Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Saturday, July 21, 2012
Sunday, March 25, 2012
New Study on Remittances to Cuba
They apparently broke the $2 billion level last year.
Opening up on both shorelines helps increase remittances sent to Cuba in 2011 by about 20%
By Emilio Morales & Joseph L. Scarpaci (THCG).― While Cubans debate the future of their economic model, measures taken by Raúl Castro since the Sixth Cuban Communist Party Congress held last April, are correlated with nearly exponential growth in remittances reaching the island. Nearly $2.3 billion USD entered the island through this venue last year, up about 19.5% over 2010.
Table 1. Remittances sent to Cuba, 2000-2011 (millions USD).
Year Totals
2000 986.96
2001 1,010.87
2002 1,072.15
2003 1,100.46
2004 1,030.84
2005 1,144.12
2006 1,251.15
2007 1,362.71
2008 1,447.06
2009 1,653.15
2010 1,920.44
2011 2,294.54
Source: Calculated by The Havana Consulting Group LLC.
Remittances increased ten fold over the past six years compared to the 2000-2005 period.
A variety of measures confirm that remittances are the main source of hard currency reaching peoples’ pockets.
What factors have unleashed this growth in the past six years?
This time, both the Obama administration’s policy towards Cuba and the measured implemented by the government of Raúl Castro have made this growth possible.
Allowing Cuban Americans to go from visiting the island once every three years, to as often as they want, has been a major driver of these remittance increases. At the same time, the Obama regulations removed the $300 wiring maximum each three months, to sending $10,000 daily.
Factors carrying the greatest weight on the Cuban side include allowing cell phones for a mass market and the sale of private homes and cars.
The six most important factors behind these changes are:
1. Increase in trips to Cuba.
2. Opening the Cuban real-estate market.
3. More space for private enterprises.
4. Growth of cell phone usage.
5. Decreasing wire-transfer and package shipping costs.
6. Out-migration.
Read the full story HERE.
Opening up on both shorelines helps increase remittances sent to Cuba in 2011 by about 20%
By Emilio Morales & Joseph L. Scarpaci (THCG).― While Cubans debate the future of their economic model, measures taken by Raúl Castro since the Sixth Cuban Communist Party Congress held last April, are correlated with nearly exponential growth in remittances reaching the island. Nearly $2.3 billion USD entered the island through this venue last year, up about 19.5% over 2010.
Table 1. Remittances sent to Cuba, 2000-2011 (millions USD).
Year Totals
2000 986.96
2001 1,010.87
2002 1,072.15
2003 1,100.46
2004 1,030.84
2005 1,144.12
2006 1,251.15
2007 1,362.71
2008 1,447.06
2009 1,653.15
2010 1,920.44
2011 2,294.54
Source: Calculated by The Havana Consulting Group LLC.
Remittances increased ten fold over the past six years compared to the 2000-2005 period.
A variety of measures confirm that remittances are the main source of hard currency reaching peoples’ pockets.
What factors have unleashed this growth in the past six years?
This time, both the Obama administration’s policy towards Cuba and the measured implemented by the government of Raúl Castro have made this growth possible.
Allowing Cuban Americans to go from visiting the island once every three years, to as often as they want, has been a major driver of these remittance increases. At the same time, the Obama regulations removed the $300 wiring maximum each three months, to sending $10,000 daily.
Factors carrying the greatest weight on the Cuban side include allowing cell phones for a mass market and the sale of private homes and cars.
The six most important factors behind these changes are:
1. Increase in trips to Cuba.
2. Opening the Cuban real-estate market.
3. More space for private enterprises.
4. Growth of cell phone usage.
5. Decreasing wire-transfer and package shipping costs.
6. Out-migration.
Read the full story HERE.
Friday, February 17, 2012
The Booming Havana Real Estate Market
From the NYT
February 15, 2012
Cuba Unleashes the Pent-Up Energy of Real Estate Dreams
By VICTORIA BURNETT
HAVANA — As fixer-uppers go, Carmen Martínez’s derelict shotgun house is no cakewalk. The living-room roof collapsed 15 years ago, and the porch soon followed suit, leaving two teetering columns with nothing to hold up. The bathroom is a squalid privy, and the kitchen consists of a sink with no taps and two oil drums full of water.
But roofs — even half-missing ones — are a hot commodity these days in Havana, which has been swept by a bout of real estate fever. So Yoél Bacallao, a 35-year-old entrepreneur, offered to repair Ms. Martínez’s dilapidated house for free on one condition: that she let him build an apartment of his own on top of it.
“It was as if a ray of light had come down from the sky,” said Ms. Martínez, 41, who would hang laundry in the roofless living room and sweep furiously during rainstorms to keep the rest of the house from flooding. “I have been watching this house fall apart around me for years.”
All over the capital and in many provincial towns, Cubans are beginning to inject money into the island’s ragged real estate, spurred by government measures to stimulate construction and a new law that allows them to trade property for the first time in 50 years.
The measures are President Raúl Castro’s biggest maneuver yet as he strives to get capital flowing on the island, encourage private enterprise and take pressure off the economically crippled state.
For decades, the government banned real estate sales and kept a jealous grip on construction. Materials were scarce, red tape endless and inspectors meddlesome. Black marketeers would deliver cinder blocks by cover of darkness, and purchasing a bag of sand was a furtive process akin to buying drugs.
But during the past two months the state has reduced paperwork, stocked construction stores, legalized private contractors and begun offering homeowners subsidies and credits.
On many streets, the chip of hammers and gritty slosh of cement mixing rises above the sparse traffic as Cubans paint facades, build extensions or gut old houses. Still, it is generally small-scale stuff: Mr. Bacallao, who has savings from his business repairing mobile phones, expects to spend about $10,000 on his project.
“Before, you had to sneak a bag of cement here, a bag of cement there,” he said. Mr. Bacallao, who rents a tiny apartment with his girlfriend, built a rooftop house three years ago, but the state confiscated it because he could not explain how he came by the materials. If this house works out, he will move his daughters to Havana from the provinces.
“Now I can explain where I got the materials,” he said. “I can explain where I got the money. No problem.”
Behind scruffy porticos and walls of bougainvillea, the wheels of the property trade are turning. Unofficial brokers — who are still outlawed in Cuba — say they have never been so busy, trawling the streets and the Internet for leads and fielding calls from prospective buyers.
Cubisima, an online classified service, said the number of hits on its real estate page tripled to an average of 900 per day after the new property law took effect on Nov. 10. The law allows Cubans to buy and sell their houses, and even own a second home outside the cities, though it still bars most foreigners from buying.
It is a crude market, where househunters rely on word of mouth and prices are based as much on excitement as on any clear sense of property values, according to interviews with homeowners, brokers and experts. Buyers, who at the top end are mainly Cuban émigrés and Cubans married to foreigners, often declare a fraction of what they pay, and money sometimes changes hands overseas, suggesting that the government’s hope of reaping significant tax revenues may be at least partly thwarted.
On a recent day, a stylish flight attendant showed a viewer around the pretty three-bedroom home she hopes will fetch $150,000; a mile away, an elderly widow held out for an offer of $500,000 for her big, unkempt 1950s house — to be deposited in Spain, please.
Many sellers plan to downsize, so they can live better or leave. Victoria Pérez, a retired doctor, put her spacious house and two-bedroom annex on sale last month for $80,000. She hopes to buy something smaller and put aside about $20,000 to live on and visit her daughter in the United States.
“To earn $20,000 would take 20 years,” she said. “This opens up a whole world of opportunities.”
Statistics are few, and brokers admit that the curious outnumber the serious. The National Housing Institute processed just 364 sales in the three weeks after the new law took effect.
“Prices are very inflated,” complained a Cuban-Canadian who was viewing a mint-colored four-bedroom house priced at $240,000 one recent afternoon. He said he would watch the market for a month or two to see how things shook out.
Steep price tags notwithstanding, experts and brokers say there are signs that the better-off are starting to migrate to areas like Miramar, Havana’s embassy district, and build vacation homes on the coast.
“There is definitely a rearrangement going on,” said Carlos García Pleyan, a sociologist who worked for decades for the Cuban government’s urban planning department.
Other than Cuban émigrés, he said, the gentrifiers were “the winners of the Cuba of recent years.”
“People who have made money legally, and people who have made money illegally,” he said. “Businesspeople, maybe a restaurant owner, maybe someone who owns taxis, maybe someone who has made money through corruption.”
“We shouldn’t be worrying so much about how people rearrange themselves,” he added. “We should be asking ourselves how such large social inequalities have happened.”
While the new market dynamics helped Ms. Martínez, some worry they will do little to solve the housing problems faced by many Cubans, whose wallets would not stretch even to buy a $3,000 one-bedroom apartment.
“It’s all very well for those who have money or who have a relative abroad; but if not, forget it,” said Luis Martínez, a construction worker (who is not related to Carmen). “My son is 18. The only way he’ll ever leave home is if he marries a girl who has a house.”
If anyone needed a reminder of Cuba’s critical housing problem, they got one in January, when a building collapsed in central Havana, killing four people. Miguel Coyula, an architect who specializes in urban planning, said an average of three buildings collapsed in Havana each day, victims of neglect, overcrowding and improvised construction. Well over 100,000 people are waiting to move to government hostels.
Mr. Pleyan estimated that it would cost about $3.6 billion to build the 600,000 houses Cuba needs, according to the government. Independent estimates are more than double that. The creation of construction and housing cooperatives is one step being discussed: such arrangements would reduce building costs and allow groups of individuals to build, say, a small apartment block.
But Mr. Pleyan said Cuba would also have to open wider to foreign investment and look for models that would balance public interests and private profit, by, for example, encouraging developers to build local infrastructure.
Such projects will not happen quickly — if at all — and Ms. Martínez feels lucky that she salvaged her home before she and her family had to abandon it. Once the roof is on, she said, she would like to get running water in her kitchen, replace the toilet and finish building a bedroom for her teenage son.
“I need taps, doors, windows, tiles; everything needs fixing,” she said, looking at the stained walls and rotten shutters of her bedroom.
“Little by little,” she added. “Little by little.”
Read the story and see photos HERE.
February 15, 2012
Cuba Unleashes the Pent-Up Energy of Real Estate Dreams
By VICTORIA BURNETT
HAVANA — As fixer-uppers go, Carmen Martínez’s derelict shotgun house is no cakewalk. The living-room roof collapsed 15 years ago, and the porch soon followed suit, leaving two teetering columns with nothing to hold up. The bathroom is a squalid privy, and the kitchen consists of a sink with no taps and two oil drums full of water.
But roofs — even half-missing ones — are a hot commodity these days in Havana, which has been swept by a bout of real estate fever. So Yoél Bacallao, a 35-year-old entrepreneur, offered to repair Ms. Martínez’s dilapidated house for free on one condition: that she let him build an apartment of his own on top of it.
“It was as if a ray of light had come down from the sky,” said Ms. Martínez, 41, who would hang laundry in the roofless living room and sweep furiously during rainstorms to keep the rest of the house from flooding. “I have been watching this house fall apart around me for years.”
All over the capital and in many provincial towns, Cubans are beginning to inject money into the island’s ragged real estate, spurred by government measures to stimulate construction and a new law that allows them to trade property for the first time in 50 years.
The measures are President Raúl Castro’s biggest maneuver yet as he strives to get capital flowing on the island, encourage private enterprise and take pressure off the economically crippled state.
For decades, the government banned real estate sales and kept a jealous grip on construction. Materials were scarce, red tape endless and inspectors meddlesome. Black marketeers would deliver cinder blocks by cover of darkness, and purchasing a bag of sand was a furtive process akin to buying drugs.
But during the past two months the state has reduced paperwork, stocked construction stores, legalized private contractors and begun offering homeowners subsidies and credits.
On many streets, the chip of hammers and gritty slosh of cement mixing rises above the sparse traffic as Cubans paint facades, build extensions or gut old houses. Still, it is generally small-scale stuff: Mr. Bacallao, who has savings from his business repairing mobile phones, expects to spend about $10,000 on his project.
“Before, you had to sneak a bag of cement here, a bag of cement there,” he said. Mr. Bacallao, who rents a tiny apartment with his girlfriend, built a rooftop house three years ago, but the state confiscated it because he could not explain how he came by the materials. If this house works out, he will move his daughters to Havana from the provinces.
“Now I can explain where I got the materials,” he said. “I can explain where I got the money. No problem.”
Behind scruffy porticos and walls of bougainvillea, the wheels of the property trade are turning. Unofficial brokers — who are still outlawed in Cuba — say they have never been so busy, trawling the streets and the Internet for leads and fielding calls from prospective buyers.
Cubisima, an online classified service, said the number of hits on its real estate page tripled to an average of 900 per day after the new property law took effect on Nov. 10. The law allows Cubans to buy and sell their houses, and even own a second home outside the cities, though it still bars most foreigners from buying.
It is a crude market, where househunters rely on word of mouth and prices are based as much on excitement as on any clear sense of property values, according to interviews with homeowners, brokers and experts. Buyers, who at the top end are mainly Cuban émigrés and Cubans married to foreigners, often declare a fraction of what they pay, and money sometimes changes hands overseas, suggesting that the government’s hope of reaping significant tax revenues may be at least partly thwarted.
On a recent day, a stylish flight attendant showed a viewer around the pretty three-bedroom home she hopes will fetch $150,000; a mile away, an elderly widow held out for an offer of $500,000 for her big, unkempt 1950s house — to be deposited in Spain, please.
Many sellers plan to downsize, so they can live better or leave. Victoria Pérez, a retired doctor, put her spacious house and two-bedroom annex on sale last month for $80,000. She hopes to buy something smaller and put aside about $20,000 to live on and visit her daughter in the United States.
“To earn $20,000 would take 20 years,” she said. “This opens up a whole world of opportunities.”
Statistics are few, and brokers admit that the curious outnumber the serious. The National Housing Institute processed just 364 sales in the three weeks after the new law took effect.
“Prices are very inflated,” complained a Cuban-Canadian who was viewing a mint-colored four-bedroom house priced at $240,000 one recent afternoon. He said he would watch the market for a month or two to see how things shook out.
Steep price tags notwithstanding, experts and brokers say there are signs that the better-off are starting to migrate to areas like Miramar, Havana’s embassy district, and build vacation homes on the coast.
“There is definitely a rearrangement going on,” said Carlos García Pleyan, a sociologist who worked for decades for the Cuban government’s urban planning department.
Other than Cuban émigrés, he said, the gentrifiers were “the winners of the Cuba of recent years.”
“People who have made money legally, and people who have made money illegally,” he said. “Businesspeople, maybe a restaurant owner, maybe someone who owns taxis, maybe someone who has made money through corruption.”
“We shouldn’t be worrying so much about how people rearrange themselves,” he added. “We should be asking ourselves how such large social inequalities have happened.”
While the new market dynamics helped Ms. Martínez, some worry they will do little to solve the housing problems faced by many Cubans, whose wallets would not stretch even to buy a $3,000 one-bedroom apartment.
“It’s all very well for those who have money or who have a relative abroad; but if not, forget it,” said Luis Martínez, a construction worker (who is not related to Carmen). “My son is 18. The only way he’ll ever leave home is if he marries a girl who has a house.”
If anyone needed a reminder of Cuba’s critical housing problem, they got one in January, when a building collapsed in central Havana, killing four people. Miguel Coyula, an architect who specializes in urban planning, said an average of three buildings collapsed in Havana each day, victims of neglect, overcrowding and improvised construction. Well over 100,000 people are waiting to move to government hostels.
Mr. Pleyan estimated that it would cost about $3.6 billion to build the 600,000 houses Cuba needs, according to the government. Independent estimates are more than double that. The creation of construction and housing cooperatives is one step being discussed: such arrangements would reduce building costs and allow groups of individuals to build, say, a small apartment block.
But Mr. Pleyan said Cuba would also have to open wider to foreign investment and look for models that would balance public interests and private profit, by, for example, encouraging developers to build local infrastructure.
Such projects will not happen quickly — if at all — and Ms. Martínez feels lucky that she salvaged her home before she and her family had to abandon it. Once the roof is on, she said, she would like to get running water in her kitchen, replace the toilet and finish building a bedroom for her teenage son.
“I need taps, doors, windows, tiles; everything needs fixing,” she said, looking at the stained walls and rotten shutters of her bedroom.
“Little by little,” she added. “Little by little.”
Read the story and see photos HERE.
Thursday, November 03, 2011
Story on New Housing Regulations in Cuba
Cuba legalizes sale, purchase of real estate
Much-despised ban on these transactions took effect in stages over the first years after Fidel Castro came to power in 1959
MSNBC
By PAUL HAVEN
HAVANA — For the first time in a half-century, Cubans will be allowed to buy and sell real estate openly, bequeath property to relatives without restriction and avoid forfeiting their homes if they abandon the country.
The highly anticipated new rules instantly transform islanders' cramped, dilapidated homes into potential liquid assets in the most significant reform yet adopted by President Raul Castro since he took over the communist country from his brother in 2008.
But plenty of restrictions remain.
Cuban exiles continue to be barred from owning property on the island, though they can presumably help relatives make purchases by sending money. And foreigners can also hold off on dreams of acquiring a pied-a-terre under the Caribbean sun, since only citizens and permanent residents are eligible.
The law, which takes effect Nov. 10, limits Cubans to owning one home in the city and another in the country, an effort to prevent speculative buying and the accumulation of large real estate holdings. While few Cubans have the money to start a real estate empire, many city dwellers have struggled over the years to maintain title to family homes in the countryside, and the new law legalizes the practice.
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. The government has also allowed citizens to go into business for themselves in a number of approved jobs — everything from party clowns to food vendors and accountants — and permitted them to rent out rooms and cars.
While Castro has stressed that there will be no departure from Cuba's socialist model, he has also pledged to streamline the state-dominated economy by eliminating hundreds of thousands of state jobs and ending generous subsidies the state can no longer afford.
Cuba's government employs about 80 percent of the workforce, paying wages of just $20 a month in return for free education and health care, and nearly free housing, transportation and basic foods.
Economists and Cuba experts say the new property law will have a profound impact on people's lives, though probably will not be enough by itself to transform the island's limping economy.
>>>>>>>>
Read the full post HERE.
Much-despised ban on these transactions took effect in stages over the first years after Fidel Castro came to power in 1959
MSNBC
By PAUL HAVEN
HAVANA — For the first time in a half-century, Cubans will be allowed to buy and sell real estate openly, bequeath property to relatives without restriction and avoid forfeiting their homes if they abandon the country.
The highly anticipated new rules instantly transform islanders' cramped, dilapidated homes into potential liquid assets in the most significant reform yet adopted by President Raul Castro since he took over the communist country from his brother in 2008.
But plenty of restrictions remain.
Cuban exiles continue to be barred from owning property on the island, though they can presumably help relatives make purchases by sending money. And foreigners can also hold off on dreams of acquiring a pied-a-terre under the Caribbean sun, since only citizens and permanent residents are eligible.
The law, which takes effect Nov. 10, limits Cubans to owning one home in the city and another in the country, an effort to prevent speculative buying and the accumulation of large real estate holdings. While few Cubans have the money to start a real estate empire, many city dwellers have struggled over the years to maintain title to family homes in the countryside, and the new law legalizes the practice.
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. The government has also allowed citizens to go into business for themselves in a number of approved jobs — everything from party clowns to food vendors and accountants — and permitted them to rent out rooms and cars.
While Castro has stressed that there will be no departure from Cuba's socialist model, he has also pledged to streamline the state-dominated economy by eliminating hundreds of thousands of state jobs and ending generous subsidies the state can no longer afford.
Cuba's government employs about 80 percent of the workforce, paying wages of just $20 a month in return for free education and health care, and nearly free housing, transportation and basic foods.
Economists and Cuba experts say the new property law will have a profound impact on people's lives, though probably will not be enough by itself to transform the island's limping economy.
>>>>>>>>
Read the full post HERE.
Thursday, October 13, 2011
Viva la evolucion (Cuban private market story)
Globe and Mail
Capitalism
In Cuba, it's Viva la evolucion!
sonia verma
HAVANA— From Thursday's Globe and Mail
Published Wednesday, Oct. 12, 2011 8:42PM EDT
Last updated Wednesday, Oct. 12, 2011 9:49PM EDT
Barbershops, beauty salons, restaurants and car washes have sprung up across Cuba in the year since the Communist Party allowed citizens to open small, private businesses in an effort to save the country from ruin.
The government says more than 157,000 people have qualified for business permits and are currently self-employed. This new generation of Cuban entrepreneurs is quietly reshaping the island’s stagnant revolution in a way that was inconceivable when Fidel Castro was in control. The economic changes brought about by his brother Raul, however, are proving slow to take hold.
Many are being implemented by young Cubans with virtually no memory of life before communism. Some new entrepreneurs are struggling to understand how to pay small-business taxes or navigate the country’s labyrinthine bureaucracy. With virtually no access to bank loans or credit, most are relying on family living abroad to float their new ventures.
Still, Cuba is buzzing with new energy as people attempt, for the first time in their lives, to make money outside of the underground economy. Business owners are experimenting with novel concepts, such as advertising and open competition. It’s unclear, however, how far the Cuban authorities will allow the reforms to go – whether small business owners will be permitted to accumulate vast amounts of wealth, for example, or build empires.
At the moment, however, these new entrepreneurs seem content enough to turn a profit they can officially pocket.
Read the four profiles HERE.
Capitalism
In Cuba, it's Viva la evolucion!
sonia verma
HAVANA— From Thursday's Globe and Mail
Published Wednesday, Oct. 12, 2011 8:42PM EDT
Last updated Wednesday, Oct. 12, 2011 9:49PM EDT
Barbershops, beauty salons, restaurants and car washes have sprung up across Cuba in the year since the Communist Party allowed citizens to open small, private businesses in an effort to save the country from ruin.
The government says more than 157,000 people have qualified for business permits and are currently self-employed. This new generation of Cuban entrepreneurs is quietly reshaping the island’s stagnant revolution in a way that was inconceivable when Fidel Castro was in control. The economic changes brought about by his brother Raul, however, are proving slow to take hold.
Many are being implemented by young Cubans with virtually no memory of life before communism. Some new entrepreneurs are struggling to understand how to pay small-business taxes or navigate the country’s labyrinthine bureaucracy. With virtually no access to bank loans or credit, most are relying on family living abroad to float their new ventures.
Still, Cuba is buzzing with new energy as people attempt, for the first time in their lives, to make money outside of the underground economy. Business owners are experimenting with novel concepts, such as advertising and open competition. It’s unclear, however, how far the Cuban authorities will allow the reforms to go – whether small business owners will be permitted to accumulate vast amounts of wealth, for example, or build empires.
At the moment, however, these new entrepreneurs seem content enough to turn a profit they can officially pocket.
Read the four profiles HERE.
Sunday, July 24, 2011
Cuba's black-market housing trade to go legit
MNBC/AP
Cuba's black-market housing trade to go legit:
Castro vows to end law prohibiting sale of private property
updated 7/24/2011 5:30:26 PM ET
By Peter Orsi
Each morning before the sun rises too high, Cubans gather at a shaded corner in central Havana, mingling as though at a cocktail party. The icebreaker is always
the same: "What are you offering?"
This is Cuba's informal real-estate bazaar, where a chronic housing shortage brings everyone from newlyweds to retirees together to strike deals that often involve thousands of dollars in under-the-table payments. They're breaking not just the law but communist doctrine by trading and profiting in property, and now their government is about to get in on the action.
President Raul Castro has pledged to legalize the purchase and sale of homes by the end of the year, bringing this informal market out of the shadows as part of an economic reform package under which Cuba is already letting islanders go into business for themselves in 178 designated activities, as restaurateurs, wedding planners, plumbers, carpenters.
An aboveboard housing market promises multiple benefits for the cash-strapped island: It would help ease a housing crunch, stimulate construction employment and generate badly needed tax revenue. It would attack corruption by officials who accept bribes to sign off on illicit deals, and give people options to seek peaceful resolutions to black-market disputes that occasionally erupt into violence.
It's also likely to suck up more hard currency from Cubans abroad who can be counted on to send their families cash to buy, expand and remodel homes, especially since President Barack Obama relaxed the 50-year-old economic embargo to allow unlimited remittances by Cuban-Americans.
"All these things are tied in," said Sergio Diaz-Briquets, a U.S.-based demography expert. "They want expatriate Cubans to contribute money to the Cuban state, and this is one big incentive for people who want to help their families."
But few changes are likely to be as complex and hard to implement as real estate reform.
Read the full post HERE.
Cuba's black-market housing trade to go legit:
Castro vows to end law prohibiting sale of private property
updated 7/24/2011 5:30:26 PM ET
By Peter Orsi
Each morning before the sun rises too high, Cubans gather at a shaded corner in central Havana, mingling as though at a cocktail party. The icebreaker is always
the same: "What are you offering?"
This is Cuba's informal real-estate bazaar, where a chronic housing shortage brings everyone from newlyweds to retirees together to strike deals that often involve thousands of dollars in under-the-table payments. They're breaking not just the law but communist doctrine by trading and profiting in property, and now their government is about to get in on the action.
President Raul Castro has pledged to legalize the purchase and sale of homes by the end of the year, bringing this informal market out of the shadows as part of an economic reform package under which Cuba is already letting islanders go into business for themselves in 178 designated activities, as restaurateurs, wedding planners, plumbers, carpenters.
An aboveboard housing market promises multiple benefits for the cash-strapped island: It would help ease a housing crunch, stimulate construction employment and generate badly needed tax revenue. It would attack corruption by officials who accept bribes to sign off on illicit deals, and give people options to seek peaceful resolutions to black-market disputes that occasionally erupt into violence.
It's also likely to suck up more hard currency from Cubans abroad who can be counted on to send their families cash to buy, expand and remodel homes, especially since President Barack Obama relaxed the 50-year-old economic embargo to allow unlimited remittances by Cuban-Americans.
"All these things are tied in," said Sergio Diaz-Briquets, a U.S.-based demography expert. "They want expatriate Cubans to contribute money to the Cuban state, and this is one big incentive for people who want to help their families."
But few changes are likely to be as complex and hard to implement as real estate reform.
Read the full post HERE.
Thursday, May 26, 2011
Golf Courses Return to Cuba
NYT
May 24, 2011
Revolutionary Cuba Now Lays Sand Traps for the Bourgeoisie
By RANDAL C. ARCHIBOLD
MEXICO CITY — One of Fidel Castro’s first acts upon taking power was to get rid of Cuba’s golf courses, seeking to stamp out a sport he and other socialist revolutionaries saw as the epitome of bourgeois excess.
Now, 50 years later, foreign developers say the Cuban government has swung in nearly the opposite direction, giving preliminary approval in recent weeks for four large luxury golf resorts on the island, the first in an expected wave of more than a dozen that the government anticipates will lure free-spending tourists to a nation hungry for cash.
The four initial projects total more than $1.5 billion, with the government’s cut of the profits about half. Plans for the developments include residences that foreigners will be permitted to buy — a rare opportunity from a government that all but banned private property in its push for social equality.
Mr. Castro and his comrade in arms Che Guevara, who worked as a caddie in his youth in Argentina, were photographed in fatigues hitting the links decades ago, in what some have interpreted as an effort to mock either the sport or the golf-loving president at the time of the revolution, Dwight D. Eisenhower — or both.
President Hugo Chávez of Venezuela, who maintains close ties with Cuba, has taken aim at the pastime in recent years as well, questioning why, in the face of slums and housing shortages, courses should spread over valuable land “just so some little group of the bourgeois and the petit bourgeois can go and play golf.”
But Cuba’s deteriorating economy and the rise in the sport’s popularity, particularly among big-spending travelers who expect to bring their clubs wherever they go, have softened the government’s view, investors said. Cuban officials did not respond to requests for comment, but Manuel Marrero, the tourism minister, told a conference in Europe this month that the government anticipates going forward with joint ventures to build 16 golf resorts in the near future.
For the past three years, Cuba’s only 18-hole course, a government-owned spread at the Varadero Beach resort area, has even hosted a tournament. It has long ceased to be, its promoters argued, a rich man’s game.
“We were told this foray is the top priority in foreign investment,” said Graham Cooke, a Canadian golf course architect designing a $410 million project at Guardalavaca Beach, along the island’s north coast about 500 miles from Havana, for a consortium of Indians from Canada. The company, Standing Feather International, says it signed a memorandum of agreement with the Cuban government in late April and will be the first to break ground, in September.
Andrew Macdonald, the chief executive of London-based Esencia Group, which helps sponsor the golf tournament in Cuba and is planning a $300 million country club in Varadero, said, “This is a fundamental development in having a more eclectic tourist sector.”
...
Read the full story HERE in the NYT.
May 24, 2011
Revolutionary Cuba Now Lays Sand Traps for the Bourgeoisie
By RANDAL C. ARCHIBOLD
MEXICO CITY — One of Fidel Castro’s first acts upon taking power was to get rid of Cuba’s golf courses, seeking to stamp out a sport he and other socialist revolutionaries saw as the epitome of bourgeois excess.
Now, 50 years later, foreign developers say the Cuban government has swung in nearly the opposite direction, giving preliminary approval in recent weeks for four large luxury golf resorts on the island, the first in an expected wave of more than a dozen that the government anticipates will lure free-spending tourists to a nation hungry for cash.
The four initial projects total more than $1.5 billion, with the government’s cut of the profits about half. Plans for the developments include residences that foreigners will be permitted to buy — a rare opportunity from a government that all but banned private property in its push for social equality.
Mr. Castro and his comrade in arms Che Guevara, who worked as a caddie in his youth in Argentina, were photographed in fatigues hitting the links decades ago, in what some have interpreted as an effort to mock either the sport or the golf-loving president at the time of the revolution, Dwight D. Eisenhower — or both.
President Hugo Chávez of Venezuela, who maintains close ties with Cuba, has taken aim at the pastime in recent years as well, questioning why, in the face of slums and housing shortages, courses should spread over valuable land “just so some little group of the bourgeois and the petit bourgeois can go and play golf.”
But Cuba’s deteriorating economy and the rise in the sport’s popularity, particularly among big-spending travelers who expect to bring their clubs wherever they go, have softened the government’s view, investors said. Cuban officials did not respond to requests for comment, but Manuel Marrero, the tourism minister, told a conference in Europe this month that the government anticipates going forward with joint ventures to build 16 golf resorts in the near future.
For the past three years, Cuba’s only 18-hole course, a government-owned spread at the Varadero Beach resort area, has even hosted a tournament. It has long ceased to be, its promoters argued, a rich man’s game.
“We were told this foray is the top priority in foreign investment,” said Graham Cooke, a Canadian golf course architect designing a $410 million project at Guardalavaca Beach, along the island’s north coast about 500 miles from Havana, for a consortium of Indians from Canada. The company, Standing Feather International, says it signed a memorandum of agreement with the Cuban government in late April and will be the first to break ground, in September.
Andrew Macdonald, the chief executive of London-based Esencia Group, which helps sponsor the golf tournament in Cuba and is planning a $300 million country club in Varadero, said, “This is a fundamental development in having a more eclectic tourist sector.”
...
Read the full story HERE in the NYT.
Tuesday, May 10, 2011
Havana: The State Retreats
New York Review of Books
Havana: The State Retreats
May 26, 2011
José Manuel Prieto, translated from the Spanish by Esther Allen
1.
When I picked up my ticket for the only nonstop New York–Havana flight, I was given a list of the goods I could take: ten kilos of medicine and up to twenty kilos of food, duty free. While it’s true that Cuba suffers from the US embargo, it’s also the US and its Cuban exile community that keep the country afloat. The day of the flight, many of my fellow passengers were loaded down with heavy bundles of food and medicine, plasma TV sets in their original packaging, audio equipment, and domestic appliances. In 2010, 324,000 visitors arrived in Cuba on direct flights from the United States like this one, and several economists calculate that remittances to Cuba from the US total more than a billion dollars annually, about 35 percent of the country’s annual foreign exchange inflow.
All that help still isn’t enough. After landing at José Martí International Airport, I find the city in a virtual state of blackout, the celebrated corner of 23rd and L, Havana’s Times Square, empty at 10 PM. It’s as if a catastrophe has struck. There is a constant, ominous feeling of abandonment and crisis. My impression doesn’t much differ from the diagnosis delivered on December 18—days after my arrival—to the Cuban Parliament by the country’s current leader, Raúl Castro: “Either we rectify our course or the time for teetering along on the brink runs out and we go down. And we will go down…[with] the effort of entire generations.”
Certainly the signs of this deep crisis have been in the air for at least twenty years. What’s clear now is that it’s not enough to go on blaming the American bloqueo or the fall of the Soviet Union. Something is wrong with the system itself. This could be glimpsed in the startling comment made by Fidel Castro to the US journalist Jeffrey Goldberg and the Latin American scholar Julia Sweig last August: “The Cuban model doesn’t even work for us anymore.”
NYR / NYR Tote Bag
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What model is he talking about? The Soviet model of forced nationalization. The Cuban Revolution was among other things a cure for the chronic weakness of the Cuban state prior to 1959. The new, postrevolutionary state would take upon itself all that previous governments of Cuba had done so badly. The example of the Soviet Union, with triumphs such as the 1957 launch of Sputnik, seemed to indicate that this was a promising way forward, and it had the added appeal to Cuba’s unelected rulers of calling for government by a single party, virtually without opposition, and the pulverization of civil society.
Now, on my first visit to Cuba in ten years, I had the chance to observe the first signs of the inverse process: the dismantling of this gigantic state, visibly in retreat. I saw the detritus left behind: the disaster of a dysfunctional economy and a deep financial crisis aggravated by a dual currency system. All amid the growing discontent of the population and surging dissidence.
2.
In Havana I buy every bit of printed news on sale at the kiosk near the casa particular where I’m renting a room. Such an unusual interest in publications almost no one reads immediately gives me away as a visitor from abroad. I ask for the recently released official publication “Proyecto de Lineamientos de la Política Económica y Social” (“Draft Guidelines for Economic and Social Policy”), but it’s sold out, the elderly vendor informs me: “All Havana is reading it.” In the end, I buy it secondhand, for ten times the original price, from a passerby who has overheard the conversation.
It’s a twenty-nine-page pamphlet whose 291 points set forth the coming “update” of the Cuban model. These points, the Cuban Communist Party newspaper Granma affirms, were distilled from the vast consulta, or survey, Raúl Castro declared would take place on July 26, 2007, when “more than four million Cubans raised more than a million points.” By and large, the guidelines attempt to reduce the cumbersome size of the state to make it more compact and less costly.
The crux of the debate, I gather, after penetrating the technical jargon all Havana is reading and discussing as if it were a best-selling novel, is whether a new role can be assigned to the state: Can it be imagined more as referee than as star player while ensuring that it doesn’t lose control? There is of course no question that the governing party must remain in power and “safeguard the conquests of the revolution.”
I come to see that in fact the Party is trying to adjust to a transformation that began without much government participation, something the Cuban people started doing on their own. The government is like a general who mandates an “orderly retreat” when his army is being crushed. The “Guidelines” are for keeping up appearances.
............
Read the full story HERE.
Havana: The State Retreats
May 26, 2011
José Manuel Prieto, translated from the Spanish by Esther Allen
1.
When I picked up my ticket for the only nonstop New York–Havana flight, I was given a list of the goods I could take: ten kilos of medicine and up to twenty kilos of food, duty free. While it’s true that Cuba suffers from the US embargo, it’s also the US and its Cuban exile community that keep the country afloat. The day of the flight, many of my fellow passengers were loaded down with heavy bundles of food and medicine, plasma TV sets in their original packaging, audio equipment, and domestic appliances. In 2010, 324,000 visitors arrived in Cuba on direct flights from the United States like this one, and several economists calculate that remittances to Cuba from the US total more than a billion dollars annually, about 35 percent of the country’s annual foreign exchange inflow.
All that help still isn’t enough. After landing at José Martí International Airport, I find the city in a virtual state of blackout, the celebrated corner of 23rd and L, Havana’s Times Square, empty at 10 PM. It’s as if a catastrophe has struck. There is a constant, ominous feeling of abandonment and crisis. My impression doesn’t much differ from the diagnosis delivered on December 18—days after my arrival—to the Cuban Parliament by the country’s current leader, Raúl Castro: “Either we rectify our course or the time for teetering along on the brink runs out and we go down. And we will go down…[with] the effort of entire generations.”
Certainly the signs of this deep crisis have been in the air for at least twenty years. What’s clear now is that it’s not enough to go on blaming the American bloqueo or the fall of the Soviet Union. Something is wrong with the system itself. This could be glimpsed in the startling comment made by Fidel Castro to the US journalist Jeffrey Goldberg and the Latin American scholar Julia Sweig last August: “The Cuban model doesn’t even work for us anymore.”
NYR / NYR Tote Bag
Advertisement
What model is he talking about? The Soviet model of forced nationalization. The Cuban Revolution was among other things a cure for the chronic weakness of the Cuban state prior to 1959. The new, postrevolutionary state would take upon itself all that previous governments of Cuba had done so badly. The example of the Soviet Union, with triumphs such as the 1957 launch of Sputnik, seemed to indicate that this was a promising way forward, and it had the added appeal to Cuba’s unelected rulers of calling for government by a single party, virtually without opposition, and the pulverization of civil society.
Now, on my first visit to Cuba in ten years, I had the chance to observe the first signs of the inverse process: the dismantling of this gigantic state, visibly in retreat. I saw the detritus left behind: the disaster of a dysfunctional economy and a deep financial crisis aggravated by a dual currency system. All amid the growing discontent of the population and surging dissidence.
2.
In Havana I buy every bit of printed news on sale at the kiosk near the casa particular where I’m renting a room. Such an unusual interest in publications almost no one reads immediately gives me away as a visitor from abroad. I ask for the recently released official publication “Proyecto de Lineamientos de la Política Económica y Social” (“Draft Guidelines for Economic and Social Policy”), but it’s sold out, the elderly vendor informs me: “All Havana is reading it.” In the end, I buy it secondhand, for ten times the original price, from a passerby who has overheard the conversation.
It’s a twenty-nine-page pamphlet whose 291 points set forth the coming “update” of the Cuban model. These points, the Cuban Communist Party newspaper Granma affirms, were distilled from the vast consulta, or survey, Raúl Castro declared would take place on July 26, 2007, when “more than four million Cubans raised more than a million points.” By and large, the guidelines attempt to reduce the cumbersome size of the state to make it more compact and less costly.
The crux of the debate, I gather, after penetrating the technical jargon all Havana is reading and discussing as if it were a best-selling novel, is whether a new role can be assigned to the state: Can it be imagined more as referee than as star player while ensuring that it doesn’t lose control? There is of course no question that the governing party must remain in power and “safeguard the conquests of the revolution.”
I come to see that in fact the Party is trying to adjust to a transformation that began without much government participation, something the Cuban people started doing on their own. The government is like a general who mandates an “orderly retreat” when his army is being crushed. The “Guidelines” are for keeping up appearances.
............
Read the full story HERE.
Wednesday, May 04, 2011
Young Cubans deal with the unimaginable: pink slips
Young Cubans deal with the unimaginable: pink slips
'We have to think differently' to deal with new reality brought in by reforms
By Mary Murray
NBC News
updated 5/4/2011 9:15:41 AM ET
HAVANA — Last hired, first fired – one of those golden laws of free market economies most workers know by heart.
But not Adrián Chacón and Alejandro Ortega, two young repairmen who found themselves on the losing end of the fight for their jobs. The best friends were knocked off balance when the Cuban government changed what had been a hard-and-fast rule for the last 50 years.
Like all Cubans their age, these young men were told all their lives that a tough job market had nothing to do with the Cuban reality – that only capitalist workers faced layoffs. That, under the island’s state controlled socialist economy, work was a guaranteed right.
Sure, the state might not pay people enough to put much food on the table, but anyone looking for work would always be welcomed at some public company or government ministry.
Not so fast …
That promise went out the window last year when Cuban President Raul Castro told people to take a hard look around them.
Cuba, he said, must stop being the “only country in the world where it is not necessary to work.” The only way to heal Cuba’s battered economy, he insisted, was to start producing more, and with fewer people.
Castro first took aim at Cuba’s bloated state payrolls and state-run companies failing to turn a profit. Both drain the public treasury, he argued, at a time when the country’s very survival was at stake.
While promising a wholesale overhaul of Cuba’s financial system, Castro had the state start by laying off workers in droves. His plan was to cut 500,000 jobs by the first quarter of 2011 and more than one million by 2015 – effectively eliminating one in every five jobs.
While that frenetic pace has slowed considerably (perhaps someone figured out that throwing so many people out of work in such a concentrated time could end up fueling social unrest), thousands of younger workers, including Chacón and Ortega, were among the first to go.
Initially, both had similar reactions to the layoffs: anger. Months later, the friends have adapted differently to their circumstances.
Read the full post HERE.
'We have to think differently' to deal with new reality brought in by reforms
By Mary Murray
NBC News
updated 5/4/2011 9:15:41 AM ET
HAVANA — Last hired, first fired – one of those golden laws of free market economies most workers know by heart.
But not Adrián Chacón and Alejandro Ortega, two young repairmen who found themselves on the losing end of the fight for their jobs. The best friends were knocked off balance when the Cuban government changed what had been a hard-and-fast rule for the last 50 years.
Like all Cubans their age, these young men were told all their lives that a tough job market had nothing to do with the Cuban reality – that only capitalist workers faced layoffs. That, under the island’s state controlled socialist economy, work was a guaranteed right.
Sure, the state might not pay people enough to put much food on the table, but anyone looking for work would always be welcomed at some public company or government ministry.
Not so fast …
That promise went out the window last year when Cuban President Raul Castro told people to take a hard look around them.
Cuba, he said, must stop being the “only country in the world where it is not necessary to work.” The only way to heal Cuba’s battered economy, he insisted, was to start producing more, and with fewer people.
Castro first took aim at Cuba’s bloated state payrolls and state-run companies failing to turn a profit. Both drain the public treasury, he argued, at a time when the country’s very survival was at stake.
While promising a wholesale overhaul of Cuba’s financial system, Castro had the state start by laying off workers in droves. His plan was to cut 500,000 jobs by the first quarter of 2011 and more than one million by 2015 – effectively eliminating one in every five jobs.
While that frenetic pace has slowed considerably (perhaps someone figured out that throwing so many people out of work in such a concentrated time could end up fueling social unrest), thousands of younger workers, including Chacón and Ortega, were among the first to go.
Initially, both had similar reactions to the layoffs: anger. Months later, the friends have adapted differently to their circumstances.
Read the full post HERE.
Friday, September 11, 2009
Cuba OKs licenses for new private taxis
MSNBC
Cuba OKs licenses for new private taxis
Move offers rare glimpse of free market in communist nation
The Associated Press
updated 1:41 p.m. PT, Fri., Sept . 11, 2009
HAVANA - Jose Obdilio Duran's '57 Chevy has holes in its mottled floor, a passenger window that can't be rolled up and no inside panels on its doors. But the 71-year-old retiree wants to put the old car to work — applying for one of the first taxi licenses this communist country has granted in a decade.
About 60 would-be taxi drivers lined up early Friday at a Transport Ministry office in central Havana to fill out forms for permission to use their own cars as taxis — a rare dose of the free market on an island whose economy is dominated almost entirely by the state.
The new, private taxis are meant to help alleviate chronic transportation problems. In the capital, many people have to hitchhike to work in the morning. Things are so grave in the countryside that entire families wait by the highway for hours for transportation from one town to another.
Those willing to brave long lines at bus stops and endure sardine-like conditions can squeeze aboard former Soviet-bloc coaches that still list destinations such as East Berlin. Cuba has used credit to buy thousands of new buses from China, but they are mostly used to carry tourists and have not been enough to meet Cuban demand.
"This is one of the best decisions the state has ever made," said Luis Pozo, 67, another retiree seeking a license for his Russian-built 1988 Moscovich. Pozo said he didn't think the small free-market opening was out of step with the ideals of Cuba's revolution.
"It's not like anybody is going to get rich from this," he said.
‘Still going strong’
The license gives drivers the right to ferry fellow Cubans — but not foreigners — for a monthly fee of $21.50 a month. They must pay that quota whether they make the money back or not.
The government says it will set price ceilings, but has yet to provide details. Most of those applying for licenses said they hoped to charge 10 pesos — about 50 cents — for standard trips. A separate fleet of modern cabs caters to tourists and they can charge up to $30 for a single trip through Havana.
Cuba stopped granting new licenses for private taxis in October 1999, but lifted the restrictions in January. Authorities started handing out taxi permissions in May, but were so inundated with requests that they quickly suspended the program in Havana, and only resumed in earnest on Friday.
The government has not said how many licenses it will grant. Thousands of Cubans already use private cars, either classic or modern, to give black-market rides. But they risk steep fines and even having their cars seized by the state if caught.
To an outsider's detached eye, Duran's brown Bel Air looks as if it could come apart at any minute, but he sees it differently.
"It's a beautiful car," he said proudly, before slowly puttering away. "The motor is old, almost as old as me, but it works well. It is still going strong, just like me."
Duran says once he gets the license — wait time is supposed to be about a month — he hopes to drive part-time to supplement his monthly pension of $13. He and others waiting to get the licenses said they figure they will be able to pull in about $10 a month after taxes and maintenance costs, often driving their cars along set routes where many Cubans wait for a lift.
Increased competition
While getting new taxis on the road will be some comfort to commuters, not everyone is thrilled.
"This is going to mean more competition," said 35-year-old Manolo Rodriguez, one of about 50 already-licensed taxi drivers waiting under the shade of a tree-lined street next to Cuba's majestic capitol dome, a slightly taller replica of the U.S. Capitol in Washington.
Rodriguez says he spends most of his 12-hour day waiting his turn in line behind other taxis, since cruising for fares uses up lots of fuel. He said he usually only carries four passengers each shift on a set route to the remote suburb of El Cotorro.
Still, that's enough to make more on a good day than Rodriguez used to earn in a month working at a cracker factory — about $15.
"If they keep giving out licenses I may only be able to get three trips a day, and that will really affect my income," said Rodriguez, standing next to a hulking '53 Oldsmobile whose faded coat of powder blue paint had seen better days.
Supply and demand
The loosening of taxi rules is one of a small number of limited reforms taken by President Raul Castro's government. But it seems to expressly defy the policies of his brother Fidel, who singled out private taxis as seeking "juicy profits" and fomenting a black market for state-subsidized gasoline.
Raul took over Cuba's presidency in February 2008 and has spoken publicly about the need to address dire daily life problems like transportation, housing and food shortages. But he has largely failed to solve them, and the global financial crisis has taken a toll on the island's ever-weak economy.
Another hopeful new taxi driver, Rigoberto Lamyser, said he plans to use his Czech-made Skoda sedan on weekends to earn extra cash while keeping his full-time job as a hydraulic engineer.
Vehicle ownership is strictly controlled, and most Cubans can only have cars built before Fidel Castro's revolution on New Year's Day 1959. But the 60-year-old Lamyser said he was able to buy a modern car because his job took him overseas, making him eligible for a special license.
He said he would charge 50 cents a trip unless a passenger is desperate enough to pay more.
"The market decides," said Lamyser. "It's supply and demand and even Cuba can't resist it."
Cuba OKs licenses for new private taxis
Move offers rare glimpse of free market in communist nation
The Associated Press
updated 1:41 p.m. PT, Fri., Sept . 11, 2009
HAVANA - Jose Obdilio Duran's '57 Chevy has holes in its mottled floor, a passenger window that can't be rolled up and no inside panels on its doors. But the 71-year-old retiree wants to put the old car to work — applying for one of the first taxi licenses this communist country has granted in a decade.
About 60 would-be taxi drivers lined up early Friday at a Transport Ministry office in central Havana to fill out forms for permission to use their own cars as taxis — a rare dose of the free market on an island whose economy is dominated almost entirely by the state.
The new, private taxis are meant to help alleviate chronic transportation problems. In the capital, many people have to hitchhike to work in the morning. Things are so grave in the countryside that entire families wait by the highway for hours for transportation from one town to another.
Those willing to brave long lines at bus stops and endure sardine-like conditions can squeeze aboard former Soviet-bloc coaches that still list destinations such as East Berlin. Cuba has used credit to buy thousands of new buses from China, but they are mostly used to carry tourists and have not been enough to meet Cuban demand.
"This is one of the best decisions the state has ever made," said Luis Pozo, 67, another retiree seeking a license for his Russian-built 1988 Moscovich. Pozo said he didn't think the small free-market opening was out of step with the ideals of Cuba's revolution.
"It's not like anybody is going to get rich from this," he said.
‘Still going strong’
The license gives drivers the right to ferry fellow Cubans — but not foreigners — for a monthly fee of $21.50 a month. They must pay that quota whether they make the money back or not.
The government says it will set price ceilings, but has yet to provide details. Most of those applying for licenses said they hoped to charge 10 pesos — about 50 cents — for standard trips. A separate fleet of modern cabs caters to tourists and they can charge up to $30 for a single trip through Havana.
Cuba stopped granting new licenses for private taxis in October 1999, but lifted the restrictions in January. Authorities started handing out taxi permissions in May, but were so inundated with requests that they quickly suspended the program in Havana, and only resumed in earnest on Friday.
The government has not said how many licenses it will grant. Thousands of Cubans already use private cars, either classic or modern, to give black-market rides. But they risk steep fines and even having their cars seized by the state if caught.
To an outsider's detached eye, Duran's brown Bel Air looks as if it could come apart at any minute, but he sees it differently.
"It's a beautiful car," he said proudly, before slowly puttering away. "The motor is old, almost as old as me, but it works well. It is still going strong, just like me."
Duran says once he gets the license — wait time is supposed to be about a month — he hopes to drive part-time to supplement his monthly pension of $13. He and others waiting to get the licenses said they figure they will be able to pull in about $10 a month after taxes and maintenance costs, often driving their cars along set routes where many Cubans wait for a lift.
Increased competition
While getting new taxis on the road will be some comfort to commuters, not everyone is thrilled.
"This is going to mean more competition," said 35-year-old Manolo Rodriguez, one of about 50 already-licensed taxi drivers waiting under the shade of a tree-lined street next to Cuba's majestic capitol dome, a slightly taller replica of the U.S. Capitol in Washington.
Rodriguez says he spends most of his 12-hour day waiting his turn in line behind other taxis, since cruising for fares uses up lots of fuel. He said he usually only carries four passengers each shift on a set route to the remote suburb of El Cotorro.
Still, that's enough to make more on a good day than Rodriguez used to earn in a month working at a cracker factory — about $15.
"If they keep giving out licenses I may only be able to get three trips a day, and that will really affect my income," said Rodriguez, standing next to a hulking '53 Oldsmobile whose faded coat of powder blue paint had seen better days.
Supply and demand
The loosening of taxi rules is one of a small number of limited reforms taken by President Raul Castro's government. But it seems to expressly defy the policies of his brother Fidel, who singled out private taxis as seeking "juicy profits" and fomenting a black market for state-subsidized gasoline.
Raul took over Cuba's presidency in February 2008 and has spoken publicly about the need to address dire daily life problems like transportation, housing and food shortages. But he has largely failed to solve them, and the global financial crisis has taken a toll on the island's ever-weak economy.
Another hopeful new taxi driver, Rigoberto Lamyser, said he plans to use his Czech-made Skoda sedan on weekends to earn extra cash while keeping his full-time job as a hydraulic engineer.
Vehicle ownership is strictly controlled, and most Cubans can only have cars built before Fidel Castro's revolution on New Year's Day 1959. But the 60-year-old Lamyser said he was able to buy a modern car because his job took him overseas, making him eligible for a special license.
He said he would charge 50 cents a trip unless a passenger is desperate enough to pay more.
"The market decides," said Lamyser. "It's supply and demand and even Cuba can't resist it."
Friday, July 31, 2009
Cuba shuts factories, cuts energy to save economy
Yahoo/AP
Cuba shuts factories, cuts energy to save economy
By WILL WEISSERT, Associated Press Writer Will Weissert, Associated Press Writer 1 hr 1 min ago
HAVANA – It's hard to find a spare tire in Cuba these days, or a cup of yoghurt.
Air conditioners are shut off in the dead heat. Factories close at peak hours, and workers go without their government-subsidized lunches.
Cuba has ordered austere energy savings this summer to cope with rising budget deficits and plummeting export profits, and the Communist Party Central Committee on Friday lowered 2009 economic growth projections by nearly a full percentage point. The committee also announced that it was suspending plans for the first Communist Party congress in 12 years in order to deal with the financial crisis.
A report in official Cuban newspapers cited President Raul Castro as saying the island is struggling through a "very serious" crisis and hinted that further belt-tightening was on the way.
The government already has imposed conservation measures even as it continues to get free oil for services from Venezuela, fueling rumors that Cuba is selling President Hugo Chavez's crude on the side to raise cash.
More likely, the shortages result from a global recession that hit an already struggling economy still reeling from last year's hurricanes. President Raul Castro scolded Cubans in a national address Sunday to work harder because they have no one to blame but themselves.
"The only thing I know is that this is lousy," said one 27-year-old who only gave the name Raul because he sells cement and housing materials on the black market. "I don't work. I find a way to survive."
The latest cuts are small compared with strict measures imposed during the so-called special period, when Cubans nearly starved after subsidies dried up with the collapse of the Soviet Union. Nor are they as severe as the blackouts of 2004, when technical problems at power plants left much of the island in the dark for hours at a time. Fans and water pumps were idled. Milk and food spoiled, while electrical surges damaged refrigerators, televisions and other costly appliances.
Still, every bit of belt-tightening stings in a country where almost everyone works for the state and average wages are less than $20 per month.
The price of nickel, Cuba's chief export, is down more than 50 percent from last year, according to Toronto-based Sherritt International Cooperation, Cuba's largest energy partner.
The company's oil production on the island was down 19 percent last quarter compared to the second quarter of 2008, mainly because Sherritt suspended drilling earlier this year when Cuba fell behind on its payments.
The government and Sherritt have worked out a plan to pay down the debt, and the company says Cuba has been sticking to it. But the situation could have spurred the mandatory energy savings. Neither Sherritt nor the Cuban government would provide more details.
Or Cuba may be trying to save unused oil to bolster strategic reserves while prices are still relatively low, said Dan Erikson of the Inter-American Dialogue in Washington.
But he also said the strict measures lend credence to whispers that Cuba is selling Venezuelan oil overseas — something the communist government did with some of the discounted oil it got from the Soviet Union.
"It's been alleged they've been selling Venezuelan oil on the side. They've denied that, but if they are open to doing it, now would be the time," Erikson said. "Cuba's in a real cash crunch."
Beginning June 1, the government ordered energy conservation measures as part of a broader plan to cut the national budget by 6 percent. Central planners also announced Friday they were revising their economic growth projections downward, from 2.5 percent to 1.7 percent. As recently as December, they had projected 6 percent economic growth in Cuba.
These days, most countries would cheer any economic growth. But Cuba counts what it spends on free health care and education, monthly food rations and other social programs as production — making economic growth figures dubious.
The island's economic woes began in earnest with three hurricanes last summer that caused more than $10 billion in damage and wiped out some of the food and grains the government had stockpiled to insulate itself from rising commodities prices.
How much Cuba has spent on hurricane recovery is unclear. But Castro said the government has rebuilt or repaired 43 percent of the 260,000 homes damaged or lost in the storms.
Cuba consumed about 150,000 barrels of crude oil a day in 2008, of which 52,000 were produced domestically and 93,000 imported from Venezuela, said Jorge Pinon, an energy fellow at the University of Miami's Center for Hemispheric Policy. Half is used to generate electricity, according to Cuba's Ministry of Basic Resources.
Though the numbers leave the country 5,000 barrels a day short, Pinon said natural gas production last year covered the energy equivalent of 20,000 barrels of oil daily and kept the power plants running smoothly.
"Cuba, from a petroleum point of view, is balanced," he said. "It's not running out of oil."
So far the power-saving measures have been confined to state-run businesses and factories, though many Cubans fear they will soon hit residential users as well.
Workers at a tire factory in San Jose de las Lajas, a rugged farming town 30 miles (50 kilometers) south of Havana, said production is down and the factory goes dark when demand for electricity is high — leaving gas stations and mechanics short on spare tires.
In the central province of Cienfuegos, a large dairy that supplies ice cream and other products to much of the country and exports cheese has been ordered to cut production, according to the Communist Youth newspaper Juventud Rebelde. Yogurt is scarce in Havana — sold only in upscale grocery stores that cater to tourists and are too expensive for most Cubans.
Some government office workers say their hours have been cut to between 8 a.m. and 3 p.m., and others are being told to come in only twice a week.
State companies also have stopped offering employees low-cost lunches in worker cafeterias to save power.
Other government offices, businesses, banks and stores have ordered air conditioners turned off for much of the day, rather than close early.
Customer service, never stellar in state-run institutions, has suffered even more. In the sweltering banks, barbershops and boutiques, listless employees are more interested in fanning themselves than serving sweating customers.
Cuba shuts factories, cuts energy to save economy
By WILL WEISSERT, Associated Press Writer Will Weissert, Associated Press Writer 1 hr 1 min ago
HAVANA – It's hard to find a spare tire in Cuba these days, or a cup of yoghurt.
Air conditioners are shut off in the dead heat. Factories close at peak hours, and workers go without their government-subsidized lunches.
Cuba has ordered austere energy savings this summer to cope with rising budget deficits and plummeting export profits, and the Communist Party Central Committee on Friday lowered 2009 economic growth projections by nearly a full percentage point. The committee also announced that it was suspending plans for the first Communist Party congress in 12 years in order to deal with the financial crisis.
A report in official Cuban newspapers cited President Raul Castro as saying the island is struggling through a "very serious" crisis and hinted that further belt-tightening was on the way.
The government already has imposed conservation measures even as it continues to get free oil for services from Venezuela, fueling rumors that Cuba is selling President Hugo Chavez's crude on the side to raise cash.
More likely, the shortages result from a global recession that hit an already struggling economy still reeling from last year's hurricanes. President Raul Castro scolded Cubans in a national address Sunday to work harder because they have no one to blame but themselves.
"The only thing I know is that this is lousy," said one 27-year-old who only gave the name Raul because he sells cement and housing materials on the black market. "I don't work. I find a way to survive."
The latest cuts are small compared with strict measures imposed during the so-called special period, when Cubans nearly starved after subsidies dried up with the collapse of the Soviet Union. Nor are they as severe as the blackouts of 2004, when technical problems at power plants left much of the island in the dark for hours at a time. Fans and water pumps were idled. Milk and food spoiled, while electrical surges damaged refrigerators, televisions and other costly appliances.
Still, every bit of belt-tightening stings in a country where almost everyone works for the state and average wages are less than $20 per month.
The price of nickel, Cuba's chief export, is down more than 50 percent from last year, according to Toronto-based Sherritt International Cooperation, Cuba's largest energy partner.
The company's oil production on the island was down 19 percent last quarter compared to the second quarter of 2008, mainly because Sherritt suspended drilling earlier this year when Cuba fell behind on its payments.
The government and Sherritt have worked out a plan to pay down the debt, and the company says Cuba has been sticking to it. But the situation could have spurred the mandatory energy savings. Neither Sherritt nor the Cuban government would provide more details.
Or Cuba may be trying to save unused oil to bolster strategic reserves while prices are still relatively low, said Dan Erikson of the Inter-American Dialogue in Washington.
But he also said the strict measures lend credence to whispers that Cuba is selling Venezuelan oil overseas — something the communist government did with some of the discounted oil it got from the Soviet Union.
"It's been alleged they've been selling Venezuelan oil on the side. They've denied that, but if they are open to doing it, now would be the time," Erikson said. "Cuba's in a real cash crunch."
Beginning June 1, the government ordered energy conservation measures as part of a broader plan to cut the national budget by 6 percent. Central planners also announced Friday they were revising their economic growth projections downward, from 2.5 percent to 1.7 percent. As recently as December, they had projected 6 percent economic growth in Cuba.
These days, most countries would cheer any economic growth. But Cuba counts what it spends on free health care and education, monthly food rations and other social programs as production — making economic growth figures dubious.
The island's economic woes began in earnest with three hurricanes last summer that caused more than $10 billion in damage and wiped out some of the food and grains the government had stockpiled to insulate itself from rising commodities prices.
How much Cuba has spent on hurricane recovery is unclear. But Castro said the government has rebuilt or repaired 43 percent of the 260,000 homes damaged or lost in the storms.
Cuba consumed about 150,000 barrels of crude oil a day in 2008, of which 52,000 were produced domestically and 93,000 imported from Venezuela, said Jorge Pinon, an energy fellow at the University of Miami's Center for Hemispheric Policy. Half is used to generate electricity, according to Cuba's Ministry of Basic Resources.
Though the numbers leave the country 5,000 barrels a day short, Pinon said natural gas production last year covered the energy equivalent of 20,000 barrels of oil daily and kept the power plants running smoothly.
"Cuba, from a petroleum point of view, is balanced," he said. "It's not running out of oil."
So far the power-saving measures have been confined to state-run businesses and factories, though many Cubans fear they will soon hit residential users as well.
Workers at a tire factory in San Jose de las Lajas, a rugged farming town 30 miles (50 kilometers) south of Havana, said production is down and the factory goes dark when demand for electricity is high — leaving gas stations and mechanics short on spare tires.
In the central province of Cienfuegos, a large dairy that supplies ice cream and other products to much of the country and exports cheese has been ordered to cut production, according to the Communist Youth newspaper Juventud Rebelde. Yogurt is scarce in Havana — sold only in upscale grocery stores that cater to tourists and are too expensive for most Cubans.
Some government office workers say their hours have been cut to between 8 a.m. and 3 p.m., and others are being told to come in only twice a week.
State companies also have stopped offering employees low-cost lunches in worker cafeterias to save power.
Other government offices, businesses, banks and stores have ordered air conditioners turned off for much of the day, rather than close early.
Customer service, never stellar in state-run institutions, has suffered even more. In the sweltering banks, barbershops and boutiques, listless employees are more interested in fanning themselves than serving sweating customers.
Cuba Cancels Plans for Communist Party Congress
AP
Cuba nixes plans for party congress
Economic woes foil plans for congress to chart island’s post-Castro course
The Associated Press
updated 7:47 a.m. PT, Fri., July 31, 2009
HAVANA - Cuba on Friday suspended plans for a Communist Party congress and lowered its 2009 economic growth projection to 1.7 percent — nearly a full percentage point — as the island's economy struggles through a "very serious" crisis.
In a closed-door meeting of the Communist Party Central Committee, officials agreed to postpone indefinitely the first congress since 1997, which had been announced for the second half of this year.
The gathering was to chart Cuba's political future long after President Raul Castro and his brother Fidel are gone. Instead, top communists will try and pull their country back from the economic brink.
Second downward revision of 2009
Cuba lowered its 2009 growth estimate from 2.5 percent to 1.7 percent, but even that figure is dubious given that it includes state spending on free health care and education, the food Cubans receive with monthly ration booklets and a broad range of other social services.
The revision downward was the second of its kind this year. As recently as December, central planners said they thought the Cuban economy would grow by 6 percent in 2009.
The country's economic problems began last summer, with three hurricanes that caused more than $10 billion in damage. The situation has worsened with the onset of the global financial crisis and subsequent recession.
Break with tradition
The 78-year-old Raul Castro succeeded his brother as president more than 18 months ago, but it's the soon-to-be 83-year-old Fidel who remains head of the Communist Party.
Party congresses historically have been held every five years or so to renew leadership and set major policies, but the government has broken with that tradition over the past decade.
Information about the Central Committee meeting occupied the entire front page of the Communist Party daily Granma and a full page inside cited Raul Castro as reporting that "things are very serious and we are now analyzing them."
"The principal matter is the economy: what we have done and what we have to perfect and even eliminate as we are up against an imperative to make full accounts of what the country really has available, of what we have to live and for development," the newspaper said, citing the president.
It said authorities would postpone the sixth Party congress "until this crucial phase ... has been overcome," but did not say when that might be.
Waiting for his copy of Granma when it hit newsstands at 7 a.m., Raul Salgado, a 72-year-old retiree, said, "I want to know what's happening, or better yet, what's going to happen."
"I don't think it matters much to the people if there is a congress or not. What the people want here in Cuba is to know what the government is going to do to get out of such a terrible situation like the one in which we're living," Salgado said.
More cutbacks likely
Cuba has begun a major push to conserve energy in an attempt to save some of the imported oil it uses to run power plants. State-run factories have been idled during peak hours, air conditioners have been stilled at government offices and some work hours shortened.
Granma made it clear more cutbacks were coming, but did not give details. Cuba's rubber-stamp parliament convenes Saturday for one of its two full sessions a year and could unveil new energy-saving plans then.
Cuba nixes plans for party congress
Economic woes foil plans for congress to chart island’s post-Castro course
The Associated Press
updated 7:47 a.m. PT, Fri., July 31, 2009
HAVANA - Cuba on Friday suspended plans for a Communist Party congress and lowered its 2009 economic growth projection to 1.7 percent — nearly a full percentage point — as the island's economy struggles through a "very serious" crisis.
In a closed-door meeting of the Communist Party Central Committee, officials agreed to postpone indefinitely the first congress since 1997, which had been announced for the second half of this year.
The gathering was to chart Cuba's political future long after President Raul Castro and his brother Fidel are gone. Instead, top communists will try and pull their country back from the economic brink.
Second downward revision of 2009
Cuba lowered its 2009 growth estimate from 2.5 percent to 1.7 percent, but even that figure is dubious given that it includes state spending on free health care and education, the food Cubans receive with monthly ration booklets and a broad range of other social services.
The revision downward was the second of its kind this year. As recently as December, central planners said they thought the Cuban economy would grow by 6 percent in 2009.
The country's economic problems began last summer, with three hurricanes that caused more than $10 billion in damage. The situation has worsened with the onset of the global financial crisis and subsequent recession.
Break with tradition
The 78-year-old Raul Castro succeeded his brother as president more than 18 months ago, but it's the soon-to-be 83-year-old Fidel who remains head of the Communist Party.
Party congresses historically have been held every five years or so to renew leadership and set major policies, but the government has broken with that tradition over the past decade.
Information about the Central Committee meeting occupied the entire front page of the Communist Party daily Granma and a full page inside cited Raul Castro as reporting that "things are very serious and we are now analyzing them."
"The principal matter is the economy: what we have done and what we have to perfect and even eliminate as we are up against an imperative to make full accounts of what the country really has available, of what we have to live and for development," the newspaper said, citing the president.
It said authorities would postpone the sixth Party congress "until this crucial phase ... has been overcome," but did not say when that might be.
Waiting for his copy of Granma when it hit newsstands at 7 a.m., Raul Salgado, a 72-year-old retiree, said, "I want to know what's happening, or better yet, what's going to happen."
"I don't think it matters much to the people if there is a congress or not. What the people want here in Cuba is to know what the government is going to do to get out of such a terrible situation like the one in which we're living," Salgado said.
More cutbacks likely
Cuba has begun a major push to conserve energy in an attempt to save some of the imported oil it uses to run power plants. State-run factories have been idled during peak hours, air conditioners have been stilled at government offices and some work hours shortened.
Granma made it clear more cutbacks were coming, but did not give details. Cuba's rubber-stamp parliament convenes Saturday for one of its two full sessions a year and could unveil new energy-saving plans then.
Sunday, July 26, 2009
Castro calls for tight finances in Cuba
CNN
Castro calls for tight finances in Cuba
From Shasta Darlington
CNN
HOLGUIN, Cuba (CNN) -- Sunday was a day of commemoration in Cuba -- the 56th anniversary of the start of the Cuban Revolution -- but the message from President Raul Castro was not all celebratory.
The island nation will face a second round of belt-tightening as a result of the global financial crunch, Castro said in a speech marking Revolution Day.
He said that on Tuesday he would hold a meeting of the Council of Ministries "dedicated to the analysis of the second cost adjustment in this year's plan, due to the effects of the global economic crisis, especially on the reduction of revenues from exports and the additional restrictions on accessing external financing."
The global economic downturn has hit Cuba hard. Revenues from key exports like nickel are down. The price of imports, like food, is up.
Castro said he would also meet with the central committee of the Communist Party this week to discuss the situation.
Any proposed cuts will affect a Cuban population already feeling the squeeze.
Public transport has been reduced as part of austerity measures. The government has ordered factories and businesses to cut energy consumption or face sanctions.
Castro took a few swipes at the U.S. trade embargo that has been in place since 1962, but made it clear Cubans have only themselves to blame for agriculture shortages.
"The land is there. We Cubans are here. We'll see if we get to work or not, if we produce or not, if we keep our words or not," he said, pounding his fist on the podium.
"It's not just a question of shouting 'fatherland or death, down with imperialism, the blockade knocks us out' when the land is there, waiting for our sweat."
Cuba has seen hard times before and has always worked to pull through, Castro said in front of the 200,000 people packed into the parade grounds of Holguin, about 500 miles southeast of Havana.
Castro calls for tight finances in Cuba
From Shasta Darlington
CNN
HOLGUIN, Cuba (CNN) -- Sunday was a day of commemoration in Cuba -- the 56th anniversary of the start of the Cuban Revolution -- but the message from President Raul Castro was not all celebratory.
The island nation will face a second round of belt-tightening as a result of the global financial crunch, Castro said in a speech marking Revolution Day.
He said that on Tuesday he would hold a meeting of the Council of Ministries "dedicated to the analysis of the second cost adjustment in this year's plan, due to the effects of the global economic crisis, especially on the reduction of revenues from exports and the additional restrictions on accessing external financing."
The global economic downturn has hit Cuba hard. Revenues from key exports like nickel are down. The price of imports, like food, is up.
Castro said he would also meet with the central committee of the Communist Party this week to discuss the situation.
Any proposed cuts will affect a Cuban population already feeling the squeeze.
Public transport has been reduced as part of austerity measures. The government has ordered factories and businesses to cut energy consumption or face sanctions.
Castro took a few swipes at the U.S. trade embargo that has been in place since 1962, but made it clear Cubans have only themselves to blame for agriculture shortages.
"The land is there. We Cubans are here. We'll see if we get to work or not, if we produce or not, if we keep our words or not," he said, pounding his fist on the podium.
"It's not just a question of shouting 'fatherland or death, down with imperialism, the blockade knocks us out' when the land is there, waiting for our sweat."
Cuba has seen hard times before and has always worked to pull through, Castro said in front of the 200,000 people packed into the parade grounds of Holguin, about 500 miles southeast of Havana.
Wednesday, November 12, 2008
Cuba replaces foreign investment minister Lomas
AP
Cuba replaces foreign investment minister Lomas
Wed Nov 12, 10:08 pm ET
HAVANA – Cuba replaced its foreign investment minister Wednesday in a high-profile Cabinet change, but did not explain the move.
A statement read during the communist island's nightly newscast said the Communist Party's Politburo "decided to liberate" Marta Lomas from the position. It did not give a reason, and it was not clear if she will take on a new governmental role.
She will be replaced by former U.N. Ambassador Rodrigo Malmierca, whom the statement praised as an experienced diplomat and leader.
The 24-member Politburo is headed by Fidel Castro, 82 years old and ailing, who stepped down from the presidency in February in favor of his younger brother Raul.
Havana's communist government controls well over 90 percent of the economy, but the island created joint business ventures with foreign enterprises and began encouraging foreign tourism en masse in the early 1990s after the collapse of the Soviet Union crippled its economy.
As foreign investment minister, Lomas helped negotiate contracts with trade delegations from foreign governments and foreign business leaders.
Cuba replaces foreign investment minister Lomas
Wed Nov 12, 10:08 pm ET
HAVANA – Cuba replaced its foreign investment minister Wednesday in a high-profile Cabinet change, but did not explain the move.
A statement read during the communist island's nightly newscast said the Communist Party's Politburo "decided to liberate" Marta Lomas from the position. It did not give a reason, and it was not clear if she will take on a new governmental role.
She will be replaced by former U.N. Ambassador Rodrigo Malmierca, whom the statement praised as an experienced diplomat and leader.
The 24-member Politburo is headed by Fidel Castro, 82 years old and ailing, who stepped down from the presidency in February in favor of his younger brother Raul.
Havana's communist government controls well over 90 percent of the economy, but the island created joint business ventures with foreign enterprises and began encouraging foreign tourism en masse in the early 1990s after the collapse of the Soviet Union crippled its economy.
As foreign investment minister, Lomas helped negotiate contracts with trade delegations from foreign governments and foreign business leaders.
Tuesday, October 21, 2008
Cuban foreign minister: Salary reform advancing
AP
Cuban foreign minister: Salary reform advancing
By E. EDUARDO CASTILLO, Associated Press Writer E. Eduardo Castillo, Associated Press Writer Tue Oct 21, 7:11 pm ET
MEXICO CITY – Cuba is making progress in a salary reform that will ensure waiters don't make more than doctors, but the changes must be handled carefully to avoid economic turmoil, the island's foreign minister said Tuesday.
Appearing before business leaders in Mexico City, Felipe Perez Roque said reforms within the communist system will help guarantee that people earn a salary more commensurate with their career.
"We are in a salary reform that allows people to earn for what they do and resolves the contradiction in Cuba ... in which the bellboy of a hotel or the employee of a restaurant, with tips, earns more than a surgeon," he said.
But he cautioned that the change "has to be done in phases."
"If they just start throwing money in the streets without support, there will be inflation and it will damage our currency," he said.
Under the island's communist economic system, nearly all Cubans work for the government and earn an average monthly wage of 408 Cuban pesos, or just under US$20. That is supplemented by food and other subsidies.
People working in the tourist industry often receive tips that can far surpass state wages and give them greater access to luxury goods at hard-currency stores.
President Raul Castro and other Cuban officials have talked of the need for salary reforms and the government announced in June it would start paying workers on the basis of individual rather than group production so that workers who don't do their share or are frequently absent don't earn the same as those who show up regularly and do a good job.
The government in April raised salaries of court workers and increased monthly pensions for all workers. But the salary increases could not be extended to other sectors immediately because of insufficient resources.
Perez Roque also said that Cuba is working toward having a single currency.
Cuba has had two primary currencies since the collapse of the Soviet Union wrecked its economy and spurred its turn to tourism. Tourist businesses took U.S. dollars and charged U.S. prices, while the peso was maintained for everyday transactions.
A convertible peso, largely linked to the dollar, is now used for tourism and at stores offering goods that are often unavailable in local pesos.
Officials have repeatedly said they hope to bring the two systems together, but say that cannot be done until productivity increases.
Perez Roque also said that relations with the European Union have improved after the EU moved last year to lift sanctions imposed on Cuba for its jailing of 75 dissidents in 2003.
"There has been a process of reconstruction of Cuba's relations with the European Union," Perez Roque said. "In general, Cuba's relations with the EU are advancing and improving."
Also Tuesday, Perez Roque met with President Felipe Calderon and invited the Mexican leader to visit Cuba. No date was set for a visit.
Both Perez Roque and Calderon celebrated closer relations. Ties between the countries soured under the 2000-2006 presidency of Vicente Fox, when Mexico voted at the U.N. in favor of monitoring human rights in Cuba. Relations reached a low in 2004, when both countries called home their ambassadors.
Mexico signed an agreement with Cuba on Monday to deport Cubans caught moving through Mexico illegally to reach the U.S.
Cuban foreign minister: Salary reform advancing
By E. EDUARDO CASTILLO, Associated Press Writer E. Eduardo Castillo, Associated Press Writer Tue Oct 21, 7:11 pm ET
MEXICO CITY – Cuba is making progress in a salary reform that will ensure waiters don't make more than doctors, but the changes must be handled carefully to avoid economic turmoil, the island's foreign minister said Tuesday.
Appearing before business leaders in Mexico City, Felipe Perez Roque said reforms within the communist system will help guarantee that people earn a salary more commensurate with their career.
"We are in a salary reform that allows people to earn for what they do and resolves the contradiction in Cuba ... in which the bellboy of a hotel or the employee of a restaurant, with tips, earns more than a surgeon," he said.
But he cautioned that the change "has to be done in phases."
"If they just start throwing money in the streets without support, there will be inflation and it will damage our currency," he said.
Under the island's communist economic system, nearly all Cubans work for the government and earn an average monthly wage of 408 Cuban pesos, or just under US$20. That is supplemented by food and other subsidies.
People working in the tourist industry often receive tips that can far surpass state wages and give them greater access to luxury goods at hard-currency stores.
President Raul Castro and other Cuban officials have talked of the need for salary reforms and the government announced in June it would start paying workers on the basis of individual rather than group production so that workers who don't do their share or are frequently absent don't earn the same as those who show up regularly and do a good job.
The government in April raised salaries of court workers and increased monthly pensions for all workers. But the salary increases could not be extended to other sectors immediately because of insufficient resources.
Perez Roque also said that Cuba is working toward having a single currency.
Cuba has had two primary currencies since the collapse of the Soviet Union wrecked its economy and spurred its turn to tourism. Tourist businesses took U.S. dollars and charged U.S. prices, while the peso was maintained for everyday transactions.
A convertible peso, largely linked to the dollar, is now used for tourism and at stores offering goods that are often unavailable in local pesos.
Officials have repeatedly said they hope to bring the two systems together, but say that cannot be done until productivity increases.
Perez Roque also said that relations with the European Union have improved after the EU moved last year to lift sanctions imposed on Cuba for its jailing of 75 dissidents in 2003.
"There has been a process of reconstruction of Cuba's relations with the European Union," Perez Roque said. "In general, Cuba's relations with the EU are advancing and improving."
Also Tuesday, Perez Roque met with President Felipe Calderon and invited the Mexican leader to visit Cuba. No date was set for a visit.
Both Perez Roque and Calderon celebrated closer relations. Ties between the countries soured under the 2000-2006 presidency of Vicente Fox, when Mexico voted at the U.N. in favor of monitoring human rights in Cuba. Relations reached a low in 2004, when both countries called home their ambassadors.
Mexico signed an agreement with Cuba on Monday to deport Cubans caught moving through Mexico illegally to reach the U.S.
Monday, October 20, 2008
20bn barrel oil discovery puts Cuba in the big league
Guardian
20bn barrel oil discovery puts Cuba in the big league
• Self-reliance beckons for communist state
• Estimate means reserves are on a par with US
* Rory Carroll, Latin America correspondent
* The Guardian,
* Saturday October 18 2008
Friends and foes have called Cuba many things - a progressive beacon, a quixotic underdog, an oppressive tyranny - but no one has called it lucky, until now .
Mother nature, it emerged this week, appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers. The government announced there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba's share of the Gulf of Mexico, more than twice the previous estimate.
If confirmed, it puts Cuba's reserves on par with those of the US and into the world's top 20. Drilling is expected to start next year by Cuba's state oil company Cubapetroleo, or Cupet.
"It would change their whole equation. The government would have more money and no longer be dependent on foreign oil," said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. "It could join the club of oil exporting nations."
"We have more data. I'm almost certain that if they ask for all the data we have, (their estimate) is going to grow considerably," said Cupet's exploration manager, Rafael Tenreyro Perez.
Havana based its dramatically higher estimate mainly on comparisons with oil output from similar geological structures off the coasts of Mexico and the US. Cuba's undersea geology was "very similar" to Mexico's giant Cantarell oil field in the Bay of Campeche, said Tenreyro.
A consortium of companies led by Spain's Repsol had tested wells and were expected to begin drilling the first production well in mid-2009, and possibly several more later in the year, he said.
Cuba currently produces about 60,000 barrels of oil daily, covering almost half of its needs, and imports the rest from Venezuela in return for Cuban doctors and sports instructors. Even that barter system puts a strain on an impoverished economy in which Cubans earn an average monthly salary of $20.
Subsidised grocery staples, health care and education help make ends meet but an old joke - that the three biggest failings of the revolution are breakfast, lunch and dinner - still does the rounds. Last month hardships were compounded by tropical storms that shredded crops and devastated coastal towns.
"This news about the oil reserves could not have come at a better time for the regime," said Jonathan Benjamin-Alvarado, a Cuba energy specialist at the University of Nebraska.
However there is little prospect of Cuba becoming a communist version of Kuwait. Its oil is more than a mile deep under the ocean and difficult and expensive to extract. The four-decade-old US economic embargo prevents several of Cuba's potential oil partners - notably Brazil, Norway and Spain - from using valuable first-generation technology.
"You're looking at three to five years minimum before any meaningful returns," said Benjamin-Alvarado.
Even so, Cuba is a master at stretching resources. President Raul Castro, who took over from brother Fidel, has promised to deliver improvements to daily life to shore up the legitimacy of the revolution as it approaches its 50th anniversary.
Cuba's unexpected arrival into the big oil league could increase pressure on the next administration to loosen the embargo to let US oil companies participate in the bonanza and reduce US dependency on the middle east, said Jones. "Up until now the embargo did not really impact on us in a substantive, strategic way. Oil is different. It's something we need and want."
20bn barrel oil discovery puts Cuba in the big league
• Self-reliance beckons for communist state
• Estimate means reserves are on a par with US
* Rory Carroll, Latin America correspondent
* The Guardian,
* Saturday October 18 2008
Friends and foes have called Cuba many things - a progressive beacon, a quixotic underdog, an oppressive tyranny - but no one has called it lucky, until now .
Mother nature, it emerged this week, appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers. The government announced there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba's share of the Gulf of Mexico, more than twice the previous estimate.
If confirmed, it puts Cuba's reserves on par with those of the US and into the world's top 20. Drilling is expected to start next year by Cuba's state oil company Cubapetroleo, or Cupet.
"It would change their whole equation. The government would have more money and no longer be dependent on foreign oil," said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. "It could join the club of oil exporting nations."
"We have more data. I'm almost certain that if they ask for all the data we have, (their estimate) is going to grow considerably," said Cupet's exploration manager, Rafael Tenreyro Perez.
Havana based its dramatically higher estimate mainly on comparisons with oil output from similar geological structures off the coasts of Mexico and the US. Cuba's undersea geology was "very similar" to Mexico's giant Cantarell oil field in the Bay of Campeche, said Tenreyro.
A consortium of companies led by Spain's Repsol had tested wells and were expected to begin drilling the first production well in mid-2009, and possibly several more later in the year, he said.
Cuba currently produces about 60,000 barrels of oil daily, covering almost half of its needs, and imports the rest from Venezuela in return for Cuban doctors and sports instructors. Even that barter system puts a strain on an impoverished economy in which Cubans earn an average monthly salary of $20.
Subsidised grocery staples, health care and education help make ends meet but an old joke - that the three biggest failings of the revolution are breakfast, lunch and dinner - still does the rounds. Last month hardships were compounded by tropical storms that shredded crops and devastated coastal towns.
"This news about the oil reserves could not have come at a better time for the regime," said Jonathan Benjamin-Alvarado, a Cuba energy specialist at the University of Nebraska.
However there is little prospect of Cuba becoming a communist version of Kuwait. Its oil is more than a mile deep under the ocean and difficult and expensive to extract. The four-decade-old US economic embargo prevents several of Cuba's potential oil partners - notably Brazil, Norway and Spain - from using valuable first-generation technology.
"You're looking at three to five years minimum before any meaningful returns," said Benjamin-Alvarado.
Even so, Cuba is a master at stretching resources. President Raul Castro, who took over from brother Fidel, has promised to deliver improvements to daily life to shore up the legitimacy of the revolution as it approaches its 50th anniversary.
Cuba's unexpected arrival into the big oil league could increase pressure on the next administration to loosen the embargo to let US oil companies participate in the bonanza and reduce US dependency on the middle east, said Jones. "Up until now the embargo did not really impact on us in a substantive, strategic way. Oil is different. It's something we need and want."
Sunday, October 12, 2008
In food crisis, Cuba limits sales so all can eat
AP/Breitbart
In food crisis, Cuba limits sales so all can eat
Oct 10 02:54 PM US/Eastern
By ANNE-MARIE GARCIA
Associated Press Writer
HAVANA (AP) - Cuba is limiting how much basic fruits and vegetables people can buy at farmers' markets, irritating some customers but ensuring there's enough—barely—to go around.
The lines are long and some foods are scarce, but because the government has maintained and even increased rations in some areas, Cubans who initially worried about getting enough to eat now seem confident they won't go hungry despite the destruction of 30 percent of the island's crops by hurricanes Gustav and Ike last month.
"Of the little there is, there is some for everyone," 65-year-old Mercedes Grimau said as queued up behind more than 50 people to buy lettuce, limited to two pounds per person.
"I'm not afraid that I will be left without food, but it's a pain to think about all the work we are going to have to go through," Grimau added. "Two or three months ago the farmers markets were well-stocked."
Cuba's government regularly stockpiles beans and other basics, and Economics Minister Jose Luis Rodriguez said authorities are ready to increase the $2 billion they already spend on food imports annually. The world credit crisis won't affect much of those imports because U.S. law forces communist Cuba to use cash to purchase American farm goods. But imports from other countries bought with credit could become more difficult or expensive.
The government is delivering all items distributed each month on the universal ration that provides Cubans with up to two weeks of food—including eggs, beans, rice and potatoes—at very low cost. In some hard-hit provinces, extra food has been added.
But the rest of the food Cubans supplement their diets with at supply-and-demand farmers markets and government produce stands has dwindled, prompting the government to limit consumer purchases and cap prices on items including rice, beans, root crops and fresh greens.
Rodriguez has sought to dispel speculation about a replay of the desperate early 1990s, when shelves were bare and people survived for weeks on one small meal daily. Cubans who lived through deprivation after the Soviet Union's collapse say the current food situation doesn't come close.
"It is true that it will take us some time to bring the agricultural production up to the levels that existed before the hurricanes," Rodriguez told state television this week. "Nevertheless, there is no reason to speculate or assume that there will be any hunger."
Although Cuba's relative financial isolation partially protects it from the jolts of the world economy, an extended credit crisis could stunt the island's foreign currency income if Cubans living abroad lose jobs and stop sending family remittances, or if potential tourists can no longer afford to travel.
But now, Cuba's top challenge is to increase local production of fruits and vegetables sold at the farmers' markets.
Waiting at one market on a recent morning, 55-year-old homemaker Regla Suazo said, "At least with the measures I know I can buy something." Shortly thereafter, the first truck of the day pulled up with green beans, green onions, guavas, avocados, corn, squash, cassava root and sweet potatoes.
But quantities were much smaller than usual. Vendor Nadia Gomez, who received nothing that day, said police checkpoints leading into Havana now turn away trucks unauthorized to market produce in the capital or have been ordered send their goods to harder-hit areas.
Cuban agricultural officials expect six months of food shortages, and are increasing short-cycle crops such as salad greens and taking other measures to ensure everyone gets enough to eat.
At Cuatro Caminos farmers market, among Havana's largest and most varied, vendor Juan Carlos Martinez lamented he had only papayas, guavas and pineapples to sell. "This isn't the business it used to be," he said.
In food crisis, Cuba limits sales so all can eat
Oct 10 02:54 PM US/Eastern
By ANNE-MARIE GARCIA
Associated Press Writer
HAVANA (AP) - Cuba is limiting how much basic fruits and vegetables people can buy at farmers' markets, irritating some customers but ensuring there's enough—barely—to go around.
The lines are long and some foods are scarce, but because the government has maintained and even increased rations in some areas, Cubans who initially worried about getting enough to eat now seem confident they won't go hungry despite the destruction of 30 percent of the island's crops by hurricanes Gustav and Ike last month.
"Of the little there is, there is some for everyone," 65-year-old Mercedes Grimau said as queued up behind more than 50 people to buy lettuce, limited to two pounds per person.
"I'm not afraid that I will be left without food, but it's a pain to think about all the work we are going to have to go through," Grimau added. "Two or three months ago the farmers markets were well-stocked."
Cuba's government regularly stockpiles beans and other basics, and Economics Minister Jose Luis Rodriguez said authorities are ready to increase the $2 billion they already spend on food imports annually. The world credit crisis won't affect much of those imports because U.S. law forces communist Cuba to use cash to purchase American farm goods. But imports from other countries bought with credit could become more difficult or expensive.
The government is delivering all items distributed each month on the universal ration that provides Cubans with up to two weeks of food—including eggs, beans, rice and potatoes—at very low cost. In some hard-hit provinces, extra food has been added.
But the rest of the food Cubans supplement their diets with at supply-and-demand farmers markets and government produce stands has dwindled, prompting the government to limit consumer purchases and cap prices on items including rice, beans, root crops and fresh greens.
Rodriguez has sought to dispel speculation about a replay of the desperate early 1990s, when shelves were bare and people survived for weeks on one small meal daily. Cubans who lived through deprivation after the Soviet Union's collapse say the current food situation doesn't come close.
"It is true that it will take us some time to bring the agricultural production up to the levels that existed before the hurricanes," Rodriguez told state television this week. "Nevertheless, there is no reason to speculate or assume that there will be any hunger."
Although Cuba's relative financial isolation partially protects it from the jolts of the world economy, an extended credit crisis could stunt the island's foreign currency income if Cubans living abroad lose jobs and stop sending family remittances, or if potential tourists can no longer afford to travel.
But now, Cuba's top challenge is to increase local production of fruits and vegetables sold at the farmers' markets.
Waiting at one market on a recent morning, 55-year-old homemaker Regla Suazo said, "At least with the measures I know I can buy something." Shortly thereafter, the first truck of the day pulled up with green beans, green onions, guavas, avocados, corn, squash, cassava root and sweet potatoes.
But quantities were much smaller than usual. Vendor Nadia Gomez, who received nothing that day, said police checkpoints leading into Havana now turn away trucks unauthorized to market produce in the capital or have been ordered send their goods to harder-hit areas.
Cuban agricultural officials expect six months of food shortages, and are increasing short-cycle crops such as salad greens and taking other measures to ensure everyone gets enough to eat.
At Cuatro Caminos farmers market, among Havana's largest and most varied, vendor Juan Carlos Martinez lamented he had only papayas, guavas and pineapples to sell. "This isn't the business it used to be," he said.
Wednesday, August 20, 2008
Cuba looks at trimming social welfare
Financial Times
Cuba looks at trimming social welfare
By Richard Lapper in London
Published: August 18 2008 22:38 | Last updated: August 18 2008 22:38
Cuba, one of the world’s last surviving Communist states, is looking at watering down the generous social welfare system that has been a cornerstone of its economy for nearly 50 years, according to a senior government official.
Alfredo Jam, head of macroeconomic analysis in the economy ministry, told the Financial Times that Cubans had been “over-protected” by a system that subsidised food costs and limited the amount people could earn, prompting labour shortages in important industries.
“We can’t give people so much security with their income that it affects their willingness to work,” Mr Jam said. “We can have equality in access to education and health but not in equality of income.” He said the emphasis on equality had helped maintain social cohesion during the 1990s when Cuba’s economy came close to collapse after the withdrawal of Soviet assistance, but “when the economy recovers you realise that there is [a level of] protection that has to change. We can’t have a situation where it is not work that gives access to goods,” he said.
Mr Jam’s remarks represent a rare and unusually frank insight into official thinking on Cuba’s future economic direction in the wake of the resignation of its long-time leader, Fidel Castro, in February.
Under Cuba’s new president, the former leader’s younger brother Raúl, the country has eased restrictions on bonuses that can be paid to workers and lifted bans on products such as mobile phones and DVD players.
Mr Castro also decentralised the country’s agricultural system and said idle land would be offered to co-operatives and private farmers to lower dependency on imported food.
However, the welfare system has remained almost intact. Under it, all Cubans are entitled to basic foods, including bread, eggs, rice, beans and milk, at much cheaper prices than those elsewhere in the world. Rents and utilities are extremely cheap and education and healthcare are free.
Any reform of these universal benefits would be controversial within the governing Communist party and unlikely to happen quickly.
But Mr Jam’s comments reflect growing frustration in official circles about poor performance in agriculture, construction and manufacturing. “There isn’t motivation to work in these sectors,” he said.
Cuba looks at trimming social welfare
By Richard Lapper in London
Published: August 18 2008 22:38 | Last updated: August 18 2008 22:38
Cuba, one of the world’s last surviving Communist states, is looking at watering down the generous social welfare system that has been a cornerstone of its economy for nearly 50 years, according to a senior government official.
Alfredo Jam, head of macroeconomic analysis in the economy ministry, told the Financial Times that Cubans had been “over-protected” by a system that subsidised food costs and limited the amount people could earn, prompting labour shortages in important industries.
“We can’t give people so much security with their income that it affects their willingness to work,” Mr Jam said. “We can have equality in access to education and health but not in equality of income.” He said the emphasis on equality had helped maintain social cohesion during the 1990s when Cuba’s economy came close to collapse after the withdrawal of Soviet assistance, but “when the economy recovers you realise that there is [a level of] protection that has to change. We can’t have a situation where it is not work that gives access to goods,” he said.
Mr Jam’s remarks represent a rare and unusually frank insight into official thinking on Cuba’s future economic direction in the wake of the resignation of its long-time leader, Fidel Castro, in February.
Under Cuba’s new president, the former leader’s younger brother Raúl, the country has eased restrictions on bonuses that can be paid to workers and lifted bans on products such as mobile phones and DVD players.
Mr Castro also decentralised the country’s agricultural system and said idle land would be offered to co-operatives and private farmers to lower dependency on imported food.
However, the welfare system has remained almost intact. Under it, all Cubans are entitled to basic foods, including bread, eggs, rice, beans and milk, at much cheaper prices than those elsewhere in the world. Rents and utilities are extremely cheap and education and healthcare are free.
Any reform of these universal benefits would be controversial within the governing Communist party and unlikely to happen quickly.
But Mr Jam’s comments reflect growing frustration in official circles about poor performance in agriculture, construction and manufacturing. “There isn’t motivation to work in these sectors,” he said.
Friday, July 18, 2008
Cuba allows private farmers to have more land
AP
Cuba allows private farmers to have more land
By WILL WEISSERT, Associated Press Writer Fri Jul 18, 12:19 PM ET
Communist officials decreed Friday that private farmers and cooperatives can use up to 100 acres (40 hectares) of idle government land, as President Raul Castro works to revive Cuba's floundering agricultural sector.
The law published in the Communist Party newspaper Granma did not say how much state land will be turned over to private hands and gave no indication of how many Cubans might apply.
But it described the measure as a way to help Cuba solve the problem of underused land while cutting food imports that are expected to cost the government US$2 billion this year.
Landless Cubans can be given a bit more than 33 acres (13 hectares) while those who already have fully producing plots can add enough state lands to bring their total holdings to 100 acres (40 hectares).
Existing state farms, cooperatives and state factories also can apply for underused land.
Ownership will stay with the state. Private farmers can get concessions of up to 10 years, renewable for another 10. Cooperatives and companies can have renewable 25-year terms. And all will have to pay taxes for the lands, though the decree gave no details.
While the individual parcels are small, the widespread transfer of farmland from public to private hands could change the face of farming in a country where the government controls well over 90 percent of the economy.
The decree noted that Cuba now suffers from "a considerable percentage of idle state lands," making it necessary to grant concessions "with the objective of elevating food production and reducing importation."
Government statistics released last month show that the percentage of fallow or underused Cuban farm land increased to 55 percent in 2007, up from 46 percent in 2002. Just 29 percent of land on state farms is actively used.
After Fidel Castro took power in 1959, the government expropriated many large farms and agricultural holdings, while allowing thousands of small farmers to keep their plots and sell their produce to the state.
The new measure doesn't say where farmers will sell their output, but nearly all private farmers now are required to sell most of their produce — beyond what they eat themselves — to the state.
Friday's decree spells out details of a plan announced in March, when officials told state television they had begun lending more small plots to private producers of tobacco, coffee and other key cash crops.
Raul Castro, 77, has made increasing food production and reducing dependence on foreign imports a top priority since succeeding his brother Fidel in February.
The government earlier gave more autonomy to regional farm authorities and it is paying private farmers more for milk and meat.
State-owned farms now hold just over one-third of Cuba's agricultural land — down from about 70 percent two decades ago. The rest is worked by small farmers and cooperatives, many of them state-organized.
Cuba allows private farmers to have more land
By WILL WEISSERT, Associated Press Writer Fri Jul 18, 12:19 PM ET
Communist officials decreed Friday that private farmers and cooperatives can use up to 100 acres (40 hectares) of idle government land, as President Raul Castro works to revive Cuba's floundering agricultural sector.
The law published in the Communist Party newspaper Granma did not say how much state land will be turned over to private hands and gave no indication of how many Cubans might apply.
But it described the measure as a way to help Cuba solve the problem of underused land while cutting food imports that are expected to cost the government US$2 billion this year.
Landless Cubans can be given a bit more than 33 acres (13 hectares) while those who already have fully producing plots can add enough state lands to bring their total holdings to 100 acres (40 hectares).
Existing state farms, cooperatives and state factories also can apply for underused land.
Ownership will stay with the state. Private farmers can get concessions of up to 10 years, renewable for another 10. Cooperatives and companies can have renewable 25-year terms. And all will have to pay taxes for the lands, though the decree gave no details.
While the individual parcels are small, the widespread transfer of farmland from public to private hands could change the face of farming in a country where the government controls well over 90 percent of the economy.
The decree noted that Cuba now suffers from "a considerable percentage of idle state lands," making it necessary to grant concessions "with the objective of elevating food production and reducing importation."
Government statistics released last month show that the percentage of fallow or underused Cuban farm land increased to 55 percent in 2007, up from 46 percent in 2002. Just 29 percent of land on state farms is actively used.
After Fidel Castro took power in 1959, the government expropriated many large farms and agricultural holdings, while allowing thousands of small farmers to keep their plots and sell their produce to the state.
The new measure doesn't say where farmers will sell their output, but nearly all private farmers now are required to sell most of their produce — beyond what they eat themselves — to the state.
Friday's decree spells out details of a plan announced in March, when officials told state television they had begun lending more small plots to private producers of tobacco, coffee and other key cash crops.
Raul Castro, 77, has made increasing food production and reducing dependence on foreign imports a top priority since succeeding his brother Fidel in February.
The government earlier gave more autonomy to regional farm authorities and it is paying private farmers more for milk and meat.
State-owned farms now hold just over one-third of Cuba's agricultural land — down from about 70 percent two decades ago. The rest is worked by small farmers and cooperatives, many of them state-organized.
Thursday, July 17, 2008
Life in Cuba: One Country, Two Currencies
Same old story...
http://www.sun-sentinel.com/news/local/cuba/sfl-0716havanadaily,0,5077590.story
Life in Cuba: One Country, Two Currencies
Doreen Hemlock
Havana Bureau--South Florida Sun-Sentinel
7:25 AM EDT, July 16, 2008
HAVANA
Salesman Juan Carlos Lee hears the complaints daily. He works in an Old Havana store that offers juice, candy and other goods only for sale in Cuba's hard, convertible currency, not in local pesos.
"Ay, everything is so expensive. Convertible currency is such a problem. Cuba, it's not easy," clients tell him.
Lee tries to calm buyers by noting prices are rising worldwide for food, oil and other basics.
But he knows first-hand how hard it is to make ends meet with a salary equal to about $20 a month, when many consumer items now sell at international prices. He gives thanks that family in Spain sends him money. Yet like clients, he yearns for a day when wages stretch far and shopping takes one currency, not two.
"That's going to take time," the 42-year-old Havana resident said Tuesday. "It won't be overnight."
Strapped for dollars, euros and other currencies needed to buy imports, communist-run Cuba uses a unique dual-currency system to conserve foreign reserves. It pays islanders in local pesos and offers some goods and services at peso outlets, often with hefty subsidies. But increasingly, it requires a dollar-like convertible currency unit or CUC at other shops and businesses, where prices include little or no subsidies.
Cubans pay 25 pesos per CUC, a hefty sum when salaries average in the 400-range monthly. Those who can best afford it are those Cubans who earn some pay or tips in CUC from tourism or the thriving black market, and those who receive cash from friends and family overseas.
The government recognizes the four-year-old system hurts national self-esteem and widens social divides. Officials vow to end the program once foreign reserves spike -- a growing challenge as import prices soar.
Lucia Morgan, 38, a teacher in Havana who earns about $20 a month, said she copes with rising costs by buying soda just once or twice a week at the CUC store, instead of three times. She's also trying to rely more on goods sold in pesos, like rice and beans, foregoing the spaghetti she buys in CUC.
Other Cubans seek quicker change. The Federation of Latin American Rural Women, a group known by its Spanish initials as Flamur, is campaigning to end the two-currency system it calls "discriminatory." On Monday, two activists protested by entering a pharmacy that sells goods in CUC and offering to pay for a bottle of medicine in local pesos. The cashier refused, and the manager took the bottle away, the group said.
"These actions will continue until the popular will is fulfilled, expressed by the 10,738 signatures that we gave the National Assembly, to pay in all establishments in the country with the same currency in which are wages are paid to us," Flamur President Belinda Salas said in a news release. "We will not be intimidated."
http://www.sun-sentinel.com/news/local/cuba/sfl-0716havanadaily,0,5077590.story
Life in Cuba: One Country, Two Currencies
Doreen Hemlock
Havana Bureau--South Florida Sun-Sentinel
7:25 AM EDT, July 16, 2008
HAVANA
Salesman Juan Carlos Lee hears the complaints daily. He works in an Old Havana store that offers juice, candy and other goods only for sale in Cuba's hard, convertible currency, not in local pesos.
"Ay, everything is so expensive. Convertible currency is such a problem. Cuba, it's not easy," clients tell him.
Lee tries to calm buyers by noting prices are rising worldwide for food, oil and other basics.
But he knows first-hand how hard it is to make ends meet with a salary equal to about $20 a month, when many consumer items now sell at international prices. He gives thanks that family in Spain sends him money. Yet like clients, he yearns for a day when wages stretch far and shopping takes one currency, not two.
"That's going to take time," the 42-year-old Havana resident said Tuesday. "It won't be overnight."
Strapped for dollars, euros and other currencies needed to buy imports, communist-run Cuba uses a unique dual-currency system to conserve foreign reserves. It pays islanders in local pesos and offers some goods and services at peso outlets, often with hefty subsidies. But increasingly, it requires a dollar-like convertible currency unit or CUC at other shops and businesses, where prices include little or no subsidies.
Cubans pay 25 pesos per CUC, a hefty sum when salaries average in the 400-range monthly. Those who can best afford it are those Cubans who earn some pay or tips in CUC from tourism or the thriving black market, and those who receive cash from friends and family overseas.
The government recognizes the four-year-old system hurts national self-esteem and widens social divides. Officials vow to end the program once foreign reserves spike -- a growing challenge as import prices soar.
Lucia Morgan, 38, a teacher in Havana who earns about $20 a month, said she copes with rising costs by buying soda just once or twice a week at the CUC store, instead of three times. She's also trying to rely more on goods sold in pesos, like rice and beans, foregoing the spaghetti she buys in CUC.
Other Cubans seek quicker change. The Federation of Latin American Rural Women, a group known by its Spanish initials as Flamur, is campaigning to end the two-currency system it calls "discriminatory." On Monday, two activists protested by entering a pharmacy that sells goods in CUC and offering to pay for a bottle of medicine in local pesos. The cashier refused, and the manager took the bottle away, the group said.
"These actions will continue until the popular will is fulfilled, expressed by the 10,738 signatures that we gave the National Assembly, to pay in all establishments in the country with the same currency in which are wages are paid to us," Flamur President Belinda Salas said in a news release. "We will not be intimidated."
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