Thursday, June 27, 2013

Cuba After Communism
The Economic Reforms That Are Transforming the Island
By Julia E. Sweig and Michael J. Bustamante

July/August 2013
Foreign Affairs

Cuba has entered a new era of economic reform that defies easy comparison to post-Communist transitions elsewhere. Washington should take the initiative and establish a new diplomatic and economic modus vivendi with Havana.

JULIA E. SWEIG is Nelson and David Rockefeller Senior Fellow for Latin America Studies at the Council on Foreign Relations and the author of Cuba: What Everyone Needs to Know. Follow her on Twitter @JuliaSweig. MICHAEL J. BUSTAMANTE is a Ph.D. candidate in Latin American history at Yale University.

A car for sale in Havana.
¡Adelante! A car for sale in Havana, February 2012 (Desmond Boy Lan / Courtesy Reuters)
At first glance, Cuba’s basic political and economic structures appear as durable as the midcentury American cars still roaming its streets. The Communist Party remains in power, the state dominates the economy, and murals depicting the face of the long-dead revolutionary Che Guevara still appear on city walls. Predictions that the island would undergo a rapid transformation in the manner of China or Vietnam, let alone the former Soviet bloc, have routinely proved to be bunk. But Cuba does look much different today than it did ten or 20 years ago, or even as recently as 2006, when severe illness compelled Fidel Castro, the country’s longtime president, to step aside. Far from treading water, Cuba has entered a new era, the features of which defy easy classification or comparison to transitions elsewhere.

Three years ago, Castro caused a media firestorm by quipping to an American journalist that “the Cuban model doesn’t even work for us anymore.” Tacitly embracing this assessment, Fidel’s brother Raúl Castro, the current president, is leading a gradual but, for Cuba, ultimately radical overhaul of the relationship between the state, the individual, and society, all without cutting the socialist umbilical cord. So far, this unsettled state of affairs lacks complete definition or a convincing label. “Actualization of the Cuban social and economic model,” the Communist Party’s preferred euphemism, oversells the degree of ideological cohesion while smoothing over the implications for society and politics. For now, the emerging Cuba might best be characterized as a public-private hybrid in which multiple forms of production, property ownership, and investment, in addition to a slimmer welfare state and greater personal freedom, will coexist with military-run state companies in strategic sectors of the economy and continued one-party rule.

A new migration law, taking effect this year, provides a telling example of Cuba’s ongoing reforms. Until recently, the Cuban government required its citizens to request official permission before traveling abroad, and doctors, scientists, athletes, and other professionals faced additional obstacles. The state still regulates the exit and entry of professional athletes and security officials and reserves the right to deny anyone a passport for reasons of national security. But the new migration law eliminates the need for “white cards,” as the expensive and unpopular exit permits were known; gives those who left the country illegally, such as defectors and rafters, permission to visit or possibly repatriate; and expands from 11 months to two years the period of time Cubans can legally reside abroad without the risk of losing their bank accounts, homes, and businesses on the island.

This new moment in Cuba has arrived not with a bang but rather on the heels of a series of cumulative measures -- most prominent among them agricultural reform, the formalization of a progressive tax code, and the government’s highly publicized efforts to begin shrinking the size of state payrolls by allowing for a greater number of small businesses. The beginnings of private credit, real estate, and wholesale markets promise to further Cuba’s evolution. Still, Cuba does not appear poised to adopt the Chinese or Vietnamese blueprint for market liberalization anytime soon. Cuba’s unique demographic, geographic, and economic realities -- particularly the island’s aging population of 11 million, its proximity to the United States, and its combination of advanced human capital and dilapidated physical infrastructure -- set Cuba apart from other countries that have moved away from communism. It is perhaps unsurprising, then, that Cuba’s ongoing changes do not resemble the rapid transition scenario envisioned in the 1996 Helms-Burton legislation, which conditioned the removal of the U.S. embargo on multiparty elections and the restitution of private property that was nationalized in the 1960s. In this respect, Washington remains more frozen in time than Havana.

Cuba is an underdeveloped country with developed-world problems.
Cuba’s reforms might appear frustratingly slow, inconsistent, and insufficient to address its citizens’ economic difficulties and desires for greater political participation. This lack of swiftness, however, should not be taken as a sign that the government has simply dug in its heels or is ignoring the political stakes. The response of Cuban leaders to their country’s vexing long-term challenges has involved strategic thinking and considerable debate. Indeed, the next few years will be crucial. As the 53-year-old Miguel Díaz-Canel, the current vice president and Castro’s newly designated successor, recently noted, Cuba has made “progress on the issues that are easiest to solve,” but “what is left are the more important choices that will be decisive in the development of [the] country.”

Those fundamental dilemmas include the following: How can Cuba attract and manage the foreign investment it urgently needs while preserving its hard-fought sovereignty? How much inequality will the island’s citizens tolerate in exchange for higher productivity and greater opportunities? And even if the Communist Party manages to take a step back from day-to-day governance, as Castro insists it must, how will Cuba’s leaders address the long-simmering pressures for greater transparency, public accountability, and democratic participation? If the recent past is prelude, Cuba will likely continue on its gradual path toward a more open, pluralistic society, while preserving its foreign policy independence.


From the moment he assumed provisional power in 2006, Raúl Castro has spoken bluntly about Cuba’s predicament. “We reform, or we sink,” he declared in a characteristically short and pointed 2010 national address. Even as Havana sticks to its central political conviction -- namely, that the Communist Party remains the nation’s best defense against more than a century of U.S. interference -- terms such as “decentralization,” “accountability,” and “institutionalization” have become buzzwords, not taboos. Whereas in the 1990s, Havana was willing to permit only limited private enterprise as an emergency measure, the government now talks openly of ensuring that 50 percent of Cuba’s GDP be in private hands within five years. Realistic or not, such ambitious goals would have been sacrilege less than ten years ago. Already, the representation of Cuban small-business owners in the country’s National Assembly and their participation in the annual May Day parade offer evidence of changes under way.

The reforms have yielded several modest successes thus far. After facing sharp liquidity and balance-of-payments crises in the wake of the 2008 global financial meltdown, Cuba has succeeded in restoring a modicum of financial stability, resuming its debt payments, sharply cutting its imports, and beginning the arduous task of reducing public expenditures. Several key strategic investments from international partners -- most notably, the refurbishing of Mariel Harbor, with the aid of Brazilian capital, to transform it into a major container shipping port -- are moving forward on schedule. Meanwhile, a new state financial accountability bureau has begun the hard task of weeding out endemic corruption.

Nevertheless, Cuba faces serious obstacles in its quest for greater economic vitality. Unlike China and Vietnam at the start of their reform efforts, Cuba is an underdeveloped country with developed-world problems. Not only is the population aging (18 percent of the population is over 60), but the country’s economy is heavily tilted toward the services sector. When Vietnam began its doi moi (renovation) economic reforms in 1986, services accounted for about 33 percent of GDP, whereas the productive base represented nearly 67 percent. By contrast, services in Cuba make up close to 75 percent of the island’s GDP -- the result of 20-plus years of severe industrial decay and low rates of savings and investment. Service exports (mainly of health-care professionals), combined with tourism and remittances, constitute the country’s primary defense against a sustained balance-of-payments deficit.

Cuban officials and economists recognize this structural weakness and have emphasized the need to boost exports and foster a more dynamic domestic market. Yet so far, the state has not been able to remedy the imbalance. In the sugar industry, once a mainstay, production continues to flounder despite a recent uptick in global prices and new Brazilian investment. Meanwhile, a corruption scandal and declining world prices have weakened the nickel industry, leading to the closing of one of the island’s three processing facilities. More broadly, Cuban productivity remains anemic, and the country has been unable to capitalize on its highly educated work force.

Although important, the expansion of the small-business sector cannot resolve these core issues. There are now 181 legal categories for self-employment, but they are concentrated almost exclusively in the services sector, including proprietors of independent restaurants, food stands, and bed-and-breakfasts. Start-up funds are scarce, fees for required licenses are high, and some of the legal categories are senselessly specific. It also remains unclear whether the chance to earn a legitimate profit will lure black-market enterprises out into the open.

No surprise, then, that the expansion of self-employment has not yet enabled the state to meet its targets for slimming down its bloated payrolls. In late 2010, Castro pledged to eliminate 500,000 state jobs in the first six months of 2011, with an eye to incorporating over 1.8 million workers (out of a total estimated work force of 5.3 million) into the private sector by 2015. But the government managed to eliminate only 137,000 positions that first year. Still, the reforms are making a serious impact. Small businesses currently employ some 400,000 citizens, an increase of 154 percent since the liberalization of self-employment began in October 2010. To spur further growth, moreover, authorities recently launched a wholesale company that will allow emerging enterprises to purchase supplies on the same terms as state-run companies, thus addressing a major complaint of business owners.

To supplement these gains, Cuba needs to continue rebuilding its productive capacities in core areas such as agriculture. Before Raúl Castro came to power, approximately 20 percent of the cultivable land in the country lay fallow and Cuba imported half its domestic food supply -- a significant part of which came from the United States, under a 2000 exception to the trade embargo. To increase domestic production, the state has handed over more than 3.7 million acres of land to private farmers, whose crops now account for 57 percent of the total food production in the country despite their occupying just under 25 percent of the arable land. Yet aggregate food-production levels in most basic categories still hover at or slightly below 2002 levels.

It has been a long time since Cubans on the island and off could be neatly divided between anticommunists and pro-Castro revolutionaries.
More promising is the investment to renovate Mariel Harbor, led by the Brazilian conglomerate Odebrecht, with backing from the Brazilian National Development Bank. Cuba is hoping to position itself as a major shipping hub in the Caribbean. Located between the Panama Canal and points in the United States and Europe, the enormous, deep-water port at Mariel is ideally situated to handle trade with the United States and beyond in a post-embargo world. In addition, four Brazilian pharmaceutical companies have signed on to produce medicines in the port’s vicinity for direct export to Brazilian and other markets. Still, if the U.S. embargo remains in place, the long-term benefits of the Mariel investment will be limited.

The port project underscores some of the broader dilemmas constraining foreign investment in Cuba and the country’s overall growth prospects. Havana designated Mariel as a special economic development zone -- an area where foreign companies are given special incentives and prerogatives -- in an effort to attract badly needed investment dollars. Cuban officials also aim to take advantage of the country’s well-educated population and establish investment zones geared toward high-tech innovation and other high-value-added activities, such as biotechnology. Yet without links to local industries, such investment zones could become economic islands, providing employment to locals and income to the Cuban government but reduced multiplier effects.

The island’s dual-currency system makes the challenge all the more difficult. A byproduct of the circulation of U.S. dollars in the 1990s -- first in the black market, then legally -- the Cuban convertible peso (CUC) today functions as the currency of the tourist sector and is required for the purchase of many consumer items. For common Cuban citizens, the value of the CUC is pegged to the dollar, with one CUC equal to 25 Cuban pesos (CUP), the currency in which most state workers are paid. Consequently, citizens who receive hard currency from abroad or who earn money in CUC, such as workers who collect tips from foreign tourists, enjoy much higher incomes than workers who rely solely on salaries paid in CUP.

Even worse, the values of the CUC and the CUP are considered equal within and between state enterprises. This bizarre accounting practice helped insulate CUP prices from inflation during the depths of the economic crisis that followed the collapse of the Soviet Union, but today it makes it difficult for analysts and investors to estimate the real costs of doing business on the island or the value of state companies. Economists agree that the least disruptive way to move toward a single currency would be to gradually merge the two exchange rates in tandem with a steady rise in GDP and salaries overall. But in the meantime, the artificial one-to-one ratio within the state sector has the effect of overvaluing the CUP’s international exchange rate and thus decreasing the competiveness of domestic goods. Paradoxically, the dual-currency regime protects imports at the expense of domestic production.


Cuba’s recent reform of its migration law neatly encapsulates a number of the possibilities, limits, and implications of Castro’s larger agenda. Despite being both a sign of the state’s willingness to make strategic decisions and arguably the most important reform to date, the new law also underscores the uphill battles that remain and illustrates the difficulty of managing optics and expectations. As with most issues in Cuban society, the line between politics and economics is entirely blurred.

Faced with an exodus of educated professionals and capital from the country after the revolution, the Cuban government began heavily regulating the movement of its citizens abroad in the early 1960s. In light of émigrés’ direct involvement in attempts to unseat the Castro regime, often financed by the U.S. government, Havana treated migration as a matter of national security. For many years, those who succeeded in leaving, legally or illegally, had their property stripped by the state and could not, barring extraordinary exceptions, return home. Such restrictions left deep wounds.

Yet it has been a long time since Cubans on the island and off could be neatly divided between anticommunists and pro-Castro revolutionaries. Any visit to the Miami airport today attests to the strength of transnational ties; in peak season, over a hundred weekly charter flights carry Cubans and Cuban Americans between the two countries. Such travel, allowed under some circumstances since the late 1970s, has expanded considerably since 2009, when U.S. President Barack Obama lifted restrictions on family visits. In 2012, upward of 400,000 Cubans in the United States visited the island. And this is to say nothing of the hundreds of thousands of Cuban emigrants living across Latin America, Canada, Europe, and beyond who also visit and support family at home.

Indeed, by making it easier for Cubans to travel, work abroad, and then return home, Cuba’s new migration law is also meant to stimulate the economy. At an estimated $1 billion a year, remittances have been big business since the late 1990s, helping Cubans compensate for low salaries and take advantage of what few opportunities have existed for private enterprise. Now that the government has undertaken a wider expansion of the small-business sector, ties between the diaspora and the island are bringing an even greater payoff. Cubans abroad are already helping invest money in the window-front cafeterias, repair shops, and other small businesses popping up across the country. Some islanders are also sending their own money out of the country so that relatives can buy them consumer goods abroad.

Beyond redressing a deeply unpopular status quo, however, the new migration law has put the government in an awkward position. Assuming enough Cubans can afford the now reduced, but still comparatively high, fees associated with acquiring necessary travel documents, other countries -- principally the United States -- will need to continue receiving Cuban visitors and migrants in large numbers. Ironically, Havana has long criticized the special preferences granted to Cubans under U.S. immigration law for seeming to encourage and reward dangerous attempts to reach U.S. shores. Now, Cuba appears to benefit from such measures’ remaining on the books -- especially the one-year fast track to permanent residency established by the 1966 Cuban Adjustment Act. Under Cuba’s expanded two-year allowance for legal residency abroad, the more than 20,000 Cubans emigrating legally to the United States each year will be able to acquire green cards without necessarily giving up their citizenship claims, homes, or businesses on the island.

Debate in public among high-ranking Cuban officials remains rare, even if it is reportedly vigorous behind closed doors.
Small-time diaspora capital may prove easier to regulate and rely on than funds from multinational corporations driven strictly by profits. Under the repatriation provisions of the island’s new migration law, some Cubans may even retire to the island with their pensions and savings after decades of working abroad. Yet opening the doors for more young citizens to leave could prove risky for a quickly aging, low-birthrate society that has been suffering from a brain drain for some time. Besides, along with remittance dollars, Cuba urgently needs both medium and large investors. Ultimately, only larger outlays can help fix Cuba’s most fundamental economic problem: its depleted productive base. Castro appears to recognize that attracting foreign investment, decentralizing the government, and further expanding the private sector are the only ways to tackle this long-term predicament. The government is unlikely to proceed with anything but caution, however. Officials are wary of rocking the domestic political boat, and citizens and party leaders alike recoil from the prospect of more radical shock therapy. Rising public protests in China and Vietnam against inequality and rampant corruption have only reinforced the Cuban government’s preference for gradualism.

Striking an adequate balance will be no easy task. In late 2012, Havana legalized the creation of transportation cooperatives -- private, profit-sharing entities owned and manage by their members -- to fix bottlenecks in agricultural distribution. Meanwhile, 100 state enterprises are now running their finances completely autonomously as part of a yearlong pilot program. The government is also reportedly considering ways to offer a wider array of potential foreign partners more advantageous terms for joint ventures. But the Communist Party is working through numerous contradictions -- recognizing a place for market economics, challenging old biases against entrepreneurs, and hinting at decentralizing the budget while incongruously insisting, in the words of its official 2011 guidelines, that “central planning, and not the market, will take precedence.”


Curtailing the state’s economic role while preserving political continuity requires threading a delicate ideological needle. Although the government expects to continue providing Cubans with key social services, such as health care and education, party leaders have reprimanded the island’s citizens for otherwise depending too heavily on what one prominent official a few years ago called the “daddy state.” In the eyes of many Cubans, this is deeply ironic. Cuba’s revolutionary founders, who built up a paternalistic state in the service of equality, are now calling for that state’s partial dismantlement. What’s more, most Cubans already need to resort to the black market or assistance from family abroad to acquire many daily necessities.

That is not to say that the reforms have been conducted without popular input. In the run-up to the 2011 Sixth Congress of the Cuban Communist Party, the government convened an unprecedented series of assemblies across the country to hear citizens’ grievances and proposals for change and to discuss Castro’s agenda. Although multiparty elections are not on the horizon, this undertaking allowed for widespread and often contentious public debate, albeit within broadly “socialist” conceptual parameters. Despite defending one-party rule, Castro has also called on public officials to make themselves accessible to the state press, and he has asked the press, in turn, to drop its traditional triumphalism. In a similar vein, he has implored students to “debate fearlessly” and party members to “look each other in the eyes, disagree and argue, disagree even with what leaders say whenever [you] think there is reason to do so.” More recently, Díaz-Canel publically mentioned the impossibility of prohibiting the diffusion of news via social media and the Internet -- a sign that, for the government, the strategic benefit of facilitating wider Internet connectivity may well outweigh the usefulness of controlling access.

Reality has not yet caught up with this rhetoric. Debate in public among high-ranking Cuban officials remains rare, even if it is reportedly vigorous behind closed doors. Nor is it clear whether Cuba’s National Assembly can become a more consequential, deliberative branch of government. Public statements perceived to impugn the Cuban Revolution’s legitimacy remain taboo and are grounds for facing consequences in the workplace or even ostracism. Nevertheless, outside of high-level government bodies and the still largely anodyne daily press, diverse voices have pushed the terms of debate considerably in recent years, blurring the purportedly neat line dividing “revolutionary” and “counterrevolutionary” positions.

International attention tends to focus on Cuba’s small, self-identified dissident community, particularly a newer cast of digitally savvy activists and bloggers. Yet in a country where the Internet remains an expensive, highly regulated commodity, perhaps the most interesting, potentially consequential debates are transpiring among academics, artists, independent filmmakers, former officials, and lay religious leaders, particularly from the Catholic Church, whose websites, journals, and public forums are more accessible to the island’s population. In general, these actors do not propose a radical break with all of the revolution’s legacies, symbols, and narratives. They also maintain their distance from foreign, especially U.S. and Cuban American, financial support, which marks many dissidents as “mercenaries” in the eyes of the Cuban state. Yet they do so more out of political conviction than strategic calculus, refusing to accept the purported choice between towing the party line at home and collaborating with transition schemes concocted abroad.

Recently, a small group of Catholic moderates and reformist Marxists, brought together under the auspices of a church-sponsored cultural center, circulated a series of straightforward proposals for political reform online. These included allowing direct, competitive elections for all of Cuba’s major leadership positions (albeit with all the candidates coming from one party), unrestricted access to the Internet, freer media, more effective separation of powers in the government, and greater use of plebiscites on major government decisions. The proposals have provoked opposition from some defenders of the status quo while generating substantial support, interest, and debate among academics on the island.

Yet despite the unprecedented scope of these discussions, it is hard to predict whether they will produce much concrete change in the short term. Presently, they do not seem to be having much impact on the public, which pays less attention to them than do the orthodox keepers of the revolutionary faith. The explanation for ordinary Cubans’ disengagement has as much to do with apathy, inertia, self-preservation, and the material demands they face every day as it does with limited access to information and a curtailed right of assembly. After all, substantial numbers of Cubans watch Miami television stations via pirated recordings or illicit satellite hookups, yet they have so far proved no more likely to take to the streets than their neighbors who lack such access. Since the 1960s, the primary means for those disaffected or unsatisfied at home to register their opinion has been to emigrate -- particularly to the United States, given the multiple incentives for Cubans built into U.S. immigration law. As long as this pattern continues, Havana will have the political space to continue its reforms “without pause, but without haste,” in Castro’s formulation.


As the migration issue shows, Cuba’s economic and political predicaments cannot be appreciated in isolation from its international context. The U.S. embargo remains a formidable obstacle to the island’s long-term economic prosperity, and it casts a long shadow over Cuban domestic politics. In the case of Vietnam, it was only after the lifting of the U.S. embargo in 1994 that the economy began to transform in earnest. Given Cuba’s proximity to the United States and its relatively low labor costs, a similar shift in U.S. law could have a profound impact on the island.

In January, U.S. Secretary of State John Kerry opened his confirmation hearing by celebrating his close collaboration with Senator John McCain (R-Ariz.) in overcoming the legacy of war in order to restore U.S. relations with Vietnam. Yet both Kerry and Obama still seem to defer to the outdated conventional wisdom on Cuba, according to which Washington cannot change its failed policy so long as Cuban Americans in Congress continue to oppose doing so. Reality, however, is already changing. These legislators’ constituents have started voting with their feet and checkbooks, traveling to the island and sending remittances to family there as never before. Several wealthy Cuban Americans, moreover, are now talking directly with Havana about large-scale future investments. As a Democrat who won nearly half of Florida’s Cuban American vote in 2012, Obama is in a better position than any of his predecessors to begin charting an end to the United States’ 50-year-long embargo.

The geopolitical context in Latin America provides another reason the U.S. government should make a serious shift on Cuba. For five years now, Obama has ignored Latin America’s unanimous disapproval of Washington’s position on Cuba. Rather than perpetuate Havana’s diplomatic isolation, U.S. policy embodies the imperial pretensions of a bygone era, contributing to Washington’s own marginalization. Virtually all countries in the region have refused to attend another Summit of the Americas meeting if Cuba is not at the table. Cuba, in turn, currently chairs the new Community of Latin American and Caribbean States, which excludes Washington. The Obama administration has begun laying out what could become a serious second-term agenda for Latin America focused on energy, jobs, social inclusion, and deepening integration in the Americas. But the symbolism of Cuba across the region is such that the White House can definitively lead U.S.�Latin American relations out of the Cold Warr and into the twenty-first century only by shifting its Cuba policy.

To make such a shift, however, Washington must move past its assumption that Havana prefers an adversarial relationship with the United States. Raúl Castro has shown that he is not his brother and has availed himself of numerous channels, public and private, to communicate to Washington that he is ready to talk. This does not mean that he or his successors are prepared to compromise on Cuba’s internal politics; indeed, what Castro is willing to put on the table remains unclear. But his government’s decisions to release more than 120 political prisoners in 2010 and 2011 and allow a number of dissident bloggers and activists to travel abroad this year were presumably meant to help set the stage for potential talks with the United States.

Meanwhile, the death of Hugo Chávez, the former Venezuelan president, and the narrow margin in the election of his successor, Nicolás Maduro, have made it clear that Havana has reasons of its own to chart a path forward with the United States. In the last decade or so, Cuba came to depend on Venezuela for large supplies of subsidized oil, in exchange for a sizable brigade of Cuban doctors staffing the Chávez government’s social programs. Political uncertainty in Caracas offers a potent reminder of the hazards of relying too heavily on any one partner. Havana is already beginning to branch out. In addition to financing the refurbishing of Mariel Harbor, the Brazilians have extended a line of credit to renovate and expand five airports across the island and have recently signed a deal to hire 6,000 Cuban doctors to fill shortages in Brazil’s rural health coverage. Even so, in the long run, the United States remains a vital natural market for Cuban products and services.

Of course, as the 1990s proved, even a huge financial setback may not be enough to drive Havana to Washington’s door. Half a century of U.S. economic warfare has conditioned Cuban bureaucrats and party cadres to link openness at home or toward the United States with a threat to Cuba’s independence. Some hard-liners might prefer muddling through with the status quo to the uncertainty that could come from a wider opening of their country.

The best way to change such attitudes, however, would be for Washington to take the initiative in establishing a new diplomatic and economic modus vivendi with Havana. In the short term, the two countries have numerous practical problems to solve together, including environmental and security challenges, as well as the fate of high-profile nationals serving time in U.S. and Cuban prisons. Most of the policy steps Obama should take at this stage -- removing Cuba from the list of state sponsors of terrorism, eliminating obstacles for all Americans to travel there, and licensing greater trade and investment -- would not require congressional approval or any grand bargain with Havana. Although it might be politically awkward in the United States for a president to be seen as helping Castro, on the island, such measures would strengthen the case that Cuba can stand to become a more open, democratic society without succumbing to external pressure or subversion. Deeper commercial ties, moreover, could have repercussions beyond the economic realm, giving internal reformers more leeway and increasing support on the island for greater economic and political liberalization.

In 1991, Soviet President Mikhail Gorbachev stood beside U.S. Secretary of State James Baker in Moscow and announced that the Soviet Union would eliminate its multibillion-dollar annual subsidy to Cuba. Cia analysts and American pundits immediately began predicting the imminent demise of the Cuban Revolution and a quick capitalist restoration. More than 20 years have passed since then, Fidel Castro has retired, and 82-year-old Raúl Castro is now serving the first year of what he has said will be his final five-year term as president.

In 2018, when Díaz-Canel takes the reins, Cuba in all likelihood will continue to defy post�Cold War American fantasies even as it moves further away from its orthodox socialist past. For the remaining members of Cuba’s founding revolutionary generation, such a delicate transformation provides a last opportunity to shape their legacy. For Cubans born after 1991, the coming years may offer a chance to begin leaving behind the state of prolonged ideological and economic limbo in which they were raised.

Obama, meanwhile, has a choice. He can opt for the path of least political resistance and allow the well-entrenched bureaucrats, national security ideologues, and pro-embargo voices in his own country to keep Cuba policy in a box, further alienating regional allies and perpetuating the siege mentality among Cuban officials. Or he can dare to be the president who finally extracts the United States from Cuba’s internal debate and finds a way for Washington and Havana to work together. Both the Cuban people and U.S. national interests would benefit as a result.

Friday, January 11, 2013

Brave new world of Cuba travel begins Monday

Posted on Fri, Jan. 11, 2013

Cuba, which has long been criticized for keeping families apart and punishing those who try to leave the island illegally, has removed nearly all restrictions on travel by its citizens, a move that could cause ripples well beyond this island of 11 million people.

Gone is the reviled tarjeta blanca, the white card or exit visa that Cuba used to control who could leave the island. Gone is the notarized letter of invitation from a foreign host.

Now Cubans simply need a valid passport to travel — as long as they can get a visa from the country they intend to visit and a ticket for travel. Cuban authorities say they have set up 195 locations around the country where citizens may apply for their passports. Those who already hold passports will be required to recertify them under the reform.

But getting an entry visa allowing travel to another country and paying for a ticket are two big ifs.

“I was in Havana when the new policy was announced in October and people were very happy,’’ said Domingo Amuchastegui, a former Cuban intelligence analyst who lives in Miami. “But people thought it was going to be easy to get a visa and travel. Just getting the money for a ticket will be a monumental problem for many people.’’

Presumably many Cubans will seek visas to travel to the United States — and now even minor children will be allowed to travel as long as they have the authorization of parents or legal guardians.

“The United States welcomes any reforms that allow Cubans to depart from and return to their country freely,’’ said Will Ostick, spokesman for the U.S. State Department Bureau of Western Hemisphere Affairs.

But it’s unlikely the U.S. Interests Section in Havana will be handing out significantly more non-migrant visas than it does now. That could spur Cubans, intent on reaching the United States, to seek indirect routes through nearby countries or those that don’t require entry visas for Cubans.

“We cannot predict if the change in exit visa requirements will lead to a change in migration patterns from Cuba,’’ said spokeswoman Victoria Nuland at Friday’s State Department briefing. “We continue to encourage people not to risk their lives by undertaking dangerous sea journeys, and we note that most countries still require that Cuban citizens have entry visas.’’

Although the United States is committed to processing at least 20,000 non-migrant visas annually for Cubans, so many have been applying that last year some applicants said they were given appointments for visa interviews three years down the road.

“We have dramatically reduced wait times for visitor visa appointments…. as the U.S. government intensifies our commitment to provide appropriate legal avenues for Cubans to travel to the United States,’’ said Ostick this week.

But he said wait times for appointments could return to “multi-year levels if demand increases after the changes to Cuban exit permit requirements go into effect, because of constraints on our staffing levels and facilities in Havana.’’

Currently, the number of consular personnel authorized at both the U.S. and Cuban Interests Sections is 50 people and there is strict reciprocity between the two countries, which maintain Interest Sections instead of embassies because they don’t have diplomatic relations.

“I think there will be a large number of Cubans who will want to leave,” said Robert Pastor, a professor of international relations at American University and national security advisor for Latin America during the Carter administration. The majority, he said, will probably opt for a third country that doesn’t require Cubans to obtain an entry visa or that is within striking distance of U.S. borders.

Under the Cuban Adjustment Act, Cubans who reach U.S. soil can be paroled into the United States and become permanent residents a year later. Making the whole scenario even more convoluted: under Cuba’s migration reform, Cubans will be allowed to stay outside the island for up to two years — rather than the current 11 months — without losing their rights as residents, meaning their could get green cards and work in the United States and still freely return to Cuba at the end of 24 months if they choose.

In this hemisphere, Haiti, Ecuador, Trinidad and Tobago, Barbados and a handful of small islands such as St Lucia and Grenada don’t require entry visas for Cubans. Maximum stays range from a low of 28 days in Barbados to as long as 90 days in Ecuador and Haiti.

“Cuban citizens like many other foreigners can enter Ecuador without a visa for tourism,’’ said Nathalie Cely Suárez, Ecuador’s ambassador to the United States

Some Cubans, she said, have tried to use “irregular mechanisms,’’ such as fake marriages, to remain in Ecuador, which has prompted stricter controls by Ecuadorian authorities.

Because of the difficulty in reaching the United States, the ambassador said she didn’t think concerns about Cubans using Ecuador as a launching pad to reach the U.S. are “substantive.’’ But already there are reports of smugglers taking Cubans who enter Ecuador across Colombia to the rugged Darien Gap between Colombia and Panama and then on up to the Mexican border.

Mexico requires entry visas for Cubans but it has been a favorite jumping off point for Cubans who can present themselves at the border and request to be paroled into the United States under the adjustment act, a 1966 law that was designed to normalize the status of thousands of Cubans who fled to the United States after the 1959 Cuban Revolution.

Some Cubans may make the assumption that once they reach a non-visa country, they can then apply for a U.S. entry visa but it might not help their chances. “Although visa applicants may apply at any U.S. consular office abroad, it may be more difficult to qualify for the visa outside the country of permanent residence,’’ said Ostick of the State Department.

Analysts say it’s hard to know whether the influx of Cubans through third countries will be a trickle or a torrent or whether it will prompt smugglers to create new networks to bring more Cubans to U.S. shores but there appear to be plenty of legal loopholes.

The U.S. Coast Guard says it will continue to maintain a “robust maritime presence in the Caribbean” but declined to say whether it planned to beef up efforts.

However, sooner or later, analysts say, Cuba’s new travel policy will have an impact on U.S. policy.

“I think there’s an understanding in Cuba that finally the ball is going to be in the other court,’’ Amuchastegui said.

Cuba’s new policy, for example, may indirectly prompt calls from other migrant groups for the same access to the United States now enjoyed by Cubans, said Pastor. “I think this will be a real test for the Cuban lobby to retain the Cuban Adjustment Act.’’

But Larry Rifkin, a Miami immigration lawyer, said, “The Cuban Adjustment Act won’t be removed until democracy returns to Cuba.’’

In the meantime, Cubans who reach U.S. borders can seek refugee status and will be admitted.

Rifkin was counsel in a 2007 case known as the “Matter of Vasquez” that involved a Venezuelan native born in Caracas to Cuban parents. The case, he said, established a legal precedent as to who qualifies as a Cuban national and is eligible under the adjustment act.

Now the U.S. accepts, he said, that a child born outside Cuba to at least one parent who is a Cuban citizen at the time of the child’s birth and registers the birth at a Cuba consulate in the country where the child is born is considered to have acquired Cuban citizenship.

So-called step-across the border migration to the United States might also be aided by Spain’s Law of Historical Memory, which gives citizenship to the descendants of Spaniards who were persecuted and fled during the Spanish Civil War and the Franco dictatorship.

Spain has closed the period for accepting passport applications under the law, which went into effect in 2008. But passport applications from 500,000 Cubans are still pending, said Gregorio Laso, a spokesman for the Spanish Embassy in Washington. Several thousand Cubans have already received Spanish passports under the law, setting them up for travel to Spain and countries and territories that don’t require entry visas for Spanish citizens. In the Caribbean that includes the Cayman Islands and Turks and Caicos.

The Spanish themselves aren’t expecting a large influx of Cubans under the new policy. “It is not so easy to move your family and begin a new life in another country without a job,’’ Laso said. Spain’s unemployment rate is currently 26.6 percent.

But he said the embassy was aware of some Cubans who have tried to enter the United States on Spanish passports. Some have been rejected, he said, but more recently, cases have been referred to immigration judges. Spaniards can visit the U.S. without a visa.

For its part, Cuba has said it wants its travel laws to be similar to those of other countries.

“For many Cubans, this is a very positive thing,’’ said Nik Steinberg, an Americas researcher at Human Rights Watch, “but the critical question, as with any reform, is how it is implemented. The real test will be whether those who are critical of the government’’ will be allowed to get their passports and travel.

The Cuban government is apparently betting that most Cubans who travel abroad will return. A program broadcast on Cuban television in October gave this statistic: Of 941,953 Cubans who traveled to foreign countries from 2000 to last August, 12.8 percent — or 120,705 people — didn’t come back to Cuba.

Miami Herald reporter Jacqueline Charles contributed to this report.

Read more here:


Major provisions of Cuba’s New Migration Policy

•  Allows Cubans who obtain their passports to travel as long as they have an entry visa from the country they intend to visit and a ticket; eliminates the need for an exit visa and letter of invitation.
•  Increases the time Cubans may stay outside the country from 11 months to 24 months without losing their status as residents of Cuba. Previously Cubans were given permission to visit for only 30 days after which they had to pay a fee for each additional month’s extension up to 11 months.
•  Allows those younger than 18 years to leave the country with the notarized authorization of their parents or legal representatives.
•  Allows Cubans who have emigrated to visit the island for a period of up to 90 days — 60 more than currently allowed.
•  Allows those who were previously barred from returning, such as those who left for humanitarian reasons, rafters, and athletes and professionals who left their teams or posts while on official trips abroad, to return. Those who escaped through the U.S. Navy base in Guantanamo will still be banned for defense and national security reasons.
•  Allows those who left Cuba illegally after the 1994 migration accord with the United States to return as long as eight years have passed since their departures. An exception to the eight-year requirement will be made for Cubans who emigrated illegally when they were under 16 years of age.
•  Allows Cuban doctors, whose travel was highly restricted except for official missions abroad, to leave the country for travel just as other citizens do.

Read more here:

Wednesday, January 2, 2013

The Evolving Celebration of Christmas

A little background. During the ”Revolutionary Offensive” (1968-1970), at the same time that all economic activities, except for small farmers, were nationalized and private activity, personal or in business entities, were prohibited, Fidel personally made an effort to stop Christmas celebrations and transform the New Year festivity into the welcoming of a new anniversary of the triumph of the Revolution, January 1, 1959.

The arguments were not religious. It went like this: the tradition of Christmas and big New Year parties correspond to Europe and North America, with cold seasons, in which snow and freezing temperatures didn't allow working in agriculture in the countryside or construction in the cities. In Cuba, it is just the opposite. From November until May it is the dry cooler season, in which you work much better in the fields. It is the time in which the harvests of sugar cane, rice, beans, potatoes, and also green vegetables, are plentiful. So, the economic logic is that this is a time to work: Cubans should celebrate in July.

So, the Party did a serious effort to convert traditional celebrations and days of December into the hailing of the Anniversary of the Revolution. They tried to move family meetings, children's celebrations and other big parties to official nonworking days around July 26.

Even so, the tradition of giving toys and presents to the children around the days of Christmas and the Three Wise Men went on and the Government, even during the years of scarcity in the end of the sixties provided, through the industrial articles rationing card, 3 toys for every child,- one more expensive and two inexpensive.

Celebrations went on in the Catholic and Christian churches, and, in private, some families gathered to eat on Christmas Eve, the night of the 24th, as is our tradition.

Culture, traditions and Christian beliefs proved to be much harder to change than it looked. After the debacle of “Real Socialism” in Europe, and during the “Special Period” (the economic collapse following the abrupt end of Soviet support), Cuban families restarted slowly the Christmas Eve gathering more publicly albeit still non-officially.

Fidel, always a shrewd politician, accepted the reality and took advantage of the first Papal visit to that year declare that on the 25th of December work will stop, as a gesture to the Catholic Church and Christians as a whole.

After this, Christmas trees and decorations came out of the closet and made a strong come back, including in state owned stores and restaurants.

An additional factor was the opening to tourism and the construction of new hotels or rebuilding of old ones which had to be decorated for Christmas for international guests. The difference between a sad, not decorated Havana, and the bright lights of Christmas trees in hotels was politically impossible to maintain.

No less important was the cascade of Cubans from Miami, Spain and elsewhere during the Christmas season. They came full of presents and happiness, wanting to enjoy and longing for a traditional Christmas eve dinner, full of joy and cariño (there is not an appropriated word in English for it). Except for the presents, they were received in the same way.

So, human links, meeting of similar cultures and family relations made Party policies obsolete and more than that, ridiculous.

Now, December 25 is legally a day to celebrate. Scores of private choruses of young children practice during the previous months and in these days appear in churches, hotels, and parks to sing Christmas carols. More and more people go to the Catholic churches at 12 o'clock “Misa del Gallo” on the 24th to welcome Jesus birth. In the Havana Cathedral, the widely respected Cardinal Ortega offers the mass and delivers the Sermon. People also go to other Christian churches for their services.

Construction workers, which are mostly from the eastern provinces, go back to their home towns for the period from around December 20th to the 2nd of January and it is very hard to keep labor in the sugar mills albeit in harvest. It is very true, that this is the best time to work in the fields in Cuba. A big movement of people takes place along the Island as Cubans go back to their elders' homes to celebrate. Special buses and trains have to be provided by the state.

Still, the official propaganda puts the emphasis on the New Year as the Anniversary of the Revolution as the main celebration. But there is no repression or official effort of any kind to dissuade the people from celebrating Christmas. The ideological defeat has been swallowed in the most gracious possible manner.

Economically speaking, families have a real problem to celebrate two so expensive and close to each other festivities like Christmas and New Years eve.

For Cubans, Christmas eve is a family celebration, -a dinner with roast pork, white rice, black beans, boiled yucca with mojito (garlic, lime juice, a little fried in pork lard), a salad with lettuce (a must) and at least tomatoes. The dessert is Spanish turrones and/or home made buñuelos.

New Year's Eve is a party with friends and, for the wealthy ones, in a night club. Dinner is part of the party including roast pork again as the main course. People have to choose some time which one will be the bigger celebration because there is not enough money for both.

The State stores sell Christmas decorations, but very expensive.

In sum, Christmas is back, and every year it goes more and more to be the old traditional happy and respectful family feast, away from politics. Even so by being itself it is political, reminding everybody where the cultural roots are of the Cuban nation.

Friday, December 7, 2012

In Farmers Market, A Free Market Rises In Cuba


December 07, 2012 4:00 AM

Morning Edition

Cuba has relaxed some business rules, allowing street vendors to sell produce and a large wholesale produce market to open at night on the edge of Havana.

Greg Kahn/Getty Images

Cuba has no shortage of fertile farmland, but the country spends $1.5 billion a year importing about 70 percent of its food.

The communist government's chronic struggle to get farmers to produce more is forcing authorities to grudgingly accept a greater role for market principles and the profit motive.

Now authorities seem willing to go another step further, tolerating the rise of what might be described as Cuba's "free-est" market.

This market, on the edge of Havana, only exists at night, appearing after sundown every day in a muddy vacant lot. Scores of battered, sputtering Chevy farm trucks and ancient Ford tractors arrive loaded with onions, squash, papayas and cabbage. It must be the largest gathering of 50-year-old American farm equipment anywhere on the planet.

The market doesn't have any signs, or even bathrooms, adding to the impression that Cuban authorities haven't quite accepted its permanence. Sales are done in cash under the faint glow of cellphone screens and lanterns. Even the police, who are ubiquitous elsewhere in Cuba, seem absent here.

Wholesale produce markets like this one exist all over Latin America, of course, where farmers can drive to the city and freely sell their crops. But in Cuba, there hasn't been anything like this in a half-century.

Armando Manzo has driven 250 miles from his farm in Cuba's Villa Clara province, with the family's 1957 Chevy Bel Air sedan stuffed to the roof with garlic. It's the kind of act that in the past wasn't allowed by a government that has spent decades micromanaging food production and distribution, often with disastrous results.

"The police would stop you and confiscate your produce," Manzo says in Spanish. "It was madness. Now what we're doing is legal."

Like other private farmers here, Manzo still has to meet an annual production quota that requires him to sell about a quarter of his harvest to the government at artificially low prices. But since taking over Cuba's presidency from his brother, 81-year-old Raul Castro has been gradually dialing back the island's state-dominated system.

Castro has turned over millions of acres of state land to private farmers and cooperatives, enough to lure Cubans like Ramon Gonzalez back into farming.

"There's more incentive to work harder," he says in Spanish. Dressed in a blue Best Buy shirt and selling sacks of sweet potatoes, Gonzalez says he quit his government job as a mechanic three years ago and joined a cooperative. The more you can sell, the more money you can make, he says.

The days of empty Cuban produce stalls appear to be over, but food prices here have never been higher. So far, the move toward a more market-driven model hasn't been popular with Cubans who depend on government pensions and the state salaries that average little more than $20 a month. For them, a single avocado or a pound of tomatoes can equal a full day's wages.

But even as Castro complains in speeches about costly imports and urges Cubans to produce more, his government still hasn't taken basic steps like letting farmers buy new trucks and tractors.

"If we don't give farmers access to a market for equipment and supplies, the problems will continue," University of Havana economist Juan Triana says in Spanish. But that's just one factor among many.

The main customers at the wholesale market are the pushcart vendors who have flooded Cuba's streets since Castro licensed them to work legally. Most are young men like Alejandro Cruz, riding homemade tricycles with makeshift carts mounted on the back. Working as independent entrepreneurs has left them wanting more.

"There's still too much government control," says Cruz in Spanish. "They have to loosen up so there can be more business on the streets and people can make a living without fear."

One pushcart driver who complained of police seizing his wares put it another way. Asked what he thought of new regulations that will compel vendors to limit cart sizes and wear uniforms, he puts his hands around his throat and says as soon as there's something good, they choke it off.

Friday, September 14, 2012

Cuban ingenuity in the iPhone age

Published 5:43 p.m., Friday, September 14, 2012
When my iPhone slipped from the back of the tank and into the toilet, I snatched it out immediately. Though at first all seemed fine, it soon switched off and remained unresponsive.
"It's toast," was the verdict from Grant, an Apple store Genius. "We don't deem it really, like, worth it to replace the inner components of the shell of a broken phone. I'll throw that guy away and get you a brand new one."
Grant said I'd have to buy a new phone for $649 (or a refurbished one for $150). I was about to leave on a trip to Cuba, where my phone wasn't going to work anyway. So I thanked him and left.
On my second day in Havana, I passed a small electronics store in the once-upscale Vedado neighborhood and stopped in. Fishing the useless slab from my bag, I asked, "Is there anyone who might know how to fix this?" The woman at the counter headed to the back and returned with a thin slip of paper bearing an address in the Miramar neighborhood.
A kid wearing white-framed Ray-Bans nodded when I knocked on the green plywood door at the destination. His name was Andy, and he was confident he could fix my problem. Removing the tiny screws that hold the glass cover in place, he began a rapid disassembly. I had to admit Andy seemed less impressed with my fancy phone than I might have expected.
"How often do you fix an iPhone?" I asked.
"Daily," he replied.

A phone explosion

"In the last two or three years, I've noticed [iPhones] popping up," said Philip Peters, a Cuba expert at the Lexington InstituteRaúl Castro's reforms have jolted the mobile market. "In 2008, when he lifted the prohibition on Cubans' having cell phones in their own name, that led to an explosion in the number of subscribers."
Like many products in Cuba, iPhones are often brought in by tourists or citizens allowed to travel abroad.
Andy extracted the motherboard with a dental pick, put it in a green tank, added alcohol from a soda bottle, and pressed power. The contraption shook vigorously. Abelito, his partner, says they learned most of what they know via an illegal Web connection. After 20 minutes of careful prodding and scrubbing, Andy miraculously resuscitated my phone, but the battery holds little charge. I tried to pay. He refused.
"We usually only accept payment when we've fixed the problem."
"But you did!" I argue. He would not be swayed.

A black market

A day later, at Hotel Saratoga in Old Havana, I noticed the porter swiping at his iPhone 3. I told him about my battery, and he pointed to a thin, carefully dressed young man hanging around the bar. Ten minutes later, Roberto and I were making our way down a muddy street behind the impressive, decaying Capitol Building modeled exactly after the rather better-kept one in Washington.
We stopped in front of a dark entryway. Roberto asked me to wait and bounded up a set of concrete stairs. Minutes later, he returned with a new iPhone battery in its black plastic wrapper.
As payment, he accepted an 8-gigabyte flash drive I'd been carrying. Flash drives are valuable in Cuba, where Internet use is restricted and monitored. Roberto, an architecture student, explained that while "tuition here is free, you have to buy lesson books, paper, pens, your food, your transportation." All that costs money.
Just as their fathers learned to fix obsolete Detroit cars, Andy and Roberto have learned to make a living with Palo Alto technology to which they have no official access. The healthy cell phone repair market here is the latest example of Cuban ingenuity that locals call sobreviviendo. It's small-scale capitalism working around a 50-year embargo and an anemic, centrally planned economy.
Two months later, my phone works perfectly. The next time an Apple Genius tells you there's no hope, consider it an excuse to visit Havana.
Elien Blue Becque is a Bloomberg Businessweek contributor. E-mail:

Read more:

Saturday, September 1, 2012

New Import Duties Go Into Effect

Import tax deadline has Cuba entrepreneurs on edge
By Peter Orsi on September 01, 2012

HAVANA (AP) — A sudden jump in import taxes on Monday threatens to make life tougher for some of Cuba's new entrepreneurs and will mean higher prices for many of their customers by raising the cost of goods ranging from jungle-print blouses to jewelry.

The new measures steeply hike duties on cargo shipments, as well as on many bulk goods brought in by airline passengers, a crucial supply line for many of the small businesses the government has been trying to encourage as it cuts a bloated workforce in the socialist economy.

Officials insist the taxes are similar to those in other countries, but many small-business owners view the change as an ominous sign.

While the published official description seems aimed at items such as clothing, soap, food and other personal-use goods, it is so complex it leaves importers of other products unsure if they will be affected, now or in the future.

Some of the entrepreneurs, such as Javier Ernesto Matos, say they have prepared for the blow by stocking up on parts before the tax takes effect.

He also has prepared for a worst-case scenario if supply dries up entirely: "It's pretty shocking, but the strategy we have in mind is to consolidate in a single shop and leave prices the same to recoup what we can from our investment," said Matos, who together with two business partners operates three mobile phone repair shops called the Cellphone Clinic.

Others say they'll have no choice but to raise prices. That, along with the higher taxes on goods brought in by friends, has worried consumers in a country where the average monthly wage is about $20.

"For our family these are important items, from a little soap to a backpack for school," a woman identified as Loraine wrote on the state-run Cubadebate website. "We all make sacrifices to help them. Nothing falls from the sky. Why are they turning their backs on reality? Knowing how many shortages there are in the country, why be so strict?"

While President Raul Castro has tried to expand the private sector, the government has done little to provide wholesale outlets where businesses can buy parts and materials for the goods they sell, so many supplies are either unavailable or prohibitively expensive due to high government retail markups.

Arturo Lopez-Levy, a Cuban-born economist at the University of Denver, said it's not unusual for countries to levy high customs duties, but Cuba has exceptional circumstances that make it inadvisable right now.

"The right timing was to create the wholesale market first and then try to crack down on this type of activity," Lopez-Levy said. "If you don't have a wholesale market, then you are implementing the measures without the proper sequence, especially if you really want to promote the small- and medium-size nonstate sector."

"In the long term, this resolution was necessary," he said. "Right now, it's a mistake."

The new duties seem primarily targeted at so-called "mules," who make frequent shopping trips to places such as Ecuador, Panama and Miami and bring back duffel bags bulging with food, underwear, shoes and electronics.

Starting Monday, Cubans who travel abroad more than once a year not only will pay higher tariffs, they'll pay in hard currency rather than the more-easily obtainable national peso, which trades at 24 to the U.S. dollar and is used for most salaries.

Cubans will also begin paying dollar-based sums of $4.55 a pound ($10 per kilogram) above a certain weight to receive packages shipped by air and sea. That rate doubles if they bring in large shipments.

The impact is already being felt by people like Rafael, a 50-something who imports clothes to Havana. Before, he paid the equivalent of $65 in the local currency to import 550 pounds (120 kilograms) of clothing. Under the new, progressive duty schedule, that would apparently cost between $1,300 and $1,800.

"This idea of raising taxes is crazy. ... I don't know where this decision came from, because it hurts everyone," Rafael said. "But it hurts the people the most, because we have to raise our prices."

Already costly for Cubans — a pair of jeans costs an average month's wage — Rafael's prices stand to rise an initial $2-3 per garment and could go up even more, he said.

previousHe declined to be identified by his full name because his business license only authorizes him to make clothing, but he essentially resells imported garments.

The new rules will mostly affect clothing stands and boutiques, but could also hurt the supply of things such as artificial nails to beauty salons, or fabric, buttons and zippers to dressmakers.

It could also make it harder for some Cubans to visit family abroad. Trips are often funded by agreeing to bring back large bags on behalf of someone who pays the airfare.

The Cellphone Clinic's Matos said he began doubling his normal purchases this summer and has stockpiled enough parts like fragile electronic ribbons to stay in business for two more years, no matter what.

"If buying pieces becomes more expensive, if people are bringing in less, you have to reevaluate and prices will have to rise," he said. "It's a bad thing, because if you raise the price not everyone will come like before. It's not worth it, you know?"

It's not clear that any state-run operation would offer some of the Clinic's services, such as unblocking an iPhone 4.

Separate tax rates cover food and electronics, including 400 pesos (or $17) for a Cuban to import a 32-inch or larger flat-screen TV on a first trip, and $400 on subsequent travels.

Authorities insist they're just trying to improve service at Cuban airports, where excess baggage clogs conveyor belts in passenger terminals. In mid-August, state-run website Cubadebate published Customs officials' explanation of the tariffs along with several examples.

But it did little to ease concerns, judging by the dozens of exasperated reader complaints posted in the comments section.

"Why should a Cuban citizen have to pay the taxes in a currency in which they themselves are not paid?" said a poster identified as Roberto Suarez. "That's not fair. I don't travel, but I don't see the logic in that."

Some said the regulations could force entrepreneurs to turn to black-market goods pilfered from state-run concerns.

Others, however, predicted that Cubans, famous for their knack for finding a make-do solution to any problem, will figure a way to sidestep the duties.

"Something will be found to get around this," said Maria, another clothing vendor who also would not give her last name because her business activities exceed the scope of her license. "It always happens in this country. It's like they say: 'He who creates the law, also creates the cheat.'"


Associated Press writer Anne-Marie Garcia in Havana contributed to this report.


Follow Peter Orsi on Twitter at

Sunday, June 10, 2012

Cuba's International Medical Assistance

Cuba-trained doctors making difference around the world

Nabeel Yar Khan, a fourth year student of medicine, looks after Paulina Sarduy in the Jose Luis Miranda hospital in Santa Clara, Cuba, March 31.
Nabeel Yar Khan, a fourth year student of medicine, looks after Paulina Sarduy in the Jose Luis Miranda hospital in Santa Clara, Cuba, March 31.
By Catherine PorterColumnist
SANTA CLARA, CUBA—Every morning, on the edge of town, you can witness a spectacular migration. Hundreds of students in white lab coats pour from a squat university building on to the street, around the line of horse-drawn wagons, and into nearby hospitals.
You can play a game, watching from your perch beneath a flowering flamboyant tree: where do you think the guy with dreadlocks is from? What about the girl with a hijab? Some have telltale signs — an Argentinean or Angolan flag stitched over their medical uniforms.
They are international students at the world’s largest medical school, the Escuela Latinoamericana de Medicina — ELAM.
To put the school’s size in perspective: the University of Toronto has 850 medical students and Harvard University has 735. ELAM has twelve times more students than those two schools combined: 19,550. And, despite being a poor country, every single one of those students is on full scholarship.
Nabeel Yar Khan rushes among them, his stomach growling from missing a miserable mess-hall breakfast, glasses gleaming, short hair gelled to a peak like an angry bird from the popular video game. Most locals guess from his brown skin that he is one of the 906 Pakistani students granted scholarships since the deadly 2005 earthquake. But, peer closely at the back of the grey knapsack strapped over his shoulders and you see a small red maple leaf pin.
Yar Khan is from Scarborough — Malvern, to be precise.
He is rushing toward the low-slung, pink pediatric hospital — a place where the third and first worlds collide. Here, he can learn how to transplant a kidney, but patients bring their own buckets and kettles to heat water for baths.
For the past week, Yar Khan, 25, has been caring for 8-year-old Paulina, a girl with long curly hair tied loosely into a ponytail and a half-naked Cabbage Patch doll beside her in bed.
She is here for a urinary tract infection, her eighth this year. She smiles warmly as he checks her abdomen. The hospital’s head of nephrology, Dr. Maria Del Carmin Saura, joins him and class begins.
“When is a urinary tract infection considered chronic?” she asks Khan in Spanish.
“When there are more than three in a year,” he replies.
“What are the causes?” she asks. “What is the treatment?”
Satisfied with his answers, she steps back and Yar Khan continues his examination.
“He is a very good student,” Del Carmin confides before blowing a kiss to Paulina and leaving the room. “He’s really curious and part of a group of students that help one another a lot, which is important. . . . Canada will have a good doctor.”
Yar Khan is the first Canadian student at ELAM. Chances are, he will be the last.
Like most things in today’s Cuba, Fidel Castrol gets credit for starting ELAM.
In October 1998, he dispatched a team of doctors to the Central American countries that were being pounded by Hurricane Mitch. In a matter of days, more than 11,000 people died in the resulting floods and mudslides. Upon arriving in the mostly rural areas, the Cuban doctors discovered that many people suffered chronic, long-term illnesses. Instead of broken bones, they were treating river blindness and stunted growth. In places like the Mosquito Coast of Honduras, the Cubans were the first doctors the patients had ever seen.
Castro came up with a variation on the “teach-a-man-to-fish” theory: instead of leaving Cuban doctors in disaster areas indefinitely, he would teach locals to become their own doctors.
A naval academy on the outskirts of Havana was reclaimed and, at a speed perhaps only achievable under communism, the last naval students were shipped out by January. The next month, the first busloads of Nicaraguan students pulled up.
Half a year after the hurricane, ELAM’s initial 1,932 medical students began their classes in a six-year program. Raul Castro, Fidel’s younger brother who replaced him as president in 2008, opened the school.
“He said that this was a school to graduate the doctors for all the world,” says Eladio Valcarcel Garcia, one of the school’s founders, who had helped run the naval academy. The memory makes him weep. “He told me I’d no longer be preparing children for war, but to heal the world.”
The school quickly expanded to include students from more than 110 countries, from Mozambique and Yemen to Cambodia and East Timor. According to the school, more than two-thirds come from poor, rural families. Many represent first nations — the Kiche of Guatemala or Igbo of Nigeria.
Most could never afford medical school — or even access one.
Here, they study for free. They are given a bed in a dorm room, three basic meals a day, textbooks and a monthly stipend of 100 pesos — enough for a bottle of shampoo and one beer. (That’s about $3.90, or four days’ pay for a Cuban doctor.)
The only anomaly on the list of recipient countries, until recently, was the United States — Cuba’s bitter enemy. Sixty-seven Americans have already graduated from the school, and another 116 are currently enrolled — all from poor communities that rarely produce doctors, Garcia says.
“It is not a political idea,” he says, adding in the next breath: “They blockade us from medicine that could save children’s lives.” (After our interview, ELAM announced the school would not accept any more American students because of the American embargo.)
The school was supposed to close after 10 years, when enough new doctors would have graduated to replace the Cubans in the students’ home villages. But, as ELAM’s reach expanded to include the entire developing world, the end date has been pushed back indefinitely.
“We created this school to provide health for all,” Garcia says. “It’s 2012 and we still don’t have health care for everyone. So we have to continue working on this.”
Given ELAM’s mandate, you might presume Yar Khan comes from the troubled Kashechewan reserve in Northern Ontario or a rundown apartment at Jane and Finch.
But his family lives in a neat, four-bedroom home on a leafy suburban street in Scarborough.
His parents are immigrants of Indian descent. His father works for the Workplace Safety and Insurance Board. His mom answers the phone at a food distribution company.
Yar Khan worked throughout high school and his two years at York University, but he didn’t have to. His parents paid his tuition and living costs.
They aren’t wealthy by Canadian standards. But compared with most students at ELAM, Yar Khan is well-off. His closest friend, Carlos Roberto Perez, hasn’t flown home to El Salvador for two years because of the cost — not even when his mother died.
How Yar Khan became the school’s first Canadian student is a story of a little chance and a lot of perseverance.
During his second year at York, Yar Khan wandered through a campus international development fair and learned about Canada World Youth, a non-profit organization that sends young Canadians abroad on exchanges. He applied and was sent to rural Cuba.
He describes a party at his Cuban friend Eykel’s one-room concrete house to describe how the experience changed him. After dinner, Eykel turned on the stereo and the entire family — mother, father, grandmother — danced together.
“It made me look at life differently,” says Yar Khan. “You can have little but still be happy. Money can’t buy happiness. Even though I wasn’t with my family, I still felt love and affection here.”
While in Cuba, Yar Khan phoned the Cuban Embassy in Ottawa to ask about ELAM. Their response: the school wasn’t open to Canadians. Upon his return to Toronto, he launched a letter and telephone campaign, which also proved fruitless.
After Christmas 2007, he flew back to Cuba and camped out in the Foreign Affairs Ministry building — to no avail.
Two days later, the phone rang back in Scarborough. It was the Cuban Embassy in Ottawa. He had been accepted.
“I was jumping around, banging on the walls, I was so excited,” he recalls.
Less than a month later, he started classes in Cuba.
Along with sugar, cigars, 1950s cars and Fidel Castro, Cuba’s health-care system is the country’s pride and defining characteristic.
Dr. Margaret Chan, director general of the World Health Organization, recently praised the Cuban medical system as a model for the world. “People in this country are very fortunate,” she said.
Cubans have more doctors per person than anyone else on the planet. Most residential blocks still have a local medical consultorio — a doctor’s office with the doctor living upstairs on call. (This has been changing, as many doctors have been sent on missions to Venezuela over the past decade.)
Medical treatment is more hands-on and less technology-driven, mostly because MRIs and lab tests are expensive. They call it preventive — meaning people see their doctor regularly, before there is a crisis. The results are stellar: Cuba was the first country in the world to eliminate polio and measles. According to a 2006 journal of epidemiology, it has the lowest rate of AIDS in the Americas. Cuba has a lower infant mortality rate than Canada and the United States. The average lifespan, at 78, is just three years lower than Canada’s.
None of this is an accident. From the beginning, Fidel Castro set out to make Cuba an international medical superpower, according to Julie Feinsilver, author of Healing the Masses: Cuban Health Politics at Home and Abroad.
When a 9.5-Richter earthquake struck Chile just a year after the Cuban revolution in 1959, Castro sent a medical team even though half of Cuba’s 6,000 doctors had fled the country. Three years later, when Algeria’s independence led to a similar brain drain, Cuba provided 56 doctors for 14 months.
“They believed Cuba owed a debt to humanity for assistance the nation received during the revolution,” says Feinsilver.
Cuban doctors have also been sent on development missions around Latin America and Africa: starting vaccination campaigns in Angola and Ethiopia, working in rural South Africa and starting and staffing medical schools in a half-dozen countries like Yemen and Ghana where doctors are scarce. (In Ghana, local newspapers report that citizens are more likely to see a Cuban doctor than a local one.)
Since 2006, Cuban doctors have restored vision to 2.2 million Latin Americans through simple eye surgeries.
Today, the tiny country of Cuba, population 10 million, sends more doctors to assist in developing countries than the entire G8 combined, according to Robert Huish, an international development professor at Dalhousie University who has studied ELAM for eight years .
There are 68,600 Cuban doctors now and more than 20 per cent of them — or 15,407 — are on missions in 66 countries.
They have saved 4 million lives over the past five decades, they say.
“We are the army of doctors in the world,” says Dr. Jorge Juan Delgado Bustillo, the country’s deputy director of medical co-operation, standing in front of a giant map on which almost every country in Africa and Latin America sports a little Cuban flag. “We don’t fight with guns. We fight with our knowledge and hands to assist people.”
Most Cubans I spoke to call these medical missions a gesture of solidarity. More than once, I heard the same phrase: “We don’t have much. But what little we have, we share.”
But there is a business model here, too. More than two-thirds of the medical internationalistasare in Venezuela, which repays the Cuban government with cheap oil.
Cuban medical teams are in other rich countries, like Qatar, where they are paid $1,000 a month — more than 30 times their regular salary of $35. About 40 per cent of the Qatari wage goes to the Cuban government, Delgado says. “Every student studies medicine here free. It’s their responsibility to their society.”
Critics of the system call this modern slavery. Dr. Julio Cesar Alfonso runs Solidaridad Sin Fronteras (Solidarity without Borders), a Miami-based charity that assists Cuban doctors get their American accreditation. Since the George W. Bush administration created a special visa program for Cuban medical internationalistas in 2006, about 800 Cuban doctors have defected from international missions, he says.
“They work long hours and receive tiny salaries while the Cuban government makes good money,” says Alfonso. “Doctors in Cuba won’t tell you the truth. They are scared to speak openly about this.”
Statistics are hard to get in Cuba. But author Feinsilver estimates Cuban medical exports surpassed the $2.3-billion tourism industry earnings of the early 2000s.
If the money is big, the political returns are even bigger. Cuban doctors have earned their country many international allies, essential in Cuba’s long, cold fight with the United States. In April, most Latin American and Caribbean countries at the Summit of the Americas rejected the American demand that Cuba not attend the next forum.
Experts call this “medical diplomacy.” ELAM fits neatly into it. Most countries that receive Cuban doctors send students to the school. In 2004, Paraguayan President Nicanor Duarte Frutos said he would not support another American anti-Cuba resolution because of Cuban doctors in his country and the 600 Paraguayan students at ELAM.
“Dimi Chocolito,” Yar Khan says to a passing South African.
Que tal mi hermano?” he asks an East Timorese.
Next is a guy from Paraguay before he finally settles into conversation beside the line of coches— horse-drawn carriages that are Santa Clara’s version of buses — with a student from Guinea Bisau.
“I’ve learned so much about the world here,” Yar Khan says, as we clip-clop toward the city centre. “Did you know Nicaragua is the only country in the world that has sharks in lakes?”
Back in Scarborough, Yar Khan’s parents thought of him as their reserved, driven, middle child. He has always worked hard, signing himself up for Kumon classes in Grade 7 because he thought he needed help with math. He volunteered a lot, running a kids’ soccer team and helping at the local hospital. But he wasn’t super social. He kept to his close friends from grade school.
Four years in Cuba have transformed him.
The Cuban Yar Khan is short and funny — “I’m 5-foot-4, hopefully,” he says — and outgoing. He kisses his teachers on the cheek goodbye and strokes the arms of patients while talking to them. He talks to strangers on the street in an easy Spanish, which he taught himself.
“At the beginning of the year, he told me he wanted to be paired with a Spanish-speaking student,” recalls Gloria (Prof Katty) Catalina Bacallao Martinez, who taught Khan semiology (the science of symptoms) last year. Yar Khan missed the intensive Spanish classes most foreign students receive during their first six months at ELAM. He was admitted too late, thrown directly into pre-med sciences. He wanted the Spanish-speaking partner to do the bedside talking.
“I told him ‘No. You must acquire the ability to speak good Spanish for your patients,’” Bacallao continues. “When he finished, he spoke more fluently than the Spanish students.”
Yar Khan lives at the top of a mottled, four-storey building, in a room with six other men. They each have a mattress on a bunk bed, a wooden locker and a miniature desk. Amazingly, another six men were billeted here, but they sleep at their girlfriends’ places. The room is so small, it’s hard to imagine how they would fit. As it is, Yar Khan has to move desks to make enough room to unfurl his prayer rug.
There are no bedside lamps. The last one to bed turns out the fluorescent lights. There was no electricity at all between 8 a.m. and 4 p.m. during Yar Khan’s first two years here.
The men share one toilet and one shower, when it works. Most of the time they bathe from a bucket of water.
The food served in the gloomy canteen below is predictably terrible — mostly rice and black beans.
Yar Khan’s father sends him $150 every month to buy essentials, when he can find them. Santa Clara has been out of toilet paper for about a week — rumour has it the factory shut down.
“There were two hurricanes during my first year here,” he says. “You couldn’t find fruit or vegetables in town for four weeks. Or eggs.”
Last year, after Yar Khan’s Canadian bank changed its credit cards, he went four months without being able to access money. His friends paid for his beer and the odd dinner out with what little they had. When he was recovering in hospital from an appendectomy, Perez — his poor Salvadoran friend — brought him green mangoes and tamarind fruit that he had picked.
Yar Khan has learned first-hand that Cuban motto: “We don’t have much, but what little we have, we share.”
“This program has changed me into a better person,” he says.
ELAM students don’t sign formal contracts promising to use their free degrees in poor, rural communities. The hope is that the school experience will inspire them to do that. According to ELAM’s administration and international scholars, about 80 per cent follow through.
“Many have made efforts toward humanitarian outreach rather than hightail it into radiology or some specialization that sees the top pay scale,” says Dalhousie’s Huish.
He is talking particularly about the American graduates who would have incurred huge debts had they studied medicine at home.
“Many of them are in self-organized health brigades. Some went to New Orleans to do community-based care with other physicians. Others have gone to work in Oakland, the Bronx, and one grad set up an NGO to promote safe maternity in Ghana.”
At ELAM’s main campus near Havana, Eladio Valcarcel Garcia, the teary administrator who helped found the school, says the 2010 Haitian earthquake, which killed up to 300,000, was a perfect test case. The Cuban government tapped ELAM to gather 356 graduates to join the large contingent of Cuban emergency doctors heading to help. “We had to stop calling. All of them said yes. They came from Guatemala and Mali and Nigeria, Morocco. We still have 102 graduates there.”
Yar Khan has two more years of medical school and likely a residency program in Canada before he decides where he will practice. He is certain he wants to be a pediatrician. From there, he is wavering between working in a developing country with Doctors Without Borders or heading to Canada’s north, where doctors are rare.
“This is survival of the fittest. I’ve gone through so many obstacles to get here,” Yar Khan says with a smile. “I can survive with minimum essentials anywhere.”
It is unlikely another Canadian will ever follow him to ELAM. The Cuban government has made no moves to open the door to others.