Cuba: ETECSA's rate hike, the bureaucracy and the threat of capitalist restoration

On Friday 30 May, the Cuban Telecommunications Company (ETECSA) announced an increase in its rates, provoking unprecedented indignation in Cuba. This has brought to the fore discussions on a series of issues central to the future of the Cuban Revolution.

Let's start at the beginning. On 30 May, a brief statement from ETECSA announced a unilateral change in its rates. The maximum monthly data plan will be 360 CUP (Cuban pesos), which will give access to 6 GB of data. The price for extra data top-ups will be much higher. In Cuban pesos, an additional 3 GB will cost 3,360 (almost ten times more), and in dollars, an additional 4 GB will cost US$10. This also means that the black market exchange rate (US$1 = 370 CUP) has been used to calculate the conversion, rather than the official rate (US$1 = 120 CUP).

This is therefore a real price hike that significantly increases the cost of the service and affects the vast majority of the population. To give you an idea, Communications Minister Mayra Arevich reported in December last year that “the average monthly consumption of mobile data is 9.9 GB”.

This means that the average person will be forced to purchase an additional 3 GB at the prohibitive price of 3,360 CUP. Bear in mind that, according to ONEI data, the monthly state salary is 5,839 CUP. Previously, a 500 CUP plan included 4.5 GB, but there was no limit to the number of plans that could be purchased. Thus, 9 GB used to cost 1,000 CUP, whereas now it will cost 3,700 CUP.

In addition to this, the decision was made in violation of ETECSA's service contract, which clearly states that any changes to the conditions must be announced 30 days in advance.

Anger erupts

On Friday, anger began to spread on social media with all kinds of comments. When the news of the rate hike was published on Cubadebate, it received a total of 1,600 comments, the overwhelming majority of which were critical of the decision, many of them people who openly declared themselves defenders of the Cuban Revolution.

Here is one example:

“I am a university student at the University of Information Sciences, and in May I spent a total of 125 GB downloading programming course videos for my final project. Each course has more than 40 videos. Not only for that subject, but for every difficult subject in my degree… We've had to study on YouTube and search for information on different websites to do our assessment projects. That alone uses up a data package in a single afternoon, because to watch the video properly, it has to be in a minimum quality of 360p, and watching it online uses almost as much as downloading it. 6 GB goes in a week doing that every day, and even more now that I'm in midterm and final exam season.”

Others contrasted the air conditioning in the offices and cars of ETECSA bureaucrats with the economic punishment they have inflicted on the entire population.

On my own Facebook page, where there are no counter-revolutionaries, many Cuban comrades commented angrily. We are talking about people who, during the protests of 11 July 2021, responded to the call to take to the streets to defend the revolution. Some now asked themselves, “How can I now defend the revolution on social media?”

Others recalled the massive demonstration that took place this year on 1 May in defence of the revolution: “We took to the streets on 1 May and this is how they repay us.” Others spoke of class struggle and the need to respond.

In recent years, internet use has become so widespread in Cuba that it is now considered a basic right to which the population should have access / Image: Ian Southwell, Flickr

In recent years, internet use has become so widespread in Cuba that it is now considered a basic right to which the population should have access. According to official data, there are 8 million active mobile phones in Cuba, 95 percent of which have internet access.

The discontent was not only with the decision itself, but also with how it was implemented: without prior notice, by violating the terms of service and without giving any reasonable explanation to the people. The appearance of second-tier ETECSA executives on the Mesa Redonda TV programme to attempt to justify the price rises only made matters worse.

The rate hike affects virtually the entire population, but especially university students, many of whom have to access their course materials digitally. So much so that, in an unprecedented decision, the Federation of University Students (FEU) of the University of Havana, together with the FEU of five faculties – the University Student Federation of the Faculty of Communication of the University of Havana (FEU FCOM), together with the secretariat of the Faculty of Chemistry (FEU QUÍMICA), the Higher Institute of Technology and Applied Sciences (FEU InSTEC), the Faculty of Mathematics and Computing (FEU MATCOM), the Faculty of Philosophy, History and Sociology (FEU FHS) and the Higher Institute of International Relations (FEU ISRI) – published a statement of protest against ETECSA's decision.

The statement notes that:

“We consider that these measures restrict the fundamental right to information, education and communication, which are essential pillars for the academic and personal development of students. The increase in the cost of data top ups beyond 6 GB constitutes an obstacle that hinders the fulfilment of our educational and professional responsibilities.”

This was followed by another ‘formal protest’ statement from the Federation of University Students of the Faculty of Economics (FEU-EKO) demanding “the rectification of these actions.”

The fact that official mass organisations are speaking out against decisions made by a state-owned company, and which are therefore presumed to have been officially approved, is unprecedented. It reveals, on the one hand, the degree of loss of legitimacy and authority of the leadership of the country and, on the other, the strength of pressure from below.

Cuba in crisis

It is clear that this is not just about discontent with this particular decision. The unrest over the rate hike has a broader background of worsening living conditions in Cuba.

On top of the blow dealt to the island's tourist income by the pandemic, Cuba has faced the tightening of the imperialist blockade by the first Trump administration (these measures have remained in place to this day), the impact of rising energy prices, and restrictions on Venezuelan oil shipments.

The unrest over the rate hike has a broader background of worsening living conditions in Cuba / Image: public domain

These, among other factors, have led to constant and increasingly prolonged power cuts, generalised price increases and shortages of basic products, as well as the general deterioration of services (medical, educational, etc.).

A migration crisis of enormous proportions has been provoked not only by these economic difficulties, but also by the feeling that there is no solution either from within or outside the island. We are talking about hundreds of thousands of people – some estimates say more than 15 percent of the population – who have left the country in the last two or three years. This factor also makes internet access more important, in order to maintain contact between those who left and their families in Cuba.

After 60 years of being subjected to a brutal blockade by the United States, which was aggravated by the collapse of Stalinism more than 30 years ago, it is clear that there are serious problems affecting the economy as a whole. These problems affect a company such as ETECSA, which must purchase internet service on the world market and maintain and repair the network with supplies that also come from the world market.

The devaluation of the currency, expressed in the exchange rate differential between the official market and the black market, has negatively affected ETECSA. It is cheaper for relatives to send dollars from abroad to top up their accounts in pesos purchased on the black market, thus depriving the company of foreign currency income.

Many can understand that the company needs money. But what is not understood is that this has to be paid for by the general population, including the lowest income sectors that have already been hit by the impact of other economic measures, particularly since the ‘Reorganisation’ in 2020.

The Cuban leadership has responded to the problems caused by the brutal imperialist blockade and the isolation of the revolution with a series of economic measures that represent increasing concessions to the mechanisms of the capitalist market. This includes the creation of private companies and the elimination of universal state subsidies. These measures have had the effect of increasing social and economic inequality.

The Cuban Revolution is in grave danger!

Among the comments made about the rate hike, many have wondered if we are living under a Cuban perestroika – that is, if the Cuban leadership has decided to restore capitalism, but without saying so publicly.

One of the comments that has circulated most widely in recent days in Cuban revolutionary media – and I emphasise, in revolutionary media – has been that of documentary filmmaker Javier Gómez Sánchez. His Facebook post, ‘ETECSA's tariff hike and the culture of government’, ends with these devastating paragraphs:

“A leadership that is united with the people is capable of maintaining support, even when it has to make difficult decisions. But we see nothing of the sort. The Ideological Department no longer exists, not even to function well or badly. It was created because the Revolution needed it to guide the construction of socialism, but in the transition to capitalism, the only ideology needed to guide us is that of the market.

“There are things that only history teaches. This people has demonstrated extraordinary capacities for sacrifice, but only when guided by great leadership. Keep locking yourselves away in meetings, alienating yourselves with select groups, visiting your cronies, and ignoring the people, and the day will come when you will learn a hard lesson. No one wants that day to come, but it seems that you are working to make it happen.

“If things continue as they are, they do not bode well for the future. The question is no longer whether you will play the role of Gorbachev. That is becoming increasingly clear. The next question is whether you will end up like Ceaușescu.” (Emphasis added)

Javier Gómez (co-creator of the excellent documentary El insomnio del hombre nuevo, recommended for anyone who wants to understand what revolutionaries in Cuba are discussing today) hits the nail on the head. The danger of continuing down this path – the path of pro-capitalist measures applied in a bureaucratic manner – is that it could provoke a social explosion that sweeps everything away and carries the revolution with it.

The warning is serious, but it is not an exaggeration.

It is possible that, under pressure from below, in the coming hours and days, ETECSA, or to be more precise, the government, will partially rectify and make some concessions to popular anger. A televised appearance by First Secretary Díaz-Canel has already been announced.

But the problem remains. The Cuban Revolution is in danger. In grave danger.

The economic situation in Cuba leaves little room for manoeuvre / Image: vipstano, wikimedia commons

In Cuba, the current state was created by the revolution and therefore formally defends the property relations it created: the expropriation of the capitalists, landowners and imperialists. However, the state is not really in the hands of the working class, but in the hands of a bureaucracy that has its own privileges and interests and is not accountable to working people.

And this bureaucracy, or an important sector of it, has embarked on the path of capitalist reforms, which it considers the only way to maintain its dominant position. This is justified with arguments such as that “the productive forces must be liberated” and that it is necessary to put an end to “undue gratuities”.

The dangers threatening the Cuban Revolution are of various kinds. On the one hand, there is the relentless pressure of imperialist encirclement, which, in the final analysis, can only be broken by the advance of the world revolution.

On the other hand, there is the pressure of capitalist restoration, which the bureaucracy is moving towards. This must be fought with workers' control and the direct and decisive participation of the working class in the administration of all things.

The economic situation in Cuba leaves little room for manoeuvre. Difficult measures will have to be taken in any case, that is certain. But it is one thing for the bureaucracy to take them in defence of its own privileges and with a view to a transition to capitalism, without taking into account the general interests of the working people. It is quite another thing for the revolutionary people to take them consciously, after a discussion of the different options, knowing the dangers they entail and strengthening and defending the revolution as a counterweight.

One thing is clear: it does not serve the revolution to apply or accept price hikes; it serves the opposite.