As the Castro era ends, Cubans grumble at pace of reforms | Business| Economy and finance news from a German perspective | DW | 20.04.2018
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As the Castro era ends, Cubans grumble at pace of reforms

For the first time since the 1959 revolution, Cuba's new head of state will not answer to the name Castro. Miguel Diaz-Canel takes on a country facing many challenges. Andreas Knobloch reports from Havana.

Juan Carlos climbs the narrow stairs of an old apartment block in Centro Habana, a rundown district of the Cuban capital, and enters a tastefully furnished apartment.

For a while now, Juan Carlos — who worked for many years as a professor at the local university — has been renting two of his bedrooms to tourists.

"Even if fewer Americans are coming, things are going quite well," he says happily. "My wife and I used to rent a room under the table, but since Raul [Castro] permitted the opening of private businesses, we have legalized our leased rooms. We pay taxes, but there's still enough left."

Read more: New leader in Cuba: What's in store after the Castros?

Juan Carlos belongs to the new Cuban middle class, one of the many beneficiaries of Raul Castro's reform policy. "Cuba has completely changed in the last ten years," he says.

When Raul took over from his brother Fidel Castro as president in 2008, he set in motion a gradual reform process. The Cuban economy was opened up to foreign capital, the public sector was reduced and more private initiatives were encouraged.

In addition, the government allowed the purchase and sale of cars and real estate, expanded Internet access, and lifted travel restrictions.

Some see the benefits

"Things have improved," says Hector, who sells newspapers at a bus stop in Havana's Vedado district. "There are more opportunities, more options." Hector, who's in his mid-forties, says the transformation couldn't have come sooner.

Read more: Cuba: Mystery illness strikes down American tourists, embassy staff

Cuba: Raul Castro and Miguel Díaz-Canel (picture-alliance/Photoshot/Xinhua/Liu Bin)

Handing over: Raul Castro (right) and his successor Miguel Diaz-Canel

"But we'll have to wait and see how far this reform goes and what the Cuban people get out of it."

A key 2011 congress of the Communist Party of Cuba (PCC) provided a framework for Castro's social and economic makeover, which the government hailed as "updating the socialist model."

Singer-songwriter Jorge Garcia agrees that a lot has changed: "I just don't know if it's for the better," he tells me.

Of course Cubans can now travel or start their own small businesses. "The difference is that the social inequalities that have always existed have become much more visible," he says.

"Everything has become more expensive, but Cubans continue to earn the same. Today, people are coming from Miami to open bars and shops."

New army of self-employed

Since they were allowed to become mini-entrepreneurs, more than half a million Cubans have registered as self-employed — mostly in basic services and trades.

Sergio Machado is one of those who have benefitted from the reforms: "I used to work as a butcher for the state, making the equivalent of $10 (€8) a month. That wasn't enough to live for a day."

The 56-year-old says: "Now I have a permit to work as a carpenter. I don't make much, but it's enough to live on. Personally, I'm much better off, and I'm not the only one."

For Ani Esther Pacheco, however, not much has changed. The 28-year-old is currently studying to be a lawyer. "I'm not in the 'up-and-coming class' that opens shops and bars. I have worked for the state, and yes, wages have risen a little, but not enough. That needs to change."

Read more: EU eyes a fresh start in Cuba relations

A wifi hotspot in Havana (Imago/Zuma Pres)

The Internet is now available in Cuba - but wifi hotspots are few and far between

In order to attract foreign investors and new technologies, in 2013, Cuba established a special economic zone around the port of Mariel, 45 kilometers (28 miles) west of Havana. A new investment law was passed that allows foreign companies to invest in almost all areas of the Cuban economy. Even so, economic development is stagnating.

Reforms have stalled

Tensions with Cuba's most important ally and main oil supplier Venezuela, and frosty relations with Washington are partly to blame.

The rapprochement between Cuba and the US — its former arch-enemy —  which began at the end of 2014, was probably Raul Castro's greatest achievement. Under President Donald Trump, the US has returned to the Cold War rhetoric of the 1960s and threatened confrontation.

"The new US administration has complicated the situation," says Pacheco. Obama's reconciliation policy had raised hopes in Cuba, especially among the younger generation. Trump's recent U-turn "closes us off so many opportunities … and when the main world power closes the door on you, it threatens the economic situation immensely."

Read more: US tightens terms for Americans traveling to Cuba

The Cuban embassy in Washington (picture-alliance/AP Photo/A. Harnik)

Under Obama, Cubans gained new hope. But that quickly disappeared again under Trump

Washington's new hostility has led to a "fasten your seat belts" reaction by Cuba's government. Further moves to reform the economy were put on the back burner, and the private sector's advance has been slowed down.

No improvement for many

More than seven years after the "updating the socialist model" project began, large sections of the population have hardly noticed any improvement in their living standards. Amid high prices for food and consumer goods, they continue to struggle on low incomes from government jobs. Young, well educated Cubans either leave the country or dream of emigration.

A young man selling fruit and vegetables at a weekly market in Vedado refuses to keep his frustration to himself. "People want change," he says, refusing to give his name. "But nothing will change here. If I get the chance, I'm out of here."

Read more: Cuba's new president Diaz-Canel vows Communism will go on

Raul Castro's 10-year scorecard is mixed. Warmer ties with the US, along with his economic reforms have given Cuba a new momentum. But only a fraction of the plans agreed in 2011 have seen the light of day.

The Cuban economy must grow in order to improve people's living standards, says sociologist Juan Valdes. "Basic consumption, health and education are taken care of, but the public's other demands and expectations cannot be met until the economy improves.”

Machado, meanwhile, is confident that Cuba has new, younger, leaders taking the helm who think differently.

"I don't really care who takes charge, so long as the money keeps rolling in."

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