Santiago de Cuba, where Castro's revolution began

Fidel Castro announced the success of the revolution from the main balcony of this city hall in Santiago de Cuba

We talked to people who looked at Cuba and Cuban/U.S. relations from an American point of view as well as with Cubans who gave us their perspective (my last blog).  I have summarized these conversations below.

There are 4 transitions underway in Cuba:
1.  The political transition that will happen when Raul Castro steps down on Feb. 24, 2018.  While he is stepping down as president, he is also head of the Communist Party, the military and the Council of Ministers.  He hasn't said what he'll do about these other jobs.  So, Cuba is experiencing its own political turmoil as various candidates juggle for position to succeed Raul Castro.

1.    
  

symbol of the outgoing generation of leaders

child in shop door--Cuba's future leader

22.     The economic transition—the government wants a human-based social system in which the government provides health care, education and basic food supplies.  But, it’s hard to maintain full social programs when you have an aging population.  Twenty percent of Cuba’s population is over 60, so the private sector is becoming ever more essential to help provide for them.  While there are over 200 economic areas that are open to private business (taxis, restaurants, bed and breakfasts), they do not play a big role in the economy.

3.     

new economy--selling plantains on street

 The generational transition--from the aged Castros to a younger group of potential leaders, resulting from Fidel Castro’s death and the looming handover of power from Raul Castro to a new, and younger, president.  The younger generation of Cubans wants new economic opportunities.  They are less committed to the revolution and more interested in providing for the well-being of their families and themselves.

bodega (ration store) with little on shelves--old economy

          4. Then, of course, there is the technical transition where even Cuba is slowly moving into the internet age.  While it is still very difficult to connect to the internet—slow, very limited connectivity—there are now 300 areas in the country, including parks and plazas, where people can get access to the internet.  And they are full of people on their smart phones, on the internet.  Prices for internet access are still high for the average Cuban, but are coming down.

primary school classroom--triumph of the revolution

Cuba’s dilemma is how to maintain the gains of the revolution while moving into the future it’s younger citizens demand.

Since Pres. Obama opened the door to more diplomacy and exchange opportunities, the number of people-to-people delegations has grown dramatically, with an increase in American tourism of 84% from 2015 to the end of 2016.  Last year, 600,000 Americans visited Cuba.  This is a huge benefit for the Cuban economy and has generated thousands of private businesses, ranging from bed and breakfast lodging to guiding to private transportation and restaurants.

woman scavenging--still a long way to go

The U.S. and many Cuban Americans want to support the private sector in Cuba.  Ultimately, Cuba needs  a stronger currency and greater transparency if it wants to attract foreign investors.  In communications, direct mail service was implemented in 2014.  Before, mail had to be routed through some other country, such as Mexico or Panama, often taking 6 months to reach the U.S.  Even the cargo carriers are exploring their opportunities in Cuba.  And 4 major U.S. phone carriers now have roaming agreements in place with Cubatel, making calls from Cuba to the U.S. on our mobile phones quite a bit cheaper than even a year ago.

Since the partial opening in late 2014, the U.S. and Cuba have signed 22 memorandums of understanding, each of which had to be carefully negotiated by the 2 parties, and has sent over 50 high level government officials, including, of course, Pres. Obama to Cuba.  More American businesspeople are coming to Cuba and more Cubans, to the U.S.

woodblock print by artist with 10 year U.S.visa

Remittances total about $3.4 billion a year from the U.S. to Cuba and are the third biggest source of foreign exchange.  The government is worried about the growing discrepancy between rich and poor, particularly since this gap tends to divide the country by race and geography.  They can’t tax remittances, but they do tax the importation of goods and the profits of private businesses.  The private sector is pretty cautious and tends to stay on the right side of the law, keeping good records of their profits.

The president can’t just eliminate the U.S. embargo; only Congress can lift the sanctions.  Pres. Obama’s executive orders regarding Cuba resulted in a lot more activity between the 2 countries, such as the agreement that permitted scheduled flights from a number of U.S. cities to several Cuban cities, a huge improvement over the charter flights that used to service Cuba.

Big global companies are looking into Cuba—and Cuba favors the larger companies.  The government doesn’t really want start-ups or smaller companies without the resources, staying power and patience of the multinationals.  The medium and smaller companies are having a hard time getting opportunities in Cuba.  Most decisions go to the top of the government and tend to sit there. For the smaller companies, getting meetings with officials is very difficult.  They can’t set up relationships easily, often have trouble getting a visa and get slow or no responses to their inquiries.  So many of them just give up.

outside art market on the street

American multinationals and other potential investors have been telling the government that interest in Cuba won’t last if it continues to be so difficult to do business there.  But, the government doesn’t believe it.  Now their opportunities for foreign investment are smaller than before.  The major industries that are opening to foreign investment are airlines, telecommunications, cargo carriers, manufacturing, agriculture and the hospitality industry.

clinic examination room, Playa Giron

Cubans now have the same requirements as the rest of the world to get U.S. visas.  To get a non-immigrant visa, you must be able to prove you will not stay in the U.S.  The assumption is that everyone wants to stay in the U.S.  However, it is much easier for some Cubans to get visas than others.  Artists we met told us they have 5 or 10 year visas with multiple entries allowed.  The U.S. has made big efforts to encourage free expression through art, music and writing in Cuba.

Cubans can praise but not protest government policies.  The government reports that there are 70 to 100 people in prison for expressing political views.  If you talk to Cubans about human rights, the Cubans say that socio-economic rights (access to health care, housing, education and food) are human rights.  They point out that police are killing black men in our cities, so who are we to talk to them about human rights.

children watching clown--Museo de Bellas Artes

Cuba has a very old population for a developing country, with 20% of people being over 60.  They have the demographics of Switzerland but the economy of Haiti.  To deal with the problem of providing social services to their aging population, the government has raised taxes.  On incomes of more than $25 per month, they levy a $2 tax.  They are bringing back the income tax which hasn’t been in place since before the revolution.  Because they export so many doctors and other medical personnel (their largest export), it has become harder to access health care.  There are now 60,000 doctors working overseas.

Exceptions to the U.S. embargo include medicine and agricultural products (Cuba imports $500 million in food every year from the U.S.).  The Cubans would prefer to manufacture their drugs here.  There is real scarcity in pharmacies.

mosaic boat with revolutionaries--Jose Fuster neighborhood

The American side of the “small tractor company” story varies a bit from the Cuban side (see my blog on Cubans’ views of the U.S.).  This company planned to manufacture a very small tractor in Cuba priced to meet Cuban budgets and sized for Cuban fields.  The company thought it would be able to open a factory in a planned duty free zone by the Havana port.  But, the Cubans finally turned it down, saying the tractor was too small to be of much use, had no advanced technology, and didn’t generate enough jobs.  Of the 400 companies that have applied for licenses in the duty free zone, only 18 have been approved.

unemployed man outside bodega

People who start private businesses like paladars and bed and breakfasts buy their goods for these businesses mostly in the U.S.  There is a “Samsonite express” between the U.S. and Cuba, with Cubans making their livings by going to the U.S. with 10 to 12 suitcases, loading them with U.S. goods, then returning to Cuba with their haul for their clients.  The remittances from the U.S. to Cuba go right back to the U.S. to buy these goods and don’t do much for creating jobs in Cuba outside those small businesses.  The customs agents will often let 7 or 8 large suitcases to get in duty-free and then dig through the 8^th or 9^th or 10^th bag and charge duties on the goods they contain.

A bus boy in a tourist restaurant makes much more money than a doctor or engineer, so there has been a big move to the tourist industry.  This is a problem for the government which pays for the education of its professionals, only to lose them to lesser jobs that pay so much better.

living room of farmer's home with photo of Che Guevara

The Communist Party will determine the next president.  There are several front runners, with the current Vice President at the top of the list for the moment.  He is a party man who believes in the existing mission of the party.  The Foreign Minister is another possibility, also a party man.  And then, there’s Alejandro Castro, son of Raul Castro, who might be in the running.  This will be tricky for the party since the Castros have insisted they will not allow a dynasty to be established in Cuba.  Soon we’ll start seeing a bigger public face of the expected top candidate.

Young people don’t have a lot of interest in politics.  They’re much more concerned about starting families and earning enough money to support them.  They have always thought they could just leave if things didn’t go well.  But now, with the lifting of the “wet foot, dry foot” rule that allowed any Cuban who set one foot on American soil (even if the other foot was in the water off the sandy beach), they will have less opportunity to go to the U.S. and may become more interested in Cuba’s policies.

paladar (private restaurant) in Vinales Valley