After over fifty years Cuba opens its gates to the world. Many economic changes in sight, but the politics will stay the same.
Armando López is a 77-year-old-pensioner from Havana. On 17 December when he heard that the United States and Cuba had signed an agreement to renew diplomatic ties, he wondered whether he’d have the chance to welcome back those Yanquis, whose visits had been terminated by Republican President Dwight D. Eisenhower on 3 January 1961.
“I can remember that day well. A kind of chill fell upon Havana,” recalls López, who at the time was only 24 and had recently begun selling cars in Havana, his birthplace.
“Near the American Embassy, on the sea front, groups of people were shouting slogans: ‘Fidel, Fidel, que tiene Fidel que los americanos no pueden con él’ (‘Fidel, Fidel, what is it with Fidel, that the Americans just can’t defeat him’) and ‘Yanquis go home!’. 53 years later everything is different and, perhaps, more complicated”, says López. The announcement of the ‘normalization’ of relations between Washington and Havana came one year after the handshake between Cuban President Raúl Castro and Barack Obama at Nelson Mandela’s funeral on 10 December 2013.
“It’ll be a while before they open a McDonald’s round the corner”, says López. “There are too many differences between the two governments, mainly ideological ones”. A An economist working for the Cuban state who asked to remain anonymous believes these new relations with Washington will have a serious impact on the national economy. “It will be a slow process. The government must first consolidate the changes it is introducing to revive our stagnant Soviet style state economy”, he claims. “They will bring money”, he predicts. “The first revenues will come American tourists and the figures shouldn’t be too far off those predicted: a million arrivals as soon as the embargo is lifted”. But the “political adjustments will take time”.
Six years ago, at the age of 87, when Fidel fell seriously ill, the lider històricowas replaced by his brother Raul, who embarked on a new phase of economic transformation. The changes are still taking place and have enabled the private sector to employ 476,000 citizens. Hundreds of cooperatives have sprung up, managed by former state employees. Unused land belonging to the state has been handed over to 177,000 farmers. According to official thinking, these changes should also improve the efficiency of the large state enterprises on which the national economy depends. “Everything seems to point to a regulated opening of the economy to international markets”, says the economist. In spite of the changes, which critics claim are slow and insufficient, the last year has been a bad one for the Cuban economy. GDP growth was “lower than forecast” at 1.3% instead of 2%.
This “deceleration”, in the words of the authorities, has been due to the global economic crisis and the US embargo on Cuba. The official line is that “the progress of the Cuban model” is moving ahead “without haste but without pause”, but they admit it will be awhile before any positive results will show . The authorities are hoping for a 4% increase in GDP in 2015 that should allow the economy to make up the lost ground. In order to attract foreign capital, the government plans to exploit the fiscal advantages and facilitations for capital exports introduced by a new law on foreign investment. There’s also the new economic development zone located 45 miles to the east of the capital.
Government officials claim that if the “normalization” of relations stays on track, investments will start pouring in from the US, Spain, Italy, Russia and China to name just a few. In 2015 Cuba will also have to solve its double currency problem: the peso and the cuc, a convertible peso worth 24 pesos (€0.87). The parallel circulation of the two currencies since the ’90s is an obstacle to financial transactions and an added burden on the purchasing power of the already meagre Cuban salaries. In the dominant state sector, the average is around 500 pesos (€17) a month. However, Havana and the other regions of the Caribbean island have already changed. There is no official data, but a few of those 500,000 selfemployed already pocket hundreds, and in some cases, thousands of dollars a month. In the ‘luxury’ activities sector, top international restaurants have been particularly successful.
“I can’t complain, we’re always full”, says Carlos, the impeccable owner of a Havana bar-restaurant, where the prices are still too high for most Cubans. There are many more modern cars on the road in the capital since the 40-year-long ban on car sales was lifted in 2012, and even the property market is perking up. The modernization process still has to deal with a few infrastructural problems, such as internet access, which is currently very limited. The majority of Cuban residents are forbidden from using the internet at home. In spite of this, ETECSA, the state telecommunications monopoly, has announced that it is “evaluating the conditions to expand” access. Some months ago the government already opened a few web access locations and even Wi-Fi availability is set to increase starting in 2015.
The political sphere doesn’t seem to have been much affected by the changes, even though “constructive criticism” is now permitted. The government insists that the system will continue to be based on communist precepts, such as single party rule, with the press and the unions at the service of “socialism”, while all opposition that is “in thrall to the empire” will not be accepted.