Cuba’s Economic Reforms in the Human Dimension and 3-D

Five Cubans will visit Washington next week to talk about how their country’s economy is being transformed, and how their lives are being improved, disrupted or simply affected by the changes underway.

Four run small businesses; a fifth is a state employee.  Only one has ever traveled to the U.S.  All can visit our nation’s capital because Havana ended travel restrictions on Cubans this year, and because Washington gave them visas.  These visitors are:

  • Nidialys, who runs a car rental company, “Nostalgicar,” with her husband Julio.  Together, they have formed a fleet of self-employed drivers with pristine Chevrolets from the 1950s, who provide transportation services to tourists visiting the island.
  • Niuris is the owner of the successful paladar, Atelier, in Havana. The restaurant is run by Niuris and her siblings from their home, a former senator’s mansion.
  • Yamina owns and operates a party decorations company, “Decorazón”.  A mother of two, Yamina creates decorations, like balloon displays, party favors, and table centerpieces, for celebrations ranging from elegant weddings to children’s birthday parties. She also fills the role of event planner, contracting services such as cakes and clowns, for an almost entirely Cuban clientele.
  • Emilia works in human resources at an eye clinic in Havana. Having completed her education in the Soviet Union, Emilia, who previously worked as an accountant and an auditor, speaks Spanish, English, and Russian, and expresses great satisfaction with the opportunities she has received from the Cuban system.

At a forum to be held at George Washington University, and in private meetings with policy makers, they will discuss what the biggest changes in Cuba’s economic model since the dissolution of the Soviet Union mean to them.

What is taking place in Cuba is not change at the margin.  Since late 2010, more than 442,000 Cubans have obtained licenses to work at small businesses and cooperatives in newly-authorized categories of self-employment.  Cubans are leaving the certainty that comes with a state job, state wages, and state benefits, learning the joys and problems that accompany running a business and making more of their own decisions. They are living with the uncertainties that come with rules that evolve and change, as authorities decide how much and how fast to update the model.

The rules do change.  In this space, we wrote last week about decisions in Cuba to end its two currency system and to end the government’s monopoly on public restrooms, and about entrepreneurs who operate video salons and screen 3-D movies.  Just hours after we hit send, Cuba’s government moved to close the theaters, which had not been officially approved.

Our friends at Progreso Weekly quickly posted an analysis written by José Jasán Nieves Cárdenas, a Cuban journalist.  His topline “Yes, it IS an obvious step backward,” was just the beginning of a thoughtful reaction:  the decision will be unpopular in Cuba (especially among young people whose decisions to stay in Cuba are critical to the island’s future), it contradicted earlier government statements, and is likely to be disobeyed.  He might have added that this reversal is a reminder that reform needs to be encouraged; because, among Cuban decision makers, not everyone is a fan of reform.

In contrast, some hardliners responded not in sadness, at the loss of a valuable service for Cubans, but with glee because a “pro-Castro group,” their reference to us, had cited the 3-D theaters as evidence of reform, and their ability to operate had been taken away by Cuba’s government.

Let’s spend some time with that.  Whenever Cuba announces a significant reform, hardliners don’t acknowledge it, they denounce it.  Why?  To maintain U.S. economic sanctions as they currently exist, they feel duty-bound to argue that Cuba isn’t changing. Although, when you think about it, failure is hardly testimony for keeping a policy like the embargo when it doesn’t work.

We saw this when Cuba’s government ended travel restrictions on its people. Hardliners called it a plot. They said Cuba was just getting ready to “dump a new wave of refugees onto U.S. shores.” They continue to argue even today, November 8, that the travel reforms aren’t real.

You see, they operate under what Richard Feinberg calls “the old narrative” – that Fidel and Raúl Castro have to pass from the scene before any real change could occur – otherwise, if the reforms are actually producing more choices, more jobs, and the opportunity to earn more money for the Cuban people, why do we need their embargo?

For the hardliners, the suffering imposed by sanctions is an end unto itself, to be preserved no matter what happens in Cuba.

That’s why the visit by Nidialys, Julio, Niuris, Yamina, and Emilia to Washington is so important. For those of us who cannot see reform in 3-D, they are reform in its human dimension, a reminder that the process that has brought them to this point in Cuba should not be disparaged but encouraged by the United States.

This week, in Cuba news…

UPCOMING EVENT:

RSVP NOW! Wednesday, November 13: Cubans in the New Economy: Their Reflections and the U.S. Response

The Center for Democracy in the Americas (CDA), the Elliott School of International Affairs at the George Washington University, and USA*Engage, a project of the National Foreign Trade Council are hosting a conference on November 13th to examine what have been called the most far-reaching changes Cuba has made to its economic model in half a century.

We invite you to hear directly from Cubans experiencing these changes, how their lives have been affected, and the challenges they face as Cuba’s growing private sector evolves and occupies a more prominent place in the national economic landscape.

Don’t miss this unique opportunity. Click here to RSVP now!

U.S.-CUBA RELATIONS

After nearly 30 years of exile in Cuba, former Black Panther to return to U.S.

William Potts, a former Black Panther and a fugitive who has lived in Cuba since 1984 after he hijacked a plane and forced it to fly there, has returned to the United States, reports the Associated Press. Potts, now 56 years-old with two daughters living in the U.S., hijacked a flight from New Jersey originally destined for Florida with the hopes of receiving guerrilla training in Cuba. Instead, Potts was sentenced to more than 13 years in prison on the island.

Potts, currently in custody in Miami, is still wanted in the U.S. for air piracy and could once again face incarceration. He has already made his first US court appearance, where he said he wanted to “protest [the] proceedings,” and was subsequently appointed a federal public defender. In previous press statements, Potts stated, “My position is I am a free man. I have served my time…But [the U.S. seems] to have another concept…. I will be under their authority.” Though he is aware that he may face federal charges, Potts said “It’s time it had closure. Why leave it hanging, why leave this gaping uncertainty?” Potts unsuccessfully solicited pardon from President Obama in 2009. He plans to return to Cuba after his case is resolved in the U.S.

U.S. people-to-people organization offers cruise option for those traveling to Cuba

Boston-based tour operator, Road Scholar, is now offering people-to-people trips to Cuba with cruise options, reports Travel Weekly and Cuba Standard. The Department of Treasury’s Office of Foreign Assets Controls (OFAC) had refused Road Scholar a license in August, stating that “travel to and from Cuba, whether originating or terminating in the U.S. or a third country, may not be aboard a vessel.” Road Scholar’s new itinerary will allow tourists to fly to Havana and stay on land for six nights and on a cruise ship for five nights as a means of getting around the island. Road Scholar will partner with the Canadian cruise company Cuba Cruises and offer trips from December 16th through March 17th for $4,795 per person plus airfare. While traveling the island, tourists will have the opportunity to meet with Cuban artists, dancers, students, farmers, families and community leaders.

IN CUBA

Cuba closes unauthorized home-based movie theaters

As discussed above, Cuba’s government last weekend ordered all privately-owned movie theaters and game arcades to “stop immediately in any type of self-employment,” Reuters reported. Officials stated that home-based movie theaters were never explicitly authorized by the government, adding that the objective of the closings is to “…continue bringing order to this form of management, fight impunity and insist people live up to the law.”

The government classified the move as “corrections to continue bringing order to this form of management, fight impunity and insist people live up to the law,” adding that “In no way does this mean a step backward. Quite the contrary, we will continue to decidedly advance in the updating of our economic model.”

In a regular weekly spot on state radio, economist Juan Triana criticized the decision, and asked “Is it really worthwhile for the state to continue expending effort, money and prestige in an activity it was not designed for…?”

Reuters quotes Marlene of Havana, who said “The state has no 3D theaters, so what is their problem? Sometimes the government seems to want to make our lives worse for the fun of it.”

As Cuba updates its economic model, areas remain where laws are not totally clear, and some categories of legalized self-employment have been stretched to fit demand, for example, with many who obtained licenses as “seamstresses” selling clothing and accessories.

Last month, the government announced a ban on the sale of imported goods in the private sector, effectively shuttering many such clothing stores, and affecting other business that sell imported hardware and other products. The move caused an outcry from both store owners and from Cubans who have patronized those businesses. On Saturday, the government said that it would delay implementation of the ban until January, to allow those who had already accumulated inventory to sell their goods.

According to the latest government figures, there are approximately 442,000 self-employed people in Cuba.

Cuba’s government gives green light to food wholesalers

On Wednesday, Cuba’s government published regulations in Granmathat will allow private wholesale of agricultural goods in three provinces, reports Cuba Standard. The regulations aim to “simplify the links between the producer and the final consumer” on a national level by first establishing wholesale markets “in an experimental manner” in the provinces of Havana, Artemisa, and Mayabeque. The first market, “El Trigal” will open in Havana before January.

A state company Acopio formerly oversaw all means of food distribution. The new regulations charge non-agricultural service cooperatives with operation of the wholesale markets and authorize private entrepreneurs to conduct mobile and market sales, diversifying options for Cuba’s growing private restaurant and food service industry.

More Cubans buying and selling homes in 2013

Real estate sales in Cuba for the first half of 2013 jumped 2% compared to 2012, reports the Latin American Herald Tribune. According to Anniuska Puente, a principal specialist at the Property, Business, and Estate Register, nearly 660,000 individual homes and 215,000 state properties were added to the register 2013, reports Prensa Latina. Cuba’s government authorized the private purchase and sale of homes in 2011, and recently approved real estate agents and construction workers as categories of self-employment.

Cuba publishes first summary for selected indicators of the 2012 Census

The National Bureau of Statistics and Information in Cuba published a summary of the final results for some indicators covered by the Population and Housing Census in 2012, reports Havana Times. The results confirm already known trends that Cuba’s population is aging and is continuing to shrink. The summary also includes information on the rise in the number of homes and percentage of married adults and domestic partnerships. The Bureau will gradually release information on other indicators from the 2012 Census in future publications.

CUBA’S FOREIGN RELATIONS

Cuba and Venezuela sign 40th economic agreement

Cuba and Venezuela signed their 40th economic trade agreement during the International Havana Fair, reports Cuba Standard. This agreement, ACE 40, establishes rules of origin for all goods produced in both countries. It was signed by Cuban Foreign Trade Minister Rodrigo Malmierca and Venezuelan Trade Minister Alejandro Fleming. The Cuba Standard notes that the agreement could help reverse a recent stagnation in trade and cooperation on construction projects with Venezuela. This summer, plans to construct a $700 million ferronickel joint venture plant in eastern Cuba were put on hold, while a project announced in 2010 for the construction of petrochemical plants around a joint-venture refinery in Cienfuegos has seen little movement.

Cuba’s government signs cooperation agreements with Mexico

During his visit to Mexico, Cuba’s Foreign Minister Bruno Rodríguez and high ranking Mexican officials signed eight cooperation agreements, reports the Latin American Herald Tribune. The signed agreements cover cooperation in trade, tourism, education, and environment. At his keynote address at the Mexican Foreign Relations Secretariat, Rodríguez stated “What we’ve done today I think has been to revive, strengthen, continue. We signed a series of legal instruments that are undoubtedly very important.” Mexico’s Finance Secretary also announced last week that Mexico would write-off 70% of a $487 million debt that Cuba has with Mexico’s state-owned National Exterior Commerce Bank, “Bancomext.”

Foreign Minister meets with Chinese President Xi Jinping

Cuba’s Foreign Minister, Bruno Rodríguez Parrilla traveled to China where he met with China’s President, Xi Jinping, reports Xinhua. Both countries reiterated their desire to strengthen cooperation in trade, investment and the economy while working together on international affairs. President Xi expressed hopes that both countries will work together to support China in developing relations throughout the Latin America and Caribbean region.

Brazil contracting more Cuban doctors for “Mais Médicos” program

Brazilian officials have announced that they will add another 3,000 Cuban doctors to the team of 2,400 already working in the country since September on the “Mais Médicos” program, aimed at providing health services in needy regions, reports Cuba Standard. Brazil scaled down initial plans to contract 6,000 Cuban doctors this summer following protests by some local physicians, and finally announced a plan to bring 4,000 doctors in August. The addition of this new group will represent a significant increase, bringing a total of 5,400 doctors to the country. Brazilian health ministry officials said that they want the “Mais Médicos” program to grow to 13,000 doctors by March 2014.

Cuba relies significantly on the export of services, especially doctors and other health professionals, as a source of foreign income. The largest agreements are with Venezuela, where more than 20,000 medical personnel from Cuba are currently working. This summer, Ecuador announced that it would contract 1,000 Cuban doctors, and Cuba Standard reports that a delegation from Trinidad and Tobago will be in Cuba from Nov.15-18 to negotiate a contract for Cuban doctors and nurses.

Around the Region

El Salvador Monthly Update: October, Linda Garrett, Center for Democracy in the Americas

This month, Linda Garrett, CDA’s Senior Policy Analyst on El Salvador gives a breakdown of the controversy surrounding the shutting down of Tutela Legal, El Salvador’s historic human rights offices, by the Archbishop Escobar Alas. The Update also discusses developments in the country’s presidential campaigns and provides a chronology for news in the country’s ongoing gang truce. If you would like to receive CDA’s Monthly Update on El Salvador, email: ElSalvadorUpdate@democracyinamericas.org.

Police Chief in Honduras denies existence of death squads; concern as elections near

Honduras’ Police Chief, Gen. Juan Carlos Bonilla, denied the existence of death squads, and spoke during his first interview since 2011 about the close working relationship he has with the U.S. government, despite efforts by the U.S. Department of State to distance itself from his leadership, reports the AP.

Bonilla’s statements come with the backdrop of Honduras’ fast-approaching presidential elections, in which members of Xiomara Castro’s Libre opposition party have faced increasing violence. Eighteen members of the party have been killed and 15 faced armed attacks in the last 18 months, reports Al Jazeera America. Xiomara Castro, whose husband, former president Manuel Zelaya, was deposed in a military coup in 2009, holds what is reported as a tight lead in the polls.

Last week, human rights defenders from Honduras spoke about the extreme corruption and violence already in place in the current post-coup environment. For its part, Amnesty International has issued a letter to all of the presidential candidates, asking that they confront the country’s human rights crisis, reports Infosur.

Nicaragua’s Sandinista National Liberation Front Party seeks to extend presidential term limits

Nicaragua’s National Assembly has set up a commission of six lawmakers to examine a proposal which would eliminate presidential term limits in the constitution by the end of this year, reports The Guardian. Although Nicaragua’s constitution currently prohibits consecutive terms for president, that article was overturned by the country’s courts in 2010, allowing Nicaragua’s President Daniel Ortega to compete in and win the presidential election in 2011. If the National Assembly – dominated by Ortega’s FSLN party – passes this proposal, it would formalize the country’s Supreme Court decision. Although Ortega has not stated if he would like to run again or not, the proposed changes would allow him to do so indefinitely, reports Reuters.

Recommended Reading

Soft Landing in Cuba? Emerging Entrepreneurs and Middle Classes, Richard Feinberg, Brookings Institute

This report analyzes the “dynamic, independent” private sector that is quickly growing in Cuba. Richard Feinberg points out: “It remains to be seen whether the powerful Cuba state is prepared to allow these businesses to expand and partner with state entities, creating a hybrid market socialist economy that can accelerate growth into a legitimate boom.” The report also includes recommendations on what Cuba’s government – as well as the U.S.- can do to encourage an “inclusive” economy and bring prosperity to the wider population.

Cuba – a path toward national healing, Ricardo Herrero, Cuba Study Group

Herrero writes about lessons gleaned the Cuba Study Group’s Reconciliation Project’s last two conferences, which brought together speakers from Germany, South Africa, Ireland, and elsewhere, to discuss key factors in reconciliation processes. Among the lessons: “Reconciliation requires forgiveness and justice,” “Reconciliation is not a linear process,” “Reconciliation cannot be a competition of wounds,” and “Dialogue is more important at the onset than trust.”

Cuba’s Reforms Favor Foreign Investment, Create Low-Wage Sponge, Kevin Edmonds, NACLA

Edmonds gives a brief history of the impact of Export Processing Zones (EPZs) throughout Latin America, and asks if in the case of Cuba’s construction of the Mariel Port, the country will be able to embrace EPZs in a way that promotes sustainable development.

Recommended Viewing

Cuba Photo Contest Winners for 2013, Havana Times

Havana Times publishes the winners and special mentions of its 5th annual photo contest. Our personal favorite is Eduardo Javier García’s “De donde crece la palma,” from the “Lines” submission category. This year’s other categories were Gardens, Dance, Transportation, and Rain.

In pictures: Havana recovers Halloween traditions, Sarah Rainsford, BBC

In this photo series, Sarah Rainsford reports on the beginnings of “Halloween fever” in Havana, as small private businesses sell Halloween costumes and decorations, beauty salons offer Halloween makeup, paladares offer Halloween-themed parties, and Cubans buy pumpkins to carve.

Meanwhile, Tico Times reports on the residents of Tonacatepeque, El Salvador, “rejecting” Halloween for the indigenous tradition of “La Calabiuza.” The photo series can be found here.

Error

A colleague and friend, reading last week’s news blast during his trip to southeast Asia, wrote us from a dozen time zones away about a mistake we need to correct. The Miami-based travel company that will begin offering flights to Cuba from Key West appears to have its offices in the Congressional district of Rep. Ileana Ros-Lehtinen, but we’re advised that the Key West airport has been firmly located in the district now represented by Rep. Joe García since new lines were drawn after the 2010 Census. Our apologies and thanks to our dedicated if not sleepless readers.

© 2013 Center for Democracy in the Americas. All rights reserved.

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