How the Black Market Keeps Cuba’s Private Restaurants in Business

How the Black Market Keeps Cuba's Private Restaurants in Business
The challenge of running a restaurant "a la izquierda"
by Suzanne Cope Mar 21, 2017, 2:02pm EDT

On a recent January evening, tourists and a few Habaneros sat under a
palm frond canopy sipping rum cocktails, listening to a live band
playing Cuban folk songs — and eating notoriously difficult-to-procure
lobster, a special of the day.

California Cafe, a paladar, or newly legal, privately owned restaurant
in a country where the state has controlled almost all businesses for
the past half century, is owned by a couple who met in San Francisco.
Paver Core Broche is Cuban, Shona Baum is American, and they decided to
return to Havana to open a restaurant in February 2015, not long after
the regulations for private businesses started loosening.

"In some ways it was really easy," Baum says about the process of
opening a paladar in Havana. "You can't even open a coffee cart in San
Francisco without a million permits and tons of money, and here… we
bought the space, and applied for a license, and it didn't take that long."

But in Cuba, most businesses can't simply call up a bulk vendor or
wholesaler purveyor to place a produce order, since most means of
production are controlled by the government. The country uses two
currencies, Cuban convertible pesos (CUCs) and Cuban pesos (CUPs), the
former tied to the U.S. dollar and known as the "tourist currency," the
latter, valued at 1/25th of the CUC, used by the government to pay its
oversized labor force. (Paladares and private businesses might charge in
either.) Running a restaurant can be complicated in the best of
situations, but it's especially challenging in a country where most
aspects of daily life are tightly regulated — and where much of the
economy operates a la izquierda, or "on the left."

As California Cafe grew, both Baum (who works the front of the house)
and Broche (who cooks) had to learn to navigate the labyrinth of
sourcing food and supplies in a place where the state-run corner bodega
might have 100 imported fruit cakes on the shelf but no toilet paper.
Baum says the reality in Cuba is that product availability is sporadic.
"When they have mayonnaise, they have three million [jars of]
mayonnaise, and then it's gone and they have three million of something
else," she says.

To find many necessary items — from condiments to serving plates — one
has to travel around the city visiting various markets. That process can
quickly become time-consuming, and Broche and Baum hired a full-time
person to help with sourcing. They also rent a storeroom to stockpile
enough nonperishables to last a few weeks of service, and they plan
their menu around ingredients that are usually available. The result is
a style they call "Californian-Cuban fusion," with vegetable-heavy
dishes like pork and vegetable "California" skewers.

But the inconsistent availability of products is only one aspect of
sourcing that makes operating a paladar a complicated endeavor in
Havana. The other is the persistence of a la izquierda — the Cuban black
market. There are many ingredients and products needed by restaurants
that are either illegal to buy or else often expensive or scarce, such
as lobster or non-processed cheese. And staples like toilet paper,
vinegar, and beer can also suddenly become hard to find, or "esta
perdido," (literally "it's lost"), Baum says. Numerous restaurant owners
note that if they want to stay in business, they have to buy certain
things a la izquierda.

Alexi, a paladar owner near Cuba's second-largest city, Santiago de
Cuba, worked for many years in the state-owned hotel industry before
opening his own open-air restaurant with tented tables right on the
Caribbean. "You must be enterprising to get all of the things you need
for your restaurant," he says. "Today we have something, but tomorrow it
will be quite difficult to get that same thing … and it is illegal to
buy some things. For example, the government has made all kinds of
seafood illegal to buy. So sometimes I have to buy products other ways."

The Cuban black market works in many ways to circumvent the government's
control of goods. One is the common — and complicated — practice of
state-owned-store employees holding back certain goods to sell a la
izquierda, while accepting pay-offs for other goods — procured illegally
by individuals — to be sold in their shop instead. The government has
strict regulations on the sale of almost every food sourced, from
seafood to coffee to tomatoes, setting the harvest goals and prices for
each farmer or fisherman and prohibiting the sale of excess through
private channels. To make extra money, almost any person within the
supply chain might reserve products to be sold at a price he or she
dictates.

Buying products a la izquierda is so integrated into daily Cuban life
that it often does not look much different than most other transactions
to the average non-Cuban — these sales aren't all happening in dark
alleys with secret handshakes. Rather, there is a complex system of
bribery and separate record-keeping that many employees of both state-
and private-run businesses take part in.

Both Alexi and a former military cook, Marcus, who lives in Santiago de
Cuba, attribute this in part to the government prioritizing state-run
restaurants and hotels when they distribute the best-quality food. "If I
have a good paladar, then that means people are going to eat at my
paladar and they are not going to be a good customer for the
government," Marcus says. "That's [the government's] loss, and they
don't want that." Marcus is currently attending a military cooking
school, but hopes to soon work in a tourist hotel and eventually own his
own restaurant, a dream that wouldn't have been possible just a few
years ago.

Paladares were technically legalized in the 1990s, partially in reaction
to a mass poisoning in an illegal restaurant, when a cook accidentally
added rat poison to the food. However, they were highly regulated, and
it was difficult to obtain their required permits until the 2011
economic reforms under Raúl Castro's leadership. These reforms made
opening paladares much easier — and in 2016, the government announced
plans to ease other private ownership laws as well, paving the way for
individuals to open a variety of private businesses.

These changes, along with the revised laws allowing United States
citizens to more easily travel and send money to the island, have helped
the number of paladares swell. After President Barack Obama restored
diplomatic relations with Cuba in mid-2015, U.S. tourism to the country
hit an all-time high, with 615,000 travelers visiting Cuba from the U.S.
in 2016.

However, the support for this quickly growing class of business has not
been enough to sustain them, particularly as competition increases.
There have been reports of food shortages for locals in part due to the
demand of private restaurants (although some Cubans are equally quick to
blame farmer strikes and government disorganization over the emerging
private sector). Leo, one of the owners of the popular Havana paladar
Havana Blue, has noted the number of paladares that have already come
and gone in his quickly changing city. "There are some that open and
then close," he says. "Not because of lack of demand. It's also bad
management. Many people don't have the foggiest idea because they have
never run a restaurant before."

The government, for its part, has made some effort to support paladares,
at least in gesture. It opened a version of a wholesale market, but
multiple paladar owners question its usefulness. The prices aren't any
cheaper than a retail market, and availability is still often
unpredictable. "People pull up and the beer is gone in two minutes,"
Baum says.

Baum also says that the national bank reached out to small business
owners in the last two years to offer loans. While commonplace in the
United States, this kind of credit is mostly unheard of in Cuba. Yet
when Baum asked about interest rates, the bank associate was vague.
"'Don't worry, we'll give you a good rate!'" was the answer.

Ministry of Agriculture journalist Jose Ignacio Fleitas Adan says the
government is working to do better. "There's an intention, and also
projects and plans, to increase food production and availability," he
says, echoing the official government response. "Es complicado," he adds
with a laugh.

And that seems to be the one truism about food sourcing in Cuba,
particularly when one is running a business. Baum mentions two
restaurants nearby that were shut down recently. "They just
disappeared," she says. "Basically, they were doing illegal things. So
there's a lot of fear around what's going to happen next." She questions
whether more crackdowns are coming for those who buy goods a la izquierda.

What were those shuttered restaurant doing that was more illegal than
what anyone else is doing? Baum pursed her lips. This answer, too, was
complicado. "I spoke with someone who ate there, and they had dried
cranberries on their salad. Which is great, but clearly dried
cranberries aren't available here." She pauses. "What you realize over
time is that there are people who are really well connected, so it's
hard for the regular people like us, and all the other people in our boat."

Still, the opportunities for business owners are lucrative. A Cuban
working in the growing service industry — as a taxi driver or a
restaurant host — can earn exponentially more than the average state
wage of around 20 to 40 CUCs per month. Many educated young Cubans are
thus leaving professions like teaching or medicine to work in the
emerging private sector. When I walked into a new Mediterranean-themed
paladar with Habanero food writer Sisi Colomina, the first question she
asked the host was, "What did you do before?" The answer: psychology.

This wage disparity also makes it easy to understand why so many people
risk buying and selling a la izquierda, or starting their own businesses
in an uncertain market, to supplement their meager income. What
successful paladares demonstrate is that capitalism can work in a
country where almost all aspects of (legal) businesses have being
tightly controlled by the state for more than 50 years.

Yet while many come to the restaurant business for monetary reasons, for
others, opening a paladar is a chance to follow their passion. "It was
always my dream — illegal or legal," Alexi says. "Cooking is an art." He
also called paladars the most popular private businesses in the country
by almost any metric: They're "the most important window for showing the
possibilities to other Cubans."

And while the challenges of food sourcing can make running a private
business in a communist state complicated, Baum does appear to love her
work. We finished our cocktail as she sang along to the band and then
did a sweep of the patio to help her servers deliver food and greet
customers she had met earlier in the week. When she sat back down, she
admitted that the business had a rocky start. But now, she says, she is
"slowly falling in love with Cuba."

Suzanne Cope is the author of Small Batch and an upcoming book on food
and revolution.
Editor: Erin DeJesus

Source: How the Black Market Keeps Cuba's Private Restaurants in
Business - Eater -
http://www.eater.com/2017/3/21/14946146/cuba-paladar-private-restaurant-black-market