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East Germany’s bitter lessons for Cuba Those looking forward to a happy new capitalist age may find themselves disappointed

Some Cubans genuinely like the guy. Photo credit should read ELMER MARTINEZ/AFP via Getty Images

Some Cubans genuinely like the guy. Photo credit should read ELMER MARTINEZ/AFP via Getty Images


September 24, 2021   6 mins

“Homeland or Death — We Shall Overcome!” Cuba’s state motto still reflects the country’s combative self-image. Over sixty years have passed since Fidel Castro marched his revolutionary forces into Havana — now, it seems, many Cubans are tired of the permanent struggle they are asked to undertake in the name of socialism. It is likely that the island will soon give in to the mounting pressure to privatise its economy.

Having grown up in a country which has already undergone the same painful process, I can say that the transition to capitalism will not come pain or risk-free. When the Berlin Wall fell in 1989, there was immense pressure to transition the state-owned East German economy to a capitalist model and to do it quickly. But the price was extremely heavy, and many former GDR citizens paid with their jobs, their livelihoods and sense of identity; what should have been entirely joyous moments of liberation and reunification left a sour taste that for many lingers still.

Similar to the peaceful revolution that occurred in my homeland before the Communist regime fell, Cuba too has seen widespread protests. The latest wave began on 11 July in San Antonio de los Baños, south-west of Havana, and have since spread across dozens of cities. Cuban exile communities and their campaign groups have claimed that these gatherings were anti-communist in nature and called for an overthrow of the regime, but this only shows one side of a complex picture.

There can be no doubt that Cubans are angry and frustrated. Economically, their country is suffering from an existential crisis to which there is no obvious solution, exacerbated by the pandemic which caused its tourism industry to grind to a near-halt. Around 75% fewer international arrivals were registered last year, and recovery in 2021 has been sluggish.

Unlike other countries, Cuba has not been able to borrow money or receive any form of international aid to deal with the pandemic. Pressure from successive US governments has ensured that the island is still excluded from organisations such as the IMF, which has agreed to help the neighbouring Dominican Republic with an aid package of US$650 Million. Unaided and isolated, the Cuban authorities watched on helplessly as the national economy contracted by a painful 11% last year.

People who work in the private sector were particularly affected by the Covid-induced downturn. Since reforms in 2011 allowed an expansion of the non-state economy, around one million Cubans left state employment, some 15% of the workforce. As self-employed workers in jobs that were often tied to the tourism industry, they suffered a disproportionate hit and fell through the cracks of government support systems, a problem witnessed in many other countries too. The salaries of those employed in the majority state-owned sectors were also reduced but they are safe and include at least rudimentary health and social care packages.

It is therefore reasonable to conclude that the July protests were driven and fuelled by those Cubans who had moved into the private sector and would like to see it expand, and in particular open up to the US (including American tourists).

But this protest movement is not necessarily representative of the Cuban population as a whole. There were also widespread counter-demonstrations, which ranged from outright pro-government marches to processions celebrating the old symbols of the Cuban revolution, including images of Che Guevara or the flag of Fidel Castro’s “26th of July Movement”.

It is part of a struggle for the soul of the nation that has been ongoing for decades, a question that can be as important as mere economic questions. Castro and his revolutionaries received widespread popular support during and after the revolution of the 1950s largely because they successfully portrayed their actions as a struggle for independence, not socialism. Cuba Libre is more than a drink to the nation – the famous toast to national independence predates the Castros and socialism by over 50 years and it will likely outlast them too.

However, even if Fidel Castro painted an image of the revolution as a struggle for independence, he could not fulfil this ambition once he was in power. A US trade embargo was introduced in 1960 and continues to this day, making it the longest lasting in modern history. The embargo bans all American enterprises and even foreign ones active in the US from trading with Cuba, isolating the island from commercial interaction with the West. While the aim may have been to isolate Cuba, it drove the state into the arms of communist allies, particularly the Soviet Union, which in turn demanded political loyalty.

The island nation cannot produce everything it needs by itself and so became reliant on communist support for anything from paper to bicycles — and when the Soviet Union collapsed in 1991, Cuba suddenly found itself entirely cut off. Its exports dropped by 61% and imports fell by 72% — staggering figures given that this included basic supplies such as medicines and food. The Cuban economy lost around $28.6 billion between 1989 and 1992, marking the beginning of the so-called “Special Period”, a term for the crisis used by the government to suggest transience.

When I travelled to the island in 2005, toilet paper was still rationed to three sheets at a time in public places. The family I stayed with in Havana had none at all, and resorted to installing a bidet instead. There were long queues in front of shops whenever deliveries of staple goods such as eggs or cooking oil arrived. The situation is so bad that, year on year, the UN passes a resolution to stop the blockade due to its humanitarian consequences. Year on year it is vetoed by the US.

Yet while life is undoubtedly dire, it does not mean that all Cubans want an unbridled opening to the West, as the exiles would have it. On my own travels, I was amazed to find the streets deserted when Fidel Castro broadcast a speech. When I tried to ask my own hosts why they were glued to the TV for hours when the aging revolutionary made an appearance, I was unceremoniously shushed. They later explained that it was a family tradition. I must have raised a questioning eyebrow, which was met with a shrug and the explanation that they “had always done it”.

I visited Cuba in the first place because I was born in a socialist country myself, and having seen its transition to capitalism in a haphazard and abrupt manner, which brought as much unemployment and economic devastation as it brought freedom and private enterprise, I was curious to see a state that was taking its time. Back then, some parts of the economy were being privatised; now constitutional reforms are taking speed under the first non-Castro head of state, Miguel DĂ­az-Canel.

If the East German model of selling a nationalised economy into the private sector is anything to go by, Cubans ought to be cautious. The GDR, too, began the process in a structured manner by setting up an agency, the Treuhandanstalt, whose task it was to transition around 8,500 state-owned companies into the private sector. Hopelessly out of its depth with the mission to de-nationalise the economy, the Treuhand let the step-by-step privatisation deteriorate into a bargain-basement sell-out, which cost 2.5 million employees their jobs — over half of the workforce of the companies it was responsible for.

The result was that in Germany the former East was already off to a very bad start in 1990. Having lost not only their living, but also part of their identity and sense of self-worth, millions of former GDR citizens did not look forward to reunification, democratisation and freedom but became resentful and disaffected. To this day, East Germans are far more likely to vote for the fringe parties of Alternative fur Deutschland on the Right and Die Linke on the Left than their West German counterparts.

More damning still, this trend towards political extremism is most prominent among younger voters who were only born after the fall of the Berlin Wall. In the former East German state of Saxony-Anhalt, one in five young people voted for the AfD in local elections earlier in the year, the highest rate of all age groups. This is not a problem of political culture but has deep roots in the botched process of transitioning the East German economy.

For Cuba, this process is far more risky. The East German economy had not only been the most stable among the Eastern Bloc nations but could also bank on the financial support of the powerful West German economy, which it was joining. As an isolated island nation with a feeble economy, Cuba has not got such options. If it wants financial aid, it will have to pay for it with its independence and adapt fully to the American system.

I doubt that Cuba’s soul-searching can go on for much longer. It is unlikely that the US embargo will be lifted for anything less than a complete opening up of the island’s economy to capitalism. The Cuban government will come under increasing external pressure to speed up economic reforms, as well as from a disgruntled population who long to have goods on shelves.

Miguel DĂ­az-Canel is the first Cuban leader to have been born after the revolution, and he is not ideologically wed to its ideals in the way that the Castro brothers were. Whether under him or one of his successors, the temptations and pressure to break the country’s isolation and wed it to the Western economy will prevail in the end. But Cuban leaders would do well to look to the missed chances and often disastrous outcomes in East Germany, Russia and elsewhere — because their country may be next.


Katja Hoyer is a German-British historian and writer. She is the author, most recently, of Beyond the Wall: East Germany, 1949-1990.

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Christopher Barclay
Christopher Barclay
2 years ago

The article omits three important factors that have shaped East Germany since 1990. Firstly, the Germans insisted on paying East Germans West German pay rates. This made any East German company that had not installed West German machinery and work practices immediately insolvent. Secondly, the economies of the East German export markets in Communist times collapsed, so East German companies lost their previous customers. Thirdly, there has been the massive transfer of income from West to East Germany. This started with the West Germans paying for the worthless Kommie Mark bank accounts in Deutsche Marks. It has continued with the provision of a welfare state that allows East Germans to comfortably survive on the dole.
None of these factors apply to Cuba. Cubans are not suddenly going to be paid in dollars. A transformation in Cuba will not be accompanied by a collapse of neighbouring economies. And no one is going to pay for a welfare state that supports the work shy. The main danger to Cuba is not economic but that it turns into a narco paradise.

Jan Fonfara
Jan Fonfara
2 years ago

I agree with you. The comparison the author makes is not logic as Cuba won’t be unified with California. Germany probably had to do what you describe in order to stop everyone from leaving and resettling in West Germany and therefore implemented west German standards and costs over night. This broke the economy but achieved its goal. The scenario of other east European countries is more realistic for Cuba.

Chris Wheatley
Chris Wheatley
2 years ago

The author uses her experience of living in East Germany to predict something in Cuba. I should think that Cuba would be far, far worse – more like Russia perhaps.

East Germany had the relatively calm example of West German politics to act as a guide in the transition. A capitalist Cuba would effectively be taken over by oligarchs and gangsters, like Russia in 1991. Ordinary, non-young, people would be lost while a few fast-reactors would benefit.

‘Second-Hand Truth’ by Svetlana Alexievich shows how the Russian population was split 50/50 with adaptable people loving the new capitalism and non-adaptable people still seeing S**lin as a hero.

William Murphy
William Murphy
2 years ago
Reply to  Chris Wheatley

On my very limited experience of Eastern Germany in 2015 and 2016, you could see that some people and some areas had done better than others. Potsdam, Weimar and Leipzig – prosperous. Frankfurt on Oder, Brandenburg and Cottbus – definitely not. Touristy places like Weimar obviously attracted visitors and money. Dresden obviously attracted visitors to its rebuilt historic centre. Take the tram out to the eastern edge where there was a large post communist shopping mall and the tram passed huge prefab tower blocks…..how many people in those blocks had benefitted in any way?

Chris Wheatley
Chris Wheatley
2 years ago
Reply to  William Murphy

Yes, I agree. About 15 years ago I went to work in Zagreb. I was taken to eat in a fabulous restaurant and the hotel was nice. When I travelled to the factory the taxi took a huge detour and I thought that the driver was cheating me. When I asked he said that they never took visitors around the area with the grey concrete buildings.

Later I specifically asked for a tour around that area and thousands of people were living in poverty in these grey concrete buildings.

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Chris Wheatley

A fair enough argument, except that it is exactly the same as the author’s! ‘For Cuba this process is far more risky….’ etc

Last edited 2 years ago by Andrew Fisher
peter lucey
peter lucey
2 years ago

But free Cubans can read books and surf the net – and fish from boats.. My only visit to Cuba (2012) showed the grinding poverty and boredom of a totalitarian socialist state. I was disgusted by the “apartheid” dual-currency system – Cubans earn a worthless National Peso, only accepted in shops that have no goods, whereas the Convertible Peso is used by foreigners and privileged locals in shops with actual goods.

Jan Fonfara
Jan Fonfara
2 years ago

I think that the East German scenario is not very likely for Cuba as there is no West Cuba to re-unify with. What broke the East German economy is not a sell-out of its companies but that one day to the other almost western salaries had to be paid (when the east currency was exchanged 1:1). That is what killed the industry and made East Germany uncompetitive. Also it made West German living standards the target over night which could only be paid for by huge subsidies from the west. A more likely scenario is the Czech one where citizens received parts of the companies they worked in, they bought their state owned flat very cheaply, competitiveness was retained and living standards rose gradually.
The problem for east Germany was not capitalism but that it was absorbed by a hyper efficient, expensive and rich place and had to compete over night while losing any ability to do just that. No other Eastern European country did that and Cuba won’t either.

Christopher Hilton
Christopher Hilton
2 years ago

“When I travelled to the island in 2005, toilet paper was still rationed to three sheets at a time in public places. The family I stayed with in Havana had none at all, and resorted to installing a bidet instead. There were long queues in front of shops whenever deliveries of staple goods such as eggs or cooking oil arrived”.
I lived in Cuba from 2000 until just after Fidel Castro’s death in 2016. While there were always shortages and times could be hard (if you had no money, while many Cubans do have money), I saw none of the above. The queues for toilet paper and the rest were occasional, not the norm. I accept things have changed, but not as much as the western media would like to think.

Andrew D
Andrew D
2 years ago

A new edition of T S Eliot’s letters reviewed in this week’s Spectator refers to a similar three-sheet rule in the British military: ‘1 up, 1 down, 1 burnisher’.
Purely by coincidence, an anagram of T S Eliot is toilets.

Drahcir Nevarc
Drahcir Nevarc
2 years ago
Reply to  Andrew D

I have in my possession a poem called The Waste Bin by someone calling themselves T.O.Ilets.

Jorge Espinha
Jorge Espinha
2 years ago

Then I believe the people from Havana were putting a giant play for myself and my wife’s benefit when I visited 5 years a go. Havana is a giant favela, I saw abject poverty I didn’t read about it. I entered one of their markets, and it was squalid, I lived in Mozambique in 2002/3 and I could enter a rural market in Inhambane and I could encounter a large variety of produce. Not in Havana the capital of Cuba. Every single Cuban that talked to us in the street wanted to scam us. I can’t testify this but according to people in the tourist industry Cuba is a major destination for sexual tourism. I heard many times great things about the glories of Cuba’s education system, however I didn’t spot a single cuban with a book or reading in a park, the bookshops only sold revolutionary crap.
Finally I don’t understand the lack of women and black people in the very top of Cuba’s rulling class. Very weird.

Last edited 2 years ago by Jorge Espinha
Christopher Hilton
Christopher Hilton
2 years ago

And Cubans, despite everything, are the happiest, care-free people I have ever met.

peter lucey
peter lucey
2 years ago

Outward signs of regime criticism, and political opposition were very much absent when I visited. Cant understand why…

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  peter lucey

Possibly because there are informers everywhere? People are generally pretty conformist in any case, as we’ve seen in the enthusiasm for successive lockdown in many Western countries.

Last edited 2 years ago by Andrew Fisher
Christopher Hilton
Christopher Hilton
2 years ago
Reply to  Andrew Fisher

There are certainly not informers ‘everywhere’. I had many radical friends over 16 years in Cuba; not one was ‘informed’ on. You see what you want to see, trapped in a western media bubble or just plain dishonest.

John Hicks
John Hicks
2 years ago

Another insightful commentary drawn from Hoyer’s experience and observations reinforcing that society’s reaction to the stuff people suffer is the better predictor of outcomes than the stuff itself. Cuba will be blessed should their families’ have been strengthened, like those East German families, whose skills appraising authority, determining trust and managing reliance are quite remarkable. Accumulated responding to a dictatorship of Stassi, Informers and bent traditions, these are intergenerational skills likely to enrich society into the future. No doubt like the Ku’dam, Florida also beckons?

Tony Taylor
Tony Taylor
2 years ago

Our daughter likes to watch old Olympic highlights. One of her favourites is Flo-Jo winning gold in the 100 and 200 in Seoul. I don’t mind watching them with her, but my eyes usually drift toward the muscular East German sprinters Flo-Jo beat in both races. It’s hard to explain to a child how drug cheating works. At least the Cubans haven’t taken that leaf out of East Germany’s book.
PS: good work on The Rest is History.
PPS: and yes, I’m aware Flo-Jo could have been on the gear too; especially as she beat the EGs.

Last edited 2 years ago by Tony Taylor
Jorge Espinha
Jorge Espinha
2 years ago

First the communists destroy the economy, then they destroy civil society. They make sure nothing exists beyond the party. After decades in power a red aristocracy takes form. The sons and daughters of the regime live in Spain, France, Mexico, etc where they have access to freedom and comforts that ordinary Cubans can only dream of. The day the regime colapses it will leave behind a completely bankrupt society both financially and morally. Problems will arise and capitalism will be blamed. I hope when the time comes Cubans will not let their oppressors go unpunished.