Cuban & Neoliberal Economic Development Models In The Era Of Dependency On Foreign Capital

By Siri Gamage –January 6, 2017

Dr. Siri Gamage

Recent articles in Colombo Telegraph about Fidel Castro, his legacy and the left have generated an interesting dialogue that has ramifications for Sri Lanka and indeed the political, economic, cultural and intellectual trends in the global south. While it is not for me to comment at length on Fidel and his legacy, in this article I draw your attention to several key points.

The Cuban model in social, cultural-educational terms have some merits. However, I am uncertain about its economic and political merits. I am aware of the way basic necessities such as health and education are delivered to the citizens without asking them to purchase medicine, pay for doctors etc. These services are provided by the state. In fact Cuban medicos, nurses etc provide similar services in friendly countries with a service ethos rather than a profit making intent e.g. Timor Leste. A colleague of mine has successfully applied a Cuban adult education model in Australian Aboriginal communities to enhance adult literacy levels. There may be other admirable aspects of social service delivery in Cuba based on the ideal of socialism, equity and social justice. In economic terms, the Cuban model is different from the globally dominant neoliberal, free market development model adopted by many developing countries in the global South. For instance, I do not believe that Cuba invites foreign corporations and capital to its shores for direct foreign investment (DFI). Likewise, I do not think it invites foreign education providers to provide education as a marketable commodity to local youths. Unlike Sri Lanka, Philippines, or Bangladesh, I do not think that Cuba sends thousands of married and unmarried women to countries of the Middle East and elsewhere to work as domestic workers under trying conditions facing multiple abuses by the employers. Those who fled Cuba to Florida represent a different breed of Cubans who admire the American system. The Cuban model is different from the economic development model adopted by countries like Sri Lanka, India, Thailand, Singapore, and Vietnam. Politically, the Cuban model poses some difficulties in terms of civic and political freedoms. Such problems exist even in powerful countries like Russia and China or for that matter in Vietnam ruled by Communist parties.

If you ask a Sri Lanka on the street whether he or she likes the Cuban, Chinese, Russian, Vietnam model or the Euro-American model, we all know what the answer would be? You don’t have to be a rocket scientist to understand what the average person wants. It includes basic needs, freedoms, a just society and corruption free small government, a safe nation and country to belong to, and peace. Thus, the need today is to examine these different models and their merits rather than theorise about Castro and his legacy at length (though this can be a useful intellectual exercise) if we are to derive lessons for today’s problems in economics, state and politics, sociology and culture fields.

In the contemporary era, States cannot survive on their own. They need taxes to generate income, which in turn are used to provide services while running the governments. Developing countries like Sri Lanka seek foreign capital, know how, direct investments, investors etc. for various infrastructure projects, industrial and manufacturing ventures, service provision, and even knowledge production partly due to the lack of tax income and partly for reasons of colonial dependency. They also obtain multi billion dollar loans from multilateral agencies for various projects. The hope is that such projects and investments will yield results that benefit the population in the long run, remove any dependencies and be able to stand on their foot independently while safeguarding the sovereignty, national identity, culture and values. However, by looking at the predicament of countries that follow the neoliberal, free market private capital driven Euro-American, the Chinese, Vietnam, or Russian model is that they have become more indebted to the world, more corrupt, and in many cases the states have become anti democratic.

To satisfy the needs and demands of the multinational corporations from the so called free world of the America and Europe or the state affiliated companies of China, and Russia, governments in the global South have been compelled to become authoritarian or semi authoritarian. We have first hand experience of such a situation in the not too distant past. Whether fulfilling the needs of foreign companies under semi authoritarian political framework or somewhat democratic framework where political and civic freedoms are facilitated by governments, the states seem to meet the desires of multinational corporations and the powerful states that dominate the global agenda. Thus the question is not what we can learn from Fidel, Che, Mao or indeed the Cuban model? The serious question to ponder about is how we could create a state that does not cross the line when it comes to adopting this globally dominant neoliberal economic model that has the potential to create new dependencies and lose our land, rights and freedoms. Can we become isolationist like Cuba and go on our own for our economic survival? Can we afford not to invite foreign investment to some degree? Are there other, more socially just political and economic models that we can examine for developing our economies and societies?

Multinationals from the free world and state enterprises from China etc. are interested in our labour, resources or strategically important facilities like ports for a variety of reasons. For negotiating economic and infrastructure projects countries like Sri Lanka have to compromise. However, such compromises do not have to be beyond our national interest. Rather than idolizing Fidel or Rajapaksa and demonizing Sirisena or Wickremesinghe, the need of the hour is to look for a development model that do not require us to compromise our needs, liberties, and sovereignty. Mega industrial and tourism projects funded and operated by foreign entities can have serious social, cultural consequences though they may generate taxes or employment. We cannot be blind to these consequences. From Fidel and Cuba, we can learn how to protect national sovereignty. From China, Russia and Vietnam we can learn how not to curb political and other freedoms.

Foreign corporations and other entities prefer to deal with authoritarian and semi authoritarian regimes, as they do not wish to face popular protests against their ventures or activities. Local ruling classes and capitalist classes collaborate with such corporations, entities and even the states promoting their interests in search of foreign capital, knowhow, and capacities for generating employment. Nonetheless, the interest of these foreign corporations, powerful states and entities is not necessarily the welfare of our peoples but more profits for their shareholders. States and the capitalist-ruling classes in developing countries are embedded in the corporate sectors -local and foreign – in following the neoliberal, free-market, globalisation model of development. In fact the state itself has increasingly become a corporate entity.

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