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Cuba under Raúl: Creeping toward capitalism?

Since Raúl Castro took the helm in February, he's rolled out a series economic changes, including allowing Cubans to buy cellphones and giving farmers profit-incentives.

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In his most recent speech to parliament, Raúl implored his countrymen to work harder and prepare for tough times ahead as the global food crisis ripples toward Cuba. "We have to definitively reverse the decline in the amount of cultivated land," he said, adding that it has shrunk by 33 percent in the past nine years. "Stated simply, we must return to the land. We must make it produce. There is already a clear strategy and a plan of action, from the national level to the lowest level of production."

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Currently more than half of arable land lies fallow or is under used, according to Cuban government figures cited by The Associated Press. Cuba spent $1.5 billion importing food last year. This year it is expected to spend $1 billion more, say officials.

"There's been a recognition by Raúl that the government cannot run farms as well as [private] firms can," says John Parke Wright, a wealthy rancher and sixth-generation Floridian whose ancestors were instrumental in cementing trade ties between Tampa and Havana in the 1800s (see sidebar, page 11). Mr. Wright and other longtime observers say that market experiments on farms are just a stepping stone to a more open economy.

Texan cattle and cotton

But while some Cubans blame their economic woes on strict controls and prohibitive taxes, many still view the US and its 1962 trade embargo as the bigger culprit. No matter how much Raúl seeks to open the economy, the embargo will stand in the way of much-needed foreign investment, analysts say.

If the economy is opened up, the tourist industry will explode. But it is on the farms and fields of Cuba where a change is most likely – and there is no shortage of investors eyeing potential changes. On May 27, a group of trade representatives from Texas wrapped up the first official state visit to the island since the US established the embargo.

"Cubans expressed a sincere desire to do business with Texas," says Texas agriculture commissioner Todd Staples, who led the delegation. Cuba is an important market for Texan cattle, rice, poultry, cotton, and processed food products that enter under provisions in the US embargo that allow small amounts of trade in agricultural products.

"We just went to develop relationships, but the trip exceeded our expectations," says Mr. Staples. Members of the delegation signed two new cotton contracts worth $400,000 and initiated several other contracts for poultry, milk, and processed foods. "Positive trade relationships can lead to greater understanding of the issues that divide us," he says.

Such goodwill may not be the status quo in either nation right now, but the sense that change is coming certainly is. "The social values we espouse mean nothing if there is no economic basis," says Renel, a young lawyer in Havana. "Whether it is socialism, communism, capitalism, even feudalism, things are going to change."

Squatting to fix one of his broken-down stationary exercise bikes, Arrastia agrees: "In the future, the economy will open up. It has to. The people have a limit."