Cuban academic Ricardo Torres Pérez bemoaned the state of Cuba’s socialist system and pushed for more reforms during a Feb. 28 speech at New York’s CUNY Graduate Center.
Torres Pérez, an economics professor at the University of Havana, calls for a number of unprecedented cost-cutting measures to spur along the reforms President Raúl Castro has already implemented.

One area he’d like to cut is government spending on education.

Torres Pérez said Cuba devotes 13.6% of its GDP to education the highest in the world, according to the UN Development Program. The problem, he said, is that Cuba has seen only limited returns on its heavy investment in areas like science and technology.

“We’ve been efficient in creating that talent, but we haven’t been very successful in giving people the opportunity to use that talent, to create value for the society at large,” he said.
“That’s a tremendous contradiction. Those numbers without returns are unsustainable in the long term, and we’re facing that reality in Cuba. I would like to balance that by reducing investments in education.”

Torres Pérez referred to the island’s well-regarded biotechnology sector, which has made remarkable achievements, but generates few jobs (see “Cuba seeks to decentralize biotech, pharmaceutical sector,” CubaNews, February 2013, page 2).

The University of Havana economist also urges those with specialized skills to seek employment wherever they can.

“We should give people the opportunity to use [their] talent, whether they are employed by the state or outside the state,” he said.

However, some attendees noted that he did not elaborate on how professionals like doctors, biochemists, engineers or architects can seek employment outside the public sector, since the state is still the sole employer of such individuals in Cuba.

Assuming he was referring to job opportunities abroad, it’s questionable at best if certain professionals could look for work overseas independently. Despite Cuba’s recently enacted liberalized travel regulations, restrictions that remain could still apply to them.

The CUNY event was moderated by the Graduate Center’s Julie Skurski; Mario González-Corzo sat in as a discussant.

Torres Pérez mentioned the enormous resources the Cuban government is pouring into agriculture, and wants to see more farming done by private individuals, since returns over the years have been poor.
“Cuba has about 40 research centers devoted to agriculture, uses 20% of the country’s labor force, and 54% of [its] water,” he said. “Crop yields are ridiculously low in Cuba, even compared to Latin America’s poorest nations. There is no way we can explain that rationally.”

Observing that 15-25% of import expenditures are spent on food, Torres Pérez said the island has more abundant land than industrialized Japan.

“Sixty percent of our territory can be used to produce food, well above the Latin Ameri-can average,” he said, complaining that up to 30% of the island’s arable land currently remains idle. Torres Pérez also raised this point for another reason: the day-to-day cost to Cuban consumers. If 60% of household incomes go to buy food, that means real prices are very high.”

Torres Pérez also said Cuba’s energy sector needs significant improvements if the country is to achieve future economic growth.

“We’ve been investing around 11% of our GDP [in energy] each year. That’s half of what we actually need to start thinking about fast growth,” he said, noting that average regional investment in energy is 20% of GDP.

He noted the downsizing of Cuba’s sugar sector, and the low harvests Cuba generates these days, insisting that sugar cane biomass can be used to produce energy. For that reason, Torres Pérez wants to see the Cuban government revamp the sector, as well as invest in other alternative energy methods.

“There is tremendous potential in solar energy and wind; 8,000 megawatts of power capacity can be installed [in Cuba] using renewable sources, more than 1.5 times current capacity,” he said.

Torres Pérez stressed that even with Cuba currently getting much of its oil from Venezuela on generous terms, the island now spends 40% of its import bill on fuel, meaning the island should really seriously consider alternative fuel strategies to reduce spending.

He also fears that with the Mar. 5 death of Venezuelan President Hugo Chávez, the current petroleum supply arrangement with Cuba is likely to be halted.”

With regard to future foreign investment flows, Torres Pérez focused on international financing, but skipped over the Cuban exile community preferring growth funds like Ceiba Investments to urge Cuba to create a more attractive climate for them.

Cuba’s annual per-capita FDI (foreign direct investment) is now $300, one of the world’s lowest.

“We [Cuba] have a history of dependence in the external sector. But we can change the nature of that dependency and turn that into a blessing,” Torres Pérez said. “We have seen small countries like Singapore do that.”