With Cuba facing another round of austerity measures, its population is pinning its hopes on vast quantities of oil being found in the drilling operations going on off the country's coast. However, the president of its national assembly remains cautious about any potential oil boom, and stresses that the country cannot neglect its agriculture and business sectors.

There are few, if any, Cubans without the surname Castro who are more influential in the island than 75-year-old Dr Ricardo Alarcón de Quesada. A leader of the student opposition in Havana to Fulgencio Batista’s dictatorship in the 1950s and thus a key ally of the young Fidel Castro fighting in the mountains of the Sierra Maestra, he became a key figure after Castro’s victory in 1959. Before he was 30 he was named Cuba’s permanent representative at the UN where several times during decades of service he presided over its Security Council. He became foreign minister briefly, and since 1993 has been president of Cuba’s national assembly, the Poder Popular.

His views have long held more sway than most in shaping the country's policies on finance and many other matters. This is particularly the case today, at a time when Cuba’s political landscape is simultaneously overshadowed by economic difficulty, chronic austerity, the challenge of overhauling an excessively centralised economy and the difficulties of running one economy with two currencies. (There is the non-convertible peso for domestic transactions, which is of little use outside Cuba, and the second, the CUC or 'convertible peso', for goods and services purchased by foreigners.)

Yet while the Cuban population fights with a series of dispiriting economic questions, a large oil rig is at long last drilling off the country’s northern coast. Despite the fact that the country's first well was dry, Cubans are buoyed by hope of the discovery of perhaps 20 billion barrels of oil, roughly equal to those found within the US. Such a find would be capable of transforming the future of every Cuban.

A calm presence

However, Mr Alarcón, with years of diplomacy behind him, is not one to rush into any incautious assessment, either of the difficulties or of the opportunities facing his country.

He acknowledges that Cubans are troubled by the prospect of yet more austerity after what has already been half a century of attempts by the US to destabilise its economy, as well as the rapid reduction of the public sector workforce, a policy carried out by president Raúl Castro, Fidel’s younger brother, who took over from him in 2008.

I don’t forecast that there’s necessarily got to be a period of greater austerity [in Cuba]. But what we’ve got to have is a period of more discipline, more work 

Ricardo Alarcón de Quesada

The average income of a Cuban is estimated by some to be no more than $20 a month, but the US Central Intelligence Agency puts this figure at the equivalent of $9900 a year on the basis of the country's purchasing power equivalent, including the health and education services each Cuban receives without charge from the state.

In April, the XI Congress of the Cuban Communist Party in April 2011 committed itself to seeking “new forms of management of the economy... training in the creation of the new structures... [and] strong, new and well-organised companies”.

In this context, the recent policy of releasing uncultivated government lands to private farmers has been a great success, Mr Alarcón says, creating 300,000 new jobs in one year as well as a variety of new farm products. “People in Havana have never before had the variety of fruit and vegetables they have today”, says Mr Alarcón, though he adds that prices are a worry. “But changes have come slowly. There have been no traumas, no shock tactics,” he says.

A few days before his interview with The Banker, Mr Alarcón had been on a field trip to the province of Camagüey, where he emphasised the need for better agricultural productivity. “Every piece of land has to be used, and work on producing food crops has to be made more efficient”, he said, adding that mechanical irrigation, rotation of crops and the need to grow at-home foods that currently have to be imported had all to be improved.

Tourism, he points out, is an increasingly important money-earner for the country, with the number of tourists and US-based Cubans vising family likely to reach 3 million this year. Canadians are Cuba’s most numerous visitors, followed by Cubans based in the US. “We’re the quietest zone in the Caribbean. And that’s already generating new income for people on the island. When I was in Cienfuegos and Camagüey, I saw that the demand for accommodation from visitors was such that lots of people were making good money hiring out rooms to Brazilians, Argentines, Canadians and Europeans.”

Avoiding the curse

Mr Alarcón admits nevertheless the strong likelihood of some increase in inequality among Cubans in the immediate future.

Every piece of land has to be used, and work on producing food crops has to be made more efficient 

Ricardo Alarcón de Quesada

At a time when official comment on future oil production in Cuba is being soft-pedalled, Mr Alarcón has few reservations in stating his opinion that oil will be flowing from sites around Cuba within five years. A large drilling rig, run for the moment by Spanish oil company Repsol is drilling for oil off the island’s north coast, just to the west of Havana.

 “Our people, the Repsol people, even the US Geological Survey, all have different estimates [of how much oil is present]. But what no one says is that there’s no oil”, he says. However, caution is his watchword and Mr Alarcón goes on to underline the fact that a large inflow of oil wealth could have a down side. He points to the fact that in Venezuela, for example, governments before current president Hugo Chávez came to power in 1999 welcomed their oil boom with open arms, but saw their food production plummet and the country end up dependent on food imports. “We mustn’t let that happen," he says. "Our job is to maintain our social programmes for the general population. And anyway, you can never forecast what oil prices will do in the future.” 

Mr Alarcón is measured with regard to the domestic challenges Cuba faces. “I don’t forecast that there’s necessarily got to be a period of greater austerity. But what we’ve got to have is a period of more discipline, more work,”  he says. He goes on to criticise the excessive paternalism of the Cuban state, which both Fidel and Raúl Castro have promised to reduce. “People who work for themselves are obliged to work harder than people who work for the government. If you’re running a café, you’ve go to scurry around and see if your customers are satisfied. If they’re not, they’ll go to your competitors. Life is going to get harder for Cubans, as is the case for the British or the Spaniards”.

He agrees that the present difficult times, added to the expectation of future austerity, are creating an air of insecurity in Cuba, of the sort which can be observed in many other countries. His solution to this is simple, yet one that many governments have struggled to achieve: more discipline and better efficiency.


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