As Fidel Castro and his Cuban revolution fade, is Cuba rising?
Seismic changes in the communist economy built by Fidel Castro are enriching some Cubans, scaring others, and sparking imaginations: Will the Caribbean gem shine again?
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Castro later cast it as a misunderstood offhand comment, but just a few days later, his younger brother, Raúl Castro, who now runs the government, announced layoffs of 500,000 state employees and programs to encourage many of them to become part of a new retail business sector. It is a radical step in this country where nearly 9 out of 10 people work for the government.Skip to next paragraph
In Pictures Cuba Economy: glimpses of a new order
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Some believe it represents the largest crack in the communist structure yet. Imagine, they say, Havana with billboards advertising competitive prices on repairs for cars. Imagine those cars are not 1950s Chevys but the newest models off a US assembly line. Imagine those same cars lining up at a McDonalds takeout window.
For many Cubans who have lived their entire lives "making do" in a nation without industry and entrepreneurial opportunity, this latest fissure of reform is seismic – for better or worse.
But most observers say any opening, even after the 84-year-old Castro is gone, would most probably follow a Chinese model that tolerates a degree of free market with a heavy government hand.
No one expects a radical new landscape overnight. Other postcommunist transitions have been slow evolutions. Reforms in China, which today has one of the most dynamic economies in the world, were 30 years in the making. In Vietnam, change was measured in decades, as the country experimented first with opening the agricultural sector and later access to microcredit, before making significant changes to the way the economy runs.
Nor would Cuba probably follow closely any of those precedents. After all, it is surrounded by market economies, and just 90 miles south of the US, it is much more likely to be influenced by American investment than other postcommunist nations have been. While Russia today has a market economy, it is natural resources as much as any reform that have buoyed its transition. Cuba and its flailing sugar industry are in no such position. The denouement of the revolution would probably feature the deep pockets of American tourists sunbathing and sipping cocktails on Cuba's Caribbean shores.
Actual and anticipated change have Suarez reeling: Her days of typing and filing in the halls of the communist bureaucracy are over. Without a paycheck she has started to take in mending work.
"I have a lot of uncertainty about my future and that of my children," she says. "The state says that they will give us the opportunity to work on our own but they do not say anything definitive about how that will happen. Everything is up in the air."
The details of the September announcement of a layoff of 10 percent of the 5 million workforce in Cuba are still not fully known. Layoffs will not be completed until the spring and could eventually include a million workers or more. New private cooperatives will be formed. Self-employment licenses will be issued to 250,000 individuals in 178 new categories, from stonemasons to sports trainers. All will be required to pay taxes.
It is a huge shift in a country that nationalized small businesses in 1968.
"The growth of this entrepreneur sector isn't just some insignificant marginal issue in Cuban economics, it's linked to a central strategy of Raúl's economic policy, which is to dump a million people off the payroll that aren't producing anything," says Philip Peters, a Cuba expert at the Virginia-based Lexington Institute. "They are also talking about establishing cooperatives not in agriculture but in the service sector and the retail sector. Pull this all together and the government is completely envisioning the development of a small and medium business sector in a communist economy, and that's significant."