Hasta la victoria, hambre: rare protests rock Cuba

Hello and welcome to The Intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. Look up in the sky. It's Richard Branson in a spaceship. Yesterday, the man behind Virgin Galactic made a well-publicized trip to the edge of space. Is it the start of a serious space tourism industry or just a showpiece for adventurous billionaires? And England's national football team almost won the European Championship last night. We look at the data, finding that the squad, for the first time in a long time, is living up to its promise and should still have a good run ahead. But first, Cuba is experiencing its largest protests in nearly 3 decades. Across 16 cities, including the capital Havana, thousands of people took to the streets this weekend chanting, "We are not afraid." Protesters demanded an end to the country's dictatorship and more access to vaccines. And they blamed the government for the current economic crisis, with one saying, "They are starving us to death." Exiled Cubans in Florida also joined in, chanting "freedom." Yesterday, President Miguel Díaz-Canel interrupted local television broadcasts with an address. He mentioned ideological subversion provoking destabilization. He encouraged pro-government forces to take to the streets. But ideology isn't really the point. That destabilization has come about, at least in large part, because, as the old saying has it, a hungry man is an angry man.

I would say that the shortages that Cuba is suffering are probably worse than it's seen in more than two decades.

Rosanne Lake is our Cuba correspondent.

Grocery stores are empty. The queues outside them are endless for the few things that are in them. Even farmers are starting to keep the food that they grow themselves rather than sell it because they're worried they won't be able to get enough food in other places. State-owned bakeries are even replacing a fifth of the imported wheat flour that they use in bread with homegrown substitutes like corn, pumpkin, or yuca because the price of wheat flour, which is generally imported, has become prohibitively expensive.

And we've talked a lot before about queues and, and empty shelves, but what is making these shortages so dire?

Well, the reason that the shortages are particularly dire is that essentially Cuba has run out of cash. Cuba imports 70% of its food, and it requires foreign currency with which to purchase it. And because so little is produced in Cuba, there's very little available. And adding to that, of course, you know, food prices globally have increased by 40% in the year to May 2021. Then you have things like droughts that, you know, cause particularly poor harvests on the island, namely of sugar. And also more than anything, I mean, I think the recurring factor in the food shortages over time is the fact that Cuba is astoundingly bad at agricultural production. You have a system that completely disincentivizes farmers from producing any surplus. You have the sacopio system, which requires them to hand over a large amount of what they produce to the government and restricts them from selling it on the free market at meaningful prices. And so things just don't get produced. And as a result, there are shortages. But of course, the government isn't taking responsibility for all these things. They, as usual, are blaming international sanctions.

Well, what role are those sanctions playing?

Well, since 2001, US sanctions have actually exempted food, and Cuba buys a fair amount of food from the US. Really, the issue here is Cuba's own internal embargo, the one that prevents any sort of meaningful agricultural productivity. And then you have things like shortages of petrol, which mean that perhaps a farmer has prepared however many thousand kilos of tomatoes that were promised to the government that then the government never picks up because there are no working trucks or no petrol to power those trucks in order to pick up those tomatoes. And so of the little that is produced, a lot of it is also wasted. But then you also have a great amount of bureaucracy that further complicates things. So up until very recently, it was actually illegal to slaughter a cow in Cuba for consumption. They could only be sacrificed if they were very ill and towards the end of their lives. And now that is possible and it was sort of being heralded as one of the new improvements to agricultural production because the government obviously has recognized that this is an issue that they need to improve upon, but they're not doing nearly enough. Slaughtering a cow still requires a lot of paperwork, which, you know, in the words of a farmer that I spoke with in Bayeón, the amount of paperwork required to kill a cow is enough to, you know, eliminate the appetite for one. So it really is problematic. And then on top of that, agricultural workers are paid in pesos for what they produce, and pesos have no value internationally. So buying things like fertilizer and machinery which obviously is needed for more streamlined agricultural production, is just not a possibility for them.

But given how bad things have become, I mean, why not change those policies, eliminate the bureaucracy, bend the internal embargo?

They've started, but of course the internal embargo is what has characterized Cuba for 60 years, right? Change is not something that Cuban leaders are often very open to. And of course, as soon as there's change, there's the fear that people will get different ideas or they will get wealthy, heaven forbid, and be able to do different things and challenge those in power. And so changes are often very calculated and very piecemeal in Cuba. That's just the way Cuba operates. And then of course, on top of that, what is making the situation all the more dire is, as we discussed, this, this lack of hard cash.

And what's bringing that about?

Well, there are several different factors. I mean, a big part of it has to do with the slowdown in tourism. 4.2 million visitors came to Cuba in 2019, just over a million did last year, which had a debilitating effect on the economy. But you also have very important informal networks that have stopped as a result of the pandemic. So Cuba has a system of mulas or mules that bring in cash remittances from abroad. And prior to pandemic, there were 10 flights a day coming into Cuba from Miami, and these flights were filled with people bringing in cash remittances, up to $10,000 or perhaps more if they were creative about where they can hide them on their person and keep them away from authorities as they were coming into the country. And of course, this is completely evaporated because there are far fewer flights. If there are 3 a week. That's a lot. So they play a very important role in the economy. The government relied on them to bring these cash remittances into the country, and this source of cash has also completely evaporated.

Which is to say that things aren't going to get much, much easier for, for the Cuban people anytime soon.

No, it's likely that things will probably get worse before they get better, and that's namely because the government has failed to implement bigger economic reforms. If they really wanted to stave off popular discontent, the best way would be to start with reforms to the agricultural sector and to small businesses.

But it seems the popular discontent is already here.

People are starting to get fed up. And it's interesting to observe at this particular moment in time because we know that when Fidel Castro was in power, things were very different. He had a charisma and a mystique that neither he nor his brother and successor, Raúl, or Cuba's current president, Miguel Díaz-Canel, can replicate. They just don't have that same energy. They don't have that same way of catalyzing popular support behind them. And if on top of that you add the fact that you have a much larger and wealthier Cuban diaspora, and plus the internet that is showing on a daily basis, it's showing Cubans that many of their economic difficulties are created by their leaders and not the United States, you do have a recipe for increasing discontent.

Rosanne, thank you very much for joining us.

Thank you, Jason.

The British billionaire Sir Richard Branson went to the edge of space yesterday.

To all you kids down there, I was once a child with a dream, looking up to the stars.

Now I'm an adult.

Far above New Mexico, Sir Richard waxed lyrical. He's had space tourism on his mind since 2004. 2004 when he founded Virgin Galactic. Yesterday's trip was a late-stage, high-profile test run. Paying customers will be able to make that same journey next year. And on current pace, they may have more than one spaceship operator from which to choose.

A lot of people have been waiting a long time to see that aircraft and its pendulant rocket ship take off into the stratosphere and then to see the rocket ship zoom up beyond it.

Oliver Morton is our Briefings and Essays editor, and to put it lightly, a fan of space.

Virgin Galactic have been trying for this for well over a decade, and so there's undeniably a certain joy in seeing them achieve their goal. And the question now is how much that joy will translate into bums in or floating above seats as they try to turn this technical achievement into a real business.

So talk me through this, well, this Virgin flight.

The important thing to remember about the Virgin flight is that it's nothing like the sort of flight you take to actually get into orbit. The idea, the goal here is simply to go in a high climb and then return to the Earth. So this rather wonderful carrier aircraft takes the little rocket ship up to about 15 kilometers.

3, 3, 2, 1, release, release, release. Clean release. Ignition. Good rocket motor burn.

And then the rocket ship itself goes up all the way to 85, 90 kilometres. It goes into effectively freefall. It's just a projectile at that stage. And as projectiles do, it's just following a parabola. And that's why inside the rocket, you get this weightlessness, what they call officially microgravity, in which people can float around If we can do this, just imagine what you can do. Yay! And of course, the craft is studded with portholes so that they can look outside and see the blackness of space and the thin blue line of the Earth's atmosphere.

And what about the homeward journey?

The ship's designed with a rather clever little way of shifting its wings to come back down into the Earth's atmosphere. Again, this is not an orbital flight, so reentry is nothing like the thermal challenge that it is for something coming back from orbital speeds of sort of like 7 kilometers a second. And then it just glides back down and lands like most planes. It touches down and you get out and get into the black SUV of your choice and are taken back to the airport or the spaceport, I'm sorry. What a day, what a day, what a day, what a day.

And this has been touted, of course, as the beginning of a space tourism industry. Industry. Do you think this gets us on the way?

This gets some people on the way to space who wouldn't otherwise go there. Though again, you have to be aware that space is not a place in any real sense. Space is a mixture of experience and capability and velocity. And what you get going up on a Virgin spacecraft is you get some of the experience, though briefly, but you're not actually able to go into orbit. You're not anything like that speed. The advantage of this is that you can imagine giving the experience to quite a lot of people. If you had enough of these space planes, hundreds or thousands of people a year could get that experience. So if you can charge $250,000 a pop, which is what I believe Virgin is currently suggesting, then you can make some money from that if you can get that many spacecraft and you can get your operating costs sufficiently low. I don't think you're gonna run out of people to try it because the world is very full of really quite rich people and this is an experience that Virgin Galactic can sell that at the moment almost no one else can.

But there is competition, right? More billionaires will be going into space soon.

Yes, in a way this was a rather cheeky little adventure of Sir Richard's in that there's another billionaire going into space Very shortly, earlier this year, Jeff Bezos, until recently of Amazon, announced that he would be on the first suborbital flight of a rocket that his company Blue Origin has been working on for decades called New Shepard. I want to go on this flight because it's a thing I've wanted to do all my life. And he'd chosen July 20th for that flight, presumably because of its resonance in the spacefaring imagination. It's the date of the first human landing on the moon. And so the Virgin craft was already in its test flight program, had already flown with pilots. And Sir Richard was going to be on the third of those flights, moved himself onto the second of those flights, moved that flight a little earlier in order to steal a little bit of Mr. Bezos's thunder. But Mr. Bezos has quite a lot of thunder. And though I'm sure he's disappointed by being gazumped, I don't think that he's particularly worried about competition from Sir Richard. Because the fish he has to fry in space are considerably larger. Blue Origin will be offering suborbital tourist flights like the ones offered by Virgin Galactic. But Mr. Bezos conceives of it as a way of building an industrial transportation infrastructure for a very expanded and dramatically larger space economy. Little trips up and down in the Earth's atmosphere may be a nice little earner for a while, but they're not what Blue Origin is about in the way that they are what Virgin Galactic is about. About.

So the way you're framing it, it's sort of billionaires showing this can be done for perhaps a small number of millionaire customers and the like. Do we not get some economies of scale at some point? Could this get bigger as a side hustle for these companies if the demand shows up?

I suppose it could become larger. I mean, you're talking about revenues of a billion dollars plus for Virgin Galactic if things go according to plan. So, you know, it's not an inconsequential thing to be doing. The biggest problem will come with the question that there just aren't any places to go to in space. I don't really see the burden of spaceflight being mostly about little jaunts in the Earth's atmosphere. Its burden of glorious purpose is to attempt more dramatic things. And for that to have a tourist element, you need a lot more infrastructure. I mean, if you want to go into space for a holiday, say, you really want there to be some sort of place where you can go. I think suborbital flight will always be a sideshow compared to whatever the actual orbital economy turns into. This particular company and this particular experience, I have no idea how big a niche it will be, but it doesn't really feed into those grand dreams that Mr. Bezos or Elon Musk, whose company SpaceX dominates delivery to orbit at the moment. It doesn't fit into those grander dreams.

Oliver, thank you very much for joining us.

Thanks for having me, Jason. It was a blast.

In the end, the England team couldn't quite manage to do it. Football is not, as a popular song has it, coming home. But boy was it close. The final against Italy in the European Championship came down to penalties after a 1-1 scoreline lasted through extra time. England's fans had hoped the match would put a stop to "55 years of hurt," the length of time since the country's last major victory in the 1966 World Cup. It will have been poignantly bitter for Gareth Southgate, England's manager, whose own missed penalty had put the country out of the Euros 25 years ago.

Well, in terms of the players, they've given everything they, they could have, not only tonight but through the whole tournament. They should hold their heads high.

There's still plenty of optimism about the future, both for Mr. Southgate and for his young, hungry squad. After all, it's only a bit over a year until the next World Cup.

I think interestingly, for once, this is a team that has carried through on its expectations.

James Tozer is a data journalist with The Economist.

If anything, the expectations were a little bit low before the tournament because they'd done okay in qualifying, not brilliantly. And then they sort of grew through the tournament as it went along. And in pretty much every match, you know, England's footballing past has been checkered by teams of brilliant quality players who can't quite get it together when it really matters. This was a tournament where finally they were able to replicate the sort of brilliance that they put together each week in the Premier League and even exceed what they had done in qualifying.

So from a hard-nosed data perspective, then, this is, this is a squad that, that fans should be hopeful about into the future.

I think going forward, the numbers, if I think specifically about the stats that encourage me most, they're the second youngest team at the tournament. The squad has an average age of 25, and you've got a few guys in there who are 18, 19, 20. And they've also got the highest estimated squad value in the tournament. There's a website called Transfermarkt that crowdsources estimates of how valuable the players are, and it reckons they're worth collectively more than £1 billion, which is more than any other team. They've got a lot of their best football ahead of them to play. And the other thing that's, I think, great about this team is they've really brought the country together in many ways. I mean, they're a very diverse team. Very racially diverse team, but they're also a very geographically diverse team. They come from all over the country. In fact, in the semifinal against Denmark, I think there were players from 10 different English clubs. There's something in there for everyone in England to like about them and support about them. Yeah, I think the future is very, very bright for them in a way that hasn't really been true for English football for quite a long time.

But one thing we haven't talked about yet, and perhaps can't be quantified, is the psychological element here. How much do you think that the weight history plays a role here?

It's funny, I think people put a lot of stock in this, the idea that there are sort of widespread national traits that explain why teams are good or bad at football, that the Germans are efficient, which is why they're so good at penalty shootouts, and the Brazilians are carefree. And all of those things remain true until suddenly they don't. And I think it's worth remembering that every new generation brings with it its own expectations and abilities. A lot of the guys playing weren't even born when Gareth Southgate missed that famous penalty in 1996. And I don't think there's any reason to expect them to be weighed down in the same way by 50 years of English defeats in the way that you might expect. They're a young, exciting team, and I think they're going to achieve great things in the future.

James, thank you very much for joining us.

Thank you.

That's all for this episode of The Intelligence. If you like us, leave us a rating and a review, and you can subscribe to The Economist at economist.com/intelligenceoffer. The link is in the show notes. See you back here tomorrow.