Friday, June 28, 2013

A private affair

Economic reform in Cuba

A private affair
Hesitantly, wholesale markets are becoming more established
Jun 29th 2013 | HAVANA

FROM the Bay of Pigs to Che Guevara's mausoleum, there is plenty for
revolutionary tourists to see in Cuba. For economic junkies there should
soon be a new item on the itinerary: Cuba's first privately run
wholesale market in half a century.

At present it is a nondescript warehouse of green-painted concrete near
Havana's airport. It is unmarked, and so few locals know about it that
your correspondent drove past several times before finding it. But state
media say it will open on July 1st. It is a source of excitement for
those who will occupy it, because it will replace the muddy scrubland
where drivers of hundreds of old trucks have been gathering on the
outskirts of Havana to sell fruit and vegetables in bulk, always
concerned that at any moment their makeshift trading post could be shut

They see the new premises as a further step on Cuba's hesitant path
towards freeing up wholesale markets and loosening the state's control
of food distribution. A farmer, sitting under a banana tree next to his
cargo, proudly displays a handful of permits that he has recently paid
for, covering everything from selling crops to owning and driving a
delivery truck. He says that in the past, when the police caught him
trying to drive produce to Havana without a licence, they would seize it
and give it to a nearby hospital. "They can't stop me now," he says.

However, his ability to sell a broader selection of crops remains
stymied by a shortage of seeds and fertilisers, supplies of which will
not be available in the new market. Such inputs are still controlled by
the state, he says, stroking his chin in a gesture that is meant to
resemble Fidel Castro's beard. The only way for a farmer to acquire more
than he is allotted is via the black market.

The benefits of burgeoning wholesale trade are evident in a stroll
through the back streets of Old Havana. Handcarts owned by private
traders overflow with ripe mangos, avocados and limes, whereas
government outlets nearby contain a few tired-looking pineapples.

Although wholesale produce is becoming more widely available, the
government is only gingerly broadening wholesale trade to other
supplies. Restaurant owners, for example, want to be able to buy flour,
cooking oil, beer and soft drinks in bulk. Only a few shops provide
these. The same is true of construction materials. "We don't have
anything like a Costco, where you can buy 20 crates of beer," says Omar
Everleny, a Cuban economist.

Partly to put such concerns to rest, the government announced in early
June that it would gradually permit a variety of wholesale goods to be
sold to state-run and privately run businesses, apparently building on
an experiment started three months earlier on Isla de la Juventud, an
island in western Cuba where Fidel Castro was imprisoned before his
revolutionary victory in 1959. A pilot project to sell equipment to
private farmers is also said to be taking place on the island. More than
helping businessmen, the government's priority in promoting such changes
appears to be to raise output. So far, however, the reforms have been
too half-hearted to achieve that.

Source: "Economic reform in Cuba: A private affair | The Economist" -

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