A private affair

Economic reform in Cuba



A private affair

Hesitantly, wholesale markets are becoming more established

Jun 29th 2013 | HAVANA



FROM the Bay of Pigs to Che Guevara's mausoleum, there is plenty for

revolutionary tourists to see in Cuba. For economic junkies there should

soon be a new item on the itinerary: Cuba's first privately run

wholesale market in half a century.



At present it is a nondescript warehouse of green-painted concrete near

Havana's airport. It is unmarked, and so few locals know about it that

your correspondent drove past several times before finding it. But state

media say it will open on July 1st. It is a source of excitement for

those who will occupy it, because it will replace the muddy scrubland

where drivers of hundreds of old trucks have been gathering on the

outskirts of Havana to sell fruit and vegetables in bulk, always

concerned that at any moment their makeshift trading post could be shut

down.



They see the new premises as a further step on Cuba's hesitant path

towards freeing up wholesale markets and loosening the state's control

of food distribution. A farmer, sitting under a banana tree next to his

cargo, proudly displays a handful of permits that he has recently paid

for, covering everything from selling crops to owning and driving a

delivery truck. He says that in the past, when the police caught him

trying to drive produce to Havana without a licence, they would seize it

and give it to a nearby hospital. "They can't stop me now," he says.



However, his ability to sell a broader selection of crops remains

stymied by a shortage of seeds and fertilisers, supplies of which will

not be available in the new market. Such inputs are still controlled by

the state, he says, stroking his chin in a gesture that is meant to

resemble Fidel Castro's beard. The only way for a farmer to acquire more

than he is allotted is via the black market.



The benefits of burgeoning wholesale trade are evident in a stroll

through the back streets of Old Havana. Handcarts owned by private

traders overflow with ripe mangos, avocados and limes, whereas

government outlets nearby contain a few tired-looking pineapples.



Although wholesale produce is becoming more widely available, the

government is only gingerly broadening wholesale trade to other

supplies. Restaurant owners, for example, want to be able to buy flour,

cooking oil, beer and soft drinks in bulk. Only a few shops provide

these. The same is true of construction materials. "We don't have

anything like a Costco, where you can buy 20 crates of beer," says Omar

Everleny, a Cuban economist.



Partly to put such concerns to rest, the government announced in early

June that it would gradually permit a variety of wholesale goods to be

sold to state-run and privately run businesses, apparently building on

an experiment started three months earlier on Isla de la Juventud, an

island in western Cuba where Fidel Castro was imprisoned before his

revolutionary victory in 1959. A pilot project to sell equipment to

private farmers is also said to be taking place on the island. More than

helping businessmen, the government's priority in promoting such changes

appears to be to raise output. So far, however, the reforms have been

too half-hearted to achieve that.



Source: "Economic reform in Cuba: A private affair | The Economist" -

http://www.economist.com/news/americas/21580170-hesitantly-wholesale-markets-are-becoming-more-established-private-affair