Friday, November 11, 2011

As Cuba reforms, the invisible hand is bearing gifts - and new problems

As Cuba reforms, the invisible hand is bearing gifts - and new problems
Posted on November 10, 2011 by Ben Osborn

Starting today, Cubans can buy and sell property for the first time in
over 50 years. Yet while most are excited to escape the cage of
government restrictions, others fear being kicked out in the cold.

Many Cubans haven't paid for rent, health care or education since 1959,
when Fidel Castro seized power and began nationalizing private property
in one of the staunchest socialist experiments in world history. While
the results were far from perfect, many of Cuba's poorest undeniably
benefited.

During the heyday of the Revolution, most Cubans had job security and
guaranteed food rations. The Cuban government tinkered with novel
programs and ideas, and where those programs failed, the Soviet Union
often stepped in, checkbook in hand, to balance the books. While Cuba
severely limited its citizens' rights and freedoms, it also ensured a
basic economic safety net below which no Cuban would fall. For the most
part, success was more a function of loyalty to the government than it
was a measure of personal skills. This is the government that many older
Cubans identify with.

But after decades of stuttering progress, the fall of the Soviet Union
brought an end to the heavily subsidized years of Cuban socialism, and a
so-called "Special Period" of austerity began. For most young Cubans,
these years of recession and stagnation are all they know of the Castro
regime.

So the reforms of the past five years are evoking mixed emotions among
Cubans. The loosening restrictions on property and trade will finally
allow a burgeoning entrepreneurial class to openly improve their lives.
Cubans can now buy and sell homes and cars, private businesses can be
established, and skilled workers can offer their services freelance.
These reforms are part of an effort by the government to wean its
bloated public sector off of government assistance and flood the private
sector with cash.

Suddenly, Cubans can earn more on their own initiative. As the New York
Times reports, the iconic and ancient cars that sputter through Havana
can be traded or sold, transforming old clunkers into a private reserve
of wealth.

But as Cubans are given their own paddles to navigate capitalism, some
fear the loss of the government life jacket. "What happens if I sell my
home and then I can't find another one to buy? Where do I sleep?,"
laments Félix Méndez, a 47-year-old hospital technician quoted in the
New York Times.

Another risk inherent to the reforms is a widening rift between the
richest and poorest Cubans. People can now sell their homes and move
elsewhere. This newfound mobility is expected to lead to segregation, as
wealthier Cubans (and their money) leave poorer neighborhoods in search
of better living. "Thousands of Cubans have been waiting for this
signal, like runners crouched at the starting line waiting for the gun
to go off," writes Yoani Sánchez, a prominent Cuban dissident blogger.
When the gun goes off, existing inequality will likely be increased as
money is drained from some neighborhoods without the government around
to replenish it.

Spectators on both sides of the ideological aisle call the reforms
necessary. Capitalism's enthusiasts see the changes as inevitable; the
end of an anachronism. Those farther to the left view the reforms as
necessary concessions amidst tough times; concessions to ensure the
survival and restoration of one the few remaining self-proclaimed
socialist regimes in the world.

As Ms. Sánchez writes, "a house, for 40 years an anchor, will become a
set of wings." It remains to be seen, though, who will sink and who will
fly.

http://www.globalenvision.org/2011/11/10/cuba-reforms-invisible-hand-bearing-gifts-and-new-problems

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