Monday, December 20, 2010

In Cuba, Questions About Economic Change Persist

CUBA -- December 20, 2010 at 10:25 AM EDT

In Cuba, Questions About Economic Change Persist
By: Ray Suarez
Ray Suarez's three-part Cuba series begins Monday night on the NewsHour.

When I returned from Cuba recently, I was struck by the intense level of
curiosity about the place, and the air of mystery the United States
trade embargo and travel ban have created around a place 90 miles from
the U.S. mainland.

"What was it like?" "Was it easy to get around" "Were you followed? Or
were you just able to go about your business?"

Among the most frequently asked questions had to do with the economic
conditions almost two decades since the collapse of the Soviet Union,
which had provided major subsidies to the Cuban government.

"How were people dressed?" "Was there enough food in the stores?" "How
did people look? Did they seem healthy and fed?"

Questions about the Cuban economy and the effect on every day Cubans are
not easy to answer because any calibration to economic conditions in the
United States simply doesn't work. Period. Detractors of Cuban economic
management point out correctly that many people who work for the
government, about 8 of every 10 workers, earn about 20 dollars a month
in Cuban pesos, one of the two currencies in circulation. And that's
true, technically.

But it's also true that prices for staple foods are subsidized and kept
low. On the other hand, many items are disappearing from the ration
cards, heading toward a market-based pricing system, because the
government can't afford to keep up the subsidies. The pay is low, but
the government has made itself the aggregator of wealth, which it then
attempts to dole out in a fair and rational way.

Though the prices are low, corresponding with pay, the two are no longer
in sync, creating a Cuba where inequalities have set in. That may be the
rub: not that Cubans are poor as much as we are witnessing the creation
of a multi-tiered society, and that's anathema to many Cubans and to the
Communist Party.

Families with relatives in the developed world have access to hard
currency, and therefore the ability to buy a much wider range of goods
and services. Cubans who work in the tourist industry or come into
regular contact with foreigners also get hard currency in payments and
tips. That currency can open doors to material comfort unavailable to
most of their fellow countrymen.

One sociologist mentioned to me the danger of a re-stratification along
racial lines. Before Fidel Castro rode into Havana to seize control of
the government, blacks lived far worse lives here, and had much less
opportunity. Cuban exiles in the years after the Revolution came from
the country's middle, upper middle, and wealthy classes, many of whom
were white.

Exiles in the U.S. in the post-Revolutionary years reflected this trend.
With the years of struggle far behind them, many of the Cubans who
rushed to the U.S. did very well, and contributed enough to their
families back on the island to make remittances one of the top sources
of national income. The beneficiaries of that exile largesse are
disproportionately white.

The published unemployment rate is low. But people with inside knowledge
of ministries say featherbedding is rampant because access to public
jobs is a lifeline for so many families, and because there are so few
alternatives. The old Soviet-era joke, "We pretend to work, and they
pretend to pay us," still has some life today in Cuba.

When the announcement came that the government was preparing to lay off
500,000 workers in the coming year, some analysts predicted the public
might see very little difference. Thousands of Cuban workers, it is
said, use their government job as a base for making and getting phone
calls, for lifting office supplies, and managing the hustle they're
working on the outside, the jobs they do to support their families and
make ends meet.

The ongoing conversations inside Cuban society about economic change are
carried out, for the most part, inside an oddly constrained set of
boundaries. People hope for new private enterprises, but don't imagine
they'll be allowed to get very big. If private initiatives get very big,
with stratification and bosses and lower level workers answering not to
the government, but to an owner, the architects of the current Cuban
system get very nervous.

But they're not the only ones.

The Cuban people, now more than a half century into life with built-in
cradle to grave guarantees, might initially have a lot to fear from any
rapid reform to the economy. Yes, reform might offer go-getters new
pathways to prosperity. But millions of people might wonder if they are
any of those things. They might have serious doubts about how they might
fare in a tough, competitive economic order. Allowing some to get rich
might eventually make many, many more people less poor.

Cubans are aware of the affluence that can be attained not only in the
wealthiest industrialized economies, but even in nearby Colombia, the
Dominican Republic, and Brazil as well. They are just as aware of the
widespread poverty in all the above-mentioned societies, with poor
people expected to work very hard with few guarantees of government
support. Those same poor people can't necessarily see a doctor or send
their own children to the national university system. Cubans can, or
operate on the assumption they can, even with their small earnings.

Think of it. High rates of literacy. High levels of awareness, or at the
very least an imagined understanding of the pay and opportunity of
people in Canada, the United States, and Western Europe. Add to that the
dissatisfaction of a people marching in place economically. They know
change is coming, but wonder what it will mean for them. They want very
much to do better. But they also understand that the risks involved in
removing the state from the economy also hold the possibility of doing

It was a fascinating time to be in Cuba.

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