By José Luis Rodriguez. Latin American Summary, September 4, 2023.
These months mark 30 years since the summer of 1993, a moment that marked the point of greatest economic and social impact of the crisis of the Special Period in Cuba, but also in which the recovery of a crisis that seemed insurmountable began to emerge. For our country, considering that the impact of the special period on Cuban society three years after its beginning, on August 29, 1990, was enormous.
To get an idea of the scale of the crisis, it is enough to recall that GDP fell by 34.8% between 1989 and 1993, falling this year to the level of 1981; imports fell by 75.3%; Investments fell by 61.8%; Agriculture lost 47.3% of the value of its production and labor productivity fell by 33.7%.
Furthermore, enormous inflationary pressures had grown exponentially due to an abrupt decline in the supply of goods and services, compared to a relative increase in liquidity in the hands of the population, which exceeded 66% of GDP. Inflation was also evident in the devaluation of the Cuban peso, which was quoted between 120 and 150 pesos per USD in the informal economy in the first quarter of 1994, compared to 7 pesos in 1990. Likewise, the budget deficit reached 33% of GDP in 1993 and The demonetization of society was already pronounced when barter began to spread among the population due to the loss of the functions of the national currency.
On the other hand, despite measures to protect the population, household consumption per capita fell by 34.6% between 1989 and 1993, with calorie consumption decreasing by 34.5% and protein consumption decreasing by 37.7%. This meant that in 1993 the Cuban population consumed on average only 1,863 kilocalories daily, from an estimated vital minimum of 2,100, and 46 grams of protein, from a minimum of 56. This underconsumption would remain below needs until 1996- 1997. This reduction in diet was estimated as one of the likely causes of the emergence of diseases such as the outbreak of neuropathy of toxic nutritional origin noted in 1993, which would reach an incidence rate of 493.3 per 100,000 inhabitants between 1992 and 1996.
Basic services such as electricity supply were also severely affected, with electricity production relative to installed capacity falling by up to 38% in 1994, resulting in scheduled blackouts from July 1992, reducing the availability of oil equivalent to about 6.5 million tonnes per year decreased from a minimum requirement of 8.5 million, a 50% reduction from 1989 levels.
In addition to the consequences mentioned above, there would be the increase in social tensions that a crisis situation such as the one described brings with it. These tensions found their strongest expression in the social unrest that broke out in August 1994 and in the so-called austerity crisis that occurred in the second half of that year. However, over time, there would be broader and more widespread impacts as a result of the deterioration in the living standards of the population, manifested, among other things, in an estimated 56% decline in real wages in four years. , although other authors believe the decline was as high as 80%.
Likewise, in these years, amid the current inflationary pressures, a regressive income distribution occurred, which inevitably worsened with the approval of foreign currency remittances that a part of the population began to receive from August 1993.
The GINI coefficient was 0.25 around 1989, suggesting a fair distribution of income. However, the estimates available for the 1990s show that the value of this coefficient increased to a value between 0.38 and 0.40, reflecting the deterioration suffered, although the indicator still remained below that of the main countries. from Latin America, which reached 0.63 in Brazil; 0.52 in Argentina, Chile and Mexico; 0.44 in Uruguay and 0.42 in Costa Rica.
The beginning of a process of social restructuring could not be prevented during these years. According to sociologist Mayra Espina, this process caused the proportion of the population at risk of not having their basic needs met to increase from 6.3% in 1986 to 14.7% in 1995.
The regressive distribution of income was based on the diversification of its sources due to the already mentioned remittances, but was also due to the expansion of the shadow economy and non-state labor, as well as the creation of sources of differential income in currencies for a part of the workers.
This social polarization, in turn, created favorable conditions for the increase in antisocial behavior, with phenomena such as prostitution, corruption and crime appearing, behaviors that also reflected a loss of moral values among a part of the population.
sequel follows
[1] This work is based on the author’s forthcoming book entitled “The Special Period in Cuba: The Economic Battle.”
Source: Cubaperiodistas