Thursday, September 30, 2010

How can you get your worst enemy to refinance your country’s failing economy?

Impossible, you say.

Not so, says Fidel Castro, one of the most durable and shrewd statesmen/autocrats the West has ever seen.

To his people’s great consternation he admits that his Cuban economic model is not working. Then he tries to recant, claiming

that his remarks were misinterpreted. Too late. His brother, Raul, is forced to announce that the government is planning to lay off up to one million civil servants because the State can no longer afford the expense of their salaries.

This negates the recantation and creates great uncertainty because the soon-to-be-laid-off workers realize they will not find future employment anywhere in Cuba. They have no choice but to start planning to establish small, privately-held businesses that can, according to Cuban law, employ up to four people in addition to the owner. But where would the would-be owner find the capital necessary to start his business? The State cannot lend it to him because the State is broke.

No problem. Most of the to-be-affected workers have relatives in the US whom they will ask to finance their budding enterprises and who will not refuse to help them because the concept of ‘family’ is sacred to Cubans!

The result?

The Cuban economy will flourish, stimulated by the creation of many initially small enterprises that are bound to expand with time – and the economic model will slowly cease to be centrally controlled, its conversion financed indirectly by Uncle Sam.

Bravo Fidel. Pure genius.

Pero ojo – watch out! People with money don’t like to be told what they can and cannot do.

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