Fidel Castro's resignation letter

Dear compatriots:
Last Friday, Feb. 15, I promised you that in my next reflection I would deal with an issue of interest to many compatriots. So this reflection comes in the form of a message.
The time has come to nominate and elect the State Council, its president, its vice presidents and its secretary.
For many years I occupied the honorable position of president. On Feb. 15, 1976, the Socialist Constitution was approved with the free, direct and secret vote of over 95 percent of eligible voters. The first National Assembly was established on Dec. 2 that same year, and it elected the State Council and its presidency. Before that, I had been a prime minister for almost 18 years. I always had the necessary prerogatives to carry forward the revolutionary work with the support of the overwhelming majority of the people.
There were those overseas who, aware of my critical health condition, thought that my provisional resignation, on July 31, 2006, from the position of President of the State Council, which I left to First Vice President Raul Castro Ruz, was permanent. Raul, who is also minister of the Armed Forces because of his personal merits, and the other comrades of the Party and State leadership were unwilling to consider me out of public life despite my precarious health.
It was an uncomfortable situation for me vis-a-vis an adversary which had done everything possible to get rid of me (referring to the United States), and I felt reluctant to comply.
Later, I was able to recover the full command of my mind and could do much reading and meditation, required by my retreat. I had enough physical strength to write for many hours, which I shared with rehabilitation and recovery programs. Basic common sense indicated to me that such activity was within my reach.
On the other hand, when referring to my health I was extremely careful to avoid raising expectations since I felt that an adverse ending would bring traumatic news to our people in the midst of the battle. Thus, my first duty was to prepare our people both politically and psychologically for my absence after so many years of struggle. I kept saying that my recovery "was not without risks."
My wishes have always been to discharge my duties to my last breath. That's what I can offer.
To my dearest compatriots, who have recently honored me so much by electing me a member of the Parliament where so many agreements should be adopted of utmost importance to the destiny of our Revolution, I am saying that I will neither aspire to nor accept — I repeat, I will neither aspire to nor accept — the positions of President of the State Council and Commander in Chief.
In short letters addressed to Randy Alonso, Director of the Round Table program on National Television — letters which at my request were made public — I discreetly introduced elements of this message I am writing today, when not even the addressee of such letters was aware of my intention. I trusted Randy because I knew him well from his days as a journalism student. In those days I met almost on a nearly weekly basis with the main representatives of the university students from the provinces at the library of the large house in Kohly where they lived. Today, the entire country is an immense university.
Here are selected paragraphs from the letter sent to Randy on Dec. 17, 2007: "I strongly believe that the answers to the current problems facing Cuban society, which has on average a 12th grade education, almost 1 million university graduates, and real opportunities for its citizens to study without facing discrimination, require more variables for each concrete problem than those contained in a chess game. We cannot ignore a single detail; this is not an easy path to take, if the intelligence of a human being in a revolutionary society is to prevail over instinct.
"My elemental duty is not to cling to positions, much less to stand in the way of younger persons, but rather to contribute experience and ideas whose modest value comes from the exceptional era in which I lived. "Like (Brazilian architect Oscar) Niemeyer (who turned 100 on Dec. 15), I believe that one has to be consistent right up to the end."
Letter from Jan. 8, 2008:

"... I am a firm supporter of a unified vote (a principle that preserves ignored merits), which allowed us to avoid the tendency to copy what came to us from countries of the former socialist bloc, including the portrait of the one candidate, as singular as his solidarity toward Cuba. I deeply respect that first attempt at building socialism, thanks to which we were able to continue along the path we had chosen." I reiterated in that letter that "... I never forget that all the world's glory fits in a kernel of corn."
Therefore, it would be a betrayal of my conscience to accept a responsibility requiring more mobility and dedication than I am physically able to offer. This I say devoid of all drama.
Fortunately, our process can still count on cadres from the old guard and others who were very young in the early days of the Revolution. Some were very young, almost children, when they joined the fight on the mountains and later they filled the country with glory with their heroism and their internationalist missions. They have the authority and the experience to guarantee the replacement. There is also the intermediate generation which learned with us the basics of the complex and almost unattainable art of organizing and leading a revolution.
The path will always be difficult and require everyone's intelligent effort. I distrust the seemingly easy path of apologetics or its antithesis of self-flagellation. We should always be prepared for the worst possibilities. We cannot forget the principle of being as prudent in success as steady in adversity. The adversary to be defeated is extremely strong, but we have been able to keep it at bay for half a century.
This is not my farewell to you. My only wish is to fight as a soldier in the battle of ideas. I shall continue to write under the title, "Reflections of Comrade Fidel." It will be another weapon you can count on. Perhaps my voice will be heard. I shall be careful.
Thank you. Fidel Castro Ruz

Feb. 18, 2008

5:30 p.m. - courtesy Guardian

He stood up to the US - and survived
Why is there so much attention on this small, unimportant island of Cuba?
Mark Falcoff

The news out of Havana yesterday that President Fidel Castro was stepping down from formal power for his younger brother Raúl, aged 76. comes as a surprise to many Cuba-watchers. After all, there was no particular need for him to do so. His sibling has been managing affairs without apparent difficulty since Fidel took leave for abdominal surgery 18 months ago, and during what has been advertised as his recovery the latter has continued to reassure his followers through frequent commentaries in the official press or periodic appearances in carefully staged videos or still photographs.
What could have changed these last few weeks or days to cause Fidel Castro to make this announcement? Have the doctors given him new bad news? Or is he, in fact, no longer able to even speak for himself? Is he even still alive? Some day we may know the answer to these questions.
Dynastic succession within dictatorships is nothing new in today's world, as Syria and North Korea have demonstrated. But in the case of Cuba the transfer of power from one Castro brother to another reveals a more complex and interesting process. For one thing, it has been occurring in slow motion and without incident for at least the past five years, during which time Raúl has placed people loyal to him (sometimes even family members) in all the key ministries and government agencies.
For another, Raúl has long been the commander-in-chief of the Revolutionary Armed Forces, which since at least the end of the Cuban alliance with the Soviet Union have become a far more important factor of power than the Cuban Communist Party. For yet another, the same Raúl is Minister of the Interior, which is to say, he controls the police, security forces and prison system. Finally, Fidel's designated successor possesses one matchless advantage - he is fully aware of his own personal limitations. He is not his brother and he knows it. If he chooses to lift some of the stifling restrictions on commerce and production that he has been reported to be considering, he could become very popular in Cuba and very fast. There is little doubt that at this point such reforms could be carried out with a minimum of political fallout.

This is not to suggest in any way that Cuba is on its way to becoming an island version of social-democratic Costa Rica or Chile. Far from it. The Cuban revolution is now nearly 50 years old, which is to say it represents half the country's independent history. It cannot simply be written off as an unfortunate parenthesis. Most of those Cubans who do not share the Castro brothers' vision for their country have either left or are planning to leave. The fate of those who remain depends on the capacity of their leaders to adjust to the realities of a globalised world economy. Raúl Castro's ultimate position in Cuban history depends upon his capacity to understand this and to act upon it.
One might well ask why the resignation of Fidel Castro from the presidency of Cuba is an event worthy of such extensive coverage in the international press. After all, Cuba is not an intrinsically important country. It has a tiny and not particularly productive economy. As far as we know, it has no huge oil reserves. It is not located in a strategically crucial part of the world. It is not a leading cultural force in a larger religious or linguistic area. Indeed, it is seen by other Latin American countries as a kind of picturesque eccentricity to be admired and appreciated from a distance, perhaps occasionally enjoyed as a tourist destination, but not a model to be imitated: not even, apparently, in Chávez's Venezuela.
The answer, of course, lies partly in the history of the Cold War, in which Fidel Castro's Cuba played an important role in advancing the interests of Soviet communism, or at least what Castro himself regarded as those interests. Although he failed to spread his revolution throughout Latin America, for nearly 30 years Cuban military and intelligence operatives were present in much of the Third World - Angola, Ethiopia, Yemen, even (we are told) North Vietnam. For years Cubans (which is to say, Castro) controlled the Non-Aligned Movement. And, of course, at one point the Cuban dictator was willing to expose his country to an American invasion by allowing the Soviet Union to install nuclear missiles on its territory.
But there is another, more important, reason that explains his celebrity. Fidel Castro was the first leader from a small, vulnerable country - one very much in the America's historic sphere of interest - to confront Washington and live to tell the tale. He had the good fortune to take up this challenge at the time of a seismic shift in Western culture against bourgeois values and liberal economics - both quintessentially represented by the United States.
To be sure, in order to do this he had to sacrifice much of his country's independence of action to a rival power. He had to give up important economic advantages accruing from the proximity of a huge American market and access to American technology. To protect himself from the consequences of these choices he had to create a police state with all its hateful paraphernalia.
Above all, he had to gamble upon the restraint of successive American administrations: he had to know how to represent enough of a threat to restrain Washington's hand, but not so much as to force it. Like many dictators - Franco and Salazar, Stalin and Tito, Pinochet and Mao - his luck held out to the very last.

Mark Falcoff is resident scholar emeritus at the American Enterprise Institute in Washington, DC and author of Cuba the Morning After: Confronting Castro's Legacy - courtesy the Times

Q Quotes

1. Life is not so bad if you have plenty of luck; a good physique and not too much imagination – Christopher Isherwood.

2. It was voluntary. They sank my boat. – John F. Kennedy When asked how he became a war hero. In Arthur M. Schlesinger, Jr., A thousand Days: John F. Kennedy in the White House.

3. A leader does not deserve the name unless he is willing occasionally to stand alone – Henry A. Kissinger.

4. Society is produced by our wants and government by our wickedness – Thomas Paine.

5. If one sticks too rigidly to one’s principles, one would hardly ever see anybody – Agatha Christie.

6. Profit and Morality are a hard combination to beat – Hubert Humphrey.

7. One world at a time – Henry David Thoreau (1817-1862), His whispered response, a few weeks before dying, to his friend Parker Pillsbury who had wished to talk with him of the ‘’next world’’, April 1862, In Henry Seidel Canby, Thoreau.

The biggest scam in banking history , it could have reached 50 billion Euros

By Zafar Masud

MANY readers will probably remember a Wall Street bond trader and his constantly yelling into what Tom Wolf had disparagingly called a ‘doughnut’ in his 1987 best-seller, The Bonfire of the Vanities. In these 20 years both have come a long way. Yesterday’s ‘doughnut’ is today’s highly sophisticated ‘cell’ that can dart a whisper, or a video-clip, across the seven seas in a fraction of a second.

The golden boy has changed too. High on testosterone (less than five per cent of the traders are women!) he is alone at his desk, earplugs on, a determined fist gripping the mouse, eyes, like an eagle’s, scanning the horizon on the multiple screens that offer him a permanent view of all the world’s stock markets. On an average day, he makes, or loses, for his company 100,000 euros. On a turbulent day, his wins or losses could hit the 15-million euro mark. No questions asked! Since futures are on sale somewhere in the world all the time, he doesn’t sleep much, never goes on vacation and is washed out by age 30. Then, with all his well-earned bonuses, he is promptly transferred to less straining tasks and an upper niche in the financial hierarchy.

Jerome Kerviel was such a trader who worked for one of the biggest banks in France, la Société Générale, or SocGen. An unremarkable and unremarked young man, Kerviel got hooked on venturing far beyond the beaten trail early on. In one of the deals that he struck last December he made a gain of 1.4 billion euros for his bank. Given the staggering amount, he panicked; he was not authorised to make that bid. He hid the transaction under a sea of purely invented statistics, making it appear as if the bank had made a ‘mere’ 55 million euros.

Emboldened by successes in not only carrying on his phenomenal operations undetected but also in his ability to conceal them behind a statistical smokescreen, Kerviel galloped ahead with his virtual adventures until it was too late.

On January 24, this year SocGen woke up to the fact that it was five billion euros poorer and that Jerome Kerviel had the unrivalled, and not much envied, distinction of being the cause of the biggest scam in banking history.

Two days later, Kerviel turned himself in to the French financial police, admitting all but also wondering why his bosses were denying they were in the know all the time of what he was up to!Kerviel is convinced that his transactions would not have harmed the bank in such a dramatic fashion had his bosses given him time to wait out the current financial turbulence instead of impatiently unwinding his strategy in a volatile market. The young trader remains under police custody. Once the judicial investigation comes to its term, he will face charges of forgery, breach of trust and unauthorised access to computerised data. Proven guilty, he might face a seven-year prison sentence and up to 750,000 euros fine.

Kerviel’s redemption might come from the fact that despite the enormity of his misdeed, or probably because of it, he doesn’t fit into the pattern of a small-time crook. Like any other trader, he aspired for juicy bonuses and, most of all, respect from his colleagues and a speedy climb up the gilded corporate staircase. Apparently, even his prosecutors understand this point though one of his bosses went so far as to call him a ‘terrorist’.

The only time he has been allowed to speak publicly since his detention, Kerviel told news reporters on Feb 5: “I am taking my share of responsibility but I will not be a scapegoat for the bank.” A point of view almost shared by Christian Noyer, the governor of the Bank of France and the chairman of the French Banking Commission: “I find it completely incomprehensible that the vast position accumulated by Kerviel could not be detected sooner by the SocGen management.”

Everyone agreed though that laying the suspicion of conspiracy thickly on the young trader would have amounted to asserting that a whole gang was working secretly on a plot and that he was only a part of it. Convinced that this was not true, investigators went through the phenomenal bill of Kerviel’s cellphone that ran up to 1,000 euros some months. Why the cellphone when a trader has two fixed lines permanently connected to his ear-plugs? The sleuths discovered most of the cell calls were made to another youthful trader by the name of Moussa Bakir who worked for Newedge, a SocGen subsidiary.

The conversations that were recently released to the press only show a highly stressed Jerome Kerviel seeking advice from his buddy on what to do next. Moussa Bakir’s counsel invariably boiled down to the same few essential points: “Remember, you are not a criminal. Keep your eyes on the screens. Concentrate on the futures. Pounce when the time is right. Your bosses will be thanking you instead of sending you to prison.”

Speaking of the magical vortex of trading that can suck a young man into its infernal bowels, one of Kerviel’s prosecutors, Jean-Claude Marin, says: “This works a bit like a drug. There is an addiction. There is a dependency on this complicated system of betting on the markets and there is a sort of a spiral from which it is not so easy to exit.”

In a way, despite the five billion euros loss, stopping Kerviel in the tracks when they did was a relief to the SocGen bosses because, as they were to find out to their ultimate horror, during a maximum risk phase, the young trader had exposed the bank to a far greater possible loss of 50 billion euros!

At the same time, the French government has another headache to cope with. A number of banking predators, including French establishments like the BNP and Crédit Agricole, but also foreign banks such as HSBC and Barclays, are already rolling up their sleeves to make a fatal takeover bid for SocGen.

As boys will be boys, banks will be banks. John Steinbeck had said it all in his 1939 masterpiece The Grapes of Wrath: “A bank is a monster. When the monster stops growing, it dies. It can’t stay one size.”

The writer is a journalist based in Paris. -courtesy Dawn

As America crash lands, the world looks east

By Heather Stewart and Ruth Sunderland

With Wall Street in crisis and banks begging for cash, the West has lost its swagger. Can China step in and keep the global economy on its feet?

What links Hu Jintao, president of the People’s Republic of China, with the following people: an American mom shopping at Walmart, former Citigroup boss Chuck Prince, and Federal Reserve supremo Ben Bernanke? And how is Ralph Herndon, a retired car assembly-line worker from Otisville, Michigan, connected to Mr Yu, who runs a handbag factory in Guangdong? It is the financial world’s version of six degrees of separation; the current economic crisis has revealed the close connections and interdependencies between the US, the world’s biggest capitalist economy, and communist China.

The huge glut of savings built up in Hu Jintao’s China allowed that nation to lend billions of dollars to the US, which meant American consumers could embark on a borrowing and spending spree. But too many of those loans went bad, banks racked up huge losses, and CEOs like Chuck Prince paid with their jobs. When the stock market caught on to what was happening, shares tanked on fears that the US would fall into recession. That prompted Ben Bernanke to slash US interest rates by an extraordinary three quarters of a per cent last Tuesday. As the US economy has shifted away from traditional manufacturing to service industries, car plants like the one where Ralph Herndon worked have closed, because of cheaper competition from lower-waged economies like China. The Americans now hope that China, and other emerging countries with cash reserves, will bail out troubled banks and the world economy. But as Mr Yu has found to his cost, Guangdong is not immune to US troubles - 70 percent of his American and Canadian customers are not paying their bills on time.

The current crisis has raised fundamental questions about the merits of the American model. For many years, the US has lived beyond its means: borrowing heavily to gobble up cheap Chinese consumer goods; splashing out the proceeds of a decade-long housing boom; and preaching the benefits of liberated markets.

Now the rest of the world is anxiously glancing eastward, in the hope that as America slides towards recession, the rising economic powers of Asia - in particular, China - will help to forestall a full-blown global crisis. But as Mr Yu would attest, the hope that the Chinese dragon can slay the American bear is a pretty vain one.

A few decades ago, looking to China as the driver of global growth would have been unthinkable. Henry Kissinger, Nixon’s Secretary of State, who was instrumental in opening up the channels of communication with China in the early 1970s, told the World Economic Forum in Davos, Switzerland, last week that he had no idea at the time that Beijing could emerge as an economic competitor.

In Otisville, Herndon and his former colleagues at General Motors know all too well what it feels like to be on the sharp end of competition from China. Flying into Detroit, 70 miles away, planes soar above mile after mile of rusting cars, girders and industrial scrap in what looks like the biggest junkyard on earth. Herndon, who worked for GM for 30 years, says he was struck by a realisation last year. ‘I thought to myself, they are paying these guys in China $3 a day to do what I have done all my life. No matter what cutbacks we offered the management, there is no way we can match that. I guess we are finished.’

Now it is the turn of the banks to feel the growing muscle of the Chinese. There could have been no more potent symbol of the shift of global power than the spectacle of America’s mightiest banks begging for cash from government-backed sovereign wealth funds from China and the Middle East to cover the vast losses they have clocked up through reckless lending.

But America has relied on Asian cash for years, locked in a bizarre financial embrace with the country that has become the world’s factory, and in many ways its banker. Like many nations with a strong export sector, China has earned more than it could spend and has accumulated vast savings in the past decade.

Much of this cash has been sucked into the US, as Beijing opted for the dollar as the safest currency in which to keep its reserves. In effect, it has been lending billions of dollars to the American government.

This wall of Asian cash has helped to keep the cost of borrowing down throughout the rich world and contributed to a series of asset price bubbles, in housing and in shares. The enthusiasm of sovereign wealth funds for buying up chunks of US banks - and a range of other companies - is the latest manifestation of this phenomenon.

But economists have become increasingly nervous that the world is out of kilter, with some countries borrowing and spending too much, and others too little.

Optimists argue this will not matter, because over the past decade there has been a beneficial ‘decoupling’ in the global economic train: America is no longer the sole engine of international growth.

In its assessment of the economic prospects for 2008 this month, the World Bank set out a rosy scenario in which emerging markets would continue to expand strongly, despite the credit crunch and the slowdown already under way in the US. China, it predicted, would slow almost imperceptibly, from 11.3 per cent GDP growth in 2007 to 10.8 per cent this year.

But the worldwide stock market rout at the beginning of last week, which spread through Asian markets and back to the US and Europe, suggested investors, at least, are not convinced that ‘decoupling’ is really here. The idea of ‘recoupling’ is suddenly in vogue.

Although China has begun to generate expanding consumer demand of its own, its decade of 10 per cent annual growth has been largely on the back of an explosion in exports, so it is vulnerable to downturns elsewhere.

As he contemplates the future over a working lunch, Li Xihao, senior manager at garment manufacturer Shanghai Eswell, which exported $10m of its garments last year, is hoping that US troubles will not have knock-on effects in Sydney and Melbourne.

‘We are worried about the American economy and it’s very difficult to tell what the outlook is,’ he says. ‘At the moment our major market is Australia and that still looks OK, so hopefully the business will not be affected.’

- courtesy Daily Times

America goes from teacher to student

By Kenneth Rogoff

CAMBRIDGE: As the United States’ epic financial crisis continues to unfold; one can only wish that US policymakers were half as good at listening to advice from developing countries as they are at giving it. Americans don’t seem to realize that their “sub-prime” mortgage meltdown has all too much in common with many previous post-1945 banking crises throughout the world.

The silver lining is that there are many highly distinguished current and former policymakers out there, particularly from emerging market countries, who has seen this movie before. If US policymakers would only listen, they might get an idea or two about how to deal with financial crises from experts who have lived through them and come out safely on the other side.

Unfortunately, the parallel between today’s US crisis and previous financial crises is not mere hyperbole. The qualitative parallels are obvious: banks using off-balance loans to finance highly risky ventures, exotic new financial instruments, and excessive exuberance over the promise of new markets.

But there are strong quantitative parallels as well. Professor Carmen Reinhart of the University of Maryland and I systematically compared the run-up to the US sub-prime crisis with the run-up to the 19 worst financial crises in the industrialized world over the past 60 years. These include epic crises in the Scandinavian countries, Spain, and Japan, along with lesser events such as the US savings and loan crises of the 1980’s.

Across virtually all the major indicators, including equity and housing price runs-ups, trade balance deficits, surges in government and household indebtedness, and pre-crisis growth trajectories, red lights are blinking for the US. Simply put, surging capital flows into the US artificially held down interest rates and inflated asset prices, leading to laxity in banking and regulatory standards and, ultimately, to a meltdown.

When Asia and Latin America had their financial meltdowns in the 1990’s and early 2000’s, they took advice not only from the IMF, but also from a number of small panels composed of eminent people representing diverse backgrounds and experiences. The US should do the same. The head of the IMF, Frenchman Dominique Strauss-Kahn, could easily select a superb panel from any range of former crisis countries, including Mexico, Brazil, Korea, Turkey, Japan, and Sweden, not to mention Argentina, Russia, Chile, and many others.

Admittedly, the IMF’s panel would have to look past America’s current hypocrisy. The US Treasury strongly encouraged Asia to tighten fiscal policy during its 1990’s crisis. But today the US Congress and President are tripping over themselves to adopt an ill-advised giant fiscal stimulus package, whose main effects will be to tie the hands of the next president in simplifying the US tax code and closing the budget deficit.

Americans firmly told Japan that the only way to clean up its economy was to purge insolvent banks and regenerate the financial system through Schumpeterian “creative destruction.” Today, US authorities appear willing to contemplate any measure, no matter how inflationary, to insure that none of its major banks and investment houses fails.

For years, foreign governments complained about American hedge funds, arguing that their non-transparent behavior posed unacceptable risks to stability. Now, many US politicians are complaining about the transparency of sovereign wealth funds (big government investors mainly from Asia and the Middle East), which are taking shares in trophy American assets such as Citibank and Merrill Lynch.

In fact, having countries like Russia and China more vested in the well-being of the US economy would not be a bad thing. Yes, the IMF ought to develop a voluntary code of conduct for SWF’s, but it should not be used as a weapon to enforce financial protectionism.

For years, I, along with many others, have complained that emerging markets need greater representation in global financial governance. Today, the issue goes far beyond symbolism. The US economy is in trouble, and the problems it spins off are unlikely to stop at the US border. Experts from emerging markets and elsewhere have much to say about dealing with financial crises. America should start to listen before it is too late.

Kenneth Rogoff is Professor of Economics and Public Policy at Harvard University, and was formerly chief economist at the IMF. - courtesy Daily Times

Q Quotes

1. America is a large, friendly dog in a very small room. Every time it wags its tail, it knocks over a chair. – Arnold Toynbee

2. If you can count your money, you don’t have a billion dollars. – J. Paul Getty

3. Growth for the sake of growth is the ideology of the cancer cell. – Edward Abbey

4. An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today. – Laurence J. Peter (1919-1990)

5. The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.- John Robinson (1903-1983)

6. I was in search of a one-armed economist so that the guy could never make a statement and then say, ‘’On the other hand…’’ – Harry S. Trueman (1884-1972)

7. I don’t care who writes a nation’s laws – or crafts its advanced treaties – if I can write its economics textbooks. – Paul A. Samuelson (1915- ) author of Economics: An Introductory Analysis, 1948, the largest selling economic textbook in history.