FACTBOX-Reforms by Raul Castro in Cuba

April 10 (Reuters) – In the six weeks since he succeeded his ailing brother Fidel Castro, Cuba’s new leader Raul Castro has introduced a series of reforms to improve life in the communist Caribbean island state.

Following are some steps taken so far, as Castro moves to lift what he calls “excessive prohibitions:”

* Lifted ban on Cubans buying consumer goods such as computers, DVD players, microwave ovens and other electronic appliances previously prohibited due to an energy crisis.

* Cubans can now stay at hotels and beach resorts previously reserved for foreigners only, ending a “tourism apartheid” that was a source of resentment.

* As of April 14, Cubans will be allowed to freely buy and use cellular telephones, something that had been available only to government officials and foreign companies.

* Decentralized agriculture to allow private farmers more leeway to decide how to use their land, what crops to plant and what supplies to buy. Farmers granted leases to unused land.

* Reduced bureaucracy for filling medical prescriptions and began revamping the family doctor program in response to complaints it was understaffed.

* Removed ceiling on wages to create incentives for workers and improve Cuba’s economic performance.

* Additional reforms are expected to include allowing Cubans to buy and sell their cars and easing restrictions on travel abroad.


To save communism, Raul experiments with consumerism

Minor economic reforms by Castro’s brother risk exposing inequality and encouraging the desire for change

From the ample girths and gold jewellery you could tell the Fuentes family was doing well, and from the determined way in which its five members strode into the shop you could tell they were about to do even better.

They had come for a Wanjiu pressure cooker and Daewoo washing machine, counting out the money with a certain panache. Why not? To be fleshy and flashy is to be part of Cuba’s new revolutionary vanguard: Havana bling.

This was Dita, an electronics store in Galerías de Paseo, Cuba’s dowdy answer to Harrods, and it was an incongruous scene. While Fidel Castro exhorted revolutionary solidarity from a banner outside the shop, the family members could hardly see the leader’s words over the cardboard boxes they were hauling.

Out on the street they packed their trophies into a 10-year-old Ford – a modern showcase by local vehicle standards – and with a screech of the tyres sped home. En route was the Karl Marx Theatre, but you doubted they would stop to see what was on.

Cuba is changing. In the past five weeks the government has announced and enacted a series of reforms unimaginable under Castro. It is now legal to buy mobile phones, computers and DVD players. Cubans may now rent cars and stay at hotels previously reserved for foreigners. More significantly, farmers can now cultivate idle state land and buy equipment without special permission.

Havana is buzzing with rumours of further announcements. Lifting restrictions on foreign travel, perhaps, or strengthening the near-worthless peso so more people can afford the goods that are priced in a separate currency created for foreigners.

“Finally the government is listening to us. This is stuff we’ve been asking for for years,” said Andrea, a 44-year-old technician. It is fitting that a popular new import is an electronic pedal-bike. “Not a new era, a new cycle,” she added.

Optimism is cautious. So far the changes do not add up to perestroika-style economic reforms, much less a glasnost-style cultural opening. The one-party state is tinkering with its half-century-old system to ease material hardship. The idea is to save communism in the Caribbean, not abandon it.

Havana remains a sea of decrepitude. Traffic remains a time-warp blend of 1950s American cars, three-wheel yellow cabs, Soviet-era Ladas and new Chinese-made buses. Stallholders still offer meagre wares in an illegal type of mouse capitalism. Most people are lean – if less gaunt than before thanks to easing food shortages.

“What the government is doing is a very small first step,” said a western diplomat. “They are doing the easy things and giving people more freedoms. We are still waiting for the big changes that will make a difference economically. And that will be much harder to do.”

The most important change so far is in agriculture, in which mismanagement has shrivelled cash crops such as sugar, tobacco and coffee and forced the lush island to import 80% of its food. Now decision-making has been decentralised and some restrictions lifted to give farmers more incentive to produce.

The other changes have merely legalised what has been common practice. The moneyed Cubans listening to reggaetón music by the pool bar in El Nacional hotel yesterday were the same ones who were there a month ago. Many had wangled computers, DVD players and mobile phones long before the bans were lifted. Those unable to afford such goods before still cannot afford them.

The announcements have signalled greater tolerance for displays of wealth and, by extension, displays of inequality. “Before if you had cash you would hide it but now people feel freer to show it,” said the diplomat.

It is not news to Cubans that a small minority of the 11-million population is well off thanks to remittances from relatives in the US and shady hard currency dealings. The offspring of Communist party officials are among the so-called “mickies” who flash their designer gear.

Free universal education and healthcare remain solid but sanctioning spending sprees on previously banned consumer goods has given ironic resonance to revolutionary slogans.

“We can construct the most just society in the world,” Castro’s brave words said in another banner, this time overlooking the Carlos Tercero shopping mall. Beneath it passed some families with boxes marked Yamaha, Samsung and Phillips, and many who did not.

José, a waiter at a state restaurant who earns £9 a month, was off-duty, sipping a soft drink along with his nine-year-old daughter. The neighbouring table’s family was clustered around a newly purchased £130 DVD player and sorting through a hawker’s pirated wares. “We’ve got a VHS player but you can’t get films for it anymore,” José said. “My daughter doesn’t have cartoons.”

It is no coincidence that José was black and the neighbouring family white. Racism is illegal on the island but paler-skinned Cubans dominate government and the economy and are more likely to have relatives in the US.

The authorities appear uncomfortably aware that lifting economic restrictions risks exposing and compounding that inequality, at least in the short term. Speakers at a state-sponsored Intellectuals’ Conference last week welcomed the reforms but hinted that social divisions could deepen. The comments were reported in the Communist party daily newspaper, Granma.

Raúl Castro knows reform is essential. Nobody starves but most Cubans struggle to put decent food on the table. Since taking over from his ailing brother Fidel in 2006, a transition confirmed with Raúl’s inauguration as president last month, the 76-year-old has repeatedly spoken of the need to improve an economy, 90% of which is controlled by the government.

Only so much ruin can be blamed on the US embargo and when the Castro brothers die, taking with them the revolution’s founding legitimacy, its fate will hinge on delivering better material conditions, said one Havana economist: “They know they have maybe five years to turn things around. It’s fix or perish.”

Sceptics say the effort is doomed. That no matter how much a moribund agriculture blossoms or how fast greater wealth trickles down, Cuba will remain an outpost of unworkable ideology until the day the place implodes.

Others paint a rosier scenario for a government with several advantages: a cowed opposition and submissive population; subsidised Venezuelan oil courtesy of President Hugo Chávez; strengthening ties with Asia and Latin America; and the example of China’s and Vietnam’s communists successfully riding economic liberalisation.

Raúl can already boast one remarkable feat: he has tamed the big brother who used to rail against the reforms now unfurling. Fidel’s published “reflections”, newspaper articles which are his only form of public communication, have largely avoided commenting on the changes. No one knows whether Raúl has persuaded the sickly 81-year-old to go along or simply overruled him.

The bigger unknown is how Cubans will react. Being given a little more economic opportunity could sate or whet the yearning for change, and shore up or undermine the regime. It is Pandora’s Box and opening the lid even a fraction is a gamble.

Cubans Line Up for DVD Players, Bikes

HAVANA (AP) — Cubans snapped up DVD players, motorbikes and pressure cookers Tuesday as a variety of consumer products went on sale to all of the island’s people for the first time. Many others lined up just to window shop, lamenting prices few can afford on government salaries.

Until Tuesday, most electronic goods previously were sold only to foreigners or companies — one of the many irksome rules that new President Raul Castro has vowed to lift to improve the lives of his citizens.

“They should have done this a long time ago,” one man said as he left a store with a red and silver electric motorbike that cost $814. The Chinese-made bikes can be charged with an electric cord and had been barred for general sale because officials feared a strain on the power grid.

Tuesday’s move came a day after the Tourism Ministry said any Cuban with enough money can stay in luxury hotels and rent cars, doing away with restrictions that made ordinary people feel like second-class citizens. And soon Cubans will be able to get cell phones legally in their own names, a luxury long reserved for the lucky few.

Even expert Cuba-watchers wonder how far the communist government will go in making economic changes. Until now, the impact has been largely psychological because few Cubans have the money to buy expensive products or stay in posh hotels.

There was no sign yet of promised computers and microwaves — highly anticipated items that clerks across Havana insisted would appear soon on store shelves, with desktop computers retailing for around $650.

People lined up waiting to get into the Galerias Paseos shopping center on Havana’s famed seaside Malecon boulevard, and they hurried inside when the doors opened.

Cuba’s communist system was founded on promoting social and economic equality, but that doesn’t mean Cubans can’t have DVD players, one of those who rushed to gawk at the new products, Mercedes Orta. “Socialism has nothing to do with living comfortably,” she said.

Lines outside electronics boutiques and specialty shops are common in Cuba because guards limit how many people can be inside at a time. But waits were longer and aisles more packed than usual at Havana’s best-known stores.

“DVDs are over there, down that aisle,” an employee in white short-sleeve shirt repeated over and over as shoppers wandered into La Copa, an electronics and grocery store across from the Copacabana Hotel.

“Very good! DVD players on sale for everybody,” exclaimed Clara, an elderly woman who was studying a black JVC console. “Of course nobody has the money to buy them,” she added.

Like many Cubans, Clara chatted freely, but wouldn’t give her full name to a foreign reporter.

Government stores priced all products in convertible pesos — hard currency worth 24 times the regular pesos that state employees are paid. The government controls well over 90 percent of the economy and the average monthly state salary is just 408 regular pesos, about $19.50.

Still, most Cubans have access to at least some convertible pesos thanks to jobs with foreign firms or in tourism, or cash sent by relatives living in the United States.

Some Cubans speculate the opening up of shops is a government ploy to control inflation by sopping up convertible pesos. Others say allowing those who have money to spend it freely will make class divisions evident and cause tensions.

“Those who have people who send them money from outside the country can buy more and more,” said Lazaro Martinez, a 67-year-old flower seller in Old Havana. “Everyone else, we can’t buy anything.”

At La Copa, the most expensive DVD player was a Samsung P243B without HD capability, at $288. Cheapest was a standard Phillips model at $124 — three times more expensive than what Americans pay for a similar Philips player in the United States.

Despite the steep prices, Cubans were buying. “You have to buy before they run out,” said a man named Jorge who paid $162 for a mid-range DVD player. He didn’t want his full name published because he doesn’t want Cubans to know he made such a large purchase in hard currency.

On streets throughout Havana’s suburban Miramar neighborhood, men and women walked home clutching new DVD boxes. Store employees diligently noted each consumer’s ID card number, but no other paperwork was required.

Graciela Jaime, a 68-year-old retired clothes factory employee, complained that widespread corruption and greed had created a class of rich Cubans. “Everyone wants to spend money and that is what’s happening,” she said.

Jaime said she recently took a job sweeping streets some mornings to supplement her monthly pension of about $10.

“Raul Castro has to get rid of the corruption,” she said. “And it will be hard work, because there is a lot of it.”