Cuba in the Worst Business Sense

Haroldo Dilla Alfonso*

Is there any kind of financial logic at work in hoping to sell such expensive cars to people who already have some other means of purchasing a vehicle?

HAVANA TIMES — When looking at Raul Castro’s “reform process”, you get the sense that it is slow and limited. At times, however, one cannot help but feel it is advancing in the direction that Cuba’s political elite wants it to, be it because this elite seeks to preserve stability in the short term (the only term most people can lay their bets on) or because they want to guarantee the prosperity of their families in the long run.

Cuba’s migratory reform, for instance, may be criticized in many ways (as I have done), but we cannot neglect the fact it is ultimately functional from the point of view of well-known political interests, and many of its limitations can be chalked up to the form of government that the Cuban leadership knows and wishes to maintain. That’s what politics is like.

There are moments, however, when everything seems out of place and one can’t find any logic to the situation. The ludicrous, sky-high prices of automobiles are one case in point.

The one laudable reason one could imagine to be behind these prices would be of the environmentalist kind, a strategy aimed at preventing a flood of vehicles on the island, which would be more than the roads in the country – and Havana in particular – could handle.

It seems highly unlikely, though, for Cuban high officials have always looked on automobiles as a source of prestige, as the mark of superiority, we could say. And they have never forsaken their relatives whenever there have been cars to go around.

In any event, I am not among those who believe owning a car is a virtue and believe that the only effective way of reducing car ownership is to create a comfortable and cheap public transportation system (which would simply make cars superfluous). This is precisely what the Cuban leadership has been unable to do in over fifty years, while other cities around the continent have achieved it.

Having eliminated the altruistic motive as a possibility, I am left only with financial motives to look into. I have to ask myself, however, whether there is actually any kind of financial logic at work in hoping to sell such expensive cars to people who already have some other means of purchasing a vehicle, a logic other than ripping off the unwary, I mean.

How many idiotic buyers with no shortage of money to spend, willing to buy a car at such exorbitant prices, could one actually find in Havana? How many rich relatives in Miami would be willing to spend 100 thousand dollars to buy someone a car which, in fact, is worth only one fifth that amount?

This has nothing to do with economies of scale or stable tax and commercial revenues. It doesn’t even suggest the most elementary understanding of how markets work.

Finally, I have to ask myself when the Cuban leadership will understand that some money does not belong to it and that it cannot continue to dispossess people in such vulgar ways and in the name of lofty ideals it tramples every day.

The result of these price policies has been to upset the population in general, even those sectors of the population that do not have – and probably will never have – the money to buy a car.

If we follow the logic of what the Cuban leadership vaguely refers to as a “model” – an authoritarian capitalist system, deployed in the name of socialism – it is reasonable to assume the government must prioritize consumption by the emerging class of the nouveaux riches, quite simply because they are the social foundations of the “reform process” and the social actor that is being called upon to make the pro-market reform process more dynamic.

This includes managers and professionals in the commercial sectors of the economy, the managers of large companies, émigrés who maintain close ties with the government, docile “moneybags”, heirs to family fortunes (including the kids of the Castro Clan) and artists and sportspeople integrated into a society that is increasingly becoming a showbiz mecca.

Offending people’s intelligence is quite clearly not the way to go about things. If they want to restore capitalism, and I think that, in effect, they want to, the first thing they need to do is to seriously think the matter through.

At times, it seems they’re not even willing to do that. Hence, we will continue to see these misguided policies which entail every imaginable inconvenience and the occasional, anxious dupe who buys a Hyundai Sedan – last year’s car, that is to say – at 100 thousand dollars.


26 thoughts on “Cuba in the Worst Business Sense

  • January 21, 2014 at 7:27 am
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    The topic being discussed was whether it was fair to complain of elites and people in power or their families owning paladares when in the society you advocate for Cuba this would be multiplied by 10 along with corruption and inequality. I think you should read the Helms Burton act again. It makes no mention of Soviet military as it was enacted in 1996 and the Soviet Union didn’t exist anymore though it does mention assistance from former Soviet states. Also Section 206 point 3 says that Cuba remains embargoed until “is substantially moving toward a market-oriented economic system based on the right to own and enjoy property”. This isn’t incidental – it has to be implemented even before elections. Finally, I think I contribute positively on a wide range of subjects if I think I have something interesting or original to say.

  • January 20, 2014 at 9:47 am
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    I am discussing the issue. You are the one who consistently veers off topic. There is nothing in the article about the Helms-Burton Act or Donald Rumsfeld (he’s retired now, did you know?). FOr some reason, no mater the subject of the article, you can’t help but intervene with something about the USA. It’s a kind of neo-Plattist attitude you exhibit in which no mention of Cuba can be allowed to pass without you inserting the USA into the conversation.

    The ACT calls for free and fair elections, compensation for seized US property and no Raul or Fidel Castro in the Cuban government. There are a few other incidental conditions, several of which are now irrelevant, like the removal of Soviet military from Cuba, but there is nothing in Helms-Burton which imposes a market economy on Cuba.

    Again, if you truly support the right of the Cuban people for self-determination, then you should be calling for free and fair democratic elections. You should not be defending those who deny the Cuban people their rights and freedoms.

    By the way, it is the Castro regime who vehemently opposes Samuel Farber’s proposals.

  • January 19, 2014 at 7:34 pm
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    Clinton, Busch and Obama have all signed waivers to the Helms-Burton act on lawsuits, the enforcement mechanism. Obama has relaxed travel and remittance rules.

    What holds up ending the embargo is domestic politics. Full repeal requires act of U.S. congress. The embargo has protected the Castro’s by isolating the island from being over run by US tourist and trade. It leaves Cuba to pursue it’s own destiny.

    Obama does not hate Raul Castro. He warmly greeted him at the Mandela funeral.

  • January 18, 2014 at 6:41 am
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    Drama queen, castro apologist and demagogue all for one post!! I disagree – the Helms Burton Act tells Cuba what constitution it needs to adopt, what economic system, who can be the leader, it requires it to allow US corporate media a free run in the country and requires it to disband the CDRs to name a few of the things imposed on the country. If Obama really cares about what Cuban wishes he should publicly offer to remove the embargo immediately if Cuba agrees to hold a referendum on their consitution (with international observers of course) within two or three years.

  • January 17, 2014 at 7:35 pm
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    Time give up the drama queen line, Cuba controls it’s own destiny. Obama is imposing nothing on Cuba.

  • January 17, 2014 at 7:21 pm
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    Correct, I am the one that said it. Cuba destroyed itself chasing the socialist dream of equality. A very good life can be had as long as individual economic freedom is protected, without getting rich. And to that end you are correct that far to few hold too much of the resources. Government can play a vital role to ensure fair play and to protect the most vulnerable. The Cuba reforms are headed in a beneficial direction for the people. Raul has recognized the errors of the revolution and is taking corrective action. Cuba will retain a common health care, common education system and a common defense. The introduction of cottage industry will hardly ruin the communitarian ethos of the Island.

  • January 17, 2014 at 3:32 pm
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    As usual you pick up on my alleged eloquent turn of phrase and avoid discussing the issue. I’m justified in using the term impose as the Helms Burton Act which you are a huge fan, doesn’t allow Cubans to decide. It tells them that they have to adopt a market orientated economy with private property rights. Surely Cubans have the right to decide whether they want to go down that route or not? Why does the US need to impose such a precondition, if they only have Cuban wishes at heart? Granted nobody knows exactly what that means, but ideas like Samuel Faber’s democratic planning would not allowed.

  • January 16, 2014 at 11:41 am
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    I doubt that you know what even 10 Cubans want, let alone the vast majority. Please tell me and other HT readers when the Cuban population rejected “feral capitalism” is a fair and open general election in the last 55 years.

  • January 16, 2014 at 11:13 am
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    The question remains: name one casualty of your so-called war. You know NOTHING of Cuba. You are here to rant about your silly utopic socialist fantasies and the editor of HT is good-hearted enough to let you despite the fact that you are always off-topic and repeat the same low brow mantra.

  • January 16, 2014 at 10:56 am
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    Well Griffin, we may never know since the U.S. might never end its war on the revolution given that overturning such revolutions has been a consistent U.S foreign policy for close to 100 years.
    For those like you and Moses who believe that socialism and communism are intrinsically and fatally flawed , it should be logical for you to vociferously call for an end to the attempt of the U.S to ruin the Cuban socialist-style economy and let it fall on its face .
    The fact that both you and Moses and the GOUSA do not do this is all the proof necessary to understand that there is a genuine fear in you all of a successful socialist economy providing the good alternative it is to the rest of the poor capitalist countries long trapped in immiserating capitalism .
    Have you read the full text on Poder Popular ?
    It is far more democratic an electoral system than anything else that currently exists in the world.
    We will see whether or not a cessation of U.S hostilities will bring about its implementation or whether,as we anarchists believe , the Cuban government has been in place too long and, In the fashion anarchist belief dictates, has become self-preserving, corrupt and totalitarian

  • January 16, 2014 at 10:46 am
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    The Cuban people have rejected feral capitalism as their resistance to the U.S 54 year effort to reimpose it clearly demonstrates .
    You need to realize that what the GOUSA and you want to happen in Cuba is not what the vast majority of the Cuban people want and call for a normalization of relations rather than a further punishment of an entire people for daring to defy the imposition of systems they have rejected.

  • January 16, 2014 at 10:41 am
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    I never said anything about financial equality.
    That is a fiction the right would like to stick on people who work towards financial equity.
    It means getting equal opportunity to making a decent living .
    Envy is also a right wing buzz word that means nothing in light of the capitalist economy where .0001% of the population owns some 60-80 % of everything and enormous swaths of humanity are relegated to lifelong dire poverty .
    It is illogical to have that sort of division of wealth and it is an unsustainable state of affairs as Marie Antoinette discovered a bit too late.
    The wealthy are sitting on trillions of dollars and are not either sharing that wealth through paying their fair share of taxes or creating jobs with that money as “trickle down” advocates would have the gullible believe .
    There are three unemployed people looking for every one job out there and that ratio will balloon in the next ten years .
    You have no workable solution to this but can’t bring yourself to admit it.
    Remember, the operative word is “workable”

  • January 16, 2014 at 10:29 am
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    Moses,
    Were the U.S economic war on Cuba NOT having its desired effect , why then does the U.S continue it ?
    The casualty in this war is the much higher level of poverty and hardships across the Cuban society that always was the intended effect .
    You cannot read HT without coming across the many problems in the economy and which cannot be laid solely at the door of the totalitarian Cuban systems as many would suggest.
    In other posts you have said that the purpose of the economic war on Cuba was to establish democracy and what you laughingly and euphemistically call a free economy because you can’t use the now-dirty word capitalism.
    The purpose of the present U.S. war on the people of Cuba is exactly the same as the purpose of the U.S invasion of the Soviet Union in 1918 : to prevent the rise of a democratic economy that would endanger the wealth of the few .
    This has remained a consistent policy for close to 100 years now while the establishment of democracies is something only found in your hallucinatory version of U.S foreign policy history .

  • January 16, 2014 at 9:54 am
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    to the writer: who said they want to restore capitalism. to think logic about cuba is so illogical. it is no surprise, the policy always been like that. previously cubans can not enter the hotels, wearing jeans, listening beatles, got jaild holding usd etc etc. do you read?

  • January 15, 2014 at 8:39 pm
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    Financial equality diminishes a society. Envy of they neighbor’s holding does not increase one’s wealth. Each should do the best they can and enjoy life as such. A city with wealthy creates more opportunity.

  • January 15, 2014 at 4:15 pm
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    More regime corruption, enabled by Raul’s economic reforms:

    “The Cuban Military’s upper echelons are enriched with multiple businesses right in the faces of Cuban citizens. In the block between B, C, 29 and Zapata streets, Army Corps General Abelardo Colome Ibarra, popularly known as “Furry,” exhibits part of his family patrimony which is booming.

    The minister gave his son José Raúl Colome a beautiful two-story house here to use — as do other residents of that area — to rent to foreigners. José Raúl also owns the STAR BIEN restaurant, one of the most patronized by Havana’s elite.

    Located at No. 205 29th between B and C, this restaurant was recently renovated to become a jewel of the capital’s culinary establishments, competing in price and quality with the best restaurants in the hotel sector of the capital.”

    http://translatingcuba.com/colome-ibarra-alias-furry-the-enriched-general-leon-padron-azcuy/

  • January 15, 2014 at 12:38 pm
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    Your belief that the Castro regime is waiting for the end of the embargo before they will grant freedom and democracy to the Cuban people is laughable and demonstrably wrong. Fidel Castro never intended to hold free elections. Democracy in Cuba has never been the intention of the Castro regime.

  • January 15, 2014 at 12:24 pm
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    Your reference to Donald Rumsfeld is a pathetic attempt at demagoguery. I recall the words of Cuban taxi driver who pointed out the Capitolio to me and said, “That used to be the home of our parliament. But since the triumph of the revolution, we don’t need it anymore. Now we have a parliament of One. He sits in his palace and decides, Si! or No! How lucky we Cubans are!”

    I do not wish to impose anything on Cuba. I am calling for the Cuban people to have the right to chose for themselves what sort of government they want.

    Why are you against freedom, democracy and respect for human rights in Cuba?

  • January 15, 2014 at 9:20 am
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    You continue to ramble on about wars and devastation. If you can please name one product either not available to Cubans because of the economic embargo or whose cost is prohibitively high due expressly to the embargo. I caution you that food and medicine are exempt. I would also ask that you remember that Chinese, Mexican, Brazilian and Spanish companies have largely ignored the US embargo and have never failed to export products to Cuba. Please detail even one casualty of your so-called “war”.

  • January 15, 2014 at 9:09 am
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    The U.S economic war on the people of Cuba exists because it is effective in creating economic deprivation across the entire Cuban population.
    You would have us believe that democratic economies ( socialism/communism) are intrinsically flawed and cannot work yet insist on the necessity of continuing the U.S. economic war.
    Were you not so obviously full of shit , you would call for an end to the devastating economic war and let the inherent failings of socialism do their thing and prove your contention.
    I’ll repeat the analogy of a neighbor vandalizing the house next door and then running around the neighborhood and complaining about the blighted condition next door.
    Of course the reason you want the economic war to continue is to restore feral capitalism and for no other reason .
    That’s hypocrisy writ large.

  • January 15, 2014 at 8:41 am
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    Why do Castro apologists choose such extreme examples as the only alternative to the status quo. Why don’t you give the Cuban people more credit? I believe Cubans have shown themselves to be astute businessmen and government leaders when given the freedom to do so outside of Cuba. Besides, just about any type of new structure would be better than what Cuba has now. A few Starbuck’s and McDonald’s wouldn’t be so bad, would it?

  • January 15, 2014 at 7:52 am
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    But surely this is the sort of society you are so eager to impose on Cuba. Just multiply it by ten, have all the paladares put out of business by Starbucks and McDonalds and a grinning Donald Runsfeld holding the keys of the Capitolio.

  • January 14, 2014 at 2:41 pm
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    I wholeheartedly agree with you on this.
    I think the Cuban people deserve a shot at a democratic society which is denied by their government but mainly by the actions of the GOUSA .
    The U.S has to call off its hostilities and allow the Cuban government the opportunity to fully implement the magnificently-crafted and autochthonous Poder Popular IF that government has not already been fatally poisoned by a totalitarian mindset brought on by the corrupting necessity of resisting U.S hegemony and the U.S intention to overthrow Cuba’s revolution.
    I am 100% behind development of a democratic Cuba BUT that also includes a democratic economy absent which you cannot have a democratic society at all. .

  • January 14, 2014 at 2:38 pm
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    Conservative think tank, Heritage Foundation,(http://www.heritage.org/), just published a new study which ranks all countries by economic freedom. Cuba comes in dead last. Despite the Castros recent tepid reforms, economic progress in Cuba is unnecessarily hamstrung by the socialist policies of the regime. In addition to the outrageous car prices recently in the news, Cubans have long had to endure equally outrageous prices for computers, flat screen TVs, cellular phones and other basic electronic goods. Most of these products come directly from Chinese manufacturers who are unaffected by the US embargo. Indeed, certain Chinese televisions are even assembled in Cuba. The Castros constitution imposes a 240% import tax on most electronics. Some products are strapped with taxes as high as 400%. These policies shortsightedly handicap small businesses and encourage theft and corruption. In summary, while pricing an otherwise $20,000 car for $100,000 may seem outrageous, is it any more ridiculous than pricing a $300 flat screen TV for $1,500?

  • January 14, 2014 at 1:37 pm
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    The case of Cuban families having relatives in the US sending remittances is responsible for some of the rising inequality, but not all of it. Tourism, and the ability of some Cubans to earn money from tips in hard currencies is another cause. The largest cause of rising inequality in Cuba is the opportunity for the politically powerful to take advantage of the recent economic reforms. Many of the new upscale paladars are owned by the regime elite or their relatives.

    Penultimos Dias has revealed that “Star Bien,” one of those famed (and supposedly “private”) Havana “paladares” featured in travel magazines, is owned by the son of Cuba’s Minister of the Interior, the infamous General Abelardo Colome Ibarra.

    http://www.penultimosdias.com/2014/01/12/76808/

    Let’s put aside our tiresome arguments for once. I think we can both agree this situation is neither democratic nor any help to the Cuban people.

  • January 14, 2014 at 11:00 am
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    I agree with your post .
    The only possible good aspect of the ridiculous ( for the AVERAGE Cuban) prices would be that the inequities in wealth that are arising more recently in Cuban society because some people have rich relatives in the States who make remittances while most do not, can be mitigated in a small way by selling these cars at the very high prices to the nouveau riche in Cuba and using that extra money to buy new buses for the rest of the society.
    While this is the one possible benefit, the overall effect of this apparently stupid move is far too negative .
    I have yet to see the policy explained by the Leninist leadership to anyone’s satisfaction .
    This would not, could not happen in a socialist Cuba.

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