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Cuba’s Delicate Dance with a New Economy

Issue 222

Mario A. Murillo Feb 21, 2017

HAVANA — Luis is a chemical engineer by training who worked for 20 years at a state-run medical facility. These days, he drives a run-down 1978 Fiat that he converted into a taxi.

“I take home in one day what I used to make in about three weeks,” he told me enthusiastically after giving me a lift to Old Havana. “I can’t imagine ever going back to what I was doing before.”

Ruben is another Havana taxi driver I met during my recent visit to the island. He dropped out of medical school a couple of years ago to drive his great-grandfather’s 1929 Ford convertible up and down the Malecón, Havana’s famed seaside walkway, a popular tourist destination.

“Thanks to the Commander-in-Chief, Raul Castro, I now have this,” Ruben said, pointing to the sticker pasted on his windshield that shows official recognition allowing him to use the antique car as a taxi. “After all the fees and taxes are paid for, I come home every night with between $8 and $10.” That’s a small fortune in Cuba.

In 2015, Presidents Barack Obama and Raul Castro resumed normal diplomatic relations between the two countries, after 54 years. Many Cuba-watchers are speculating how a possible reversal of that policy by President Donald Trump might affect the island nation. Yet, the biggest challenges Cuba faces at this moment may be of its own making. A growing private-sector economy centered around the tourism industry is creating pockets of individual prosperity, while driving inequalities not seen in the country since the 1959 Revolution brought Cuba’s socialist government to power.

“This is the most difficult period of the last 56 years of the revolution, even more difficult than the days of the so-called ‘special period,’ because the social inequality that is developing is breaking down the ideological fortitude of the people,” said Dr. Ana Sanchez Collazo, professor of pedagogy and philosophy at the University of Havana and a proud veteran of the literacy brigades that fanned out into the countryside in 1961 in the Revolution’s successful effort to wipe out illiteracy in Cuba.

For a society steeped in egalitarian values, the drive over the past five years by Cuban leader Raul Castro to introduce elements of capitalism into the economy have been jarring and have many people on edge, across generations.

“The challenge we face is how to build a prosperous and sustainable socialism at a moment of increasing income heterogeneity,” said Dr. Daybel Panellas, a professor of social psychology at the University of Havana who has been conducting research about the Cuban worker’s psychosocial outlook.

24 Years Later

I last visited Cuba in 1993, when its economy was enduring an unprecedented collapse caused by the sudden disintegration of the Soviet Union, the nation’s primary benefactor. Known as the “special period,” it was a time of energy rationing, extreme food shortages and scarcity of basic goods, as the real wages of the typical Cuban plummeted. Overall, the Cuban economy contracted by one-third between 1990 and 1993.

“The special period made the Great Depression in the United States, look like an economic boom,” said Dr. Ricardo Torres, an economist at the Center for the Study of the Cuban Economy. “Cuba was left all alone to fend for itself, with no support from the international community, and more importantly, with a tightening noose from Washington as it tried to finally put an end to the Cuban Revolution by making the economic blockade even more restrictive.”

Yet with some pragmatic changes such as loosening restrictions on foreign investment, propping up the long-dormant tourism sector and legalizing the use of U.S. dollars on the island in the quest for hard currency, somehow, Cuba survived.

The changes to the physical environment have been modest, but are eye-catching when seen after a long absence. There are much larger swarms of foreign tourists, including an unprecedented number of norteamericanos, who for decades had been practically non-existent because of the stringent travel restrictions placed on U.S. citizens, many of which were lifted by the Obama administration. The Malecón, the esplanade that buttresses a good part of the city from the Caribbean Sea, still has its dramatic structures with decaying facades, but its five miles are now peppered with dozens of new restaurants, cafes and swanky bars that could not have been imagined in the early 1990s.

Subtle Changes

But for the most part, the changes underway in Cuba are much more below the surface. Today, as many as 29 percent of Cuban workers are active outside of the state sector, abandoning jobs that pay as little as one-tenth what they can earn in the private sector. It’s a brain drain that sees well-educated professionals like Luis and Ruben abandoning their careers to drive taxis, run self-owned eateries or turn their homes into small hotels known as casas particulares for visiting tourists.

This trend is expected to grow as the government continues to seek out hard currency and typical Cubans look for new economic opportunities. But while the government has endorsed this process and many Cubans welcome it for the most part, the questions are how quickly it will continue to develop, and what its long-term social and economic effects will be.

The phrase quoted by economists and sociologists on the island is Raul Castro’s own slogan, “sin prisa, pero sin parar,” or “without a rush, but without stopping.” Yet, is it sustainable in the long run?

“During the special period, there was a feeling of collective sacrifice and struggle, that everyone was in this hole together,” said Dr. Panellas. “Today, that sense of social solidarity is threatened by the growing inequality. But there’s also a recognition that there’s no turning the clock back. The economic reforms that were pushed by the government will not be turned around any time soon.”

Indeed, the debate about how to move forward is being widely discussed by everyone, from young punk-rockers hanging out in the streets to high-ranking members of the Communist Party. The artistic community is embracing the new possibilities that these changes are bringing in. In the heart of Old Havana, for example, a number of galleries are popping up, run by established artists who are promoting the new spaces as venues for tourists and Cubans alike, to celebrate the vibrancy of Cuban culture and artistic expression.

One of them is Daniel Atiés Sans, a painter and sculptor whose work has been exhibited from Havana to Berlin, New York City to Santiago de Cuba. His new gallery space is conveniently situated right in front of the birth home of the revered Cuban patriot Jose Martí, the 19th-century revolutionary who is the national symbol of Cuban independence and resistance. Atiés is renovating a formerly abandoned building to “make it a space for the community and the world to celebrate our art and culture.” It was only possible, he told me, because of the reforms approved by the government to allow for more independent endeavors to take hold without the direct oversight of the state.

“Many tourists who come in here from Canada and Europe tell me they’re visiting the island before Cuba changes totally and becomes something else,” he said. “I tell these people not to worry, that they must know that the Cuban people will always be Cuban, and the rich culture of national pride and resistance will always be with us regardless of what happens.”

While Cubans are concerned that U.S. policy toward their country could once again take a bellicose turn under Trump, their experience over the past quarter-century has left them confident in their ability to face adversity.

“We’ve already suffered through, resisted and survived the worst that could be thrown at us,” said the owner of the casa particular where I stayed during my visit. “Nothing that can happen in the coming months or years can be more difficult than what we have already lived through. After all, we are Cuban.”


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