Cuba’s National Assembly passed a legislation that frees the entry of foreign capital in the country and gives investors legal guarantees and huge tax exemptions.

The law was introduced last year by Raul Castro’s government and, in fact, opens all sectors of the economy to foreign investment, except health, education and the media. Among the advantages offered by the new legislation we highlight the following:

a) The profits of foreign companies will have tax exemptions for eight years. After this period, the tax will be of 15%, but could be exempted if they reinvest their profits in the Island;

b) The Act provides “full protection and security to investors who may not be expropriated, except for reasons of public need or social interest”. In the latter case, there will be compensation.

A bitter controversy

There is a long time debate within the international and Latin America Left on the class character of the Cuban state. The vast majority of the left, especially what we call the “Castro-Chavista” trend, say that Cuba is the “last bastion of socialism.” They defend, unconditionally, the measures that Raul Castro’s government has taken and attack hardly – calling them “agents of imperialism” – all left sectors that do not share their characterization, especially when they are opponents or critics of the Castro regime.

Unfortunately, many Trotskyists or organizations with Trotskyist origins, although opposed to the regime of the Castro brothers, still believe that there is a “bureaucratized workers’ state” in Cuba and that, “although the Castro regime plans to restore capitalism” a quality change has not achieved yet. As discussed further, this debate is critical for the revolutionaries in drawing up a program for Cuba.

The restoration has happened

For us, the IWL-FI, and some few other trends, capitalist restoration has already happened and was performed under the Castro brothers’ leadership.

The main stages of the restoration were:

The 1995 Foreign Investment Law, which created the “mixed companies”, administered by foreign capital. The investments were mainly directed to tourism and related branches, but soon expanded to other sectors such as pharmaceuticals and, later, oil industries;

The state monopoly of foreign trade was abolished, hitherto exercised by the Ministry of Foreign Trade: both SOEs and mixed companies can, from then on, freely sell their exports and imports;

The dollar has become, in fact, the real currency of Cuba, coexisting with two national currencies: one “convertible” in dollars and other “non- convertible;”

The production and marketing of cane sugar was privatized, through the “basic units of cooperative production” (80% of the cultivated area). Their members have no legal ownership of the land but share the profits achieved. In 1994, the “free agricultural markets”, whose prices are determined in the market, were established.

From these measures, the Cuban economy has stopped working based on the state planned economy and started to work, although in a distorted manner, in accordance with the law of markets and profits ruling.

Cuba ceased to be a workers’ state to become a capitalist country in rapid process of semi-colonization. In this process, the Castro brothers have turned into members of the foreign capital, ensuring their business, and at the same time getting rich through state-owned enterprises and their participation in joint ventures.

At the same time, it has been occurring a increasing process of deterioration of the gains of the revolution in key areas such as health, education, job security, food supply, etc.

The difficulties of debate

The debate on the current situation in Cuba is quite difficult, because of the respect and prestige that the Castro brothers, Fidel especially, acquired by leading the first socialist revolution in Latin America and building the first workers’ state in the “backyard of the american imperialism”.

However, the Marxists should discuss concrete facts, trying to avoid the emotions and feelings that confuse us. And the facts show that the Castro leadership restored capitalism on the island.

To all those who still argue that there is “socialism” in Cuba or a “workers’ state”, we ask: what does this new foreign investment law has to do with socialism or planned economy? How this law could be understood from these definitions?

However, this law is entirely consistent with the characterization that capitalism has been restored and that the country is undergoing a process of semi-colonization by foreign capital, having the Castro brothers as partners.

Some conclusions for the program

But this is neither a debate about emotions or feelings nor about academic findings. It is a debate that has a profound importance in the proposed program for Cuba: The unconditional defense of the Castro government and its measures, as the Castro-Chavez organizations defend? Defense of the workers’ state, as some Trotskyist currents still defend? Or, alternatively, in accordance with the IWL-FI, opposition to the government measures, taking into account the need for another social revolution, now against the regime of the Castro brothers, to rebuild the workers’ state and its achievements.