Archive for August, 2011

Raul Castro: Five Years in Power

August 9, 2011 Leave a comment

Last July 31st, Raul Castro completed his first five years in charge of Cuba’s destiny. Unlike Fidel, he speaks little and isn’t too inclined to self-adulation. He knows the Cuban economic model is a fiasco and bets on a miracle.

The old conspirator, now president of the Republic, has drawn his master plan. It relies on various cardinal sectors. And it isn’t the dream of a visionary or the fatherland’s little founder. If there is something he knows how to do, it is listen to those who know how and let them do it.

Of course, he is not a democrat. He is an old school Communist dinosaur. He is surrounded by a clan of military-entrepreneurs who have put away their striking uniforms and Spartan life in the barracks, and now they wear white guayaberas. They are informed on the latest innovative methods of business administration and finance.

The General has seen how the central planning of Marxist Socialism has failed. Therefore, he looks to China and Vietnam, two nations that still opt for the bizarre ideology, but are economically growing using capitalist methods.

He doesn’t want to improvise as his brother did. The sole commander got used to conceiving plans as if they were strings of sausages and, when they didn’t work, blamed others for it and turned the page.

Castro II, 80, knows that his principal enemy is time, and not the local dissidence or the lethal Creole bureaucracy.

But if he makes changes too fast he may lose the reins of reforms and become the Caribbean Gorbachev. The Revolution’s gravedigger. That idea terrifies the General. Therefore, his reforms go at a danzon pace. Slow, methodical and safe.

He doesn’t want surprises. When things get stuck, he shifts gears while the car is running. He knows how to improvise. As in the case of self-employment.

The gypsy cab drivers were unhappy about the taxes. He didn’t think twice, and made a tax reduction from one thousand to six hundred pesos.

The same with the paladares*; rumors and dislikes. He enacted an ordinance raising the number of seats in private restaurants from 20 to 50 chairs. With the land leases he has made ​​amendments. The number of private trades have been expanded to 181. If necessary he will make other changes, according to the circumstances.

Raúl Castro doesn’t stick to a dogma or fixed ideas. Publicly, he speaks of a planned economy. A speech to toss some bones to and provide pleasant music for the ears of the party orthodox wing. And also for his brother who  looks on puzzles, from his bedside, at the chips that his successor has been moving.

Many think that Fidel Castro is abandoned to the mercy of God. We can not forget that the legendary partisan has an important asset in his hands: Hugo Chávez.

If Raul steps out of the script, Castro could convince Chavez to close the oil tap to the island. With this blackmail, he controls the excesses of the ‘olive green technocrats’ and their ambitions of founding state capitalism.

The Bolivarian is Fidel Castro’s wildcard, his counterpart. An unconditional. Because of these honors and attention, Hugo Rafael Chavez Frias feels strong. And at times, with hidden criticism, sends his hurtful remarks to Raul’s followers.

The General needs oil from the infamous Chavez. And to play on both sides. Like the conspirator he has always been.

Do not forget that Raul was the “Machiavelli” behind the episode of sectarianism in the Communist Party in the ’60s, known as ‘the microfaction’. He and his intelligence apparatus were those who managed the children and carried out purges in the armed forces, in 1989-90, at the time of the Ochoa and Abrantes cases.

While Fidel was interested in enhancing his image as a world-class statesman, Castro II was conspiring in the shadows. Since the mid ’90s, the real power in the island has been held by the General. The intrigues and political maneuvers are his favorite sauce.

Raul Castro has drawn his master plan facing the future.

One of his pillars is the water hydraulic resource. For two years, he has been building a major water transfer system across the eastern municipalities of the island. The port of Mariel is one of his ventures for an economic resurgence. Some scholars think that when the embargo becomes history, this harbor could be the largest in the Caribbean, outperforming the port of Miami.

Another strategy is to expand tourism and especially to attract travelers with money to spend. Today, the tourists who visit Cuba are using all-inclusive packages and, on average, spend $ 36 a day which its too little.

The General aims for the wealthy and the businessmen to make their trips to the island. Therefore he has launched the construction of hunting grounds and 18-hole golf courses. There’s also an increasing lobby to resume real estate construction.

In his economic design for the coming years, offshore drilling on the Cuban shelf is crucial. If the geological survey has the desired results, the dependence on Venezuelan oil will be cut short. And he would not have to bear Chavez’s subtle insults.

Among the Castro II projects is future participation in the businesses of Cuban-Americans who haven’t been too critical of the regime.

Raul Castro wants to go down in history as the statesman who laid the foundations for economic development in Cuba. Many are wary of him. He looks like a bad guy. But there are bad guys, like Pinochet in Chile, who sometimes do good things.

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Translator’s note:
Paladares — literally, palates — are small private restaurants, where actually you eat in a home’s dining room.

Translated by: Adrian Rodriguez.

August 1 2011

Economic Embargo: a Burden for Cuba’s Future

August 5, 2011 2 comments

The United States embargo is relative. If Cuba had fulfilled its economic duties, it could buy merchandise in any other place without worrying about the shipping freight cost.

In spite of the embargo, Raul Castro can afford the luxury of buying Humvee jeeps – a United States army vehicle – to travel Cayo Saetía’s virgin prairies, in Holguin province, when the top brass goes hunting.

Therefore, who suffers the consequences of the embargo most is the average Cuban, not their rulers. Right now, the Cuban-American political lobbyists are exerting strong pressure in order to enforce the embargo restrictions.

As in any conflict, there are supporters and detractors. There is a phenomenon associated with the embargo of the utmost importance. It is the future compensation or restitution for those affected as a result of the massive nationalizations of American companies and Cuban citizens by Fidel Castro’s “olive green government” in the first years of the Revolution.

According to the Helms-Burton Act, even if there is a future democratic government in Cuba, the embargo would continue until the victims of the expropriation have been compensated. For many, it’s something simple. They naively believe democracy is a magic wand that will turn into gold all the shit accumulated after 52 years of economic disasters.

But it is not like that. See for yourself: Cuba owes money to everybody. We are the most indebted country in the world on a per person basis. To Russia we owe 25 million rubles. To Spain, China and the Paris Club, billions of dollars.

Add a few more billions to the Cubans, now U.S. citizens, who lost their properties. In fact, there are a significant number of legal suits in the United States on the issue of compensation.

It is known that the Castro brothers are not going to pay. Therefore, the huge debt will fall on the shoulders of a future democratic government. The more time it takes, the more money will be accumulated. And the Cuban government will have to pay. Or sit down and negotiate.

The changes in the island can be delayed from ten to fifteen years, but they will come. The design drawn up by the current government is based on military corporations that accumulate large investments. They have been distributing the nation among themselves. A real pinata.

A future administration will be bankrupt. Even with deep cuts in social services, encouraging foreign investment or implementing flexible laws and low taxes, it won’t be able to accumulate enough capital to pay the national debt.

Antonio Rodiles, economist, from one of the think tanks who resides in Havana, has looked deeply into the subject and addresses the issue in an article entitled “Liberalization of vacant land and dilapidated properties, a necessary step to initiate a recovery process”. It’s founded on the experience of the Eastern European communist countries.

According to Mr. Rodiles, a future Cuban democratic government could compensate by selling bonds, businesses, lots and vacant land to foreign companies or citizens affected by expropriation.

In this article, Oscar Espinosa Chepe, dissident economist, rationalizes that “in regard to the refunds, the Cuban reality advises other methods. With regard to housing, we are in favor of a massive granting of these properties, along with all the responsibilities inherent to the current onerous usufructuaries.”

Espinosa Chepe believes that the fairest approach could be the return of these properties to their former owners. “But because of the time elapsed and the transformations of these properties, some of them already destroyed; the best solution would be to pay the original owners, which could be done through bonds”.

To undertake the payment of the debts incurred by the Castro brothers, a future government would have to auction the businesses and draw up a severe adjustments plan. Wilfredo Vallin, attorney at law, believes it’s probable that many countries, the United States among them, will forgive the Cuban national debt.

But a real policy is not articulated on the basis of assumptions. It wouldn’t be a profitable strategy for a new government in Cuba to disburse huge expenses to pay for an inherited debt due to Castro’s economic anarchy.

If the Castro brothers, as it’s supposed, have no intention whatsoever of compensating the property owners, then it would have to be negotiated with a future transitional government. Lifting the embargo now is a good way to save time.

The businesses and economically affected citizens should be financially compensated, without affecting Cuba’s development, and without fiscal adjustments that provoke social unrest. After five decades, plus any extended delay to end Castro’s dynasty, it is not advisable to require more sacrifices from the people.

Now, without another word, Cubans have to make a new holes in their belt. But when they get used to living in freedom, at the first change, outraged, they will throw themselves to protest on the streets. Those are the benefits of a democracy.

Video: Cay Saetia. Located in the Bay of Nipe, north of the province of Holguin. Despite being considered Raul Castro’s “private island,” the town lives off of tourism, which it is controlled by Gaviota S.A, a group run by the military. One of the main attractions are the safaris, where tourists can see camels, deer, antelopes, water buffaloes, boars, horses and parrots among other species.

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Translated by: Adrian Rodriguez

July 27 2011

What 100 Dollars Can Buy in 2011 Cuba

August 5, 2011 1 comment

Photo: Rolando Pujol, EFE

Rigoberto still remembers the smell of the green bills sent monthly from his brother in New Jersey. “They were so stiff you could stand them up in a line one behind the other. With those 250 dollars he sent me, you could buy almost twice as much as now,” he remembers, coming out of the small Western Union in the Carlos III mall, where he just changed 300 dollars.

But in 2005, Fidel Castro was caught by authorities of the  U.S. Treasury Department changing old notes for new, in a count of 4 billion dollars that Cuban entities had on deposit in branches of the Swiss bank UBS. This led to a fine of $ 100 million that the Swiss bank paid without protest, but they ended their transactions with Cuba.

Then a remarkably tense Castro placed a ‘revolutionary tax’ of 20% on the currency of his public enemy number one. By the way, the charge is a tax of 8% on other currencies. As a result, the dollar’s purchasing power fell into a tailspin. Even before the excessive tax on the dollar, the hard currency stores in Cuba had raised the prices between 15% and 30% on their goods.

Every year, in particular from Florida, the more than 800,000 Cubans who live there send some billion dollars to their families on the island, by Western Union, through “mules,” or agencies that spring up like weeds

That same amount in 1999 had a purchasing power  1.4 times higher compared to the present. Here’s an example. With $100 in 2011 you can buy $60 worth of goods versus $99 before. Right now, prices of food oils in hard currencies have been increased: those of domestic manufacture, from 2.15 to 2.40 and those imported from 2.40 to 2.60. Oil is one of the most consumed household products, because the amount assigned by the ration system — about a cup a person a month, is not enough.

Between the 10% ‘revolutionary tax’–since March it has been cut in half–and the price increases for staples, people see how magic dilutes dollars sent by relatives.

In 1993 hard-currency stores (TRD) sprung up and spread around the country. Before that, there were few shops selling in dollars and they were for diplomats, foreign experts and tourists. But the TRDs were born with a ferocious tax voracity.

With taxes of around 240% for most products offered. In addition to raising the dollars so necessary to the half-empty coffers of the nation, this caused a notable economic strain. As if that were not enough, Cuban companies, burdened by low productivity and high costs, happily sell goods for foreign currency in order to be profitable. This phenomenon we call “closed-circuit production.”

According to Orlando, a retired economist, these goods and services offered in dollars bring about a two-headed economy. “All companies that operate in foreign currencies, buy and sell their services in that currency, while their workers are paid in Cuban pesos.” The average wage in Cuba amounts to about $20 a month.

If you make a tour of stores in Havana, you will notice that there are a lot of domestically produced goods. The absurdity is that many times, items such as fruit juices, textiles or mayonnaise, cost more than imported ones.

Economists believe that this phenomenon will delay the unification of the two currencies: the Cuban peso (CUP) and Cuban Convertible Peso (CUC). A situation that strongly affects workers, who are paid in pesos and have to buy an important part of the basic market basket in hard currency.

If you want to dress in fashion, you have to pay with money in which the State does not pay you. It’s the same if you buy a washing machine. To repair the 60% of homes in poor condition in the country, you need hard currency. The worst thing is that to obtain hard currency you can’t depend on the labor force. Unless you are a notable musician, outstanding intellectual, elite athlete or government official, with the ability to travel abroad, your legal currency income will always be small.

Only 25% of State employees are paid a tiny percent of their salaries in hard currency. This happens with ETECSA, the only telecommunications company in Cuba, that pays department heads $10 to $40 a month in hard currency. “The ten dollar bill just enough to buy me a bottle of oil, a box of detergent and some soaps,” says Mirta.

That is why remittances are vital to families on the island. The figures speak for themselves. In one way or another, 60% of Cubans receive dollars or euros sent regularly by relatives and friends abroad. That slight majority, from 2000 to date, has seen the purchasing power of the dollar decline by 40%.

To this, add the global economic crisis engulfing the United States and Spain, the main countries where Cuban exiles live, many compatriots are really struggling. And to keep sending the same amount of money in 1999, even less. Now the money reaches only to eat.

Either way, recipients of remittances are privileged. There is 40% of Cubans who see dollars only in the movies. For them it’s a real headache.

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April 5 2011

Travel to Cuba: Most Are in Favor

August 2, 2011 2 comments

Photo: EFE. Cuban Americans in Miami airport, shortly before leaving for Cuba.

The polls don’t lie. All the surveys, in Cuba and among Cubans living in the U.S., indicate that the majority are in favor of family reunification and travel to the island.

The political posturing doesn’t matter. Delfin has lived in Jacksonville, Florida since 1996 and is far from appreciating the Castros’ government. In the U.S. he has always voted Republican.

Until the 2008 elections. He voted to punish John McCain due to the position of the George W. Bush administration the theme of travel to Cuba.

“I’m betting on serious and profound changes in the economy and politics of the Castro regime. I think a broad sector of Cuban-Americans want democracy in that country.  If we had felt good in our own country, we never would have emigrated. Cuba hurts. It’s not working economically. But our relatives are in Cuba. No one in their right mind would stop sending dollars and medicines. The more we send the better,” Delfin says, on his third trip to Havana in the last year.

If you want to know how Cubans living in Florida think, go to Terminal 2 at Jose Marti airport. After being gone twelve years, Sandra has returned. On the way into the old town, she looks at the the ruins of many building with moist eyes.

When her rental car pulled up the tenement where she lived, she started to cry. “I was born here and became a professional. On the roof of the tenement I had my first romances. Things in Cuba are going badly. But the country is not something disposable. Here I have friends and family,” says Sandra, who after two weeks in the capital, isn’t used to eating so much pork and drinking beer.

When a relative or friend visits their native province, the parties and binges don’t stop. Between music and rum they talk about the past. Nostalgia is a thief that steals strength.

Oscar lives in New York and wants to see the hateful travel permit — the white card — disappear. Ninety percent of Cubans on both shores do not look kindly on the arbitrary policy of the Castro brothers, authorizing who can and cannot enter their country.

Cuba belongs to all Cubans. And they should not require permission to visit it. And even being able to return, permanently, if they wish. That a high percentage of Cuban-Americans do not like the Castro regime, doesn’t mean that they agree with the tightening of the embargo. Nor with the measures proposed by Congress members of Cuban origin to restrict travel to the island.

Ernesto, a down-on-his-luck guy from Santiago who lives in Hialeah, gets angry when the topic comes up. “The problem is a personal issue for some. A family issue. The Diaz-Balarts and the Castros are related. Fidel’s oldest son, Fidel Castro Diaz-Balart, is Lincoln and Mario’s cousin. And these politicians don’t have anyone in Banes, where they originated. It’s all the same to them if people travel to the island every three years.  Or if they never travel at all. They think like gringos. Their interests lie elsewhere. If, in the future, they have political aspirations in Cuba, then there will be another revolution. Castro has been a disaster. But certain politicians and businessmen of Cuban origin in Florida are no less,” says Ernest.

There is a telling statistic. In the last elections for the mayor of Miami-Dade County, last June, only 18% of Cubans voted. And those who did, preferred to Carlos Gimenez over Julio Robaina, who is in favor of restricting travel to Cuba.

In a matter of family reunification, Cubans on both shores do not accept any political arguments. They are as tired of the Castros as they are of Cuban politicians in the United States dedicated to lobbying to tighten the embargo. Both have in common setting aside the wishes of a majority.

Please, review the surveys.

July 30 2011