NYT > Cuba
Overview
A half-century ago, on Jan. 1, 1959, Fidel Castro brought down the curtain on Fulgencio Batista’s right-wing dictatorship in Cuba. America’s cavorting, and its commerce, ceased. Miami became Cuba’s second city as, over the years, hundreds of thousands fled communist rule.
Cuba as a country has been seemingly locked in time since its revolution. But through a labyrinth of rations, regulations, two currencies and four markets (peso, hard currency, agro and black), people make their way, though the going is hard. The world economic crisis plunged Cuba into an abyss not seen since the years after the Soviet Union collapsed. Before that, the island of 11 million people suffered decades of economic deterioration.
The ailing Mr. Castro, 84, has handed over the presidency to his younger brother, Raúl, 80. Since officially taking over in 2008, the younger Castro has offered blunt assessments of Cuba’s condition and has pushed for economic reforms.
In November 2011, Cuba announced that it will allow real estate to be bought and sold for the first time since the early days of the revolution, the most important of the free-market changes.
The new law, which takes effect Nov. 10, applies to citizens living in Cuba and permanent residents only. It limits Cubans to owning one home in the city and another in the country, an effort to prevent the accumulation of large real estate holdings.
The law requires that all real estate transactions be made through Cuban bank accounts so that they can be better regulated, and says the transactions will be subject to bank commissions. Sales will also be subject to an 8 percent tax on the assessed value of the property, paid equally by buyer and seller.
Cuban exiles will not be allowed to purchase property on the island since they are not residents. Still, they will be able to send money to help relatives buy new homes, and there was speculation some might try to buy homes themselves through frontmen, something the government would likely try to prevent.
The change follows October’s legalization of buying and selling cars, though with restrictions that still make it hard for ordinary Cubans to buy new vehicles.
Raul Castro has also allowed citizens to go into business for themselves in a number of approved jobs — everything from party clowns to food vendors to accountants — and has pledged to streamline the state-dominated economy by eliminating half a million government workers.
Still, nothing promises to transform life in Cuba like the sale of private property, and Cuban-Americans are likely to be heavily involved.
Even so, one thing that is unlikely to change is sour relations between Cuba and the United States. A series of misunderstandings, missteps and perceived slights has meant that both countries, after a moment of warmth, have slipped back into a 50-year-old pattern of cold distrust.
President Obama campaigned for greater engagement with Cuba, and months after he took office, he headed in that direction, abandoning longstanding restrictions on the ability of Cuban-Americans to visit the island and send money to relatives. The Cuban government responded quickly.
But the case of Alan Gross, an American contractor serving a 15-year sentence for distributing satellite telephone equipment in Cuba, has helped to unravel whatever good will had been established.
Fidel’s Cuba
For good or ill, Fidel Castro was without a doubt the most important leader to emerge from Latin America since the wars of independence of the early 19th century, not only reshaping Cuban society but providing inspiration for leftists across Latin America and in other parts of the world. But he never broke the island’s dependence on commodities like sugar, tobacco and nickel, nor did he succeed in industrializing the nation so that Cuba could compete in the world market with durable goods. Since the fall of the Soviet Union and the end of its aid to the island, Cuba has limped along economically, relying mostly on tourism and money sent home from exiles to get hard currency.
Cuba remains a repressive society. After seizing power, Mr. Castro promised to restore the Cuban constitution and hold elections. But he soon turned his back on those democratic ideals, embraced a totalitarian brand of communism and allied the island with the Soviet Union. He brought the world to the brink of nuclear war in the fall of 1962, when he allowed Russia to build missile launching sites just 90 miles off the American shores. He weathered an American-backed invasion and used Cuban troops to stir up revolutions in Africa and Latin America.
Those actions earned him the permanent enmity of Washington and led the United States to impose decades of economic sanctions that Mr. Castro and his followers maintain have crippled Cuba’s economy and have kept their socialist experiment from succeeding completely. The sanctions also proved handy to Mr. Castro politically. He cast every problem Cuba faced as part of a larger struggle against the United States and blamed the abject poverty of the island on the “imperialists” to the north.
Cuba Under Raúl
Raúl Castro has seemed to take more pragmatic approach to governance than his older brother. He has given signals he might try to follow the Chinese example of state-sponsored capitalism, and has often pledged to make Cuba’s centralized, Soviet-style economy more efficient and open up opportunities for people. Cuba’s budding private sector is the frail backbone of his plan to reinvigorate the country’s feeble economy.
People say they have seen small improvements that do not go far enough. Cuba’s economy — grappling with the fallout from the global financial crisis and the aftermath of devastating hurricanes in 2008 — appears to be in dire shape. Salaries remain low, food prices are high and housing is scarce. Bartenders, with access to dollars, earn wages many times that of physicians. Many roads in Havana have been repaired. Microwave ovens, DVD players and cellphones are now in stores, but most Cubans cannot afford them.
The nation still imports more than 80 percent of what it consumes, and Mr. Castro is trying to encourage farming by giving fallow land to those willing to work it. But the money they can earn selling the food remains below what is needed for the tools and labor needed to start a farm.
In a speech in April 2011, Mr. Castro, heralding yet another a battery of changes intended to lift the island out of economic despair and stagnant thinking, proposed that politicians be limited to two five-year terms in an effort to rejuvenate a political system dominated by aging loyalists of the revolution. He made even more explicit what most Cubans discuss only behind closed doors and the rest of the world has taken for granted: The Castro era is nearing its end. At the party’s first congress in 14 years, the president named a party stalwart and fellow combatant in the revolution, Jose Ramon Machado, 80, to the second-highest position in the Communist Party. He also named several people younger than 70 to the central committee and three to the 15-member politburo, possibly grooming them for bigger roles in the future.
Changing the Economy
When Cuba legalizes the buying and selling of real estate, Cubans expect a cascade of changes: higher prices, mass relocation, property taxes and a flood of money from Cubans in the United States and around the world.
Private property is the nucleus of capitalism, of course, so the plan to legitimize it in a country of slogans like “socialism or death” strikes many Cubans as jaw-dropping. Indeed, most people expect onerous regulations and already, the plan outlined by the state media would suppress the market by limiting Cubans to one home or apartment and requiring full-time residency.
Yet even with some state control, experts say, property sales could transform Cuba more than any of the economic reforms announced thus far by President Castro’s government.
The opportunities for profits and loans would be far larger than what Cuba’s small businesses offer, experts say, potentially creating the disparities of wealth that have accompanied property ownership in places like Eastern Europe and China. Havana in particular may be in for a move back in time, to when it was a more stratified city.
Broader effects could follow. Sales would encourage much-needed renovation, creating jobs. Banking would expand because, under newly announced rules, payments would come from buyers’ accounts. Meanwhile, the government, which owns all property now, would hand over homes and apartments to their occupants in exchange for taxes on sales — impossible in the current swapping market where money passes under the table.
And then there is the role of Cuban emigrants. While the plan seems to prohibit foreign ownership, Cuban-Americans could take advantage of Obama administration rules letting them send as much money as they like to relatives on the island, fueling purchases and giving them a stake in Cuba’s economic success.
Relations with the Obama Administration
Many Cubans are putting their hopes for the economy on President Obama‘s easing of longstanding restrictions on family travel and remittances to Cuba, although the Cuban government charges hefty fees on such remittances. Some people believe Mr. Obama needs to do much more to make a difference.
Instead of lifting the trade embargo with Cuba, enacted in the 1960s in an unsuccessful attempt to force a change in government after Fidel Castro came to power, Mr. Obama is using his executive power to repeal President George W. Bush‘s tight restrictions and the looser restrictions under President Bill Clinton so that Cuban-Americans can now visit Cuba as frequently as they like and send gifts and as much money as they want, as long as the recipients are not senior government or Communist Party officials.
But the Gross affair cast doubt into the relationship. A contractor for a company financed by the United States Agency for International Development, Mr. Gross was arrested in December 2009. Cuba charged him with crimes against the state for delivering banned equipment as part of a semicovert program aimed at weakening the Cuban government.
The arrest sent a chill through the diplomatic corps of both countries. The Cuban government has complained for years about “democracy programs” it says subvert its authority and sovereignty. Still, American officials said they did not expect a protracted affair.
Stumbles and perceived slights over other joint projects, like a medical clinic in Haiti, deepened the rift.
The island of 11 million people is in the midst of its largest economic overhaul since the end of the Soviet Union — with a major drive toward private enterprise — and many Cuba experts believe that the country’s officials are engaged in an ideological war over how far and fast to go.
Relations with the United States appear to have become secondary to domestic concerns, some argue. Or, they say, hard-liners seem to be winning the argument on foreign relations.
President Obama campaigned for greater engagement with Cuba, and months after he took office, he headed in that direction, abandoning longstanding restrictions on the ability of Cuban-Americans to visit the island and send money to relatives. The Cuban government responded quickly.
But the case of Alan Gross, an American contractor serving a 15-year sentence for distributing satellite telephone equipment in Cuba, has helped to unravel whatever good will had been established.
Fidel’s Cuba
For good or ill, Fidel Castro was without a doubt the most important leader to emerge from Latin America since the wars of independence of the early 19th century, not only reshaping Cuban society but providing inspiration for leftists across Latin America and in other parts of the world. But he never broke the island’s dependence on commodities like sugar, tobacco and nickel, nor did he succeed in industrializing the nation so that Cuba could compete in the world market with durable goods. Since the fall of the Soviet Union and the end of its aid to the island, Cuba has limped along economically, relying mostly on tourism and money sent home from exiles to get hard currency.
Cuba remains a repressive society. After seizing power, Mr. Castro promised to restore the Cuban constitution and hold elections. But he soon turned his back on those democratic ideals, embraced a totalitarian brand of communism and allied the island with the Soviet Union. He brought the world to the brink of nuclear war in the fall of 1962, when he allowed Russia to build missile launching sites just 90 miles off the American shores. He weathered an American-backed invasion and used Cuban troops to stir up revolutions in Africa and Latin America.
Those actions earned him the permanent enmity of Washington and led the United States to impose decades of economic sanctions that Mr. Castro and his followers maintain have crippled Cuba’s economy and have kept their socialist experiment from succeeding completely. The sanctions also proved handy to Mr. Castro politically. He cast every problem Cuba faced as part of a larger struggle against the United States and blamed the abject poverty of the island on the “imperialists” to the north.
Cuba Under Raúl
Raúl Castro has seemed to take more pragmatic approach to governance than his older brother. He has given signals he might try to follow the Chinese example of state-sponsored capitalism, and has often pledged to make Cuba’s centralized, Soviet-style economy more efficient and open up opportunities for people. Cuba’s budding private sector is the frail backbone of his plan to reinvigorate the country’s feeble economy.
People say they have seen small improvements that do not go far enough. Cuba’s economy — grappling with the fallout from the global financial crisis and the aftermath of devastating hurricanes in 2008 — appears to be in dire shape. Salaries remain low, food prices are high and housing is scarce. Bartenders, with access to dollars, earn wages many times that of physicians. Many roads in Havana have been repaired. Microwave ovens, DVD players and cellphones are now in stores, but most Cubans cannot afford them.
The nation still imports more than 80 percent of what it consumes, and Mr. Castro is trying to encourage farming by giving fallow land to those willing to work it. But the money they can earn selling the food remains below what is needed for the tools and labor needed to start a farm.
In a speech in April 2011, Mr. Castro, heralding yet another a battery of changes intended to lift the island out of economic despair and stagnant thinking, proposed that politicians be limited to two five-year terms in an effort to rejuvenate a political system dominated by aging loyalists of the revolution. He made even more explicit what most Cubans discuss only behind closed doors and the rest of the world has taken for granted: The Castro era is nearing its end. At the party’s first congress in 14 years, the president named a party stalwart and fellow combatant in the revolution, Jose Ramon Machado, 80, to the second-highest position in the Communist Party. He also named several people younger than 70 to the central committee and three to the 15-member politburo, possibly grooming them for bigger roles in the future.
Changing the Economy
When Cuba legalizes the buying and selling of real estate, Cubans expect a cascade of changes: higher prices, mass relocation, property taxes and a flood of money from Cubans in the United States and around the world.
Private property is the nucleus of capitalism, of course, so the plan to legitimize it in a country of slogans like “socialism or death” strikes many Cubans as jaw-dropping. Indeed, most people expect onerous regulations and already, the plan outlined by the state media would suppress the market by limiting Cubans to one home or apartment and requiring full-time residency.
Yet even with some state control, experts say, property sales could transform Cuba more than any of the economic reforms announced thus far by President Castro’s government.
The opportunities for profits and loans would be far larger than what Cuba’s small businesses offer, experts say, potentially creating the disparities of wealth that have accompanied property ownership in places like Eastern Europe and China. Havana in particular may be in for a move back in time, to when it was a more stratified city.
Broader effects could follow. Sales would encourage much-needed renovation, creating jobs. Banking would expand because, under newly announced rules, payments would come from buyers’ accounts. Meanwhile, the government, which owns all property now, would hand over homes and apartments to their occupants in exchange for taxes on sales — impossible in the current swapping market where money passes under the table.
And then there is the role of Cuban emigrants. While the plan seems to prohibit foreign ownership, Cuban-Americans could take advantage of Obama administration rules letting them send as much money as they like to relatives on the island, fueling purchases and giving them a stake in Cuba’s economic success.
Relations with the Obama Administration
Many Cubans are putting their hopes for the economy on President Obama‘s easing of longstanding restrictions on family travel and remittances to Cuba, although the Cuban government charges hefty fees on such remittances. Some people believe Mr. Obama needs to do much more to make a difference.
Instead of lifting the trade embargo with Cuba, enacted in the 1960s in an unsuccessful attempt to force a change in government after Fidel Castro came to power, Mr. Obama is using his executive power to repeal President George W. Bush‘s tight restrictions and the looser restrictions under President Bill Clinton so that Cuban-Americans can now visit Cuba as frequently as they like and send gifts and as much money as they want, as long as the recipients are not senior government or Communist Party officials.
But the Gross affair cast doubt into the relationship. A contractor for a company financed by the United States Agency for International Development, Mr. Gross was arrested in December 2009. Cuba charged him with crimes against the state for delivering banned equipment as part of a semicovert program aimed at weakening the Cuban government.
The arrest sent a chill through the diplomatic corps of both countries. The Cuban government has complained for years about “democracy programs” it says subvert its authority and sovereignty. Still, American officials said they did not expect a protracted affair.
Stumbles and perceived slights over other joint projects, like a medical clinic in Haiti, deepened the rift.
The island of 11 million people is in the midst of its largest economic overhaul since the end of the Soviet Union — with a major drive toward private enterprise — and many Cuba experts believe that the country’s officials are engaged in an ideological war over how far and fast to go.
Relations with the United States appear to have become secondary to domestic concerns, some argue. Or, they say, hard-liners seem to be winning the argument on foreign relations.
http://topics.nytimes.com/top/news/international/countriesandterritories/cuba/index.html?inline=nyt-geo&
Tue, 07 Feb 2012 18:58:23 +0000
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