate (Oct. 14, 2016).

Projected Cuban Population: Stabilizing and Aging

Granma, the official newspaper of the Communist Party of Cuba, published an article about projections of Cuba’s population by the island’s National Bureau of Statistics and Information.[1]

Here is an attempt to put that article’s textual account and the Bureau’s tables into the following table of millions of Cubans (no available information for empty cells):

Year Working

Age

Economically

Active

> 60

years

> 65

Years

TOTAL
2015 7,203 5,030 1,940 1,589 11,239
2020   5,097 2,150   11,281
2025   5,054 2,590   11,310
2030   4,965 3,010   11,289

While the total and economically active population over the next 15 years are projected to stabilize around 11.3 million and 5 million respectively, the number of people over 60 years of age is projected to increase from roughly 2 to 3 million. This obviously will present problems and issues of financing the care of the elderly.

It is also unclear whether the Bureau has attempted to evaluate whether and to what extent there will be net out-migration of Cubans to the United States and elsewhere in search of better economic opportunities. Such calculations would be difficult under any circumstances, especially with the overhanging issue of whether and when the U.S. would eliminate its special immigration benefits for Cubans.

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[1] Curbelo, Projections on the Cuban population, Granma (Sept. 5, 2016); ONEI, Anuario Estadístico de Cuba Población 2015 (Edición 2016); ONEI, Projections of Economically Active Population, 2015-2030.

 

 

Cuban Realities Adversely Affecting Normalization with the U.S.

Underlying Cuba’s desire for normalization with the U.S. and its ability to achieve this goal are two realities that do not receive the attention they deserve. First, Cuba has a rapidly aging and declining population. Second, Cuba has very little cash to purchase goods and services in international markets. Both of these adversely affect Cuba’s desire and ability to achieve normalization.

Aging and Declining Cuban Population

Cuba already has the oldest population in all of Latin America. Experts predict that 50 years from now, its population will have fallen by a third and more than 40 percent of the country will be older than 60.[1]

This is a demographic crisis with both economic and political consequences. The aging population will require a vast health care system, the likes of which the state cannot afford. And without a viable work force, the cycle of flight and wariness about Cuba’s future is even harder to break, despite the country’s halting steps to open itself up to the outside world.

“We are all so excited about the trade and travel that we have overlooked the demographics problem,” said Hazel Denton, a former World Bank economist who has studied Cuban demographics. “This is a significant issue.”

Young people are fleeing the island in big numbers, fearful that normalization of relations with the U.S. will lead to the end of a policy that allows Cubans who make it to the U.S. to become naturalized U.S. citizens.

Over the past two years, an estimated 100,000 Cubans have streamed into the U.S., legally and illegally. Most of them fly to another country in Latin America and then make treacherous journeys by land to the U.S. border with Mexico. Thousands of others obtain family reunification visas and travel directly to the U.S. Those without money or helpful relatives flee Cuba on rafts.

The surge began in 2013 after the Cuban government eliminated the need for exit permits, and got bigger after Washington and Havana announced plans in late 2014 to end 50 years of hostility and re-establish relations.

For the fiscal year that just ended on September 30, nearly 4,500 Cubans reached U.S. soil in rafts, were caught at sea by the U.S. Coast Guard or were otherwise thwarted while trying to flee.

The younger people remaining on the island are reluctant to have children, citing the strain of raising an infant in a country where the average state salary is just $20 a month. Scant job opportunities, a shortage of available goods and a dearth of sufficient housing have encouraged younger Cubans to wait to start a family, sometimes indefinitely. In addition, abortion is legal, free, without stigma and commonly practiced. Cuba’s reported birth rate is one of the lowest in the world while its abortion rate is one of the highest.

One possible response to this demographic challenge is for the Cuban government to encourage the vast Cuban expatriate population to come home. But such an effort, in my opinion, would have to be backed by realistic opportunities to thrive and succeed economically, and this does not appear likely in the near future at least.

Another facet of Cuba’s aging population is the dying of those who fought with Fidel and Ché in the Revolution of 1959. In short, “the revolution and its heroes are fading.” According to a journalist, “many younger Cubans feel the weight of the revolution as a challenge to their future rather than as its foundation.” They “have little patience for revolutionary rhetoric, and they are frustrated by the dearth of economic opportunity in the country, despite the diplomatic thaw with Washington. They want to see change in their lives, and revolutionary talk sounds to many like a distraction from their struggles.”[2]

Cuba’s Financial Problems

Cuba is now finding it difficult to purchase goods and services from foreign suppliers. It has little cash to do so. This is resulting from low prices for nickel, which is one of its main exports; the economic crisis in Venezuela, which is one of Cuba’s major allies; and a Cuban drought. These adverse factors apparently are not offset by increased foreign tourism on the island after the U.S.-Cuba rapprochement. State companies are being forced to cut imports and to seek more liberal payment terms from foreign suppliers.[3]

The financial arrangements with Venezuela are complicated. First, Cuba receives oil on favorable terms and refines and resells some of it in a joint venture with its socialist ally, but prices for refined products are down in tandem with crude prices. Second, Cuba sends medical professionals to Venezuela, but experts believe the amount paid to Cuba for their services is tied to oil prices, meaning Venezuela would pay less to Cuba when such prices are down.

Another sign of these economic challenges is Cuba’s recent agreement with Spain to restructure Cuba’s short-term debts. Spain forgave Cuba for its defaulted interest and principal; restructured the residual principal payments for a period of ten years; and granted a three-year grace period for repayment of principal. The total principal of this debt was 201.5 million Euros.[4]

Earlier other countries also wrote off significant Cuban indebtedness: Russia, $32 billion in July 2014; Mexico, $487 million in December 2013; Japan, $1.4 billion in 2012; and China, $6 billion (restructuring) in 2010. Cuba’s debt problem with Japan, however, was not resolved after the 2012 agreement when Cuba failed to make payments thereunder, and this year the two countries are trying to resolve the debt issue as they seek to expand trade.[5]

Conclusion

These two realities, in my opinion, help to explain why normalization is not producing immediate expansion of business between the U.S. and Cuba.[6] Yes, the U.S. embargo, which is still in place, adversely affects Cuba’s foreign trade and should be ended by the U.S. as soon as possible. But ending the embargo does not directly affect these two realities that are major impediments to such trade.

Once again I invite comments of supplementation or correction, especially on Cuba’s foreign indebtedness.

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[1] Ahmed, An Abundance of Love but a Lack of Babies, N.Y. Times (Oct. 27, 2015); Assoc. Press, Historic Surge in Cuban Emigration Divides Families, N.Y. Times (Nov. 6, 2015); Dominguez, What You Might Not Know About the Cuban Economy, Harv. Bus. Rev. (Aug. 15, 2015); CIA World Factbook: Cuba.

[2] Ahmed, Cuban Revolutionaries Hope Their Legacy Won’t Fade Away, N.Y. times (Nov. 7, 2015).

[3] Reuters, ‘There is no money:’ cash-strapped Cuba is forced to cut vital imports, Guardian (Oct. 16, 2015); Three million tourist arrivals: A target in sight, Granma (Nov. 11, 2015) (three million tourists by second week of November, more than 90 days earlier than 2014); Cruise ship tourism expanding in Cuba, Granma (Nov. 9, 2015) (20,000 cruise ship visitors to Cuba so far this year).

[4] Spain agreed with Cuba to refinance short-term debt of the island, El Pais (Nov. 3, 2015)  This agreement may have resulted from a June 2015 Cuban agreement with the Paris Club of 16 wealthy nations, including Spain, that fixed Cuba’s total indebtedness to them at $15 billion (13.7 billion Euros) and that was seen as an important step towards renegotiating those debts. (Reuters, Cuba and Paris Club members agree on debt total of $15bln (June 8, 2015)

[5] Russia writes off 90% of Cuba’s debt ahead of Putin’s ‘big tour’ to Latin America, RT (July 12, 2014); Russia writes off $32bn Cuban debt in show of brotherly love, Guardian (July 10, 2014); Cuba; Mexico: 70% of Debt Forgiven, Global Legal Monitor (Nov. 8, 2013); Russia, Japan and others want to do business in Cuba, Internet in Cuba (May 4, 2015); Forte, Cuba and Japan expanding economic and trade ties, Granma (Nov. 9, 2015); Reuters, China restructures Cuban debt, backs reform (Dec. 23, 2010).

[6] E.g., Reuters, U.S. Companies Drawn to Cuba, Unsure if Profits Will Follow, N.Y. Times (Nov. 6, 2015).