The urgency of infrastructure for development in Cuba

If we could calculate how much, in terms of lost revenue, services no longer lent, and interrupted labour, we would have in our hands a very illustrative resource to help understand just how important it is to rely on a good, modern, and efficient ‘infrastructure’.

In the documents approved in the 7th Congress of the Cuban Communist Party, and whose discussion, who for all those who want to participate in life in the island, it has already begun: a group of ‘strategic areas’ with which to reach development, are described .

What is infrastructure, economically speaking?

It is a group of sectors and activities, that provide services or guarantee access to services that facilitate people’s daily life. As much in their productive tasks as when they are quietly watching TV.

A simple example of sectors of infrastructure are those of energy, transport, communications, water and sanitation. Obviously if we want to productively transform the country and insert ourselves, with real profits, into the global economy, infrastructure is decisive.  But infrastructure is also essential if we want to achieve a sustainable development, if we really want to be prosperous, if we aspire to greater equality. Including, if Cuba wants to be a more democratic country.

A good suburban train service that facilitates the transit of people in a fast and punctual manner, to and from their places of work and their houses, directly impacts on the “productivity and efficiency at a nation-wide level”, but also in these people’s equality and perceptions of prosperity.

Taking three hour to get from your home to work and then from work to your house, always with the uncertainty of “when will the next bus come” is not the same as doing it in an hour and knowing that every Tuesday of the year at 7.10am and at 5.15pm, there is one waiting at the bus stop.

In theoretical terms, investigations and studies demonstrate today the services that are provided through infrastructure are a necessary condition for quality of life and social inclusion. Particularly in isolated areas.

The growth of the economy and the competitiveness of companies (all: large and small, state or non-state) depends on good infrastructure, which can make for a more cohesive national territory (can you imagine a train that in an hour and half would allow us to go from Havana to Santa Clara?) and also diversify the production system.

But having a good infrastructure generates costs and prices we would have to know the prices at which we would have to sell these services if we were to recover the investment in creating them.

The first major task is to obtain the resources to invest in infrastructure. A portion comes from the State’s resources, nearly always insufficient. Another part comes from the private sector, which usually looks for safe returns. A third portion comes from international financial institutions, which sometimes offer States loans on ‘soft’ terms.

In the world, there are States who make every effort. For example in Latin America 70% of all investment is made by the State (in Cuba, it ought to be much higher). One part of these services are considered ‘public goods’, guarantors of equity levels, and are therefore are subsidised by the State. For example, in Cuba, the price of the first 100 kilowatts of electricity, water consumption, price of transport, etc…

Reducing subsidies is always a big political problem; it affects one of the most sensitive human organs, the wallet, and, generally negatively impacts upon equity.

From the perspective of demand, achieving a higher uptake of infrastructure requires policies that are in tune with the market and consumers, like, for example, putting different tariffs on energy consumption depending on the time of day, providing education and publicity about the rational use of energy, moving towards energy saving technologies, putting variable tariffs on water consumption, improving technology and domestic and industrial equipment, irrigation systems, etc. With all of this I just want to draw attention to the fact that a large part of improving systems of infrastructure is the responsible use of these services.

Let’s look at Cuba and its aspirations to reach a vision in which prosperity, equity, and social justice are essential elements and define our concept of development.

We are a tourist destination, and probably increasingly so. It has been announced that at the end of the year various American airlines will be able to fly regularly to Cuba, and we also know that an amendment to relax American’s travel restrictions to Cuba had gained force in the American political class. Having arrived at this point we need actual airports that compare with the rest of the world, and this means so much more than simply improving what we already have.

We should also stop learning that we are an archipelago. That an important part of the country’s inhabitants live close to, or just by, the sea. However, our maritime passenger transport is almost non-existent.

Ostensible improvements have been made in telecommunications. WI-FI hot spots have allowed many Cubans to have access to the world, it is undeniable how much access has increased if we compare ourselves with the way we were just four years ago; but the question remains the same, what should we compare ourselves with? Only with how we were? Or also, and fundamentally with where the world is heading?

If we compare ourselves (what economists call internal gap or vertical dimension) then we can almost be satisfied. But if we compare ourselves with the outside world, which is what is called external gap or horizontal dimension, then everything changes.

We still have a serious drought. Cuba only has 39 cubic kilometres of water, the majority of which is superficial, the majority of which is thanks to an INFRASTRUCURAL efforts made by the Cuban government since 1959. Of this water, half is usable, of this useable water, around 50% is used in agriculture, and of this section a significant part is lost by, among other things, having irrigation systems that in the majority are preindustrial technologies (irrigation by waterlogging).

A considerable effort is still being made in the infrastructure of the Travase Canal in the eastern region of the country. More could be made of this significant effort if, alongside this giant site, we put irrigation technologies that allowed us to use 90% of the water and not just 50%. That is the kind of thing I am talking about.

Without infrastructure there will be no development, it will not be sustainable, we will not be prosperous and we will not improve conditions of equity or social justice. Nor will we be competitive. Infrastructure costs, and it needs paying for, and it needs to be charged for adequately.

 

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Comments

barrueto

6 July, 2016

Any analysis of the telecommunications / ICT sector in Cuba goes through the complexity of providing services in a different currency needed to acquired technology advanced, also it requires this support online services added value and local content, to avoid payments for access to applications and services such as OTT located in other countries.

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