General critique of Cuba’s economic and legal system with anecdotal foreign businessman testimonies

10. 11. 12. temporarily necessary, but always under the strict control of the political police in order to avoid ideological contamination of the people and the excesses of which they are capable. The government continues to uphold the supremacy of centralized planning over the market, and the virtues of frugality and non-consumption. If an entrepreneur wants to evaluate the country risk before investing anywhere, he looks at the Moody’s or Standard & Poor’s ratings. According to these risk rating companies, Cuba appears on the most dangerous fringe. There is a very long history of arrests or simply noncompliance with obligations, and of re-financing which has turned out to be useless. They haven’t been able to pay their debts due to a serious and basic problem: Cuban society is very unproductive due to the collectivist economic system that they have imposed on it, and because of the size and priorities of public expenditures decided on by the government. The Cuban State lacks substantial reserves, and barely generates sufficient income to survive from month to month. This means that it does not have its own resources to undertake the large public works that it needs, and it requires international loans in order to confront them, which becomes a serious problem because it does not possess reliable credit. In Cuba there are no impartial courts to which one can resort in the case of a dispute of civil law, much less criminal law. There is an absolute legal defenselessness in the face of any conflict with the government or with a state-owned enterprise. The government, according to its needs, arbitrarily pursues, imprisons, or releases any citizen, including foreign businessmen with whom it has a dispute. In other words, the reverse of a true State of Law. That circumstance can be testified to by dozens of persons, including the Panamanian Simon Abadi, the Chilean Max Marambio, or the Canadian SArkis Yacoubian. Foreign businessmen located in Cuba live under the “not-so-discreet” surveillance of the security forces, always in the paranoid search for the mythical and evil agent of the CIA. Many of the Cuban officials and simple neighbors or potential friends don’t dare to link themselves to foreign businessmen out of fear of losing the government’s trust, or are forced to inform in writing about any voluntary or involuntary contact they’ve had with them. Cuba has not resolved the very important problem of currency. Officially, the dollar exchange is approximately on a par with the Cuban peso. On the parallel market it’s 24 pesos to 1 dollar. Cubans collect in pesos, but the government sells to them in dollars, which creates significant dissatisfaction and an obvious sense of injustice. Salaries are very low (some USS24 a month), which determines the nonexistence of a potential market of 11 million consumers. Cubans have the lowest purchasing power per capita in Spanish-speaking America. The banking system is insufficient and primitive. Dollar deposits — as has happened in the recent past — may be frozen at the discretion of the government. Bureaucracy is very slow and insecure. Officials don’t dare to make decisions, and the instructions they receive are sometimes contradictory. The hiring of workers is done through a state-owned company that charges investors in dollars and pays in pesos to the Cubans assigned to these jobs. In the transaction, the Cuban State keeps 94% of the salary. That practice contravenes international agreements signed with the ILO. For over half a century, Cubans have been accustomed to stealing from the State in order to survive, by swelling on the black market the product of that theft. These habits HOUSE_OVERSIGHT_025097