Cuba Under Raul Castro’s Reforms

By Isaac Risco

HAVANA TIMES — Characterized by economic reforms and political stagnation, over his seven years in power, Raul Castro has promoted a series of changes in Cuba aimed at bringing the island out of chronic economic crisis without relinquishing its one-party socialist model, in place since 1959, reported DPA news on Friday.

Hailed by analysts and the island’s population for his “pragmatism,” the younger Castro ended many of the reforms restrictions in place for decades. These have been gradually reducing the state monopoly enshrined as economic policy since the 60s.

The elimination of various “absurd prohibitions” — as a senior Cuban leader described them in 2008 — marked the first year of his administration. However, some of the still outstanding measures announced by Raul Castro include wage increases and the elimination of the dual currency (the island has two official currencies: the Cuban peso, with which public sector wages are paid; and the convertible peso, or “hard currency,” based on the value of the US dollar and with an exchange rate of 1:24 against the regular Cuban peso).

The following are some of the key measures and reforms introduced by Raul Castro since 2008. The younger brother of Fidel Castro is expected to be reelected in the coming days by the Cuban parliament to another 5-year term in office.

Sales of computers, DVDs and other home appliances: One of the first measures in the first months of his administration was the authorization of the sale of home appliances such as microwaves, computers, DVD players and electric scooters. Despite the measure not being announced in the official press, many Cubans flooded stores on April 1, 2008 to buy goods previously available only on the black market.

Luxury hotels: On March 31, 2008 hotel managers were surprised at the lifting of the ban that for more than a decade had prevented Cubans from staying in luxury facilities. Since then, it has been common to see Cubans who can afford to stay in tourist hotels at the Varadero beach resort.

Cellphones: The government authorized the sale of mobile phone service starting April 14, 2008. Since then, the public has been able to buy prepaid mobile phone cards. Access to Internet service, however, remains off limits to the vast majority of Cubans.

“Self-employment”: In October 2010 the government expanded authorizations for opening small businesses (in 178 different types of work) in the private sector. Since then, the number of people working in what’s called the “self-employment” sector has reached by almost 400,000, according to official figures from December 2012. This measure led to an explosion of private businesses in Havana, especially in the food service sector.

Transfers of land in usufruct: In July 2008, the mass transfer in usufruct of idle land to individuals was ordered. This reform, aimed at stimulating agricultural production on the island, has been expanded in recent years by other measures such as the recent granting of building permits on land being farmed in usufruct.

The buying and selling of houses and cars: In October 2011, the Raul Castro government announced the liberalization of the auto sales market, allowing Cubans to buy and sell used cars (restrictions remain in place for new cars). A month later, he also liberalized the sale of real estate. Free market sales of real estate have also caused the flourishing of informal realtor activities.

Bank loans: Cuban state-run banks begin making loans to individuals starting in December 2011. Measures to encourage private initiative have also been applied to farmers who work land in usufruct and people performing construction work on their homes. On February 21, the government extended credit facilities to permit the use of personal collateral (such as jewelry) to obtain loans.

Immigration reform: One of the measures most desired by Cubans was announced by President Raul Castro in October 2012. He called for the elimination of exit permit requirements (the “carte blanche”) and letters of invitation for Cubans to be able to travel – restrictions that had been in place for decades. After the measures were implemented on January 14, even the well-known dissident blogger Yoani Sanchez was able to leave the island. In the new law, the government can still require some restrictions on highly-trained professionals, professional-level athletes, and for reasons of “national security” (interpreted by some as being particularly applicable to people in the opposition).