Bill Blogging

Cuba in Transition

Thu, 10 Jan 2013 14:31:00 -0500

The transfer of power from Fidel to brother Raul occurred seamlessly in February 2008. Raul had been the long running Defense Minister and had a reputation as a fearless and sometimes ruthless ideologue, so there was little reason to anticipate the collapse of the Communist state. However, Raul recognizes that the current economic model is unsustainable and has begun to slowly introduce economic reforms. In 2011 the Communist Party Congress ratified Raul Castro’s five year economic plan which calls for the elimination of 1.3 million public employees and an expansion of the private business sector.

However, the list of allowable private businesses is limited; and in several respects, the economy is still severely restricted. For example, Cubans have just been allowed to buy and sell houses, previously housing transfer could only be done via swaps. And of the list of 178 allowable business categories (heavily weighted toward blue collar enterprises), only 83 are allowed to hire non-family members. In other words, the government is going very slowly in moving from a state to a “mixed” economy, as it tries to change the bureaucratic mindset that has lasted fifty years.

Broadly speaking we were told that the Cuban economy needs to raise investment levels from 10% to 25% of GDP. However, Raul and his cadre of political and economic advisors are fearful of losing control if they open the economy suddenly to outside investors and remove all constraints similar to what happened in Eastern Europe in the 1990’s. The government does not want to lose its commitment to the socialist principles that were adopted since the Revolution - free health care, education, and an egalitarian society.

There is the sense that as the economy is gradually opened, people will demand more - i.e. the Arab Spring example. Also as Venezuelan subsidies are reduced, the government will need to act more swiftly in seeking outside investment. The obvious source is the U.S., but as seen previously there is little current momentum in Washington to effect change. Cuba will not turn to the U.S. on its own. Under the 1996 Helms-Burton Law, Cuba must change its government, move toward free elections, and release all political prisoners before restrictions are removed. Cuba believes those requirements are a limit on its sovereignty and totally unacceptable.

Thus we are left with a sense of slow movement, gradual change, and hopefully some improvement in the quality of life for ordinary Cubans. For those who wish to see Havana before it becomes another Miami Beach, there appears to be plenty of time. Nevertheless Havana today is a wonderful place to experience life as it existed in a previous time, a sort of time warp with beautiful music and art, friendly people, absence of Western commercialism, and a rich and ever evolving culture.

Enough with the dry stuff, here is Roberto Fonseca playing in a...

Thu, 10 Jan 2013 07:30:00 -0500

Enough with the dry stuff, here is Roberto Fonseca playing in a jazz club as promised. Check him out on Youtube.

And the Buena Vista Social Club performing at the Hotel...

Thu, 10 Jan 2013 07:22:00 -0500

And the Buena Vista Social Club performing at the Hotel Nacional.

Finally figured out a way to upload my videos, here some...

Thu, 10 Jan 2013 07:10:00 -0500

Finally figured out a way to upload my videos, here some children dancing on the Prado, a wide boulevard in old Havana.

Dissent

Wed, 09 Jan 2013 22:26:00 -0500

We met with Camilo Candia, the acting editorial chief of the magazine “Espacio Laicel” (Lay Space) which is published quarterly under the auspices of the Catholic Church ( as opposed to the state run media). Several of the articles call for government reform, including an editorial in the current edition which calls for two party elections. Curiously the magazine is criticized by Cuban exiles because it supports reform within the current system as opposed to total “regime change” and overthrow of the current system of government. Nevertheless we were still surprised that the government would tolerate open opposition and call for change in the one party system.

Apparently as long as this dialogue and debate are between “middle aged white men”, the government will turn a blind eye. But if the call for change was targeting the working poor, students, and peasants, then tolerance would be short lived.

This is not to say that Cuba is implementing any dramatic reforms in the area of political or human rights. Nor is it moving to release political prisoners as urged by the West. Then there is the unfortunate case of Allen Gross, a contractor working for the U.S. Agency for International Development, who was arrested and convicted as a spy in 2011. Cuba has offered to trade him for five Cuban intelligence officers (the Cuban Five) arrested in the U.S. for spying in 1998, but the U.S. has refused.

While no one condones Cuba’s record of political and human rights, the fact remains that U.S. policy permits trade with and investment in other countries with equally restrictive policies.

Cuban Diaspora

Wed, 09 Jan 2013 21:54:00 -0500

In recent years the government’s attitude towards the overseas Cuban community has changed. Originally regarded as “worms”, Cubans who fled the country now provide an important source of income to the economy totaling $2.5 billion per year. As of Jan. 14, 2013 all travel restrictions have been lifted; and Cubans are being encouraged to work abroad and travel freely. The reason is that the Cuban economy can no longer afford the large state apparatus which is eliminating upwards of 500,000 jobs (total population only 11mm). The paradox is that it is the young and well educated who are leaving, which will put further pressure on the economy as the population mix will shift more to the aged and infirm.

The U.S. allows immigration of 20,000 Cubans per year. Several thousand more enter the U.S. under the “wet foot/dry foot” policy, whereby if a Cuban makes it to land (dry foot), he can stay, but if caught on the seas, even by the U.S. Coast Guard (wet foot), he is returned to Cuba. Thousands more enter legally through Mexico under the Cuban Refugee Adjustment Act. All told up to 40,000 Cubans enter the U.S. yearly. That represents in part a political safety valve. Over 200,000 young, predominantly male unemployed Cubans have left over the past five years instead of congregating in the streets and squares as they did in Egypt and other countries in the Arab Spring.

Why is Cuba so Poor?

Wed, 09 Jan 2013 21:25:00 -0500

Following the Cuban revolution and Castro’s expropriation of American property, the U.S. imposed a trade embargo as described previously. This embargo has been successively tightened over the years to include trade with U.S. subsidiaries operating overseas, adding Cuba to the list of terrorist nations, as well as other restrictions: strike one.

When Castro turned to the Soviet Union in 1962 for aid after the imposition of the American embargo, he adopted the Communist style of economic activity known as a command or planned economy - central decision making, little entrepreneurial activity, no incentives, etc. We know how that worked for Eastern Europe and the Soviet Union: strike two.

Before the Revolution Cuba’s economy had been built largely on sugar, with some investments in mining and tourism. Unlike the Soviet Union it did not have the wealth of minerals and oil to help offset weakening sugar prices and declining production, in essence Cuba lacked a broad economic base: strike three.

During the ‘80’s the Soviet Union provided Cuba with annual subsidies of $4-5 billion. This subsidy was suddenly cut off in 1991 when the Soviet Union collapsed. Over the ensuing three years, known in Cuba as the “Special Period”, the economy contracted by 34% and trade fell by over 80%.

Since then Cuba has tried to both broaden its economic base and its trading partners. Tourism is now the largest contributor to the economy. Venezuela has replaced the Soviet Union in coming to Cuba’s aid, contributing between $6-8 billion annually. There are 30,000 Cuban doctors in Venezuela, a partial payment for the oil and funds that that country provides. However, it is likely that the assistance from Venezuela will be gradually reduced in coming years, which puts even more pressure on Cuba to find a solution to its perpetually under performing economy.

We had lunch at the home and studio of artist Jose Fuster, who...

Wed, 09 Jan 2013 20:48:00 -0500

We had lunch at the home and studio of artist Jose Fuster, who has turned his home and entire neighborhood into one enormous piece of mosaic art. His work evokes themes from Cuba’s African roots as well as whimsical paintings drawn from ordinary life in Cuba. Fuster’s work also has some similarities in style to Antoni Gaudi, the Spanish Catalan architect.

Sculpture at the Colon Cemetery commemorating the death of Cuban...

Wed, 09 Jan 2013 20:34:00 -0500

Sculpture at the Colon Cemetery commemorating the death of Cuban patriots who died while attempting to assassinate Batista in March 1957, twenty months before the success of the revolution. The Colon Cemetery is considered one of the four most important cemeteries in the world for its artistic values, which might seem strange until you see the magnificent mausoleums, memorials, and chapels dating back to the early 1900’s. The sculpture above was designed by Mario Coyula, our Cuban architect guide, who personally knew many of the individuals killed in the attack. The sculpture serves as a sun dial which directs a ray of sunlight on a memorial each year at the exact time and date of the foiled attack.

Drinking daiquiris at the Floridita Bar, made famous by...

Wed, 09 Jan 2013 20:13:24 -0500

Drinking daiquiris at the Floridita Bar, made famous by Hemingway who lived out his life in Havana from the late 1930’s.

Cuban American Relations

Wed, 09 Jan 2013 20:01:00 -0500

We traveled to Cuba with the Harvard Alumni Association under a “Person to Person” visa, a program instituted under the second Clinton administration to promote direct contact with and support of the Cuban people. Hundreds of U.S. non governmental organizations (NGO’s) have licenses to sponsor travel to Cuba; and 600,000-700,000 U.S. citizens travel to Cuba annually. The object of the plan was to demystify Cuba for Americans, as well as to extract policy from hard line Cuban Americans who had controlled the dialogue between the two countries until then.

The Obama administration’s foreign policy has been based on the theory that in order to “affect” other societies, America had to “engage” those societies. As a result he has liberalized remittances and travel to Cuba by Cuban Americans, but the trade embargo first instituted in 1962 remains in effect. Even more onerous, Cuba is one of five countries including North Korea and Iran that is classified as a terrorist nation. That designation excludes Cuba from transacting international trade in U.S. dollars and joining the global financial system, factors that further damage Cuba’s ability to trade freely with other nations.

U.S. policy today is a carryover from the ‘70’s and ‘80’s when Cuba was exporting revolution to Africa and Central America, and when the Cold War and Communism were real threats to American security. But current policy is clearly counter productive and inconsistent. The U.S. trades with other Communist regimes such as China and Vietnam. Policy has been and continues to be held hostage by a hard line Cuban American community in South Florida and New Jersey which insists on “regime change”, the ouster of the Castro’s and a return to two party democracy.

While the hard liners are gradually losing power and dying off, there are no obvious groups to pick up the mantle on Cuba’s behalf despite the fact that polls show that 70% of Americans disagree with our Cuban policy. Given the current state of U.S. foreign and economic policy, it would appear that any interest in further changing Cuban American relations would have low priority for this administration.

Did I mention that we couldn’t take enough pictures of the...

Tue, 08 Jan 2013 22:19:17 -0500

Did I mention that we couldn’t take enough pictures of the vintage U.S. automobiles.

The little blue car is a Russian Lada. When Castro turned to the Russians for aid after the U.S. embargo, Cuba began importing Russian cars. There have been several waves of auto imports into Cuba. Following the Russian departure in 1991, Argentinian imports were big, followed by Korea and now China. The Lada is still around; apparently it is a terrible car, but parts are plentiful and the car is cheap to run.

Picture above is of the Riviera Hotel, a famous hotel from the...

Tue, 08 Jan 2013 22:09:45 -0500

Picture above is of the Riviera Hotel, a famous hotel from the 1950’s that was owned by the American gangster, Meyer Lansky. The lobby decor is the same as the late ‘50’s when the Mafia was kicked out by Castro. The mob had intentions of creating another Las Vegas in Havana, so it would seem that the biggest beneficiary of the Revolution was Las Vegas itself. Most of the people who visit Cuba are coming to see the city before it is turned into another Miami Beach. While some think that the change is near, by the end of our visit, the vast majority shared the opinion that things were not happening so quickly.

Our trip to Cuba was under a People to People exchange (more...

Tue, 08 Jan 2013 21:48:00 -0500

Our trip to Cuba was under a People to People exchange (more about this later), and what better way to interact with Cubans than through dance and music. In the five days we were in Cuba we visited and heard more music in the streets, on the stage, and in the bars and restaurants than anywhere I can remember. I had video clips of a jazz band we saw - Roberto Fonseca and Temperamento which won’t upload for some reason. You can catch him on Youtube, he was really good. We also saw a performance of the famous Buena Vista Social Club, the group which practically jump started the Cuban musical scene in the mid 1990’s. You should also check them out on Youtube if you are not familiar with them.

Most things in Cuba work pretty well despite the poverty and...

Tue, 08 Jan 2013 21:31:24 -0500

Most things in Cuba work pretty well despite the poverty and lack of funds. Our hotel, managed by the Spanish Iberostar chain, was clean and comfortable. Every once in a while, though, you are reminded that you are in Cuba. For example, if you want to change currency at a bank, be prepared to stand in line (see above). Of the three elevators in our wing of the hotel, two didn’t work - luckily we were only on the fourth floor. There was wifi (for a fee) in the lobby of the hotel, but since Cuba only has a satellite feed and no fiber optics cable, speed is notoriously slow and spotty. U.S. credit cards are not accepted, so all transactions must be in cash. People do not travel for the cuisine - diet is notoriously free of fresh vegetables, and quality of chicken, beef, and pork isn’t great. But beans and rice are plentiful, and we were always greeted with a rum drink before meals.

The Cuban economic structure is inverted or upside down....

Tue, 08 Jan 2013 21:18:02 -0500

The Cuban economic structure is inverted or upside down. Education is free, so the population is relatively well educated and healthy, since health care is also free. However, the State controls an estimated 85% of the economy, and all doctors, lawyers, and other professionals receive the same salary, the equivalent of $40 per month!!! On the other hand those lucky enough to work in the tourist trade with access to hard currency are at the top of the pay scale. The lady with Susan in the picture above selling peanuts for $0.50 a bag (including the photo) is probably better off than most doctors. Artists also do well; because of a quirk in U.S. law called the Berman amendment passed in 1987, Americans are allowed to purchase Cuban art legally - photos, music, paintings, etc. Many Cuban musicians and artists are world famous and are able to earn money outside Cuba through arrangements with foreign artists and partners.

Today’s highlight was a walking tour of Old Havana led by...

Tue, 08 Jan 2013 20:56:00 -0500

Today’s highlight was a walking tour of Old Havana led by Mario Coyula, a Cuban architect, Harvard visiting professor, and a former president of the Cuban Landmarks Commission. He explained why it was so difficult to make changes in the city. All the apartments in the city are individually owned, given to people after the revolution when the previous owners fled the country. There are no constraints on what people can do with their property, nor is there any money for people to improve or restore the properties. Magnificent art deco, baroque, neo-colonial and neo-classical buildings are in desperate need of repair. Decrepit buildings stand side by side with buildings that have been restored as hotels, museums, schools or government buildings - as noted earlier the latter having had the benefit of government or foreign funding.

We had lunch at the Hotel Nacional, the famous state owned hotel...

Tue, 08 Jan 2013 20:39:18 -0500

We had lunch at the Hotel Nacional, the famous state owned hotel frequented by world leaders, artists, and also leading Mafia figures. The hotel was made famous in the second Godfather movie where Michael Corleone is meeting with Hyman Roth at the hotel on New Year’s Eve 1958, the night that Batista fled the country and Castro and his revolutionary forces took the city. The building was in beautiful shape unlike most of the buildings seen on the drive from the airport. Many government, office, and apartment buildings were in various states of disrepair. The main differentiating factor is which buildings such as the major hotels have had foreign partners or investors that have provided the funds for upgrading the facilities. Note the three wheeled Coco taxi in front of the hotel, named for its resemblance to a coconut.

Hard not to notice the vintage automobiles as soon as you leave...

Tue, 08 Jan 2013 20:18:20 -0500

Hard not to notice the vintage automobiles as soon as you leave the airport - Chevrolets, Dodges, Fords, etc. all from the 1950’s. The U.S. imposed a trade embargo on Cuba in 1962 when the Castro government expropriated American businesses in Cuba, which ended imports of U.S. goods including autos. Many of the cars which are in surprisingly good condition have been converted to taxis which receive a premium to state run small foreign autos. I asked one of the owners how he maintained his ‘53 Chevrolet. He has a cousin in the U.S. who sends him parts via the Bahamas. For the rest, there is an active parts business where owners swap each other for needed parts.

Sarah and Stella at Hanukah party. If you checked for Cuba...

Mon, 31 Dec 2012 18:38:11 -0500

Sarah and Stella at Hanukah party. If you checked for Cuba posts, it’s too soon, but I had to practice downloading photos from my iPhone to the web site since I am not bringing my iPad with me.