Freedom House study reveals optimism in Cuba about economic reforms

The Freedom House report on Cuba released today finds that Cubans see real economic change there, and more Cubans now would rather work for themselves than hold once-prized state jobs.

When Raul Castro announced radical changes to the economic structure of communist Cuba, the country was in a semi-daze.

Many Cubans were excited about the prospects of economic change, particularly opening access to self-employment. But, as state jobs were slashed, many were also worried about going it alone after a lifetime of stable, if paltry, government salaries and subsidies.

But a new Freedom House survey released today shows a radical change in perceptions. Forty-one percent of Cubans say the country is making progress, compared to only 15 percent who felt optimistic about the country’s future when Freedom House last conducted field research in December 2010. In fact, today more Cubans say they would prefer to work for themselves than for the government, the survey shows.

Less than a year ago, Cubans were “very skeptical about change. They doubted real change would happen,” says Daniel Calingaert, deputy director of programs at Freedom House and co-author of the study. This survey was carried out in June, after reforms were implemented formally at the Sixth Communist Party Congress in April. And now, Mr. Calingaert says, Cubans see “change is real.”

This economic opening is the “most significant positive change to have taken place in Cuba since communism was introduced half a century ago,” the new survey concludes.

At first glance, Cuban optimism could be a good sign for the Castro government. But it could also pose additional challenges. Cubans who have tasted economic freedom say they want more, and a bit of stability has also allowed them the luxury to think beyond the day-to-day economics of feeding a family. “It’s opening people to new possibilities,” says Calingaert. “There is more interest in individual freedoms.”

Indeed, one of the more surprising findings is that, when asked what reforms they most wanted, Cubans said increased freedom of expression and the freedom to travel (28 percent). This is a radical change from the most recent study, when economic reform topped the wish list of respondents.

The Cuban government has a long way to go on the freedom front. Most Cubans continue to get their news from the government. The poll showed that only 40 percent of Cubans surveyed knew what happened to Egypt’s leaders, while only 36 percent knew how the revolution in Tunisia ignited.

Here are some of the survey’s specific major findings:

• 79 percent say they have noted visible change in the past six months in Cuba, including more self-employed on the streets.
   
• 63 percent of respondents favor the reforms introduced under Raul Castro. The report quotes an ice-cream vendor: “Imagine, I can make more money selling ice cream than I ever did as an accountant for the government.”
   
• 49 percent say that it is better to work for themselves, compared to 44 percent who say a government job is better.

That is not to say that Cubans aren’t wary of changes ahead of them. For example, the field research culled commentary from Cubans voicing concern about unsteady incomes, having enough funds to start their own businesses – especially those without family in the US to help – and growing resentment among less successful entrepreneurs.

“The changes are causing a sense of insecurity and resentment among some Cubans, as might be expected in a country where citizens were almost entirely dependent on government for their material needs and had no experience of market competition,” the report says. “Such insecurity and resentment accompanied the shift from communism to market economies in Eastern Europe and the former Soviet Union. While the insecurity and resentment presents a challenge for reform in Cuba, it is also a reflection of how profound are the changes that are currently underway.”

By Sara Miller Llana

Source: CSMonitor

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Cuba's Liberation at Hand

The liberation of Cuba has begun.  Not by invasion, but from within.  Communism has failed, and the people of Cuba are demanding freedom.  Including the revolutionary right to buy and own their own homes.

Fifty-two years ago, Fidel Castro, posing as a reformer, seized power in a revolution promising "change," social justice and a redistribution of wealth.  He attacked the rich, the owners, the employers.  He was celebrated in leftist circles around the world as a herald of a new and better society.  His 1960 visit to New York set off waves of joy and adulation.

When Castro plastered the walls of Havana with the slogan, "Socialism or Death," most Cuban employers fled, often with only the clothes on their backs.  Factories, farms, businesses, homes, cars with tail fins—all left behind, all confiscated by the state.  Private property was abolished.  All would be equal.  Cubans who stayed realized how equally poor they all quickly became.

For longer than most Americans have been alive, Castro and his Communist elite have controlled every aspect of every Cuban's life.  They turned one of the most beautiful countries on Earth, "The Pearl of the Antilles," blessed with fertile soil, abundant water and numerous natural resources, and inhabited by some of the happiest, most fun-loving people in the world, into one big gray poor gulag.

Since the Castro revolution, the Free World has surged ahead, producing a higher standard of living for more people than any period in human history.  Wealth in free countries was not "spread around," it was created and multiplied, causing what Jack Kennedy called a rising tide to lift all boats.  Many thousands of Cubans, fleeing Castro's tyranny, have prospered in freedom in the U.S. and other countries.

Modern communications have made it inevitable that despite state censorship, Cubans increasingly recognize the failure of communism, that confiscation has not produced "fairness" and that the state-run economy has not produced prosperity. They recognize and demand change.  The kind of change that toppled the failed Communist states all over Europe.  The kind of change that is bringing prosperity to China.

Fidel nearly died in a botched operation by Cuban doctors (remember Michael Moore's praise of the Cuban state-run medical system?) and had to call in a Spanish doctor from a private clinic in Madrid to save his life.  Ditto Hugo Chavez.  His cancer was treated in Cuba, but by private doctors from Spain.  Cubans saw and reacted.  "Socialism or Death" for the common folk, but free-market doctors for the Communist elite.

The everyday Cuban has long depended on an illegal black market to survive.  Doctors drive cabs, engineers fix 1950s cars, illegal restaurants spring up in a cook's living room, money changes hands so someone can illegally get a better apartment, college grads wait tables at the few tourist hotels allowed by the regime.  People get by doing what they have to do.

In the last few years, Cuba has allowed more foreign investment, primarily to develop tourism, but more recently to exploit offshore oil deposits in the Gulf of Mexico that Americans have been forbidden to touch.  More Cubans are coming into contact with foreigners.  More jobs are being created by foreign investment. 

Cubans want more.  The Castro regime is on the defensive.  Self-employment rules have been loosened in the last year and cell phone ownership is increasing.  Buying and selling cars will soon be allowed.  The dam is cracking, the river of freedom will be restored. 

Starting at the end of this year, the regime has promised that Cubans can buy and own their own homes.

Private property is the cornerstone of capitalism.  It's the talk of Havana.  After making the promise and raising expectations, the regime is widely predicted to hem in private ownership with regulation and taxation.  New owners might be limited to one home or apartment, forbidden to resell for a number of years, and be required to live there full-time.

Nonetheless, in a country where all the land and buildings are owned by the Castro State, the restoration of the concept of private property ownership is a big (Biden) deal.

A (freer) market in housing faces challenges created by 60 years of communism.  Private classified ads, for example, are forbidden.  How do you let buyers or renters know you want to sell or rent?  Brokers, cell phones and pads in hand, comb the streets of Havana listing availabilities and preparing to put buyers and sellers, renters and landlords, together.  Wait until they get the Internet!

The government-owned housing stock is a wreck, with too many people jammed into small, deteriorating units.  There is no construction industry, no materials industry.  As in other collapsing socialist states, such industries will spring up to meet demand if the regime allows it.  They will allow it because the Cubans will demand it.

Financing the recreation of a freer property market is the easy part. 

Those prosperous Cubans who fled Cuba already legally pump more than $1 billion a year into the Cuban economy (and black market) through remittances to family members.  Cubans from Miami, hearing of the potential for private ownership, have already staked out their favorite homes, farms and apartments to buy either directly or through family members.

Defenders of the Castro regime, especially the Left in the U.S., criticize the new reforms.  "Experts" fear, says the Los Angeles Times, a re-stratified society, the reemergence of the haves/have notes divide, the horror of "gentrification."  Yup, freedom and opportunity could be a downer.

For the people of Cuba, these reforms are but a taste of the life they yearn for, the life of hope and opportunity they see people enjoying in other countries, a life forbidden to them by the Castro regime for all these years.

What must the average Cuban, who has experienced not a "lost decade" but a lost lifetime, think of the U.S., the beacon of freedom and prosperity, turning now to national health care, government confiscation of private property, our President demonizing wealth creators and employers as the evil "rich."  Making the same mistakes, falling for the same propaganda that has enslaved Castro's Cuba.

Pay attention to Cuba.  Know its history under Castro.  Or be condemned to repeat that history here.

by Roger Hedgecock 

Source: Human Events 

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Cuba: Microcredit Knocks on Door...Softly

'Until about a year and a half ago, you practically couldn't talk about this issue, but now the situation is different,' a European diplomat told IPS. He preferred not to be identified, to avoid undermining progress on the issue, which has its own particular complexities in the case of Cuba. 'The idea of microcredit went from being almost sacrilege to something interesting,' he noted.

Juan Diego Ruiz, general coordinator of Spanish cooperation in Cuba, said the word microcredit is not part of the Cuban vocabulary, and actually might not be the most correct term in this case.

'Today what's being talked about more is credit policy, credit for the productive sector, and it's an issue that is being discussed both on the street and in offices,' he told IPS.

One of the entities feeling out the situation on the ground is the Italian National Committee for Microcredit. It has organised a couple of visits to Cuba, evidence that the subject of microfinance is drawing attention little by little in the context of development projects and an opening to the private sector, where international cooperation could play an important role.

This type of loan was created in the 1970s as a financing alternative for low-income people in need of capital to set up small businesses. Unlike traditional credit, no collateral is required, the amount is usually relatively small, and payments are weekly or biweekly.

These differences lead to micro-financing institutions being described as entities with high administrative costs covered by the high interest rates generated by their portfolio of clients, composed of a large number of small, short-term loans, without guarantees, concentrated in a specific geographic area.

Credit exists in Cuba in the form of Cuban pesos and focused on consumption, such as the individual purchase of domestic goods, and agricultural cooperatives.But the strategy launched by the sixth congress of the ruling Communist Party of Cuba (PCC) to modernise the economic system anticipates expanding and diversifying possibilities in terms of bank loans.

The 313-point programme charting the country's economic and social guidelines for the coming years specifies that credit policy will be essentially oriented towards providing necessary support for activities that stimulate national production and generate hard currency income or replace imports, as well as activities that promote development.

Meanwhile, since March, banking and credit policies have been in place for individuals, such as loans for farmers to buy equipment and supplies in retail stores with the goal of boosting national food production.

Also, loans may be granted to people authorised to engage in self- employment, to finance their working capital and investments via the purchase of assets, supplies and equipment, and to allow these self- employed workers to sell products and services to state entities through contracts.

It is precisely in these emerging sectors, which have developed from the distribution of idle state land to thousands of farmers and the expansion of trades and activities in which self-employment is allowed, where microcredit could have the greatest impact, at least initially.

However, the legal framework that will regulate the new policies on credit in general has yet to be defined.

In these new forms of non-state activities, small-scale loans could facilitate access to machinery, tools, supplies and equipment, and increase the individual's ability to contract services or labour, which would stimulate the economy.

It is in the area of self-employment 'where microcredit fits best, with a focus on individuals,' Tomas Marco, head of agricultural development in Cuba for the Spanish Technical Office for Cooperation, commented to IPS. 'What's opening up is a possibility; it's not even a certainty. Nobody knows if loans in hard currency for self-employed people will be permitted.'

Cuba's dual currency system, in which the Cuban peso is the national currency and the convertible peso (CUC) replaced the U.S. dollar as hard currency in all transactions in 2004, is another challenge to overcome in making credit more widely available. However, no short-term changes to the system are on the horizon.

'Another major obstacle is purchasing power,' Marco said. 'You might give a hard currency loan to a UBPC (Basic Unit of Cooperative Production in agriculture), but the cooperatives cannot directly buy in hard currency. We have to wait until regulations are created for the (new economic and political) guidelines, and see how these aspects are regulated.'

Rodolfo Hernandez, an official with the Swiss Agency for Development and Cooperation (SDC), said microcredit could benefit Cuba 'fundamentally' in the low and medium-income sectors, with a certain amount of priority given to women and young people.

'It would be important for loans to be granted in both currencies, for shops and other locales to be created that sell at the municipal and sub-municipal levels, and for the credits to carry a payable interest rate that would make the process sustainable and that would make loans accessible to people in low and medium-income segments of the population,' the expert said.

In his opinion, funds should be channelled through the Bank of Credit and Development or local banks created for that purpose, and by associations of cooperatives - whose partners are other cooperatives - that have enough income to take on the commitment. For his part, Ruiz did not rule out that in the context of international cooperation, non-commercial but reimbursable credit instruments could operate. 'The opportunity and the will are there. In recent months, our headquarters (Spanish Agency for International Cooperation) has made several visits, and has reported on credit experiences that could have work here,' he commented.

By Grogg, Patricia 

Source: IPS

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