Cuba's Economic Reforms Heighten Social Tensions

LESS than a year after introducing the most sweeping economic reforms in 35 years, the Cuban government is facing unexpected social consequences.

The emergence of a dollar-holding upper class has created resentment among many Cubans, prompting them to speak out against a system they have always been told was egalitarian.

The new measures - passed last July and meant to overcome a serious economic crisis caused by the end of Soviet support and the tightening of the United States trade embargo - forced the Cuban National Assembly to legalize the use of hard currencies, allow a limited range of private business, open so-called ``dollar shops,'' and make tourism its priority industry. Now buying most of its oil and consumer goods with hard cash in the world market, the Cuban government is hoping these steps will help attract much-needed foreign currency.

But the reforms were never intended to set the island on the road to capitalism. Cuban officials are searching for ways to liberalize the economy while holding on to the gains of socialism in the Communist-ruled island.

``The `dollarization' of the economy has created some problems,'' says Carlos Lage, the government's top economic adviser. ``But we did it knowing the risks involved,'' he adds.

Risks aside, the government is going ahead with expanded reforms. At an extraordinary meeting of the National Assembly last week, deputies agreed to look at proposals to raise taxes and begin charging for once-free services such as school lunches and tickets to sports events.

According to Western diplomats here, these economic reforms may be the undoing of the socialist system they were designed to preserve.

``People in public squares and streets of Havana and in the countryside are questioning the political system more than ever before,'' a European diplomat says. ``There is a lot of anger because the government has allowed the creation of a wealthy dollar class in a society which was supposed to be egalitarian.''

According to the diplomat, the once-sacred anti-capitalist principles espoused by Fidel Castro Ruz have been ignored in a desperate effort to save socialism.

``[President] Castro is more interested in history than in political philosophy,'' he adds. ``If he is able to remain in power through this period of crisis, he will go on to history with glory. He is a pragmatist. He is not a `Communista'; he is a `Castrista.' ''

`Shortages of everything'

Cubans in the streets bitterly complain about the gap between the poorly paid state workers and those who have businesses or work in the tourism sector. ``There are shortages of everything here. You can wait in line for hours and get nothing,'' says Rolando Ayesta, a young veteran soldier. ``But if you have dollars in this country, you can buy anything on the black market.''

Unofficial estimates put the figure of dollars circulating in the black market at more than $400 million, much of it coming from Cuban exiles who have only recently been allowed by Cuba to send cash payments to the island.

Prices on the black market are 10 or 20 times higher than at state distribution centers, where shelves are often empty. The widespread use of dollars has also driven the value of the Cuban peso, officially worth $1, to less than a penny on the black market. And dollar-only gas stations remain open when peso-only gas stations are closed.

Private businesses have become relatively prosperous. All over Havana, new bike-repair shops, barbershops, and handicrafts sellers can be seen attending to long lines of customers. Roving salesmen with bags full of coffee, eggs, and sometimes meat go from house to house selling their goods at inflated prices.

``Outside of the black market and the few small businesses, the economy as a whole is in very bad shape,'' explains Pedro Monreal, National Assembly member and a professional economist.

``The problem is that the government is interested in getting dollars at any cost, while not doing anything about the domestic economy.''

Survival strategy

In response to the growing disaffection among Cubans, Castro last week announced a crackdown on the thriving black market.

``I don't want to bring capitalist recipes to our country,'' he said at last week's National Assembly gathering. But, he added, ``We have to make concessions ... in order to survive.''

The same message was delivered by Roberto Robaina, Cuba's foreign minister, speaking at Havana's Foreign Press Center. ``This is a very important time for the destiny of our country. The Cuban people are fighting with a great deal of sacrifice and resignation in order to heroically defend sacred ideals and values, and to preserve the social gains of the revolution.''

But for people like Eusebio Betancourt, a doctor at the Havana Polyclinic and a Bay of Pigs veteran, it has become impossible to support the system anymore.

``Communism has not worked. It's proven all over the world. We are not surviving here anymore. We are dying a slow death,'' Dr. Betancourt says.

``Look at this,'' he says, pointing to his trousers that have been taken in several inches at the waist. ``I used to have the respectable belly of a middle-aged man, but not any more. I have not eaten meat in four months.''

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