Cuba: Trips, Cars, Wage Increases & Unsettled Accounts

Fernando Ravsberg*

The new law authorizing the purchase and sale of cars in Cuba will create a fund to support public transportation and bicycles for the general population.
The new law authorizing the purchase and sale of cars in Cuba will create a fund to support public transportation and bicycles for the general population.

HAVANA TIMES — Cubans will remember 2013 as the year that began and ended with the elimination of two long-standing and archaic restrictions: the restriction on travel abroad and on the sale and purchase of automobiles, maintained for fifty years in spite of the fact they were both unpopular and unnecessary.

The new travel legislation didn’t prompt a massive exodus: athletes didn’t leave the country en masse and no “large-scale brain-drain” ensued. Some 250,000 Cubans traveled abroad and the majority has returned. The island wasn’t drained of people, even though the United States granted nearly twice as many visas following the lifting of travel restrictions.

Such restrictions could have had some justification in the 60s, when the country was losing all its doctors and 14 thousand children were taken out of the island without their parents. Reading migration figures for 2013, however, I realize it was one of the more absurd prohibitions in the country.

It is not my intention to criticize the government no matter what it does or doesn’t do, but to point out that some of the restrictions that continue to torment society and cause discontent among people could also be unjustified and superfluous.

Cuba on Wheels

The decision to authorize the purchase and sale of automobiles was another bit of good news. Like the travel legislation, this eliminates a long and complicated bureaucratic process which encouraged corruption among public officials and made the life of the average Cuban more difficult.

Cuban doctors and health professionals will see a 100 % salary increase this year.
Cuban doctors and health professionals will see a 100 % salary increase this year.

Now, many are asking themselves where the vehicles needed to satisfy the demand arising from decades of a general, automobile shortage will come from. Reportedly, a large Chinese manufacturer is to set up an automobile assembly plant in Cuba (1).

The most progressive aspect of this law is the government’s announced promise of using the profits arising from the sale of cars to create a fund to bolster public transportation and the sale of affordable bicycles in the country.

Cuba, a poor country devoid of oil reserves, cannot aspire to furnish all of its inhabitants with cars. It can, however, create a public transportation system that, in the words of intellectual Aurelio Alonso, will reduce the gap “between the car-owning minority and the bus-dependent majority.”

Both the average Cuban and the environment cannot but welcome such initiatives. The truly novel thing, however, would be to make that fund public, so as to avoid the funneling of funds towards “other priorities,” to ensure everyone knows how much is collected and the buses that will be purchased with that money.

This would help make those who pay more for a car than they would in Europe feel less conned and those who have no choice but to catch a bus more willingly accept the reality that, even though everyone is equal in theory, some will be more equal than others in practice.

Cuba To Raise Salaries

Curiously, the best news of the year wasn’t divulged by Cuba’s official media. Havana Times was the alternative news source which announced that the salaries of Cuban medical doctors are to be doubled and that the incomes of health professionals working abroad will also be increased.

No other sector in the country is more deserving of a wage increase than Cuba’s health professionals, whose work in other countries secures most of the island’s income and pays its oil bill.

Pensioners, many of whom must continue to work in order to survive, make up one of the most vulnerable sectors in the country.
Pensioners, many of whom must continue to work in order to survive, make up one of the most vulnerable sectors in the country.

The measure appears to fulfill the government’s promise that it would raise salaries as productivity began to increase in the country. This year, a 2.3 % growth was reported but the wage increase was only of 1.7 %. This deficit will have to be addressed in 2014 (2).

Part of this remaining difference could also be used to raise pensions, in keeping with the principle that the country’s economic reforms will not leave any citizen behind.

If it turned out there wasn’t enough money to do this, the government could implement the proposal advanced by Cuban economist Juan Triana, who insists that to “give our pensioners a better life” we must discontinue subsidies for “those who do not require such aid.” (3)

The government, slow in adapting its social policies to the economic liberalization measures, continues to sell subsidized food products to everyone instead of devoting available resources to those made most vulnerable by the market.

Triana is not the only economist who believes the State must stop paying for the food of the rich and middle class. Though it sounds contradictory, the ration booklet is today a symbol of social injustice that is far more insulting than the purchase of an automobile or a trip abroad could be.
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Referred to articles in Spanish:

(1)   http://cartasdesdecuba.com/china-ensamblara-autos-en-cuba/

(2)   http://www.ahora.cu/secciones/opinion/11257-la-politica-economica-en-cuba-balance-del-ano-que-concluye

(3)   www.oncubamagazine.com/economia-negocios/una-pelea-cubana-contra-el-subdesarrollo-entrevista-a-juan-triana/

(*) Visita el blog de Fernando Ravsberg (in Spanish)


2 thoughts on “Cuba: Trips, Cars, Wage Increases & Unsettled Accounts

  • If the world would allow Cuba to run its own GOV things would transition faster

  • Ravsberg’s recommendations, albeit reasonable, are akin to rearranging the deck chairs on the Titanic. Unless the ship of state captained by the Castro oligarchy can figure out a way to increase production, and by that increase exports, Cuba will continue to need to import the overwhelming majority of food and energy resources it consumes to survive creating greater budget deficits. Castro sycophants will no doubt chime in with their time-worn whining about the US embargo but the reality is that even if there were no restrictions, Cuba has nothing to sell to the US. (OK, maybe cigars) Cuba can not sell enough third world medical services to dig itself out of the ever-deepening financial hole created by the Castro dictatorship. Building Chinese cars puts more money in Chinese pockets, especially at the slave wages Cubans earn. In order to create Cuban wealth, Cubans must own the means of production. The reforms of 2013 address the existing unsatisfied demand for foreign goods. In order to grow the economy, Cubans must expand the supply of Cuban goods. So far, there are no real reforms which address this need. Socialism is dead. Viva Capitalism!

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