On 12/11/06, Doug Henwood <[EMAIL PROTECTED]> wrote:
On Dec 11, 2006, at 12:19 PM, Yoshie Furuhashi wrote:
> FWIW, from the "glass is always more than half empty" camp:
>
> Alexandre Leroi-Ponant, "Iran's New Power Balance,"
> <http://mondediplo.com/2006/12/04iran>.
in which we read:
> Ahmadinejad undertook a far-reaching reorganisation of power in the
> state apparatus. The entire political and institutional hierarchy
> has been transformed and several thousand posts have changed hands:
> even university rectors and deans were pensioned off if they were
> considered close to the reformists. Ahmadinejad, knowing that he
> was shunned by the non-ideological fringes of the government,
> attacked the technocracy. This autumn he dissolved the national
> planning organisation that allocated the budgets for the
> ministries, and transferred this role to the prefectures. These
> come under the authority of the interior ministry, a conservative
> stronghold.
>
> During Khatami's presidency, the ministry of Islamic guidance,
> which supervised the output of the media and the intellectuals, had
> been transformed into a cultural organisation. Publications dealing
> with art and culture, Iranian society, and the opening-up of
> politics, proliferated. Many new papers and magazines were
> authorised. But the conservatives used the judicial apparatus as a
> counterweight to crack down on dissident intellectuals and the
> ministry reverted to its repressive role after Ahmadinejad was
> elected.
>
> Ahmadinejad handed out huge sums of money, in US dollar contracts,
> to the Islamic Revolutionary Guard Corps, the Pasdaran (see "The
> Pasdaran's private empires"), which had supported him. Money for
> the construction of a gas pipeline was granted to Khatam-ol-Anbiya,
> a Pasdaran company. The Pasdaran has become an economic giant,
> authorised to import goods for sale on the domestic market without
> paying duties. It has also become a major player in the oil sector.
> State largesse, which extends to a segment of its clientele,
> combined with a policy that is a licence to print money, has
> contributed to the inflation that has raised the price of
> necessities and further eroded the spending power of the poor. This
> has disillusioned a large segment of the poor as well as the urban
> lower-middle classes with limited resources who were depending on
> Ahmadinejad to improve their living conditions.
I'll forego comment in the interests of PEN-L peace.
The armed forces in countries like Iran are not unlike the armed
forces in countries like Cuba.
<http://www.corpwatch.org/article.php?id=14232>
CUBA: Cuba's Military Puts Business On Front Lines
Under Castro's Brother, Army Built Joint-Venture Empire; From Hotels to Dolphins
by JOSÉ DE CÓRDOBA, Wall Street Journal
November 15th, 2006
At the height of the Cold War, Cuba's soldiers became a legend on the
island when they punched through enemy lines, defeating South Africa's
army in Angola. Today Cuban generals are applying capitalist tactics
to try to improve bottom lines in businesses that range from growing
beans to running hotels and airlines.
Cuba's Revolutionary Armed Forces rent rooms to tourists through
Gaviota SA, the island's fastest-growing hotel conglomerate. They sell
premium cigars, peddle consumer goods through an island-wide retail
chain and serve lobster dinners at the Divina Pastora restaurant in
Havana's landmark Morro Castle. The military also has a say in
allotting nickel mines and leasing offshore lots for oil exploration.
The University of Miami's Institute for Cuban and Cuban-American
Studies estimates that soldiers control more than 60% of the island's
economy.
The military's economic role will likely become even more critical
after the death of Cuba's ailing 80-year-old leader, Fidel Castro, who
is widely believed to be dying of cancer. Although Mr. Castro has
steadfastly opposed economic reforms during his 47-year communist
regime, his younger brother and anointed successor, Raúl, has shown a
deep interest in free-market experiments in the past. As defense
minister since the 1959 revolution, he has frequently looked to the
military as his laboratory.
With Raúl and the military at the helm of the economy, Cuba could be
poised to follow what islanders call the "Chinese model" of
liberalization. That means carefully experimenting with market
incentives in one of the world's few remaining communist economies,
while trying to retain tight political control. It's far from clear
that a Raúl Castro government could accomplish a Chinese-style
transformation. For one thing, China isn't located just 90 miles from
the U.S. and a wealthy community of exiles looking to reshape their
home country along American lines. And the military could move to
extend monopolistic control -- and opportunities for corruption --
after Fidel's death, squelching any competition.
But the seeds of economic reform in Cuba may be planted more firmly
than many suspect. One piece of evidence: Raúl has traveled to China a
number of times to study Beijing's economic policies and in 2003 he
invited the leading economic adviser to then Chinese premier Zhu
Rongji, who played a leading role in opening up China to foreign trade
and investment, to give a series of lectures in Cuba. Fidel Castro,
who deeply opposes reforms, was a notable no-show, says Domingo
Amuchastegui, a former Cuban intelligence officer who now lives in the
U.S. and keeps close tabs on political developments on the island.
In the 1990s, Raúl sent officers, who had previously trained at
prestigious Soviet military schools, to learn hotel management in
Spain, and accounting in Europe, Latin America, Asia and Canada, says
Mr. Amuchastegui. For a time, business books such as "In Search of
Excellence" by Tom Peters and Robert H. Waterman became required
reading for ambitious officers looking to advance in the ranks, says
Eugenio Yañez, an economist who taught management to army officers at
Havana's Superior Institute of Economic Direction.
Raúl, now 75, also adopted capitalist-style accounting and management
incentives to run military-owned factories that made everything from
uniforms to bullets. In some cases, workers were given incentive pay.
Modest by Western standards, these reforms, called "perfeccionamiento
empresarial" -- loosely translated as "entrepreneurial improvement" --
were nevertheless cutting-edge for Cuba.
For most of his career, Raúl Castro was considered a tough, even
brutal, communist whose hand, as he put it, "didn't tremble" in 1989
when he ordered the execution of a former close colleague deemed a
danger to the regime. Some analysts don't think he has changed much
since then. "He's a Stalinist," says Jaime Suchlicki a Cuba analyst at
the University of Miami, who predicts Raúl will resort to more
repression after Fidel dies.
In recent weeks, speculation has grown about Fidel's health problems.
The longtime dictator temporarily relinquished power on July 31 to
Raúl after announcing he had undergone surgery for intestinal
bleeding. After rumors of his death swirled in Havana, the Cuban
government released a video on Oct. 28 showing a gaunt and aged Castro
in a track suit. U.S. officials believe Mr. Castro has some sort of
stomach or colon cancer. With his brother incapacitated, Raúl has
taken a blustery communist line. "When the U.S. says there should be a
transition in Cuba, they mean a shameful return to the neocolonial
garbage of capitalism they imposed on this country for 60 years," Raúl
told an audience of government union leaders in September.
But many Cuba watchers believe those statements are meant to give
political cover to Raúl, who has become more pragmatic as he has aged,
and has been searching for ways to improve Cuba's dismal economic
performance, especially after the Soviet Union ended its subsidies in
1990. Between 1989 and 1993, Cuba's gross domestic product fell 35%,
while the island's foreign trade slumped by 75%, says Carmelo
Mesa-Lago, professor emeritus of economy at University of Pittsburgh.
As living standards plummeted, Havana residents ate many of the city's
cats. An epidemic of optic neuropathy, caused by deficiencies in
nutrition and resulting in temporary blindness, struck down some
35,000 Cubans. For Raúl, economic security became a critical part of
national security. "Beans are more important than cannon," he told
troops in 1994.
Desperate to cut costs, Raúl slashed the military from about 300,000
troops in 1990 to some 45,000 today, according to Frank O. Mora, a
Cuban military expert at the National Defense University in
Washington. To revive the economy, he pushed innovations such as
farmers markets and self-employment for plumbers, hairdressers and
other small-time entrepreneurs.
At the time, Fidel Castro reluctantly allowed the changes, because
Cuba had little alternative. The Castro brothers appointed military
and intelligence officers, who were their most trusted and
unswervingly loyal supporters, to court foreign capital. Col. Gustavo
Loret de Mola, an electrical engineer by training, was named deputy
minister of communications and negotiated Cuba's first cellphone deal,
with a Mexican company, in 1991, says his son, Camilo Loret de Mola.
He helped the military recruit foreign tenants for Soviet-built bases
that were turned into duty-free zones.
The experiments sometimes flopped. In 1998, the younger Mr. Loret de
Mola says he persuaded a Spanish entrepreneur to start a travel agency
and hydroponics vegetable farm inside the cavernous helicopter hangar
at a former submarine base in the port of Mariel. The businessman only
managed to send a few flights of cucumbers and tomatoes on
Aerogaviota, an airline owned by the Cuban armed forces, before the
farm went out of business. "When he had workers to harvest the
vegetables, he couldn't get a plane, when he could get a plane, he
couldn't get workers," says Mr. Loret de Mola, who now sells insurance
in Miami.
By 2000, some 1,400 state companies out of about 3,000 were being
evaluated for or being run under "perfeccionamiento" management
techniques, according to Philip Peters, a former U.S. diplomat who is
now a director of the Lexington Institute, an Arlington, Va., think
tank. A manager of a tire plant told Mr. Peters in 2001 that using
such techniques had tripled profits in just two years. While far from
a free-market reform, Mr. Peters believes that the military has laid
the groundwork for further-reaching reforms in the future.
Another success: The military found foreign joint-venture partners for
Cuba's moribund citrus industry, which almost collapsed after losing
its markets in the Soviet block. Today, citrus is an important export.
Cuba's most important citrus company is a joint venture with Grupo BM,
an Israeli firm that operates a 115,000-acre farm that grows
grapefruit using state-of-the-art drip irrigation techniques.
An International Monetary Fund study in 2000 said the limited reforms
pushed by Raúl were "instrumental" in helping turn the economy around
in the mid-1990s. But then Fidel Castro clamped down on reforms,
arguing that they were sullying the revolution. Now, Cuba relies on
about $2 billion annually in fuel subsidies provided by Venezuela's
populist president Hugo Chávez, and hundreds of millions of dollars of
Chinese investment in Cuban nickel mines.
With reforms out of fashion, Cuba since 2004 has canceled business and
management courses funded by the European Union, Sweden and Canada,
which together trained more than 1,300 high-ranking Cuban officials in
capitalist management techniques. Free-trade zones emptied, while the
number of self-employed Cubans as well as foreign joint ventures fell
sharply.
But the military's own economic empire has continued to grow. Today,
the military's web of companies are run by the Grupo de Administración
Empresarial SA, or the Business Administration Group. Known by its
Spanish acronym Gaesa, the group is headed by Deputy Defense Minister
Gen. Julio Casas Regueiro. The group's deputy head is Col. Luis
Alberto Rodríguez, Raúl Castro's son-in-law. The group is run from
offices on the fourth floor of Cuba's defense ministry, according to
Mr. Mora of the National Defense University.
Gaesa's most important business is Gaviota, the tourism company.
Gaviota, which means "sea gull," began by turning officers' clubs and
navy bases into resorts. Now it has about 8,500 rooms out of Cuba's
total of 40,000 hotel rooms. Many of its hotels are luxury four- and
five-star establishments managed by companies such as Spain's Sol
Melia and France's Club Med.
Gaviota also owns the domestic airline, Aerogaviota, which uses Cuban
air-force pilots who fly refurbished Soviet transport airplanes. The
company even organizes tours for military enthusiasts who want to
visit the island's colonial forts and the no-man's land surrounding
the U.S. naval base in Guantanamo, says retired Col. Hal Klepak,
Canada's former military attaché in Havana, who has written a book on
the Cuban military. Gaviota also rents cars, runs marinas, manages
gourmet restaurants and operates an attraction that allows tourists to
swim with dolphins, according to a recent study by the Spanish
Institute of International Trade.
Generals also occupy top management slots in the country's economic
ministries. Gen. Ulises Rosales del Toro, who was named Cuba's sugar
czar in 1997, shut down two-thirds of Cuba's 156 antique sugar mills
in 2002 and is still trying to revive production, which reached a
100-year historic low of 1.3 million tons this year. Other generals
run the civil aviation, fishing, telecommunications and transportation
ministries. A colonel is in charge of Habanos SA, a joint venture with
the Spanish firm Altadis, which markets the country's famous cigars
abroad. Another colonel runs the tourism ministry.
The military has the power to cut bureaucratic red tape that stifles
other Cuban state entities that want to engage in business, says Mark
Entwistle, a former Canadian ambassador to Havana who now advises
foreign companies in Cuba. In 2004, he says that a Canadian business
that wanted to grow soybeans on the island was having a hard time
getting permission through the ministry of agriculture. But once the
Canadians began dealing directly with the military, the red tape
vanished. "The military has a whole unit devoted to doing joint
ventures in agriculture," says Mr. Entwistle. "There was zero
ideological content, it was 100% business."
Giving the armed forces a critical role in running the economy has
helped the Castro brothers reward their supporters and gives them a
stake in the preservation of the regime. But it has also introduced a
corrupting influence in the military that could worsen if the
military's role expands further in a post-Fidel Cuba. A number of
high-ranking "entrepreneur soldiers" have already been dismissed and
sometimes jailed for corruption.
The military also faces potential dissension within its ranks:
Soldiers involved with foreign joint ventures, who live far better
than others in the military, are viewed by many officers with distrust
and envy, analysts say.
Another problem sign is what Ricardo Pascoe, a former Mexican
ambassador in Havana, calls the rise of the "juniors" -- the sons of
high-ranking military officers who often live abroad and enjoy
privileges undreamed of by ordinary Cubans. During his time in Havana
from 2001 to 2003, Mr. Pascoe says, many Mexican businessmen
complained to him that the "juniors" charged commissions for contracts
through their fathers.
Mr. Mora of the National Defense University believes that if unchecked
the "juniors" could become the kernel of semicriminal mafias that
could dominate much of the economy if Cuba liberalizes its economy.
Instead of China becoming the model for Cuba, he says, Raúl Castro
could inadvertently turn Cuba into a Caribbean version of oligarchic,
post-Communist Russia.
--
Yoshie
<http://montages.blogspot.com/>
<http://mrzine.org>
<http://monthlyreview.org/>
