In rural Cuba, economy stuck in time after Castro

In rural Cuba, economy stuck in time after Castro

Alongside free education and healthcare, the Cuban revolution also
brought anemic development and a one-party state, which controls 80
percent of the economy and fears losing its grip on the market
By Rigoberto Diaz / AFP, CAMAGUEY, Cuba

A convoy is carrying former Cuban president Fidel Castro's ashes across
a Cuban countryside stuck in the bleak economy he left behind: Farmers
plowing with oxen, people traveling in horse carts and stores lacking
basic goods.
Crowds have been chanting "viva Fidel" along the island's roads as a
military jeep takes the urn to its final resting place in eastern Cuba
today.
However, behind the cheers for the man who ruled with an iron fist for
almost half a century, there is frustration about the economic hardship
they face every day.
"Everybody talks about Fidel's legacy, but to defend this legacy, the
economy must improve," said Angel Mora, a 27-year-old electronics
engineer in the eastern city of Camaguey.
Sitting shirtless in front of his home, Mora said he would like a better
salary and fresh milk, which is often lacking in stores in this cattle
ranching region.
Castro's government brought free education and healthcare across Cuba
after his 1959 revolution triumphed and sought to end gaping inequalities.
However, the economy never really took off, weighed down by the
decades-old US embargo, government policies and the exodus of Cubans
fleeing the anemic economy and political one-party system.
A deep economic shock came in 1991, when Cuba's main sponsor, the Soviet
Union, collapsed.
Seeking to reverse the decline, Castro opened the country to tourism and
introduced a dual currency system.
However, economists say the currency system has created distortions and
imperils the country's social equality ideal.
A minority of people are able to use convertible pesos, which are equal
to US$1 and are used by tourists, while the majority gets paid in
non-convertible pesos with a much weaker purchasing power.
Since replacing his brother in 2006, Cuban President Raul Castro has
embarked on a slow opening of the economy and took the extraordinary
step of restoring diplomatic relations with Fidel's capitalist foe, the US.
Raul Castro has allowed Cubans to be self-employed workers and hire
staff in certain cases, such as family-owned restaurants and
bed-and-breakfasts, tough they lack the same formal legal status as
companies.
The Cuban state controls 80 percent of the economy, from refineries to
pizzerias.
In a sign that the system is not ready for a major overhaul, the
government encouraged Cubans to sign an oath of loyalty to the
revolution following Fidel Castro's death.
"The authorities fear that a deep reform of the market will erode the
state's control over the economy and create a social class that, by
getting richer, can bring back capitalism," said Mauricio Miranda, a
Cuban economist at Javeriana University in Colombia.
Raul Castro is facing other challenges as well.
The global price of nickel — the country's main natural resource — has
dropped, while sugar production and industrial output are weak, Miranda
said.
To top it off, Cuba's main partner, Venezuela, is undergoing a political
and economic crisis that caused Caracas to reduce oil deliveries to the
island by 40 percent.
The growth of tourism has created a new, small class of better-off
Cubans who get paid in convertible pesos, while the private restaurants
fuel inflation, said Juan Triana, an expert at the Cuban Economic
Research Center.
Mora welcomed the government's decision to freeze prices of basic goods,
but he said "food remains expensive" for a population that earns on
average US$30 per month.

He recently gave up his job at a state cargo transport company because
getting to work was too complicated.
"You get up in the morning and the first problem you encounter is
transportation, because there's no fuel," said the married father of two
girls.
For him, salaries need to improve "and the other thing is that they
should unify the currencies, because for those paid in [non-convertible]
pesos, it's painful."


Source: In rural Cuba, economy stuck in time after Castro - Taipei Times
- http://www.taipeitimes.com/News/biz/archives/2016/12/04/2003660513