{"id":38354,"date":"2024-04-29T16:42:47","date_gmt":"2024-04-29T16:42:47","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/29\/in-a-communist-stronghold-capitalists-become-an-economic-lifeline\/"},"modified":"2024-04-29T16:42:47","modified_gmt":"2024-04-29T16:42:47","slug":"in-a-communist-stronghold-capitalists-become-an-economic-lifeline","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/29\/in-a-communist-stronghold-capitalists-become-an-economic-lifeline\/","title":{"rendered":"In a Communist Stronghold, Capitalists Become an Economic Lifeline"},"content":{"rendered":"<div style=\"text-align:center\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"550\" src=\"https:\/\/i3.wp.com\/static01.nyt.com\/images\/2024\/04\/23\/world\/00cuba-private-business\/00cuba-private-business-facebookJumbo.jpg?resize=1050,550&amp;ssl=1\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"In a Communist Stronghold, Capitalists Become an Economic Lifeline\" title=\"In a Communist Stronghold, Capitalists Become an Economic Lifeline\" \/><\/div><p> <br \/>\n<\/p>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">A modern grocery store whose shelves are packed with everything from pasta to wine fills a spot in central Havana once occupied by a drab state-owned flower shop, its ceilings and walls repaired and repainted.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">A former state glass company in a Havana suburb now houses a showroom for a private business selling Cuban-made furniture.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">And at the Cuban capital\u2019s port, forklifts carefully unload American eggs from a refrigerated container. The eggs are bound for an online private supermarket that, much like Amazon Fresh, provides home delivery.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">These ventures are part of an explosion of thousands of private businesses that have opened in recent years across Cuba, a remarkable shift in a country where such enterprises have not been permitted and where Fidel Castro rose to power leading a communist revolution determined to eliminate capitalist notions like private ownership.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">But today Cuba is confronting its worst financial crisis in decades, driven by government inefficiency and mismanagement and a decades-long U.S. economic embargo that has led to a collapse in domestic production, rising inflation, constant power outages and shortages of fuel, meat and other necessities.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">So the island\u2019s communist leaders are turning back the clock and embracing private entrepreneurs, a class of people they once vilified as \u201cfilthy\u201d capitalists.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Taking advantage of loosened government restrictions granting Cubans the legal right to set up their own enterprises, roughly 10,200 new private businesses have opened since 2021, creating a dynamic, if fledgling, alternative economy alongside the country\u2019s hobbled socialist model.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Underscoring the growth of private businesses \u2014 and the government\u2019s economic travails \u2014 private sector and government imports last year each totaled about $1 billion, according to government data.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Much of the private sector imports came from the United States and were financed by cash remittances sent by Cubans there to relatives back home. About 1.5 million people work for private businesses, a 30 percent jump since 2021, and they now represent almost half of the total work force on the Caribbean island.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cNever has the private sector been given so much space to operate in Cuba,\u201d said Pavel Vidal, who studies Cuba\u2019s economy and is a <a class=\"css-yywogo\" href=\"https:\/\/www.javerianacali.edu.co\/\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">university professor<\/a> in Cali, Colombia. \u201cThe government is bankrupt, so it has no other choice but to invite other actors in.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Despite the private sector\u2019s growth, its overall contribution to Cuba\u2019s economy, while increasing, remains modest, accounting for about 15 percent of gross domestic production.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Still, the economic transformation is significant enough that it is leading to deep divisions in the island\u2019s communist system as a new business elite acquires wealth, something anathema to Cuba\u2019s revolutionary ideology.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Cubans working for the state, including white-collar professionals, doctors and teachers, make the equivalent of roughly $15 a month in Cuban pesos, while employees in the private sector can make five to 10 times that amount.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">A government salary does not go very far in the private stores that have popped up, where a bag of Italian potato chips costs 51.25 Cuban pesos or $3, a bottle of good Italian wine $20 and even an everyday need, like toilet paper, costs $6 for a pack of 10 rolls.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Most customers who can afford those kinds of prices receive money from abroad, work for other private businesses or are diplomats.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cYou have to be a millionaire to live in Cuba today,\u201d said Yoandris Hierrezuelo, 38, who sells fruit and vegetables from a cart in Havana\u2019s Vedado neighborhood, earning about $5 a day. \u201cThe state can no longer meet the basic needs of the population.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Cuban government officials said the legalization of private businesses was not a grudging acceptance of capitalism for the sake of economic survival, making it clear that state-run industries still dwarf the private sector\u2019s role in the economy.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cIt\u2019s not an improvised strategy,\u201d Susset Rosales, the planning and development director at the Ministry of Economy, said in an interview. \u201cWe have a very clear idea of the pathway for gradual recuperation of the economy with the incorporation of new economic actors that are complementary to the socialist state economy.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But U.S. officials say that the growth of private businesses could be a game changer, paving the way for greater democratic and economic freedom.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe question is \u2014 are they enough?\u201d said Benjamin Ziff, the charg\u00e9 d\u2019affaires who heads the United States Embassy in Cuba. \u201cCuba is falling apart faster than it is being rebuilt. There is no turning back.\u2019\u2019<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">A key question, he added, is whether the government will allow the private sector \u201cto expand fast enough and freely enough to meet the challenges.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Cuba\u2019s rapidly expanding private sector has attracted deep skepticism within Miami\u2019s staunchly anti-Communist Cuban exile community, where many dismiss it as a ruse by Cuba\u2019s communist leaders to ride out the economic crisis and cling to power.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Representative Maria Elvira Salazar, a Republican and one of South Florida\u2019s three Cuban Americans in Congress, led a congressional hearing in January about private business titled \u201cThe Myth of the New Cuban Entrepreneurs\u201d and suggested that licenses for such ventures were reserved for relatives of Cuban government officials.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe Cuban regime is still in the business of power, and there\u2019s nothing that proves to me that they\u2019re willing to give a portion of that market share to anybody else but themselves,\u201d she said in an interview.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Since banning private businesses in the 1960s, Cuba has, in fact, experimented with free market practices during other times of hardship, only to roll them back later when economic pressures eased.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">When the Soviet Union collapsed in the early 1990s and left Cuba without its main economic benefactor, the government issued a limited number of \u201cself-employment\u201d licenses for some low-income tradespeople, including barbers and tire repairers.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">After President Barack Obama restored diplomatic relations with Cuba in 2015 and relaxed the U.S. embargo, American tourists flooded the island, and U.S. companies began exploring investments.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Still, the Communist Party never fully embraced the private sector, regarding it as a potential Trojan horse for \u201cYanqui imperialists.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Then came a double blow. Donald J.\u2019s Trump\u2019s election in 2016 led to the restoring of sanctions on Cuba, including a ban on U.S. cruise lines sailing there. Three years later, the Covid-19 pandemic shut down Cuba\u2019s tourism sector entirely, its largest source of foreign currency.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Since then, Cuba has been in financial free fall. Production of pork, rice and beans \u2014 food staples \u2014 plunged by more than half between 2019 and 2023, according to the government.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">This year Cuba requested \u2014 for the first time \u2014 help from the United Nations World Food Program, to provide enough powdered milk for children, the state-run media reported. A lack of oil and an aging electrical grid have led to rolling blackouts across the country.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The worsening living conditions triggered a rare public display of unhappiness in March as hundreds of people took to the streets of Santiago de Cuba, the country\u2019s second-largest city, chanting, \u201cPower and food,\u201d according to social media and official government reports.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The economic hardships have set off an enormous surge in emigration. Since 2022, roughly 500,000 Cubans have left the island, an extraordinary exodus for a country of 11 million, and most Cubans who have left have gone to the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Amid so much deprivation, privately run small businesses offer a small dose of hope for those with the money to open them, and for their employees.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Many are taking advantage of regulations introduced in 2021 granting Cubans the legal right to set up their own enterprises, which are limited to 100 employees.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Across Havana, new delis and cafes are appearing, while entire office floors are leasing space to young entrepreneurs bursting with business plans and products, from construction and software to clothes and furniture.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Diana Sainz, who had lived abroad for much of her life and worked for the European Union, took advantage of the economic changes in her homeland and opened two Home Deli markets in Havana, offering a mix of locally made items like pastas and ice cream, as well as imported goods, such as beer and cereals.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Ms. Sainz says Cuba had not had a private supermarket in decades. \u201cNow it\u2019s beautiful to see a store on every street corner,\u201d she said. \u201cWhen you compare things to five years ago it\u2019s totally different.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Still, many business owners said the Cuban government could do more to build the private sector.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Cuba\u2019s state-owned banks do not allow account holders to access deposits in dollars to pay importers because of the government\u2019s lack of foreign currency to pay its own bills. U.S. sanctions also prohibit direct banking between the United States and Cuba.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">And the Cuban government has kept major industries off limits to private ownership, including mining and tourism.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But that has still left plenty of opportunities.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Obel Martinez, 52, a Cuban American interior decorator from Miami, recently partnered with a local restaurant owner to reopen a landmark Havana restaurant, La Carreta, that was abandoned by the state a decade ago.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe ceiling was falling, and we had to totally demolish the interior and rebuild it,\u201d he said.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Martinez grew up in Cuba and after working in Spain and Mexico, he resettled in Miami but never gave up his Cuban residency.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe are showing the state that it\u2019s possible to do things another way,\u201d said Mr. Martinez, as he surveyed a busy lunchtime crowd in the 136-seat restaurant, which serves traditional Cuban fare. \u201cAnd we\u2019re totally private.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.nytimes.com\/2024\/04\/29\/world\/americas\/cuba-economy-communism-capitalism.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A modern grocery store whose shelves are packed with everything from pasta to wine fills a spot in central Havana once occupied by a drab state-owned flower shop, its ceilings and walls repaired and repainted. A former state glass company in a Havana suburb now houses a showroom for a private business selling Cuban-made furniture. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":38355,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/static01.nyt.com\/images\/2024\/04\/23\/world\/00cuba-private-business\/00cuba-private-business-facebookJumbo.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[40905,15478,484,24644,39508],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/38354"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=38354"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/38354\/revisions"}],"predecessor-version":[{"id":38356,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/38354\/revisions\/38356"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/38355"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=38354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=38354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=38354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}