Pandemic May Push Cuba To Ease Restrictions On Tightly Controlled Economy

Jul 30, 2020
Originally published on July 30, 2020 9:13 am
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The communist leaders of Cuba have been promising for years to ease restrictions on their tightly controlled economy. Now the pandemic may be forcing them to actually do that. NPR's Carrie Kahn reports.

CARRIE KAHN, BYLINE: When you hear dollar store, you probably think discounts, right? Not in Cuba. Last week, the government opened dozens of new stores for shoppers with hard currency, euros and dollars. But they're anything but cheap as video blogger Frank Camallerys showed off after sneaking his camera phone into one of the stores in Havana.

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FRANK CAMALLERYS: (Non-English language spoken).

KAHN: He and a friend strolled the stocked aisles checking out prices.

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CAMALLERYS: (Non-English language spoken).

UNIDENTIFIED PERSON: (Non-English language spoken).

KAHN: Thirty bucks for a block of Gouda cheese, $11 a pound for a beefsteak - way beyond the reach of most Cubans. And it's not just the prices that make the stores off limits, it's the hassle of getting into one.

ENRIQUE: (Non-English language spoken).

KAHN: "I'd have to get up before dawn, grab a bus and then wait in a line that, every day, seems to be growing longer," says Enrique (ph). He works for a state agency and didn't want to give his full name for fear of reprisals. He says last time he looked, the lines were at least several hours long. Cuba's government is hoping residents will endure the wait and give up their stashes of dollars mostly sent from family abroad. The government's even dropped a 10% tax on all dollar transactions.

TED HENKEN: They have a liquidity crisis.

KAHN: Ted Henken of Baruch College in New York is an expert on the Cuban economy.

HENKEN: This is a quick way that they can transfer the money that's in the pockets of Cuban citizens and/or their relatives abroad to fill up its empty coffers so that it can buy things abroad.

KAHN: Like food and fuel, which the government can't do with the Cuban peso that is worthless on international markets. The island's economy has lost subsidies from Venezuela, suffered increased sanctions from the Trump administration and now is reeling from the collapse of tourism because of the coronavirus. So along with opening the hard currency stores, the regime now says it will loosen restrictions on Cuba's growing private sector.

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PRESIDENT MIGUEL DIAZ-CANEL: (Non-English language spoken).

KAHN: President Miguel Diaz-Canel in a speech broadcast on state TV this month said the country can't keep doing the same thing because the current economic model isn't producing results that Cuba needs. So now the government says it will give private businesses more legal protections, allow them to import and export goods and give them access to cheaper wholesale markets. Richard Feinberg, an economist at the University of California at San Diego, says the reforms are definitely a move in the right direction.

RICHARD FEINBERG: However, there are reasons for some skepticism. Many of these measures have been announced before, several times. So the proof will be in the speed and efficiency of implementation of these measures.

KAHN: Feinberg says these are all things communist leader Raul Castro proposed a decade ago but were stymied by hardliners in the party. He says maybe Castro's handpicked president will have better luck.

FEINBERG: Perhaps now - perhaps - of course, there's no transparency. It's hard to know. But perhaps now the reformers have gained the upper hand with the support of President Diaz-Canel.

KAHN: Liber Puente (ph) is optimistic about the government's willingness to make the moves, especially given the worldwide economic slump. He owns a computer workshop in Havana. He has nearly no dollars left after four months of the coronavirus lockdown. So he can't shop in one of the new dollar stores. But he says he's holding on.

LIBER PUENTE: To be alive, breathing and keep operating is success in Cuba.

KAHN: He's hopeful he'll be able to fulfill his dream and grow his computer business. Carrie Kahn, NPR News.

(SOUNDBITE OF ROBERTO FONSECA'S "ASI ES LA VIDA") Transcript provided by NPR, Copyright NPR.