April 17, 2018

FLOOD THE SWAMP:

Castro set to step aside as Cuban president, his reforms incomplete (Sarah Marsh, 4/17/18, Reuters) 

As president, Castro has trimmed the bloated state payroll, leased out fallow land and expanded the private sector.

The number of self-employed Cubans has more than tripled to around 580,000, out of a total population of more than 11 million. Some of those have started earning - and spending - conspicuously more than everyone else.

Castro also oversaw the creation of a Chinese-style industrial park and a new law offering foreign investors tax cuts. To advance Cuba's re-integration into global markets, he renegotiated its external debt, getting the Paris Club to forgive 76 percent of its $11.1 billion in official obligations.

The detente with long-time foe the United States, reached with former U.S. President Barack Obama and announced in 2014 sparked global investor interest in Cuba.

A surge in tourism boosted the private sector and remittances served as start-up capital for many Cubans forming small businesses, but that meant many of the emerging opportunities were for people in the right place, or with relatives abroad.

In rural areas, though, farmers remain dependent on the state to allocate scarce equipment like tractors. Agricultural output stagnated over the past decade, according to the Brookings Institution think tank, and Cuba still imports 60 to 70 percent of the food it consumes.

"What we need here is a decent irrigation system," said farmer Mario Cruzata, 45, who uses ox-drawn plows to work his fields of yucca, eggplant and lettuce in southeastern Santiago de Cuba province.

And while the reforms have had more success at stimulating the services sector, there are still lids on private business such as the lack of a wholesale market and the right to import or export.

"I wish they would let people grow," said Yusbely Andino, 40, who makes a living fixing computers in the eastern province of Holguin. He has to buy old PCs for spare parts.

Moreover Cuba has authorized self-employment only in certain, highly specific categories, and it stopped issuing new licenses last year for certain popular activities like running restaurants and bed and breakfasts.

In fact, a draft of new regulations seen by Reuters proposes curtailing the private sector. One measure would limit licenses to one business activity per person, hurting entrepreneurs like Condis.

The economy overall remains distorted by a byzantine dual currency system with multiple exchange rates that Castro had promised to unify.

Some analysts say his focus on generational change and attempt to foster more critical debate within the Communist Party may yield longer-term dividends. He has proposed age and term limits for leaders and deployed a more collective leadership style, after decades of dominance by a single figure, Fidel Castro.

If Raul Castro's successor continues on his reform path, he could still be remembered as Cuba's version of Deng Xiaoping, who transformed China from failed central planning to market socialism, said William Leogrande, a professor of government at American University.

"But if the updating fails, Raul will be remembered as just one more reform communist who couldn't force the system to change despite his best efforts."

As with Iran, we should pour in business opportunity and overwhelm the system.

Posted by at April 17, 2018 3:55 AM

  

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