Cuba at a Crossroads

Posted on Wednesday, 11th May 2011 @ 06:35 AM by Text Size A | A | A

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Cubans will be allowed to travel abroad as tourists for the first time in more than 50 years, Raul Castro’s government has announced.The government’s new economic guidelines, released on Monday, gave no further details on the travel policy or a date at which it would be implemented, but the move was seen as an official decision to authorise foreign travel as part of a series of landmark reforms.

Though travel abroad is not banned outright, there is a de facto ban; Cubans who want to leave the Caribbean island face numerous bureaucratic obstacles, including receiving an invitation letter from abroad.

Then a $150 fee is required for an exit request, which may be denied.

Travel abroad has been limited to 30 days, and the paperwork authorising foreign travel amounts to around $400 – unthinkable for most Cubans, who earn about $20 a month.

Policy shift

The policy shift is part of a series of reforms announced by Raul Castro, the country’s president, to give a jolt to Cuba’s crippled economy, ostensibly by introducing elements of private enterprise without abandoning socialist principles.

The economic overhaul was approved unanimously last month at a landmark Communist Party Congress, but the final document was not released until Monday.

In other significant changes, Cubans will be allowed to buy and sell automobiles or homes, and bank loans are to become more readily available.

The 313-point guidelines say the state ought to “establish the buying and selling of homes” for Cuban citizens. There is no mention of how the system will work, what restrictions will be imposed or what taxes might be levied – all crucial to judging the scope of the changes.

The framework also says Cubans should be encouraged to form cooperatives that could function as mid-size companies with many employees. The new guidelines allow such employee-owned businesses to directly sell products to consumers or business owners, without the state operating as an intermediary.

The guidelines also say the state will convert many public buildings into residential properties in an effort to ease severe housing shortages.

Shift to the free market

Since taking over from brother Fidel Castro in 2008, Raul Castro has championed a limited but significant shift to the free market. Last year, he announced that Cubans would be allowed to go into business for themselves in 178 approved enterprises, hire employees and rent out cars and homes.

Castro has also pledged to cut up to 500,000 state jobs and has warned his countrymen the government can no longer afford the deep subsidies it gives workers.

The guidelines say cuts in the subsidies will continue so that eventually only those with the most need – such as children, the sick and the elderly – will receive benefits.

Currently, all Cubans receive a basic basket of goods through monthly ration books, as well as free education and healthcare, and nearly free housing, utilities and transportation.

The changes aim “to compensate needy people and not subsidise products in general,” the guidelines say.

Other guidelines make clear the government’s desire to eliminate Cuba’s unusual dual currency system, legalise the sale of construction material at unsubsidised prices, promote the fishing industry and link sugar prices paid to Cuban producers with prices paid on international markets.


The new economic development guidelines to be put in effect over the next five years in Cuba, published Monday by the Communist Party, include reforms allowing the sale of real estate and cars and a possible loosening of restrictions on travel abroad by Cubans.”The red tape will finally be eliminated,” one middle-aged man said after buying a copy of the ‘Guidelines for Economic and Social Policy’, approved by the sixth congress of the Communist Party of Cuba (PCC) in April.

“I came really early, which saved me, because the 300 copies that were dropped here sold out immediately,” he added.

Although the document does not provide details about how the reforms are to be implemented, it says Cubans will be allowed to buy and sell vehicles and homes – two widely hoped-for changes. “I hope this can be done soon,” said the source, who did not want to give his name.

Property rules

Under the current system, Cubans are allowed to own cars and homes, but can only sell them to the state or swap them to other private individuals for property of equal value.

The guidelines mention more flexible and streamlined forms of property transfer – “swaps, donations and others” – and of construction or remodelling.

The decision is aimed at providing solutions to the need for housing in this Caribbean island nation of 11.2 million people, where there is an estimated housing deficit of 600,000 units – one of the country’s most pressing social problems, which is aggravated by frequent hurricanes.

The PCC mentions municipal-level housing programmes that are based on the specific raw materials and technologies available in each area, as well as facilities for people to build their own homes.

The document also states that the authorities will “study a policy to facilitate travel abroad by Cubans as tourists”. Since the 1959 revolution, Cubans have not been able to travel, with the exception of collective trips to the Soviet bloc organised in the 1970s and 1980s as rewards for outstanding workers.

The programme agreed by the PCC to update Cuba’s economic policy and rescue the economy is made up of 313 guidelines on strategies to be followed in the areas of economic management, macroeconomy, foreign policy, trade, debt, credit, foreign investment and development aid.


In terms of regional integration, a priority will be put on participation in the Bolivarian Alliance for the Peoples of Our Americas (ALBA), an alternative bloc made up of Cuba, Venezuela, Bolivia, Nicaragua, Dominica, Ecuador, Antigua and Barbuda, and Saint Vincent and the Grenadines.

The government will also continue to pursue economic integration with the rest of Latin America and the Caribbean, “as a strategic objective,” the guidelines state.

In addition, the document outlines comprehensive policies in the areas of science, technology and the environment, as well as the strategies to be followed in agriculture, industry and energy, which will include a priority focus on the environmental impact of development, particularly in the chemical, oil, petrochemical and mining industries.

In terms of social questions, the guidelines call for the preservation of “the revolution’s gains”, such as free universal health care, free education, advances in culture, sports, and recreation, social security coverage, and social assistance and protection for the needy.

But “undue” universal free services and “excessive subsidies” are to be replaced by targeted assistance to needy persons, the document adds.

The government plans, for example, to eliminate, “in an orderly and gradual” manner, the ration book, a system used to ensure that the entire population has access to a basket of basic goods at heavily subsidised prices.

In the nationwide meetings and debates in which Cubans discussed the draft guidelines ahead of the party congress, the most hotly debated reform was the loss of the ration book, created in 1962 to combat food shortages and speculation and hoarding.

The delegates at the landmark party congress approved an amendment to the clause on the elimination of the ration book system, adding the word “gradual,” implying that conditions would be created to guarantee stable production levels and supplies of affordable basic products.

In response to worries among lower income sectors, President Raúl Castro clarified that under Cuba’s socialist system, there is no room for “shock therapies” that hurt the needy, and that social assistance is being restructured to guarantee protection for “those who really need it.”

The introduction to the guidelines states that the Cuban economy will continue to be based on socialist ownership of the basic means of production, and that planning rather than market forces will guide the “modernisation” of economic policy. But the economic model will incorporate cooperatives, small farms, and a broader range of options for self-employment.

A version of this story first appeared on Inter Press Service news agency.




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