Cuba Reforms Economy in Effort to Preserve Political System

Cuba Reforms Economy in Effort to Preserve Political System
April 18, 2012
Jerome Socolovsky

Ovidio Ulloa swings open his iron gate and lets in a group of women who
had seen the handwritten "Se Vende," or For Sale, sign in the window of
his home. He gives them a tour of the dining room, the brightly lit
patio and the kitchen, pointing out selling points including high
ceilings and colorfully patterned hydraulic floor tiles.

The women appear unimpressed, but that does not seem to bother Ulloa. He
already has several offers for the home in Havana. And he is eager to
move out after living there for 20 years.

"Because this place is too big for me," he said. "I want to downsize,
look for a smaller place for me and my son, and have money left over to
live on."

That is allowed under a law passed last year that permits the sale of
real estate in Cuba. Already, there's a bustling real estate market,
with homes being sold at informal street exchanges as well as on
websites such as cubisima.com and revolico.com.

Recently, President Barack Obama faced criticism from other leaders at
the Summit of the Americas in Colombia for insisting on democratic
reforms in Cuba before the United States will lift its 50-year-old
economic embargo against the island nation. But Cuba is pushing through
economic reforms in the hope of preserving the political status quo.

"In Cuba, we are updating the Cuban economic model to make our socialism
sustainable," the official in charge of privatization, Vice President of
the Council of State Manuel Murillo, told reporters covering Pope
Benedict XVI's recent visit.

Billboards in Havana and Santiago show smiling mothers and victorious
athletes clutching the national flag and proclaiming: "THE CHANGES IN
CUBA ARE FOR MORE SOCIALISM."

Another home for sale is a palatial neo-classical structure. At
$90,000, it would be a bargain in many other markets, but it needs work.
Crumbling Corinthian columns are buttressed by wooden struts. Plaster
has crumbled from the ceiling to reveal rusted steel reinforcing bars.

Owner Francisco Prats says President Raul Castro's reforms are
necessary. "The world is developing and this society is part of that
world and also has to develop," he said.

Across Havana, street after street of dilapidated architecture harks
back to a more prosperous era. So do the classic automobiles - 1950s
Studebakers, Cadillac Fleetwoods and de Villes - that now can also be
sold by individuals.

Since taking over from his brother Fidel, Raul Castro has recognized the
need for change, says Philip Peters of the Lexington Institute research
group near Washington, D.C. "It is an economy that does not produce
enough and the government has been very blunt about saying that," he said.

After the dissolution of the Soviet Union, Cuba suffered severe
shortages and economic crisis. But the farm sector was restructured in
the 1990s and markets now teem with the organically grown produce. On
the streets, the reforms of the last year-and-a-half have increased the
number of small entrepreneurs selling ice cream, eggs and crafts.

La Casa is one of a growing number of home restaurants known as
paladares that have been around since the 1990s.

Co-owner Silvia Cardoso reveals her secret of success."Lots of work and
trying to obtain quality products even if it means less earnings," she said.

Although largely for foreigners, the paladares increasingly cater to
local clientele. Cardoso's husband, Manuel Robaina, worked in
restaurants before Cuba's communist revolution and says his business is
not about profits. "I have never looked at it like a capitalist because
I have bad memories of that," he said.

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