The West vs. The Rest, The Current State of Play; Latin America Pt 2.3, Cuba, Nicaragua.
In this instalment, we look at how the US has treated two nations that experienced revolutions, with the people overthrowing the US puppet dictators. The US has not been kind to these two nations since their populations overthrew those that subjugated them.
Cuba (11.26 million; US$0.236 trillion GDP)
It is interesting that the World Bank refuses to calculate a GDP for Cuba at purchasing power parity (PPP). Figures that I can find from the World Bank for 2015 for GDP per capita PPP put it at US$21,000, and together with some figures from Trading Economics they lead me to accept that post-COVID Cuban GDP per capita PPP is about US$21,000. Multiplying that by the population provides a GDP PPP of US$236 billion. The per capita GDP at PPP of US$21,000 is astonishing given the economic and covert (and overt in the case of the Bay of Pigs) war that the US has been waging against Cuba for over 60 years.
That number is very close to that of the Dominican Republic, Mexico, Curacao, Turks & Caicos, and Colombia (also Thailand and China). It is higher than Brazil (US$19,000) and Saint Lucia (US$18,000), nearly double that of Jamaica, El Salvador, Belize, Guatemala, and Bolivia, and nearly triple that of Nicaragua, Honduras. So much for the “disaster” that is Cuban socialism. There are specific shortages created specifically by US sanctions, such as the concrete required to repair roads and buildings and pumps required to repair water lines. Let’s also remember though, that income and wealth inequality, although having increased since the opening up to tourism, is still much less than in those other countries. That means that the vast majority of the population of Cuba is better off than their counterparts in even the richest nations in Latin America; even after President Trump tightened the sanctions screws further. The vast majority of the population also lives in much less fear than those other populations, with very low rates of violent crime, free healthcare, education, and a guarantee of the basics of subsistence. In addition, the vast majority also own their own homes due to low cost government rent to buy schemes.
The US, and the West’s, governments and controlled media have led a massive anti-Cuba propaganda campaign, to go along with the economic and covert campaigns, to make the people of the West believe that Cuba’s socialism is a “disaster”. This is the standard operating procedure toward the possibility of a socialist “good example”, it must be undermined and outlandishly slandered to protect Western populations from seeing what is possible when a society’s resources are shared much more equitably. The same goes for the capitalist-dominated Latin American countries, whose position would be untenable if their populations were exposed to the success that is Cuba. For the same reasons that China must be denigrated, as the Soviet Union (and especially Stalin) was before it and is currently, and Yugoslavia and Libya were destroyed. This article covers well the brutal nature of the US sanctions against Cuba:
https://www.newarab.com/opinion/why-us-blockade-blame-cubas-water-crisis
Cuba was colonized by the Spanish from 1492 to 1898, predominantly as an urbanized administrative centre with a mixed economy rather than as a plantation economy. The Spanish attempted to significantly reverse this after the Haitian Revolution (1791 to 1804) with attempts at a rapid expansion of a slave-dependent plantation economy with the importation of hundreds of thousands of African slaves. The economy still remained somewhat diversified though, and many of the slaves resided within urban settings. A very specific to Cuba process of “buying oneself out of slavery” led to 39% of the non-white population being free by 1860. This was increased by the 1868 failed independence struggle during which some sugar planters freed their slaves to fight with them against the colonial authorities; slavery ended in Cuba in 1886.
Another rebellion broke out in 1895, which an expansionary US exploited to take control of Cuba (and Puerto Rico, Guam and the Philippines); aided by widespread US propaganda surrounding the sinking of the battleship Maine in Havana harbour. The sinking is highly questionable and could have easily been caused by an accidental internal explosion or even a false flag; whatever it was, the sinking became the Gulf of Tonkin of the US-Spain War. It is amazing how the US keeps being “forced” into wars by events “beyond its control”, such as Pearl Harbour after the oil embargo of Japan, the Gulf of Tonkin incident that never happened, Kuwaiti “babies thrown out of incubators” that never happened, Kosovo ethnic cleansing that only became widespread after NATO bombing started, 9/11 after numerous warning signs were ignored, and Libyan state “atrocities” that never happened. An “accidental” Empire created by the US just responding to events, as the US Empire apologists would have us believe.
Cuba gained “independence” in 1902 but with a constitution written by the US that allowed the US to intervene at any time and to manage Cuban finances and foreign affairs. The nation became dominated by US capital, backed up by the possibility of US intervention that became a reality a number of times prior to WW2. In 1934, the strong man Batista came to power as the Head of the Army amid continued repression for the rest of that decade. Batista was elected president in 1940 and headed up a progressive government for the next 4 years and respected the single term limitation. In 1952 he returned after eight years in Florida as a US-backed strongman that led a military coup that installed his repressive regime in power; allied with large business interests (including the US mafia). In 1959 it was overthrown by a people’s revolution led by Fidel Castro. At first, the US was somewhat supportive as perhaps Castro could be just another strongman who could be manipulated and controlled by the US.
This changed rapidly after the new state executed hundreds of Batista regime agents convicted of crimes such as torture and murder, legalized the Communist Party, and carried out a large-scale agrarian reform through land expropriation. Immediately, the US set about destroying the new state through any means necessary, including the Bay of Pigs invasion of 1961. The Cuban Missile Crisis removed any thoughts of the US invading Cuba, allowing Cuba to develop with the aid of the Soviet bloc. From the point of view of consumer goods life was very simple in Cuba, but from the point of view of the provision of healthcare, educations and the basic necessities Cuba was well ahead of the vast majority of Caribbean and Central American countries. Cuba also took a very active role in supporting revolutionary struggles in other countries, such as in Angola, Ethiopia and Algeria, with both troops and medical professionals.
A large exodus, mostly of those who benefitted from the Batista regime, took place directly after the revolution. To help destabilize Cuba, the US has offered Cubans a preferential path to US citizenship through refugee status since 1965; hoping to cause a “brain drain” of the best and brightest to the much richer US. With over 300,000 people leaving Cuba during this period, and the brain drain becoming very evident, the Cuban state stopped the program in 1973. The Mariel boatlift of 1980, with the agreement of both the US and Cuba, led to another 125,000 people leaving Cuba. A new set of emigrants started to exit Cuba during the 1990s, as the collapse of the Soviet bloc severely impacted Cuba.
Cuba had relied heavily upon access to Soviet bloc markets and subsidies to offset the US economic blockade. With the collapse of the Soviet bloc, the Cuban economy was severely disrupted and what is referred to as the Special Period (1991 to 2000) had to be endured; GDP shrank by 35% and imports and exports were reduced by 80%. In 1996, the US tightened its sanctions in an attempt to push Cuban society into open chaos and revolution. The Cuban state and the people showed incredible ingenuity, organization and resourcefulness in overcoming this period without significant social unrest. Within five years, GDP had recovered to pre-crisis levels and food consumption recovered. Average calorific intake had fallen from over 3,000 calories per day to just over 2,000 calories per day by 1993 (with the average Cuban losing 25 pounds in weight) but had recovered to higher than before the crisis by 2003. The following documentary covers this period quite well, just jump to the 10-minute mark to escape the “peak oil” messaging:
Cuban GDP grew strongly in the first decade of the new century, and then moderated to 2-3% in the second decade. GDP per capita at PPP doubled between 1998 and 2020, and currently stands at a level that is 50% higher than the peak prior to the Special Period. This was partially achieved through a major expansion of the tourist industry to help replace the export earnings lost with the fall of the Soviet bloc and the facilitation of the use of the US dollar in a controlled manner. The combination of intensified sanctions (enacted under the Trump Presidency) and the COVID epidemic, both of which severely impacted the important tourism industry, created another short-term period of economic hardship; as COVID did with other tourist dependent economies. After recovering from these challenges, the economy is forecast to grow by 3% in 2024 and 2025.
The vast sanctions that the US and the West have placed upon Russia in the past year and a half, together with the related drive to de-dollarization, provide an opportunity for Cuba (as they do for Venezuela and other nations struggling under US sanctions). The largest impact of US sanctions is through their inherent extra-territoriality provided by the use of the US dollar as the global reserve currency. Any use of the US dollar, anywhere in the world with a sanctioned nation, can be deemed to be a breach of US sanctions and few countries and corporations can risk the consequences of being found guilty of US sanctions busting by the US state judge and jury. The ability to transact in non-US$ currencies removes this threat. The growing list of US sanctioned nations also provides a group of nations that have little to lose in trading with Cuba; which now includes the fossil fuel exporting nations of both Iran and Russia. Trade with Russia has recently greatly increased, and Cuban beaches provide a welcome alternative for Russian tourists now greatly limited in their choices. Cuban trade with China (second biggest trading partner) is also growing, and its fellow-sanctioned nation of Venezuela is Cuba’s largest trading partner. China also possesses a massive and growing middle class ready to venture further and further afield as tourists.
The challenge for Cuba will be to minimize the impact of US$ and other foreign currency earnings upon inequality, as access to US$ by some has significantly increased inequality in recent years. In 2021 Cuba removed its dual currency system, whereby most necessities could be purchased in National Pesos (CUP), but special stores were made available where non-essentials could be purchased for Convertible Pesos (CUC), with 1 CUC (US$1) to 24 CUP for consumers and US$1 to 1 CUP for state enterprises. Those with access to US$ (remittances, earnings from tourists) could both buy subsidized goods extremely cheaply and buy consumer goods in the stores that only accepted CUC. After the changes, state enterprises now operate at the rate of US$1 to 24 CUP, the CUC has ceased to be legal tender, and the ability to exchange US$ for CUP has been made much more available. There were also significant raises in salaries to balance the inevitable rises in prices due to the currency devaluation experienced by state enterprises. This was an important move to stop the escalating wealth inequality that was threatening the basis of Cuba’s socialist society.
In 2023 the US has still not overthrown the Cuban state, having tried for over six decades. The rebalancing of global power, aided by the impacts of Western sanctions and asset theft, may provide significant opportunities for Cuba to flourish as it is able to substantially negate the impact of US sanctions. Recent rumours of a Chinese naval base being established in Cuba, and the US outrage at the prospect, show the failure and possible blowback of the six decades of US aggression toward Cuba; especially the intensification of sanctions by the Trump administration after the Obama loosening. Cuba has little if anything to lose given how sanctioned it already is, and much to gain in both economic and security terms from a closer alignment with Russia, China, Iran and other nations resistant to US dominance. Its removal of the previous capitalist ruling class removed the domestic US allies that could be used to help overthrow the revolution. A problem that Venezuela, Nicaragua, Bolivia and all the progressive leaders of Latin America face, where such comprador capitalist classes still exist, a problem most recently manifested in the overthrow of the progressive president of Peru.
Nicaragua (6.85 million; US$0.048 trillion GDP)
Nicaragua was colonized by the Spanish between 1523 and 1821, when it gained independence as part of the First Mexican Empire. In became an independent republic in 1838. The usual rivalry between Conservative and Liberal elites brought repeated civil wars until Conservative hegemony was established after 1857, ended by a Liberal rebellion led by Zelaya in 1893. After Zelaya strove to regulate foreign access to Nicaraguan resources, and the possibility of a canal built through the nation was raised, the US intervened on the side of the Conservative forces and occupied the country from 1909 to 1933. After a successful six-year guerilla war against the occupying US (1927 to 1933) led by Sandino, the US troops left while leaving the country ruled by the strong-man Somoza; with the latter assassinating Sandino and his family ruling as a dictator until 1979 (a total of 52 years). They ruled the nation with a handful of other rich families that were awash in ostentatious wealth while the vast majority lived in poverty.
In 1961 the Sandinista National Liberation Front (FSLN) in memory of Sandino, was formed. They ousted the Somoza dynasty in 1979 and took power. Nearly immediately, the US sought to destroy the socialist state with the Reagan administration setting up the terrorist Contra “rebels” to terrorize and destroy the country from bases in Honduras, as well as imposing a full trade embargo. When official funding for the Contras was ended by the US Congress, the administration turned to illegal methods to maintain the funding. The US refused to pay reparations to Nicaragua that was ordered by the International Court of Justice for its acts of aggression against Nicaragua during a war that cost the lives of over 30,000 Nicaraguans. After eleven years of military aggression and trade sanctions from the US, together with the ongoing collapse of the Soviet bloc, the Sandinistas agreed to hold elections that would include an opposition party (the UNO) that was covertly funded by the US; a massive mistake. The US explicitly stated that the trade sanctions would stay in place unless Chamorro was elected, blackmailing the Nicaraguan voters in an incredibly arrogant display of electoral interference.
The UNO won the elections in 1990 with 55% of the vote from a population desperate to end decades of conflict and economic hardship. In effect, they were saying “uncle” to the US as Ronald Reagan had requested; ending the revolution. The FSLN had not learnt from the Cubans that a comprador capitalist class cannot be left in place if the revolution is to succeed. The new president (Chamorro) was born to one of the landed families and had been educated in the US and inherited the leading capitalist establishment newspaper (La Prensa) from her husband. The US immediately removed the trade embargo, as they had achieved a return to comprador elite rule, and helped the new government pay off and write down foreign debts. A mixture of austerity for the many and other neoliberal policies were implemented, resulting in a decade of significant social decline in the country; with the nation falling from 60th to 116th place as measured by the Human Development Index and life expectancy falling from 66 to 60 years between 1989 and 1996. Even with the sanctions lifted and financial aid from the United States, the UNO significantly reduced the living standards of the vast majority of the population! This was the massive scale of the error of the Sandinistas in saying “uncle” to the US and allowing the capitalist elite to remain. Chamorro was replaced in 1997 by another child of the wealthy, Aleman (1997 to 2002, who was later convicted of corruption and sentenced to 20 years), in elections that many saw as involving widespread election fraud. Aleman’s vice president, Bolanos (2002 to 2007), succeeded him carrying on the neoliberal policies while fighting government corruption.
In 2007, a very different Ortega returned to power – one who had learnt from his previous massive mistake. He would still have elections, but their outcome would be managed when required. He also took direct and indirect control of eight out of nine of the free television channels, in essence taking them from the control of the capitalist elite (there is no such thing as a “free press”, when “free” simply means owned by the capitalist elite). After a dip from the 2008 GFC, economic growth took off for a decade (4.2% growth between 2007 and 2017) with GDP per capita at PPP increasing by a third between 2009 and 2017 while Nicaragua remained a safe country surrounded by nations with escalating levels of violence. Free healthcare, free education including university-level, infrastructure investments, jobs programs, public housing and other policies greatly improved the welfare of the great majority of the population. After more than a decade and a half of neoliberalism, a decade of such success meant that Ortega certainly did not need to “manage” the 2017 election. On Ortega’s re-election in 2017, the US immediately claimed election irregularities and extended sanctions against the country (sanctions that were deepened by the Biden administration in 2021). The success of his socialist government could not be allowed to continue, especially with the hardships faced by the majority in neighbouring countries loyal to the US.
With sanctions in place to create an economic crisis, the domestic capitalist elite came into play to stoke civil unrest; with the help of funding from US state agencies and Western NGOs. Of course, Western propaganda reversed reality and blamed the socialist state for the violence. This video covers the level of Western propaganda and the reality on the ground from the ten-minute mark:
A classic US regime change operation, including help from the Catholic Church with protests against specific policies that were severely misrepresented rapidly escalating into calls for Ortega to step down. The real issue was Ortega’s refusal to slash social security benefits at the behest of the IMF and the rich, and his counter proposal to make businesses pay more to rescue the social security fund. This was utterly misrepresented by an opposition that had utilized the internet and social media, greatly aided by organs of the US state, foundation and NGO complex, to go around the control of the television channels. For example, the group Let’s Make Democracy received over US$525,000 from the NED since 2014 alone, another group $260,000, very large amounts of money in a country as poor as Nicaragua.
Cleverly, Ortega ordered the police back to their barracks so that the citizens could see who exactly was driving the violence. Attempts to shut down the economy through roadblocks and to create food shortages were also partially forestalled by the Nicaraguan Small Producers Food Movement. The opposition violence torched government offices and equipment (including schools), and even kidnapped, beat and tortured state employees. The Grayzone details the scale of the opposition violence, and its funding by the US:
https://thegrayzone.com/2023/06/15/nicaragua-us-terror-defeated/
https://thegrayzone.com/2018/06/19/ned-nicaragua-protests-us-government/
https://thegrayzone.com/2018/09/26/carl-david-goette-luciak-us-regime-change-media-nicaragua/
This report details the way in which USAID and the NED act as arms of the CIA in creating, building, training and funding opposition groups in. the US. In many cases, using the Nicaraguan Chamorro foundation as a front organization.
https://thegrayzone.com/2021/06/01/cia-usaid-nicaragua-right-wing-media/
The administration survived this coup attempt, but recovery was delayed by the COVID pandemic and further sanctions, with the economy regaining its pre coup-attempt/COVID peak in 2023. After Ortega again won re-election in 2021, the US refused to accept the results, and added yet more sanctions. The US State Department and other Western states also misrepresent Nicaragua as the most dangerous country in Central America when in fact it is the safest, to dissuade Western tourists from going there. Also, as with Cuba, the US had given preferential treatment to Nicaraguan immigrants in an attempt to create a brain-drain.
The United States is Nicaragua’s biggest trading partner, taking US$4 billion of Nicaragua’s exports (56%) and sending it 23% of its imports (US$2 billion), largely oil products and medications. It would be difficult for the US to ban Nicaraguan imports as both countries are part of the CAFTA-DR free trade agreement with Costa Rica, El Salvador, Guatemala, Honduras and the Dominican Republic; especially when there are no “human rights” clauses for the US to use as an excuse. Nicaraguan textile exports are also heavily integrated into US supply chains.
Nicaragua exports mostly precious metals, textiles, coffee, cigars and other food products and insulated wire while importing mostly oil products, medicines and machinery. The import needs could be met from countries such as Russia, Iran, Venezuela, Cuba and China. These nations and others (BRICS?) would then have to provide export markets for Nicaraguan goods, none of which is currently a major receiver of Nicaraguan exports. On the import side, China provides 12% and is in the process of signing a free trade agreement with the nation. Nicaragua does have a free trade with the ALBA block (Cuba, Venezuela, Dominica, Antigua & Barbuda, Saint Vincent & the Grenadines, Granada, and Saint Kitts & Nevis) that could deepen integration between these countries. Trade with Russia is running at US$100 million per year and both nations plan to expand these ties. Together with a tightening security cooperation with Russia, a diversification of economic ties away from the US and the US$ promises a much greater ability to resist any pressures for regime change from the US.