Cuba both fuels, fights new private restaurants

A customer picks up take-out food sold out of a private home's front door in Havana.

/ CBS

(CBS News) HAVANA - As Cuba attempts to retool its economy, contradictions pop up, some of them seemingly inexplicable.

Last year, the state eliminated 140,000 jobs. This year, it is slated to eliminate another 170,000. The newly opened private sector is supposed to provide opportunities for laid-off workers, and one of the most popular areas for the "self-employed" is the food service industry.

Private eateries range from homemade pastries and pizzas sold out of a "businessman's" front door to upscale designer restaurants catering to tourists and diplomats.

Many of the better restaurants, known in Spanish as "paladares," have been opened by chefs and others who have gotten their experience in state-owned establishments but who are finding it much more profitable to strike out on their own under economic reforms set into place by President Raul Castro.

It's also profitable for the government, which collects taxes from these and other private businesses.

However, there seems to be an unofficial but powerful resistance to these businesses, which are seen as creating stiff competition for the restaurants owned and operated by the state that previously held a monopoly on visitors to Cuba.

Americans coming on group tours to the island naturally want to try some of the new private restaurants. To their surprise, tour bus drivers refuse to take them to any paladar, and the Havanatur agency guide accompanying them everywhere else is not allowed to eat with them at private places.

Alejandro Robaina, owner of the paladar La Casa, said this policy is really hurting his business.

Open since the 1990s, La Casa is popular with American travelers and has long been visited by groups of Jewish delegations visiting Cuba. A majority of these Americans are senior citizens, and many of them find it difficult to walk the five or so blocks from where the Transtur bus company will sometimes decide to drop them off. Often the bus driver will not even do that.

A Havanatur guide who asked not to be identified said the Ministry of Tourism has not put anything in writing but all guides have been told private restaurants are off limits.

The guides normally share meals with their clients at state-owned places. The guide said the tour bus drivers have told him they were shown a memorandum from their employers ordering them not to take visitors to paladares.

So, on one hand, the government is issuing licenses to open private enterprises so owners hire staff, some of whom have lost their state jobs. On the other hand, elements in the state bureaucracy are interfering with the progress of this non-state sector.

[HumbertoCapiro]

THE CASTROFASCISTS "ECONOMIC REFORMS" OF THE PAST ARE REPEATING THEMSELVES TODAY!

Cuba's Economic 'Reforms': Waiting for Fidel on the Eve of the Twenty-First Century.- Roger R. Betancourt* Department of Economics U. of Maryland - August 1999

In this paper we provide a brief summary and evaluation of the main economic changes or
'reforms' undertaken by the Cuban government during the 1990's. The thrust of our argument is that the regime does not seem to be interested in reforms that lead to a transition to a market economy or even in the more limited goal of introducing widespread market mechanisms subservient to the needs of the communist party as in China. Instead, their policies seem directed at generating mechanisms for the appropriation of foreign exchange by members of the nomenclature while keeping most citizens deprived of independent access to wealth creation activities. We develop our argument by looking separately at 'reforms' in two type of markets: those in which transactions are self-enforcing and those which depend on the contract enforcement mechanisms or services usually associated with market augmenting government to enforce transactions.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=11&ved=0CCgQFjAAOAo&url=http%3A%2F%2Fciteseerx.ist.psu.edu%2Fviewdoc%2Fdownload%3Fdoi%3D10.1.1.203.6096%26rep%3Drep1%26type%3Dpdf&ei=rbjTTrzFEqOLsALi2PTsDg&usg=AFQjCNGxl2CI9-OmB_lGSPM8Wf1z_BEnBw&sig2=UfpPs6aTjsRLqPukxhSJxg

[HumbertoCapiro]

UNIVERSITY OF PENNSYLVANIA WHARTON SCHOOL REPORT :Can Raul Castro's Reforms Create a New Cuba? -November 22, 2011

At first glance, say experts, Raul Castro seems to modeling his country's future after China and Vietnam, whose one-party, nominally communist governments have managed to maintain power for decades while also emerging as globally competitive exporters of industrial and agricultural goods. Look deeper, however, and it is apparent that Raul's approach won't turn Cuba into a miniature of those two much larger Asian communist countries, experts say. The key problem for Cuba is that Raul's reforms are not nearly as deep or thorough as those enacted by communist governments in China and Vietnam. In Cuba, "they are going in the right direction, but the issue is whether the reforms are profound enough or fast enough to meet the difficult crisis," says Carmelo Mesa Lago, emeritus professor of economics at the University of Pittsburgh, whose new book on the Cuban economy is scheduled to be published in Spain and the U.S. in 2012.

Mesa Lago notes that in China and Vietnam, local farmers have been allowed to lease from the government the land that they work on for an indefinite time period; Chinese and Vietnamese farmers have been encouraged to care for that land as if it were their own. In Cuba, contracts to lease plots of land are valid for only 25 years. "After 25 years, that contract may or may not be renewed by the government, and the land may be seized by the Cuban state for social needs," Mesa Lago notes. That's particularly troubling because "a lot of land in Cuba has been taken over by the notorious marabou plant," says Adrian E. Tschoegl, a management lecturer and senior fellow at Wharton. It often takes two years just to clear marabou-infested land, Tschoegl adds, so a 25-year lease is effectively cut.

CLICK LINK FOR ENTIRE REPORT!

http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2744&language_id=1