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ON CUBA, POST REVOLUTION

 

By Larry Smith

Friday, December 31, 2010.

HAVANA, Cuba -- "So you wanted to visit before the country opens up and everything changes?" a 30-something tour guide asked me as we surveyed Havana's bustling historic quarter from the rooftop of a restored colonial mansion.

It was true, I suppose. I had come in search of Fidel - 50 years after his revolutionary triumph and an uncertain time before his death - to get a glimpse of life in what is probably the last true communist state. According to Fidel's brother Raul, who took over as president two years ago, "Cuba is the only country in the world where people can live without working." But there are plans to change all that.

Cuba is about to take the Chinese road to transform its economy and, not coincidently, to pay back billions in overdue Chinese loans. Last November, Raul Castro issued a 32-page document calling for a raft of reforms to save the revolution. ¨We are running out of time," he conceded. "If we don´t change things now, we will bring about the collapse of efforts by many generations.”

Those reforms, which will be ratified at next April's Communist Party Congress, include the firing of more than two million state workers over the next two years, as well as efforts to reduce food and oil imports, cut public subsidies, legalize and tax the informal economy, and loosen controls over the heavily restricted private sector - including allowing individuals to rent, buy and sell their homes.

"The government has to make these changes because the system is no longer viable," Italian journalist Roberto Savio, a frequent visitor to both Cuba and the Bahamas, told me. "Services are free and there are no taxes. The only revenue comes from mining operations, sugar exports and tourism. This is not enough to pay for everything, so there will be a transition to more self-employment. The question is, can the limited private sector generate enough resources to sustain the state?"

Cuba's problem, of course, is the lack of a major benefactor like the Soviet Union, which was willing to keep the island afloat during the Cold War. In recent years, Venezuela has helped with cheap oil while China has extended credits, but Cuba has defaulted on its $18 billion debt several times, and the American trade embargo that has been in effect since 1961 was only marginally eased by the Obama administration.

So the stirring revolutionary slogans and iconic images of Che Guevara stamped on buildings and walls throughout the capital are still here after 50 years, but - like the Castro brothers themselves - they are fading fast. And the Cuban people, who once took part in nuclear showdowns and defiantly exported revolution to the Third World, now spend much of their time cheerfully hustling the 2.5 million tourists who visit the island each year - like me.

My search for Fidel began at the most logical place - the Museum of the Revolution in downtown Havana. This was originally Fulgencio Batista's presidential palace, and the bullet holes from a failed assassination attempt ordered by Fidel in 1957 are lovingly preserved by the regime, along with the hated dictator's office, cabinet room, and gold-plated telephone. It was from this imposing building that Fidel delivered the first of many long-winded speeches after the revolution.

"I never liked this building," he told rapturous crowds in January 1959. "Yet now we have come here, let us do what we can to make the people take kindly to it...It is a building that, at the present time, (houses) the Revolutionary Government of the Republic."

Right next door to the old presidential palace is the glass and steel Granma memorial built in the 60s, which displays the motorboat on which the Castro brothers and other exiles travelled to Cuba from Mexico in 1956 to launch the revolution that ousted Batista. For Cuba, where the founder of the revolution is still alive and kicking at 84, this is the equivalent of Lenin's tomb.

Not being as adventurous as the original Fidelistas who camped out in the remote fastnesses of the Sierra Maestra, for the duration of my search I stayed at the Havana Saratoga, a Spanish-operated hotel restored a few years ago to 1930s elegance. It is across the street from the Capitolio, the famous landmark that once housed Cuba's pre-revolution legislature but is now just another museum (there are 38 in all). A new national assembly was established by the communists in 1976.

The Saratoga lies on the edge of Havana's historic quarter, a maze of narrow cobblestone streets and crumbling baroque buildings that stretches from the Capitolio to the harbour. Founded by the Spanish in 1519, the city and its adjacent fortresses were declared a World Heritage Site in 1982, and many of the finest buildings have been restored over the past 15 years as museums, restaurants, shops and hotels. About half of the income they generate is reinvested in new restorations.

Havana's 400-year historical heritage, explains Cuban architect and planner Mario Coyula, has benefited from "the benign neglect of the 1959 revolution, which concentrated its efforts on the more undeveloped countryside...Although these policies increased deterioration and overcrowding in the capital, demolitions driven by real estate speculation did not do away with its multi-faceted layers of architectural history."

Coyula is a leading authority on Havana, which he describes as the major metropolis of the Caribbean, and Cuba's greatest tourist attraction. In fact, the island already receives about a million more stopover visitors than we do, and most of them stay in Havana or nearby at Varadero Beach. Cuba now has about 50,000 hotel rooms (compared to under 15,000 in the Bahamas) and could add another 20,000 over the next five years.

The key point for us to keep in mind is that, even in its present run-down condition, Cuba manages to earn some $2.5 billion a year from tourism. Despite an inefficient, government-operated and expensive product, as well as almost total exclusion from the huge US market, Cuba has a lot to offer. The competitive threat to the Bahamas from the pending privatisation is something we should all be concerned about.

In fact, it was Fidel who helped to create the Bahamian tourist industry in the first place. Havana in the 1950s was a corrupt town known as the Latin Las Vegas, its racetracks and casinos operated by infamous American gangsters like Meyer Lanksy. When the revolutionary government outlawed gambling and nationalised the hotels, Lanksy and others moved to the Bahamas.

A celebrated 1967 article in Life magazine reported that "In 1959, after Fidel Castro shut Cuba down, Lansky looked around for other places where he might set up shop beyond the reach of US law. The Bahamas were made to order." According to contemporary press accounts, US gangsters took a large percentage of gaming profits in Nassau and Freeport, where newly established casinos formed the core of our growing resort industry.

By the mid-1960s Fidel and the revolution had banned private property and eliminated tourism altogether. But after the collapse of the Soviet Union, the government revised its position. Although some of the 1990s reforms were later cancelled, today the incredible history, music, art and small-scale entrepeneurism of Habana Vieja, seem specially designed to pry hard currency from visitors. And by most accounts, younger Cubans are increasingly jaded with the revolution and frustrated by political and economic stasis.

My contacts during my stay were limited, but nonetheless indicative. An employee at our hotel studied journalism at the University of Havana, but prefers to work in tourism because the rewards are better and the media are "too political". According to one tour guide, Cuba is very safe and healthcare is excellent, "but the economy is terrible and salaries are low." Another looked forward to the day when he could leave Cuba.

According to Roberto Savio, "the first generation of the revolution is still in power and has come very sadly to the conclusion that it is not viable, so they are trying a Chinese course where the party retains political control while extending the market economy. The second generation is disenchanted and wants change, but not in a way that would bring back the wild capitalism which took over after the end of the Cold War. The third generation is much less cautious about change."

The resistance to change has a lot to do with fear of competition from the two million affluent Cubans living abroad, who are derided here as "gusanos" or worms. "This is a competition the 12 million Cubans in Cuba will never be able to win," Savio said. "They know it, and this is why they are very careful about causing a collapse of the system. Many of them live in a house that would be reclaimed by exiles.

"Of course, there is a lot of discontent. But after what happened in Russia, where life expectancy went down by 10 years, and without any credible opposition figure, if there were free elections today the government would probably get 60 per cent of the vote, with maybe 35 per cent abstaining as a sign of protest."

Currently, most of the means of production in Cuba are owned and operated by the state, which employs about 83 per cent of the work force. Another 5 per cent work in co-operatives closely connected to the state. Only 12 per cent of Cubans work in the hard-scrabble private sector - including farmers, artisans, and other self-employed persons.

Transferring 1.3 million workers this year, and 1.2 million next year, from the public sector to private employment is a major task by any standard. In China, this process took decades and is still underway. But Cuba has been described as an economy of loaves and fishes, where things somehow come out of thin air, ingenuity, and sheer will. It will certainly be interesting to watch what happens.

The Castro regime is taking a big risk by opening up. If the gamble doesn't work, things could collapse in a Berlin Wall-type scenario, with some Gorbachev trying to salvage the situation, but lacking the resources to do so. If it does work, and the US embargo finally ends, Cuba will become a tourism powerhouse, and that will have important consequences for the Bahamas, because 60 per cent of our economy is derived from tourism. Some on the Latin American left have called for a multi-billion-dollar Marshall Plan "to finance the complex process of socialist economic reform that Cuba must carry out urgently in the coming months."

We may have time to adjust, as the Cubans have a lot of hurdles to overcome. I tried to book half a dozen Havana hotels online without a single response. After visiting Havanatur on East Bay Street, it was another two weeks before my bookings were confirmed. The one-and-a-half-hour flight in the almost windowless Antonov 26 turboprop (a vintage Russian-built military transport) is not the most comfortable of journeys, and the long lines and cheerful chaos at the Cubana Airways ticket counter are reminiscent of Bahamasair in its darkest days - plan on standing in line at both airports for at least two hours.

And then there is the US embargo, which serves no purpose other than to provide the regime with an excuse to justify everything that goes wrong. It remains only because Florida - where most Cuban exiles live - is a key swing state in presidential elections. And while the younger generation of Cuban-Americans may be indifferent to current events, the older generation are still fighting the Cold War.

Some observers argue that if the pending privatisation in Cuba takes off, there will likely be many joint economic ventures with Cuban Americans, which will increase public pressure in the US to lift the embargo. And if the situation in Cuba deteriorates, the US government is likely to remove trade and travel restrictions in order to exert leverage over the crisis. Either way, an end to the embargo is not far off, according to this analysis.

As for Fidel, I was unable to find him outside the pages of the government newspaper Granma, where he regularly pontificates on international affairs (leaving domestic matters to his brother). Ordinary Cubans have no uncensored access to the Internet, but Fidel keeps well-informed by reading a 100-page daily briefing culled from online news sites around the world.

His latest thesis is that the US will attack Iran with tactical nuclear weapons and this will escalate into a global nuclear war that will lead to the destruction of humanity. I suppose you can't blame him for being paranoid in view of the history of the American vendetta against Cuba, but I doubt if many Cubans take him seriously any more.

Fidel's whereabouts and state of health are both closely guarded secrets, according to my guide, who reminded me that he had survived more than 600 attempts on his life over the years. But, as Bahamians  know better than anyone, time is longer than rope.

 

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