Recent changes to Cuba’s economy have raised many questions. Some see them as a move towards capitalism and as a recognition of the failure of socialism. But what is the truth?

On a recent visit to the island as part of a Morning Star/Cuba Solidarity Campaign media group, we were able to get a clearer idea of what is going on.

“Many of these changes are simply a legal recognition of what was already common practice,” one Havana teacher tells us.

“Garage mechanics, barbers, painters and decorators – all these sorts of tradesmen were already working outside the official economy. By legalising their work, the state can now get tax revenue from them.”

One of Cuba’s big problems is the generation of more capital through an efficient tax system.

“We don’t really have a tax culture here,” Pita Montes, of the Cuban Communist Party’s international department, explains.

“Over 50 per cent of our GDP goes on free healthcare, free education, sports and cultural activities for the population and on social security to pay for social care for the elderly, disabled people etc.

“As the non-state sector grows, the self-employed have to be made aware that they must pay tax, otherwise the state will not be able to afford to continue to give all this gratis to our people.”

Cubans call such tradespeople “workers on their own account.” There are now self-employed “bici-taxistas” – tricycles that carry two passengers – taxi-drivers, hairdressers and barbers, restauranteurs, garage mechanics, painters and decorators and many others.

By last September almost 330,000 were self-employed, of whom 60,000 were women and 7 per cent of whom had not been in work before, Montes tells us.

“We are intent on upgrading our economic model, not transforming it wholesale,” Montes says.

“Changes are being introduced on the basis of socialist ownership.

“Most people here do support the revolution. You won’t find insults against our leaders in our mass media, but you will find plenty of criticism.”

And perusing the national daily Granma, one can certainly find readers’ letters denouncing malpractices and corrupt officials, plus editorials and features in that vein too.

However the question is whether the airing of such criticism is merely a safety valve or whether anything is likely to change as a result.

One of the problems in today’s Cuba is the number of people who are not “labour-active,” as Montes puts it.

“We are reorganising the labour force,” she says.

“Some people might take early retirement, others might find a different job in another state sector – construction work or in agriculture, for instance.”

Retraining commissions have been set up to help people who have been outside the labour force to find work.

“There is employment for everybody,” Montes maintains, “but not all of it will be office work.”

One problem is the number of people, many of them young, who have got used to not working, among them the jineteros who plague foreign tourists asking for cucs – the hard currency used in Cuba alongside the national currency which local wages and salaries are paid in.

The jineteros must be the most well-dressed and well-fed beggars anywhere in the world.

They are not poor in the real sense of the word – they have free healthcare, free education, even including university education, and free milk for their children up to the age of seven, but in Cuba fashionable clothes and shoes, some imported food products and the latest electronic hardware are only available in cucs.

It will not be easy to get young people like these, who have got used to not working, to move into the sector which the party and government have identified as crucial to the national economy – agriculture.

To get people who are used to a relatively easy city life to move into the countryside to work as farmers would not be easy in any country, but in Cuba, where farm mechanisation is not widespread, it will be even more so.

“Food production is a question of national security for our country,” the Communist Party official says.

“We need to promote agricultural production so that we become more self-sufficient.”

Farmers are being given permission to lease land – any size from 13 to 33 hectares – on 10-year contracts.

Cuba has six million hectares of arable land and currently 20 per cent of this land has been leased in this way to farmers.

“Between 2008 and 2011 we have given over 1.3 million hectares on lease.

“We draw up contracts with these farmers to produce such-and-such a product,” Montes says, “but the land continues to belong to the state.”

The government is opening shops to sell farming tools and materials and the system of credits to new and existing farmers is being introduced, but is still in its infancy.

This explains why 20 per cent of agricultural land is at present unproductive.

Again, the US boycott is partly to blame, as it would be much cheaper for Cuba to import agricultural machinery and tools from its nearest neighbour, the US, than to have to import from Europe or circuitously via third countries.

For historical reasons a small number of farmers own their own land, such as Benito Camejo, a tobacco farmer we visited near Vinales.

His family had owned vast tobacco-growing fields before the revolution, he tells us.

“After the revolution most of it was confiscated,” Camejo says, “but we were left 10 hectares and we have continued to farm this land and produce the finest tobacco in the world,” he says with a laugh.

A tall, slim man with a lined, tanned face, he lights up one of the cigars his little factory produces.

“One of these a day will keep you in good health!” he exclaims.

We see that he and his family live quite well. He has his own house with several outbuildings.

A big pile of breeze blocks lies nearby ready for an extension he plans to build soon.

He works together with his brother and their families, raising a few domestic animals, growing their own coffee, salads, fruit and vegetables.

Camejo has a contract to sell 90 per cent of his cigar production to the state.

The other 10 per cent he and his family can use for themselves or sell privately.

It has become possible now for Cuba to decentralise its economic model in these ways by making small trades independent of the state due to the fact that the so-called “special period” during the 1990s had ended.

Those were the tough years after the collapse of the Soviet Union, which had been Cuba’s main trading partner, when all trade and investment from the socialist countries suddenly came to an end and Cuba had to fend for herself economically.

Cubans refer to that period as very hard, a time when they barely had enough to eat. Yet the people seem to understand the need for that special period, as well as expressing relief that it was now over and that the economy is now – to some extent at least – looking up.

In addition to the promotion of the non-state sector, Cuba has also taken steps to make ministries more efficient.

Sugar was traditionally Cuba’s main product, but not any longer. Tourism is much more profitable and not so labour-intensive, so Cuba is expanding that sector very rapidly.

Big new hotels can be seen along the western seaboard of Havana, in Miramar and beyond.

Most of the foreign tourists are from Canada, with Britain in second place.

Many basic foodstuffs are provided by the state through a ration card system. Rice, oil, coffee, meat, pork, chicken, beans, flour and some other items are sold at very low prices to each member of the family in the same amounts, irrespective of whether the individual is a baby or an adult.

Eighty per cent of these rationed items have to be imported at present, which is obviously a heavy drain on the state economy.

Yet there is no reason why these same foodstuffs cannot be grown and produced in Cuba – just as pork is, of which there is an abundance.

“We want to move towards subsidising people rather than subsidising products,” Montes explains.

“At present a high-earner pays the same for these products as someone on a low wage, which isn’t really fair.”

But the government is moving very cautiously on this one, she adds, as to cut rations to above-average earners overnight would cause too many problems for people. For the time being, rationing will continue.

Cubans are very open about their feelings. They range from enthusiastic support for the government to disgruntlement with the economic situation.

But all recognise their country’s achievements, especially in free high-quality healthcare and education, and are aware that this is far from the case in other Caribbean and Latin American countries.

February 6, 2012

The Morning Star