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12/16/13 - CBS News - Cuba economic reforms hurting the poor, experts warn 

By Portia Seigelbaum

HAVANA -- The much heralded opening of a still-limited private sector in
Cuba by President Raul Castro is being widely welcomed by Cubans who expect
the pragmatic "younger" brother of their long-time former leader Fidel
Castro to lead them out of an economic hole with its consumer goods
shortages, crumbling housing and salaries with near zero purchasing power.

And U.S. visitors to Cuba are often astonished by what seems to be an
explosion of private enterprise and the emergence of not just a middle
class but an affluent people. However, not everyone in Cuban society is
benefiting equally as the government loosens controls.

Arturo Lopez-Levy, lecturer at the University of Denver and a Cuban
American, positively views the steps being taken.

"I would say that if there is a priority that Cuban policies and politics
should have it is economic development today, economic development
tomorrow, economic development the day after tomorrow," he told CBS News
during a recent visit to the island.


CBS Evening News

Private business sector flourishing in Cuba

Over the past year, 300,000 Cubans received a license to run their own
business in part of the biggest shake-up to Cuba's state-run economy

 In the search for economic growth, President Raul Castro is budget
cutting, reducing the number of public employees, allowing enterprising
Cubans to become private entrepreneurs.  Small mom and pop operations have
sprouted like mushrooms, adding a definite commercial feel to many of the
previously purely residential neighborhoods.

There is even a wholesale produce market operating on the outskirts of
Havana as a supplier to [1]private restaurant owners and push cart vendors.
But there's a flip side to the opening that worries Lopez-Levy and other

"I'm very, very worried about one specific issue - the possibility that
class and race overlap in the context of a mixed economy because whatever
you might think about the previous system, it works a lot on the basis of
consensus and there was always a concern for those left with the most
difficult situation or the most disadvantages," he said.

In the old system, Lopez-Levy noted there was a safety net below which no
one fell. The safety net itself might have been lowered at certain points
such as during the economic crisis of the 1990s but it existed. Now he sees
investments are being concentrated in certain areas or neighborhoods that
traditionally have been middle or upper class and predominantly white.
These are neighborhoods where more wealth is concentrated, where attractive
homes inherited from pre-revolutionary affluent families are easier to
convert into bed & breakfasts or upscale restaurants and where residents
are more likely to receive help from relatives with money living abroad
since white exiles tend to be more well-to-do than black ones.  This, he
said, resurrects pre-1959 class and race inequalities.

Because there is a housing shortage in Cuba - 12 percent of the housing in
Havana has been officially declared structurally unsound - people tend to
live in the same place their parents and grandparents did before them.
Upward mobility in education and careers has almost never meant that people
were able to improve their living conditions.

"I have seen some neighborhoods where the, particularly rural and black
areas, where mainly black Cubans live and I think that it would be wise,
nationalistic, patriotic to think about the effect the reforms could have
on these people," he said, pointing out that these people have been among
the staunchest supporters of the revolution.

University of Havana Professor and historian Esteban Morales agrees and he
points out that "blacks came to Cuba as slaves while whites came as
colonizers" and that heritage has left a permanent mark on society despite
the revolutionary government's creation of free education and health care
for all along with other efforts to bring equality to society. Now, the
opening of the economy is not affecting all of Cuba's 11 million people
equally, instead, he notes it is hitting "the poorest sectors of the

In order to get the economy moving and raise productivity, the government
must take mercantile measures that are "difficult," Morales said. Tourism
and the creation of corporations have not benefited black Cubans as much as
whites, although statistics are hard to come by since the census does not
focus on race in its questionnaire.

Morales blames historic realities for this situation, noting that before
1959 "there was a very unequal system of wealth distribution." Ever since
Cuba was a colony, he notes, there also existed a "mass of poor whites."
However, Morales insists that "riches never belonged to the black or
mixed-race population." That means, he says, that "historically there has
been a poor sector of society and within that, blacks have been the most

So while he believes the current process of reforms is meant "to improve
life for everyone, to benefit all of Cuban society," it will take time to
bear fruit and in the interim will have a strongly negative impact on those
who have always faced the most difficulties to survive within Cuban

There have to be efforts to get more non-white students and more males into
the university, Morales says, noting that with economic hard times, blacks
and males tend to drop out of school to get jobs. That is something he saw
happening at the end of the 1980s when the European socialist camp
collapsed and Cuba's economy went into a tail spin.

Something similar is happening now with public sector workers barely
getting by on their wages and the cost of living rising as government
subsidies for food and other basic products disappear as part of the
reforms to make the economy more efficient and to stop it from running in
the red. As a result the gap between the "haves" and the "have-nots" is
growing wider and becoming more visible and it looks like things could get
worse before they get better.


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