Cuba's Cash Woes
The Politics eZine - Economics

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OAKLAND ROSS - May 23th, 2006.

HAVANA - There are two kinds of Cubans, and a sinewy, sexagenarian matriarch by the name of Maria knows exactly which group she belongs to.

She's the kind of Cuban who lacks a reliable source of hard currency, the kind who tries to earn a little convertible cash by engaging in one scam or another in her case, by selling phony three-peso Cuban banknotes to gullible tourists.

The notes bear the likeness of fallen revolutionary hero Ernesto (Che) Guevara photographed by Alberto Korda and are actually worthless, but at least they can be kept as souvenirs. Even so, there aren't many takers.

"Cuba bella," Maria sourly declares, as she strides along a street called Neptuno at the edge of Old Havana, carrying a ragged denim shoulder bag and a furled parasol. "At least, it was beautiful. It isn't anymore."

Maria's problem is a common one here. She doesn't have much money, and what she does have is worth next to nothing.

Forty-seven years after the overthrow of dictator Fulgencio Batista and the launching of Cuba on the uncertain road to tropical communism, no issue hobbles the revolution as thoroughly or perhaps as fatally as this a cold question of hard cash.

Some Cubans have it, while most Cubans don't, and the members of the second group are damned unhappy about scrounging for their keep in a socialist paradise where foreign capitalists and local schemers seem to have all the fun.

For long decades, it has been a fixture of official Cuban orthodoxy that the main threat to the revolution was posed by the United States of America and its conniving, anti-Communist ways, but these days it's pretty much taken for granted that the most potent dangers to the system lie not without but within.

"Nobody believes anything any longer," says a European diplomat in Havana. "Cubans are fed up with suffering and enduring this terrible situation in which they live."

Even Cuban President Fidel Castro, now fast approaching his 80th birthday, has acknowledged that the most urgent peril to the regime he has led for nearly 50 years is not the spectral U.S. military invasion he so frequently warns about but something quite different: a collapse in domestic support for a system that's now plagued with inequities and abuses.

"We ourselves, we could destroy it," he told a Spanish interviewer last December, "and it would be our fault, if we are not capable of correcting our errors, if we are not able to put an end to many vices, much theft, much diversion of money, and many sources of funding for the new rich."

Bearing right along Avenida Montserrate, Maria waves toward a blue-painted building known as Harris Brothers that recently re-opened as a four-storey shopping emporium, stocked with foodstuffs and consumer goods that are available only in hard currency precisely the kind of currency that Maria, like most Cubans, chronically lacks.

Thanks to graft, good fortune, or opportunism, a select few of her compatriots do have access to foreign currency or its Cuban equivalent, known as the convertible peso and worth $1.08 (U.S.) and they now enjoy a style of life that is unavailable but not invisible to the vast majority of islanders who are condemned to living a strapped existence on a ration card, augmented only by the measly purchasing power of the lowly national peso, now trading at about 24 to the U.S. greenback.

Like almost everyone in this land of shimmering palms and frustrated shoppers, Maria can rhyme off the prices of the goods for sale at Harris Brothers, goods that she cannot hope to buy, not in a country where a medical doctor, legitimately employed, earns the equivalent of less than $20 a month.

Maria uses her fingers to enumerate the scandalous unaffordability of it all: a pair of pants for $30 to $40; a pair of shoes for $50 to $60; a container of milk for $5.80; a bar of soap for 45 centavos.In fact, the furniture, electronics, toys, and clothing currently for sale at Harris Brothers or at hundreds of other hard-currency retail outlets in Cuba would be unlikely to impress most Canadian shoppers prices are high and quality is generally low but they are a galling affront to most people here, a reminder of all that they cannot afford and never will be able to afford, not unless something drastic happens.

For the present, a great many Cubans have little choice but to resort to some kind of fiddle in order to get by, working a la izquierda, as it's known here, or "on the left."

They divert goods from their workplaces for resale on the street, for example, or use state-owned vehicles for a little undocumented private enterprise, or target free-spending tourists for incidental bribes.

"In Cuba, everybody is guilty of a crime of some sort," says a Western official.

"Otherwise, you wouldn't be able to survive. But this permits the government to maintain a climate of fear."

In a video recently distributed to Cuba's Communist party leadership, Raul Castro, who is minister of defence and Fidel's younger brother, spoke about the dangers of corruption, and he did not mince his words.

"The deadly cancer has metastasized from our knees up to here," the president's designated successor said, pointing to his chest.

The defence minister might have been referring to a certain Juan Carlos Robinson, a highly ranked government official who last month was removed from his position in the political bureau of the party's central committee in what was officially labelled "a lamentable and unusual case of a political cadre being unable to overcome his errors."

In other words, the guy was sacked for corruption.

"He was giving huge parties and living like a prince amid poverty," says the European diplomat. "He was showing off to his blanquitas his light-skinned girlfriends by revealing state secrets."

Robinson's dismissal was undoubtedly meant to serve as a warning to other wayward officials, but it won't solve the larger problems that Cubans face as they struggle to make sense of what are often sadly nonsensical lives.

Down by the harbour in Old Havana, for example, a young woman works as a waitress in a restaurant patronized mainly by tourists. Trained as a nutritionist, she says she could earn no more than the equivalent of $15 (U.S.) a month by toiling in her former profession the same amount she must now pay each week for two hours of private English instruction. Result: she waits tables so that she can pocket the hard-currency tips.

Behind the wheel on the Malecon, the meandering boulevard that traces the length of Havana's sprawling waterfront, a grey-haired taxi driver explains that he studied for a decade in Moscow in the 1970s, earning a master's degree in engineering. Back in Havana, he rose up the ranks of the state-run taxi company until he reached the top management rung, where his salary amounted to about $20 a month. Now he earns four times that much, working one day out of two, driving a car for tips.

He's lucky. He has a job and a source of hard, convertible cash.

Many Cubans have neither, because they are enemies of the state.

Take Ricardo Aguilar Garcia, a 38-year-old unemployed plastic artist, who makes bi-weekly pilgrimages to the eight-storey U.S. Interests Section the equivalent of a U.S. embassy to do research on the Internet at the computer centre operated by American diplomats for the benefit of Cubans, who are otherwise severely restricted in their access to the Web.

"I am a human rights activist," says Aguilar, who belongs to a group that provides support for the families of Cuba's more than 300 jailed political dissidents.

"So I am not permitted to work."

Aguilar is far from alone. Somehow, however, like other Cubans, he manages to get by.

"It's a crazy, chaotic situation," says the European diplomat. "Those who are desperate have chosen to leave. The rest prefer to wait."

Still, it would be hugely misleading to portray the lot of most ordinary Cubans even those without access to hard currency as a condition of grinding misery. In fact, as they stride along the Obispo pedestrian mall in Old Havana or stroll up and down La Rampa in the Vedado section of town, denizens of the Cuban capital give precisely the opposite impression.

Whatever their ages, they invariably seem well-dressed, well-fed, and apparently content. A foreign visitor will search in vain for evidence of the desperate poverty, especially child poverty, that blots the human landscape of almost every other Latin American capital.

Cubans may not earn much money, but most necessities in Cuba are either cheap or free.

Education and health care are entirely funded by the state, while a ticket to a performance by the sensational National Ballet of Cuba at the Gran Teatro de La Habana costs only a few centavos.

Entrance to the 55,000-seat Estadio Latinoamericano for a playoff baseball game in the elite Cuban national league used to be free and now goes for a mere peso a national peso, not a convertible one the same charge levied for an ice-cream cone at a hole-in-the-wall dairy bar in the old city.

"We always struggle," says Maria, the sexagenarian great-grandmother, in her red-and-blue polka-dot smock. "We always find something to buy. There's always something."

Something, yes, but this is probably not nearly enough to satisfy the long-stifled consumer appetites of this island's 11 million people, most of whom know exactly what they can afford and what they cannot.

For his part, Castro blames this country's economic troubles partly on the United States and partly on the punishing times Cubans endured in the early 1990s, following the collapse of the Soviet Union and the suspension of Moscow's multi-billion-dollar annual subsidies to its only Caribbean satellite state.

To keep the system going during those bleak and lonely years, Castro had to compromise some of his lofty socialist principles for example, by allowing Cubans to hold foreign currency legally.

The result, in many ways, is the Cuba of today, divided between high-living sybarites such as Juan Carlos Robinson and hard-scrabble folk like Maria, she of the phony Che Guevara banknotes.

The grey-bearded commander-in-chief has lately vowed to resolve his country's economic inequities, not by making further compromises, but by reverting to the socialist purity of former times.

"We have to change back," he said in a recent interview with Spanish journalist Ignacio Ramonet. "Because we had very difficult times, inequalities were created, injustices, and we are going to change that without committing the most minimal abuse."

At 79, however, the man with the beard is unlikely to be around long enough to see those changes bear fruit, whether bitter or sweet, and this country's future is bound to wind up eventually in the hands of much younger women and men.

They are not necessarily going to see matters in quite the same way that Castro does.

"Almost everybody agrees that things will have to change," says the European diplomat. "But the scope of the change is the question that we are asking ourselves."

Most observers hope that reforms will come quickly and without the shedding of blood. But no one, not even Fidel Castro, really knows what the future holds.

Meanwhile, Cubans dig through their purses and their pockets for anything that has the feel of cold, hard cash.

And they wait.