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"I believe that to meet the challenges of our times, human beings will have to develop a greater sense of universal responsibility. It is the foundation for world peace."

Can consumerism save Communism?

August 13, 2008

By Nick Louth
MSN Money
August 12 2008

As Cuba prepares to celebrate the 82nd birthday of Fidel Castro, his
brother Raul, who took over as president in 2006, is making some
tentative and politically dangerous steps on the road to consumerism.

As the Caribbean's only communist state, Cuba has been almost frozen
in time since a US embargo began in 1959, when Castro overthrew the
dictator Fulgencio Batista. But 49 years on, Cuba is releasing land
for private farming and making it easier for ordinary citizens to buy
DVDs, mobile phones and computers.

In doing so, Raul Castro may be looking to China, where a nominally
Communist government has built fully-functioning capitalism while
keeping political freedom well out of reach. China's success is that
it is now being fêted by the world at this month's Olympics without
having to give up Tibet, torture or the gagging of press and public.
How Castro must be envious.

Avoiding the Gorbachev route

What Raul will undoubtedly hope to avoid is the Gorbachev route.
Mikhail Gorbachev's Glasnost and Perestroika loosened the political
shackles in the Eastern Bloc without first ending the bread queues.

The Berlin Wall came tumbling down, but the Soviet political edifice
came with it, bringing chaos. Gorbachev, fêted in the west, is
regarded with mixed feelings by ordinary Russians, many of whom went
hungry during the upheavals of the 1990s. Many employees were not
paid for months, while pensioners on fixed incomes could not afford
food sold at market rather than subsidised prices.

Timing of liberalisation

Timing is always important, as Gorbachev discovered. His reforms did
worse for coming at a time of weak oil prices when the Soviet
economy's biggest export was low-priced.

Cuba's leaders have great hopes for their timing. A victory by Barack
Obama in November's US presidential election could mean an easing, if
not an end, of the 52-year-old embargo even though the Democratic
contender has been careful not to promise it.

Cuba remains poor

It needs to work. While Fidel Castro disappointed his many US enemies
by outlasting nine successive US presidents, the days when the Soviet
Union underwrote Cuba's sugar exports are long over. Healthcare and
education may be first class, but the island's infrastructure is
crumbling. Almost the only vehicles are decades-old American classic
cars, charming but gas guzzlers. Thousands of young Cuban women work
the beaches as prostitutes for European package tourists.

The price of imported food has soared, but Cuba's sugar, tobacco and
coffee crops have not kept pace in either price or export output.
With state farms flagging, Raul Castro is now to allow private
farmers to enlarge their farms up to 40 hectares (99 acres) on
10-year leases, while those with just smallholdings will be able to
acquire up to 33 acres.

A friend in need...

Timing matters in Cuba's friendship with Venezuelan leader Hugo
Chavez too. Another Washington hate-figure, Chavez provides oil at
discount prices for half of Cuba's needs, a huge relief with global
prices at record levels. Cuba in turn supplied 21,000 doctors and
nurses for a Chavez-funded programme to provide healthcare for the
poor both in Venezuela and throughout Latin America. If oil prices
fall, or Chavez is deposed, that programme may be ended.

For communist governments anywhere, taking steps on the consumerist
road entails huge risks. Even if liberalisation measures do increase
wealth, that can bring new problems. Entrepreneurship and comfortable
living standards create middle classes who have political aspirations.

It is one thing to crush the political demands of students, which is
effectively what China did in the Tiananmen Square massacre of 1989,
but tackling the middle classes is something else. They have what
Marx described as "a relationship to the means of production." Money,
in other words, means power.

Almost 20 years on in Russia, they understand that. There is a
blossoming consumer culture, at least for the new rich. However,
there is a feeling of 1920s' Chicago gangsterism about the heights of
economic and political power which remain in a very few hands.

Vladimir Putin, president and ex-KGB man, sidestepped the
constitution's limits on tenure by choosing Dmitri Medvedev as his
own successor, and rubber-stamping it in an election which was far
from free and fair.

Humbling the energy giants

As the world's second largest oil and gas producer, Russia has played
rough and tumble with multinationals like Royal Dutch Shell and BP
which were contracted to help exploit those resources. Shell was
forced to hand over control of the giant $20 billion Sakhalin II
project to Russia's Gazprom in 2006, while this year BP has struggled
against legal and bureaucratic harassment to keep control of its
BP-TNK joint venture in Russia, and which accounts for 7% of group profits.

In today's Russia, businessmen, politicians and journalists can be
imprisoned, like Mikhail Khodorkovsky, exiled like Boris Berezovsky,
hounded like former chess champion Garry Kasparov, or assassinated,
like Anna Politkovskya. BP-TNK finance director Robert Dudley must be
relieved just to have to flee the country because they wouldn't renew his visa.

Bread and circuses

Even when a country appears to get it right, a few glimpses reveal a
different reality. While China wows the world with its Olympic
fireworks, it also causes gasps when viewers see burly policemen
roughing up two protesters who were doing nothing more than waving A4
sheets of paper with slogans on them (as happened in the Olympics
equestrian arena on Saturday).

"Bread and circuses" according to the saying of cynical Roman
emperors, was all you needed to retain power. Feed the masses, and
distract them with entertainment. China has certainly given its
citizens bread, and the Olympics are undoubtedly a spectacular
circus. However, keeping a lid on Chinese political aspirations is
likely to get ever more difficult the more successful that economy becomes.

Different speeds

The gathering political pressure may take decades to transform an
economically muscular China. But in poverty-stricken Cuba, now devoid
of the charismatic leadership of Fidel Castro, change may happen more
rapidly. Raul Castro may hope that he will be able to ride the
turmoil, but that chances are that flirtation with consumerism and
land reform won't be enough.

Castro's Cuba probably may outlast a 10th US president, when Bush
leaves office in January. The chances must be remote, however, that
it will manage to outlast an 11th.

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