I have just spent eight days in Havana on an immersive educational/cultural study tour. The following notes summarise some of my impressions.
“Cuba is a country without logarithms,” David, a young Cuban technology entrepreneur told me. Certainly the island nation of 11.3 million people defies easy stereotypes.
It is undergoing the “deepest transformation in six decades” according to one economist we met. Starting in 2011, President Raul Castro began to cautiously liberalise the economy, allowing private enterprise in approved sectors of the economy. When the government appeared to try and put a break on the pace of reforms a few months ago (with a ban on further private business licences), there was a popular backlash, and it was announced in mid-November that it will start to issue licences again. Today it is estimated that around 30% of the Cuban workforce are working in the private sector.
Cuba remains a largely planned economy, with all the shortages and bureaucratic interferences associated with such a system. As one economist explained, it can pay a Cuban to fly to Moscow – and back – to bring in (say) toothpaste to sell on the black market. Even in our five-star hotel in central Havana, there were several mornings where no tomatoes were available at breakfast. Perhaps the most visible example of the consequences of the planned economy of the last almost 60 years is the crumbling downtown of old Havana. I had read previously about the beautiful colonial buildings, and heard that beyond the few streets that have been renovated, most of old Havana was in a state of disrepair. I was not, however, prepared either for the size of old Havana – much bigger than I had imagined – nor for the extreme state of dereliction of most buildings. We ate one night in what is reputedly the best restaurant in Havana. To get to the restaurant we had to navigate through three floors of delapidation to reach our destination. According to some reports, three buildings in old Havana collapse every day – more than 1000 each year. Seven out of 10 houses need major repairs, according to official statistics. Some 7% of housing in Havana has formally been declared uninhabitable, according to the BBC. Some old buildings are being lovingly, and very professionally, restored. Without external capital, many more buildings will be lost before old Havana is restored.
Yet despite the Socialist economy, there are signs everywhere of entrepreneurial activity. From the private restaurants and shops (often in people’s homes) through the casas – rooms available in mainly private homes for tourists to stay – private farms, industrial cooperatives and activities beyond agriculture. There is a defined list of “Prescribed economic activities” which any self-employed person must observe. In practice, this seems to have inspired much creative interpretation! The most recent Cuban Party Congress in April 2016 declared, “There is a social role for the private sector in Cuba” – which is regarded as a significant change of party doctrine. Cubans are also now allowed to sell houses and cars and, more recently, to travel abroad if they can get a visa from another country.
Tourism is a rapidly growing sector – and will grow further now that budget airlines like South Western are starting direct flights from the US. Already, there are shortages of hotel rooms and price escalation. Significantly, at the annual Airbnb Open Conference, held this November in Los Angeles, the company announced a slew of new features designed to turn the service into an all-in-one trip-planning platform. The biggest new announcement: users can now book “Experiences” that range from multiday surfing expeditions to afternoon hops around a farmer’s market. Havana is to be one of the first 12 cities in the world where this service operates.
Marc Frank, the veteran Thompson Reuters/Financial Times correspondent in Havana – and author of “Cuban Revelations: Behind the Scenes in Havana (Contemporary Cuba)” (2015) – explained some of the reasons why Cuba is changing. It’s already well into the post-Fidel Castro era. One powerful driver has been a series of changes in US policy. In turn, there has been pressure on the US – from the rest of the Caribbean, Central and South America – to update its policy. In 1994, President Clinton called the first Summit of the Americas, which was held in Miami. All states in the region (except Cuba) were invited and these summits subsequently took place every 3 years. By the time of the sixth Summit in Cartagena, Colombia in 2012, all of the other heads of government criticised US policy towards Cuba. Only the US and Canada voted against the criticism. The US vetoed the communique and the other heads of government declared that there would be no more Western hemisphere summits unless Cuba was invited. Cuba had become an issue of symbolism to Latin America. The region’s backing has, according to Frank, “given Cuba the space to make the changes it needs to make.” As President Obama explained in his last State of the Union address, US policy towards Cuba is changing – at least in part – to “consolidate the US position in the hemisphere.” There are now increasing contacts between Cuban citizens and exiles in the US and elsewhere. As memories of the Revolution fade, the impact of these rapidly growing individual contacts is increasingly significant. There is much more movement backwards and forwards between Cuba and the US.
2018 is likely to be a significant turning point in Cuba. President Raoul Castro has already announced he will retire then. For the first time in 59 years, the country will not be led by a Castro. His likely successor, the current first vice president Miguel Díaz-Canel Bermúdez (and his ministers) will not have the historical legitimacy of being part of the Revolution. There is an intense national debate going on, both inside and outside of Cuba, about its future.
“Had you imagined Cuba was like North Korea?”, a young Cuban journalist asked me. No! I certainly had not; but equally I had not imagined there would be so much access to information, and such a lively digital culture. There is an increasingly independent media with a growing digital presence. “One of the consequences of the US economic boycott,” explained David the technology entrepreneur, “is that Cuba is relaxed about copyright, so we can watch bootlegged copies of the latest American movies and TV programmes very quickly!”
Many Cubans rely on El Paquete Semanal ("The Weekly Package"). This is a one-terabyte collection of digital material distributed on the underground market, via USB sticks, since 2014, as a substitute for broadband internet. The most popular content is TV series, soap operas, music, films, video clips, Spanish language news and computer technology websites, instructional videos and advertisements for local Cuban businesses. Wi-Fi is available at hot-spots such as the lobbies of tourist hotels, for a fee. Google apparently offered to connect the country to the web, but locals suspect it may be Chinese providers who end up connecting the island.
Another revelation for me was the dynamism and vibrancy of the music and arts scene in Havana. A group of us spent our final night in Havana at the FAC (Fábrica de Arte Cubano) – a multi-level cultural space where the Rolling Stones performed a private set recently. It was our second visit to this venue with art on the walls and for sale, bars, dance spaces, concert stages, and food. When some of my companions and I left around 10.30pm, it was just starting to buzz, with the queue to enter stretching round the block. We could have been in Berlin or Miami or Sydney.
Seeing the smartly dressed young Cubans in places like FAC, it is easy to forget that Cuba is a very poor country. The GDP in Cuba was worth 80.66 billion US dollars in 2014 – approximately what it was in 1985. The collapse of the Soviet Union and the ending of its support led to the “Special Period”, when it is estimated that maybe a third of the Cuban economy disappeared. There was a spike in the 2000s when Venezuela began to provide petroleum at deeply discounted market prices, and that peaked just before the 2008-09 financial crisis. The median monthly salary in Cuba, when converted into dollars, is c$20.
I found myself considering the likely options for Cuba in the post-Castro era. On the one hand, I met several young professionals who told me their close friends had left the island and that they planned to follow. On the other hand, there is clearly a national pride in the universal health-care and education systems that the Revolution has provided. According to Prof Jorge I Dominguez at Harvard University, Cuba has “probably the best, most well-trained workforce at the cheapest labour-market price that any international investor could find anywhere in the world." Everyone we met seemed to have several jobs to make ends meet.
Perhaps the regime will develop a sort of hybrid socialism-communism with a dynamic, state-controlled capitalist economy – a Caribbean version of China. Supposedly, the Chinese government strongly advocates that the Cuban government should reform its economy to achieve a faster, wider market opening. Perhaps there will be a peaceful implosion of the current system and a transition to a democratic, multi-party society as in Central and Eastern Europe after 1989. Perhaps Cuba will maintain its welfare state as a kind of sunny Scandinavia. Marc Frank, the veteran Havana hand, suggests that if there are free, multi-party elections in Cuba in the future, a progressive Scandinavian Social Democrat Party would likely trounce both the Communists and a “Miami party” of free market advocates.
Much will depend on the attitude of the Trump Administration. If it sticks to the logic of the campaign commitment to restrict immigration, it will curtail the right – unique to Cubans – of permanent residency (guaranteed if they reach US territory). If more educated, entrepreneurial young Cubans stay in Cuba, will that increase the pressure for a wider opening up? I am already looking forward to a return visit to see at first hand!
My heartfelt thanks and appreciation to the LQ team who organised and led us through an amazing week in Havana.