The State (Columbia, S.C.)
Nov. 10, 2002

Cuba shuns capitalism but depends on it to survive

  Chicago Tribune


  (KRT) - Cuba is officially a socialist state, but it doesn't take long to find a capitalist.

  A doctor at a state-run hospital whispers to a patient that he is available for an off-the-books house call. A merchant marine on leave turns his beat-up,
  Russian-made Lada into an unregistered taxi. A former maintenance worker fills and repairs plastic cigarette lighters, earning eight times more than he
  makes in his state job.

  "The difference is huge," said Elio Alvarez, who earns about $60 a month. "And the work is so much easier. I've had back surgery, and I can do this job
  sitting down."

  In Cuba, it is often said that nothing is quite what it seems. The Cuban economy is a confusing mix of socialism and capitalism, top-down statism and
  free-wheeling private enterprise. This summer Cuban President Fidel Castro got 99 percent of the electorate to pass a referendum making socialism
  irrevocable. Cuba is a country where the government believes in providing for all, where consumerism is a bad word and where the nearest McDonald's or
  Burger King is 90 miles across the Straits of Florida.

  But tens of thousands of Cubans are allowed to work legally for themselves and countless more make a living in Cuba's thriving underground economy.

  The reason is simple: Cuba and Cubans can't survive otherwise.

  "You can't support your family on what the state pays," said one retiree, who was hawking roach poison out of a black briefcase along the narrow,
  crumbling streets of old Havana.

  Socialism here means that everyone can have a state job. But the average salary is about $15 a month. Every man, woman and child gets a couple of
  pounds of state-subsidized sugar, rice, beans and a few other staples each month - but the subsidized food lasts most people only two weeks or so.

  Health care is free, but the system is in decay, and medicine is in limited supply. School is free, but parents say they have to provide snacks and lunch.

  How do people survive? The Cubans have two words for it, conseguir and resolver. The words literally mean to acquire or resolve something, but the
  implications are vast. It's more like using wit, guile, ingenuity and sheer determination to find scarce goods and scrape together a living.

  In any other country it would be defined as private initiative, capitalism.

  "In the neighborhood where I live every family has found a way to cope with the reality," one Cuban official said. "Everyone has figured out a way to make
  money. Go to any neighborhood and you'll see."

  Actually, the capitalists come to you. They knock at your door throughout the day offering everything from ham to fresh fish to underwear to puppies. Want
  some cheap oranges in the off season? The orange man is here. There's a shortage of eggs. No problem, the egg man is right outside.

  Some vendors have state jobs and sell their own products on the side. Others are retirees living on $12 monthly pensions. Still others have checked out of
  the official economy and are working off the books.

  Many of the entrepreneurs have been driven to the free market by burdensome government regulations. Cubans, for example, are forbidden from selling
  shellfish, which the government exports or sells at first-world prices in state-run hotels and restaurants.

  That hasn't stopped Ricardo Rodriguez from standing in front of an outdoor market in the sprawling suburb of Playa selling shrimp and lobster.

  "I've got 10 lobster tails for $25," he pitches. "A kilo (2.2 pounds) of shrimp is $10. It's fresh. I have contacts with the fishermen."

  Rodriguez looks around furtively, checking for police. He says there's nothing really to worry about. "I don't bring my merchandise here. It's somewhere
  else. If the police come I just say that I'm waiting for somebody."

  Others don't take any chances. Outside a state-run automobile dealership, Leonardo is selling carburetors, air filters and other car parts. The products are
  new. The prices are about half of what they are at the state-run store.

  Like other black-market vendors, Leonardo continues selling despite the threat of fines or imprisonment because he earns about $80 a month, five times
  the average Cuban salary. Leonardo says he operates by paying off the local beat cop.

  "I give him $1 a day," he said. "If I don't pay, I go to jail."

  As one private restaurant owner explained, "Everybody's got to live, even the police."

  Despite his socialist credentials, Castro has always allowed a small private sector. A decade ago the government, facing economic ruin after the fall of the
  Soviet bloc ended huge subsidies, collectively held its nose and embraced capitalism, though with a Cuban twist.

  The government essentially handed over more than 150 occupations, from locksmiths to cobblers to ice-cream vendors to plumbers, to the private sector.
  All entrepreneurs are required to pay a minimum monthly tax to the government, regardless of whether they make a profit, and an annual income tax.
  Business partnerships are not allowed.

  By 1996 there were about 210,000 officially licensed entrepreneurs, known here as cuenta propistas, and countless more doing the same work without a

  "The Cuban government never liked this," said Pedro Monreal, a prominent Cuban economist, referring to the private sector. "They did it out of desperation
  as an extreme act during a crisis."

  Cuban officials, always fearful that private enterprise would foster wide income disparities that are incompatible with socialist ideology, have set some
  tough restrictions_and stiff monthly fees - on many businesses, especially ones that compete directly with the recently improved state-run tourist industry.

  Private taxi drivers are not permitted to pick up passengers at hotels or Havana's airport. Those coveted spots are reserved for state-operated taxis.
  Private restaurants, known as paladares, may seat no more than 12 people, and employees are not permitted.

  Cubans in the rent-a-room business must pay a $250 monthly fee per room regardless of whether any are occupied. One landlord said he declares to the
  government only one of two rooms he rents.

  Monreal said the steep fees and strict rules governing private enterprises were crafted in such a way that the government can shut down almost any
  private business whenever it wants, something that has accelerated as Cuba's economy recovers somewhat from its collapse in the early 1990s.

  Since 1996, the number of Cubans working as entrepreneurs has fallen about 30 percent to 150,000, though many of them, like Hector, have just pitched
  their tent on the other side of the law.

  "We are not interested in re-creating capitalism here," said Ricardo Alarcon, president of the Cuban National Assembly. "There should be no confusion
  about that."


  © 2002, Chicago Tribune.