Mixed results for Cuba’s free-market experiment

Grant Fuller Apr 15, 2011

Mixed results for Cuba’s free-market experiment

Grant Fuller Apr 15, 2011

Kai Ryssdal: There is going to be a rare meeting in Havana this weekend. The first Cuban Communist Party Congress to be held in 14 years. There will be special mention of the failed Bay of Pigs Invasion, which was 50 years ago this Sunday. But a lot of the discussion is going to be about Cuba’s economic reforms. Last year President Raul Castro created a private sector made up of 178 different kinds of jobs — everything from locksmiths to gardeners to tour guides. That’s a big deal in a country where 95 percent of the population works for the government.

But Grant Fuller reports from Cuba it’s an awkward marriage of socialism and capitalism.

Grant Fuller: Twenty-one-year-old Salvador Valle leans on a chain-link fence in the small beachside town of Guanabo. He’s one of many Cubans in a nervous trial period right now — trying to make the best of his country’s free-market experiment.

Salvador Valle: I’m a tire mechanic and repairman. You know, that’s the job I chose to get a license for because it’s a necessity here. If you get stranded with a flat tire on your car, bike, tractor, or whatever, you’re gonna have to get it fixed.

And fixed often. Most of Cuba’s cars are classic American models from the 1950s, and they take a beating on potholed roads. So Valle’s skill is in high demand. Charging only a dime to fix a flat, he’s not raking it in. In fact, he struggles to make a dollar a day. But he says for young people like him, self-employment is a chance to break free from the shackles of government wages. After all, the monthly salary for public employees is just $10-20..

Valle: I have to buy disposable diapers for my son that cost $12. If I worked for the state, I’d have to work for a full month to buy one package. And if I use that money for diapers, then how do I eat? How do I buy clothes for my wife and I?

At a weekend street market in Havana, about a dozen vendors are trying out this new system of free enterprise. Next to state-run food stalls that were always there, private citizens line the sidewalk with card tables. They sell everything — from plants and household items to coffee and jewelry.

Lazaro Delgado has set up a new sidewalk flower stand. He agreed to an interview, but only behind closed doors in his apartment. He says he makes $2 a day. That’s three times the salary of the average Cuban.

Lazaro Delgado: This is the best thing the Cuban government has done to help us. They’re giving everyone the chance to work, helping us all start doing something. The state is giving people a chance to make it.

But for other Cubans, President Raul Castro’s grand plan seems to have backfired.

Man: I have a license to be a dance instructor, but I think I’m gonna go to the office and give it back tomorrow because I cannot afford it.

This man in Havana used to work for a government funeral home. But he injured himself and could no longer lift the heavy caskets. So when he heard about the reform, he snapped up permission to open a dance school. Problem is, he has no money for the startup capital he needs: a stereo system and a studio space. And taxes are high — as much as 40 percent of his income.

Man: I felt really proud when I got the license. But I talked to my family and we decided it is best just to give up. If they lower the taxes, though, I’ll probably go back and get the license again.

The government recently announced that Cuban banks will provide small loans to private businesses, helping them get off the ground. Cuban state media heavily promotes the change, like in this radio news spot.

Radio news report: This measure includes the approval of loans.

But skeptics wonder if the banks can actually follow through.

The hope for new business owners is that Castro will indeed lower self-employment taxes at this weekend’s Communist Party Congress.

In Havana, I’m Grant Fuller for Marketplace.

Grant Fuller’s reporting trip to Cuba was sponsored by The Common Language Project.

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