Inside Cuba

"We've seen everything that has happened to those European countries in a totally uncontrolled way. They wanted to go towards capitalism in 45 days, and they quickly regretted leaving socialism," Foreign Minister Roberto Robaina told Maclean's. "Ours is a strategy that includes order and control.

Rogelio Paris
Filmmaker Paris jokes with his daughter on her wedding day. Canadians are leading the way as Cuba opens up to foreign business (courtesy Maclean's).

Inside Cuba

Gone is the imposing sculpture of a hammer and sickle that formerly stood on the road from Havana's airport. Today, there is a billboard for Benetton, that sassy symbol of Western consumerism that sprang up amid the tumbling Communist regimes of Europe in the early 1990s. Cuba, an island fortress utterly dependent on Soviet aid, would be the next domino to fall, said the same pundits who once thought the Berlin Wall would last for decades. But six years on, and despite a toughening of sanctions by the United States, Cuba is emerging from the worst economic crisis in its history with the legendary Fidel Castro still solidly at the helm. With hefty investment from Canada and other friendly nations, Cuba has begun an economic upturn, logging 2.5-per-cent growth in 1995 and projecting five per cent this year. Castro has authorized unprecedented reforms and attracted much-needed dollars - while still professing a determination to save his country's socialist soul from the seductions of capitalism.

"We've seen everything that has happened to those European countries in a totally uncontrolled way. They wanted to go towards capitalism in 45 days, and they quickly regretted leaving socialism," Foreign Minister Roberto Robaina told Maclean's. "Ours is a strategy that includes order and control." So far, the strategy is working. In just two years, a string of measures that had been taboo since Castro's 1959 revolution have become an integral part of everyday life. The country opened up to outside private investors - with Canada, Mexico and Spain in the lead - and passed a law in September that allows 100-per-cent foreign ownership in most sectors. Tourism has grown fastest, pulling in $1.4 billion in 1995, up by a third in two years. The largest market is Canada, from which 54 planes a week are expected to bring 200,000 travellers to Cuba this year. There are now more than 200 bustling neighborhood food markets with freely set prices. A "self-employment" law has allowed more than 200,000 Cubans to open licensed small businesses; an equal number are believed to be operating without the paperwork.

Last May, the government abandoned its guarantee of cradle-to-grave employment, a measure that is expected to bring 800,000 layoffs - one-fifth of Cuba's workforce - as industry restructures in the next few years. That and the shutdowns caused by the loss of Soviet markets lead students such as 17-year-old Gustavo Mario Duque of Havana's José Ramón Polytechnic to fear they will not find work after graduation. "There are so many students, and they can't all be placed," says Duque. "I just hope I am able to stay in Havana." Some reports already place joblessness as high as 45 per cent - although officially there is no unemployment.

The biggest economic change of all came in July, 1993: the decriminalization of foreign currency. Just two months ago, the state even undercut the black market for U.S. dollars by opening its own kiosks, offering the street rate of 25 pesos to one U.S. dollar instead of the official 1:1 exchange. The unofficial rate has come down from 150 pesos a year ago, a sure sign that conditions are stabilizing.

Having rejected Russia's path to reform as a catastrophe, Castro has looked more to the Chinese model of introducing market mechanisms under a dictatorship. But Cuba, mindful of its status as an island of 11 million people just 160 km from the U.S. coast, believes it must go even slower to stave off the social upheaval already confounding Beijing. After Castro's December trip to China and to similarly reformist Vietnam, the catchphrase has become socialism with "Cuban characteristics." That means everything is up for grabs except the very pillars of the homegrown revolution: national sovereignty, universal education and health care. Officials say that adult literacy has risen to nearly 100 per cent, up from 60 per cent before the revolution. The number of teachers went from 26,000 before the revolution to 300,000 by the end of the 1980s, according to government statistics. Doctors increased from 6,000 to nearly 40,000, the most in the developing world in relation to population. And 90 per cent of high-school-age kids were in school, one of the highest proportions anywhere. In the words of Cuban-affairs writer Andres Oppenheimer: "Cuba had eliminated misery at the cost of imposing a general poverty."

When they wax proud of their social system - and withstanding the American giant at the gate - Cubans might well be Canadians talking. And Canadians have become key players in the reform drive. Led by investors such as mining magnate Ian Delaney, blacklisted by the U.S. government for his dealings with Cuba, a clubbish group of Canadians from gold prospectors to ice-cream purveyors have seized a unique moment - there is a reforming Communist economy with no American competition. "In a business and a political sense, this is a clean sheet of paper," says Delaney, a friend of Castro's who has become a de facto adviser to Cuban policy-makers. "There are no messes to clean up. Nothing has been done, so nothing has been destroyed." The Cubans have studied Canadian regulations on foreign investment, mining, labor and taxation as they scurry to write laws to keep up with the incoming capital.

It is a new thrust to a special relationship Canada has long enjoyed with Havana, having followed an independent policy from the United States, which imposed its debilitating trade embargo in 1961. "Canada is an old friend of Cuba's," says Fidel's older brother Ramón Castro. "It never abandoned us throughout the 34 years of blockade. When we needed medicine, it came from Canada and Mexico."

The mixed peso-U.S. dollar economy has introduced a new upwardly mobile class, visible by their cellular phones and lunches with foreign bosses. In a society that had previously been divided into poor and poorer, the new rich have made glaring the growing gap between the have-dollars and have-nots. "What reform?" asks the commercial manager of a taxi company. "I don't have more of anything. I can't travel. My life hasn't changed." People jokingly talk of the need for fe, the Spanish word for faith as well as an acronym for relatives abroad (familia en el extranjero), who send greenbacks. The changes have also unleashed social problems that Cubans had previously been shielded from. Prostitution, crime, even beggars in the street - a new blight for Communist Cuba - now seem to be grudgingly accepted as the price of doing business.

With foreigners and their dollars inevitably comes corruption, still at a low level in Cuba compared with other countries in the region. "No police can control a billion dollars worth of tourism a year," says Leonid Maximenkov, an instructor at the University of Toronto's Centre for Russian Studies, who recently spent a year in Havana. Castro is short on patience for privileged dabblers, as evidenced by the 1989 execution of the popular General Arnaldo Ochoa Sanchez and three others on drug-trafficking charges, which sent a warning chill through the country. Even the legitimate successes of the new entrepreneurs rankles the Cuban leader, who lashed out at the "new rich" in his year-end address to the National Assembly. "We legalized robbery," Castro said, announcing the impending income tax that is an attempt to rein in the runaway incomes of hard-currency earners and the self-employed. "Everything this country does is for the people, not in favor of a social class of rich people, of exploiters." Translation: it is not a shift in ideology but sheer necessity that is driving his reforms.

Hemmed in by the U.S. trade embargo, Cuba previously relied on the Soviet trading bloc and $10.8 billion a year in subsidies and aid from Moscow - all of which began to disintegrate in 1990. The bankruptcy of a centrally planned economy and a succession of poor sugar harvests pitched the nation into what it refers to as the "special period." The economy contracted by nearly 50 per cent over four years, shutting down industry and imposing shortages of fuel, water, food, medicine and soap - which is still rationed at just a few bars per person per year. So "special" were the hardships that horse-drawn carts instead of cars were seen on the road, since gasoline was scarce and expensive. Special, too, were those hours spent sitting in the dark when frequent power outages were necessary to preserve energy after Russian oil imports were cut in half.

By the summer of 1994, the "rafter" crisis focused world attention on the discontent of Cubans tired of living in a deprived if relatively benevolent dictatorship. A mini-riot broke out on Havana's Malecón boardwalk, and 33,000 refugees headed for the Florida coast. Two-thirds were intercepted and returned to Guantánamo Bay, a naval base at the eastern tip of the island still held by the U.S. Last week, U.S. immigration authorities admitted the last of those boat people. A May agreement, seen by the Cubans as a major step towards improving relations with Washington, allows 20,000 Cubans a year to immigrate legally and obliges the Americans to send illegals home. The regime's critics often cite the rafter crisis as proof of Communism's failure, although Cuban officials note that there was little violence even at its height. "They talk about the 30,000 youth that left, and they don't talk about the 11 million that stayed on the island," says foreign minister Robaina.

Now, the worst appears to be over. True, monthly rations still provide only enough supplies for half a month; the daily intake of calories for the average Cuban has fallen to 1,800 from 2,835 in 1989. But meat is available - to those who can pay for it. Cars are back on the roads, and so are the first traffic jams since the onset of the "special period." U.S.-dollar gas stations with attached fast-food outlets have become teen hangouts. While many foreigners - Canadians among them - complain that the reforms are too slow and too superficial, Foreign Minister Robaina insists "the path we have taken has no reverse."

A dashing 39-year-old favorite of Castro's who came from the Communist youth organization, Robaina is popular for his fresh approach, which includes wearing casual T-shirts. He is at the head of a new guard of mostly younger technocrats whose speech is uncluttered by revolutionary rhetoric and whose attitudes resemble those of the North American liberal left. Already called Yummies (Young Urban Marxists), they work in a variety of state agencies forming a bridge between the regime's entrenched bureaucracy and the world outside - possibly a bridge from Cuba's past to its future. Another Yummie is the no-nonsense Octavio Castilla, deputy minister of foreign investment. "There are many dangers," he says of the reforms. "It gives me no joy to see that a prostitute on the street who takes in perhaps $20 in tips can live more comfortably than a doctor. This is a transitory phenomenon. The goal is to restore a normal society with an equal distribution of wealth."

Carlos Fernandez de Cossio, who heads the North American section of the Cuban foreign ministry, is also a straight talker. As much as Cuba yearns for normal relations with the United States, he says, Havana's new foreign policy is designed to prevent overdependence on anyone. "We've suffered that in our history several times already, with Spain, the United States and to a great extent with Eastern Europe. And when something collapses in the relationship, it has been disastrous for us." Hence the desire to consolidate relations with Latin America, Europe, Canada and Asian countries such as China and Vietnam, well in advance of the day the Americans arrive. Some leverage may come from renewed ties with Russia, whose relations with the Clinton administration have lately turned cool. Russia recently announced a sugar-for-oil barter deal with the island as well as plans to help finish the Juraguá nuclear power plant in south-central Cuba.

The American trade embargo and the U.S. treatment of Cuba as a pariah on its doorstep are among the few things that have yet to change for Cuba. The vast, largely hardline Cuban exile community in the United States is a potent political force. But a moderate stream has emerged, mostly backed by the younger generation. It is led by Eloy Gutiérrez Menoyo, a former comrade-in-arms who was later jailed by Castro, exiled to Spain and now advocates dialogue from his Miami base. In the wake of the U.S. easing of travel restrictions to Cuba in October, five flights a week from Miami and Fort Lauderdale will by the end of this month be carrying Cuban sons and daughters laden with gifts. Increasingly, with the Cold War over and the Americans readily trading with such formerly embargoed opponents as Vietnam and such human-rights abusers as China, Washington's policy on Cuba looks to moderates like a hopeless anachronism. Israel was the only country that failed to join the last UN vote condemning the U.S. embargo.

And U.S. business people are champing at the bit to get involved in Cuba before the rest of the world carves it up. More than 300 representatives of corporate America have scouted the island in the past two years as guests of the Cuban government. Many signed "letters of intent" that are likely to expire well before the U.S. policy does. Even more have visited unofficially. Lee Iacocca has been spotted dining out in Havana, as has a travel industry delegation - including a representative of American Express, although use of its credit cards and travellers cheques is still banned on the island.

There is the predictable tug of war between the liberal Clinton administration and the more hardline House of Representatives, which in September passed a version of the Burton-Helms bill that seeks to penalize businesspeople from Canada and elsewhere who "traffic" in property still claimed by expatriate Cubans. Clinton could still veto the measure as he moves cautiously towards the view that says Cuba will be changed more quickly by bombarding it with American money and ideas than by withholding them. Last month, the state department agreed to the delivery of $150 million in food, medical and other aid from nongovernmental organizations. "That's more than the Europeans and everybody else together are giving the Cubans," says Ernest Preeg, a Cuba specialist at the Washington-based Center for Strategic and International Studies.

Still, few expect Clinton to lift the trade embargo before the presidential election next fall. "We don't support the Castro regime, we don't support what it stands for," says state department spokesman Nicholas Burns. "We'd like to see more contacts between people, but we certainly want to continue our policy of denying legitimacy to the Cuban government."

The key stumbling blocks are political reform and human rights in a country where more than 600 prisoners of conscience still languish in jails. Notorious as well is the system of forced quarantine for all AIDS patients in fenced compounds. The regime released more than a dozen dissidents in the past year and allowed visits by the UN high commissioner for human rights and two other top international monitors, steps that detractors say are merely part of Castro's new image campaign. There is still no freedom of speech, media or association. The more than 60 disparate dissident groups are chronically harassed by the regime. Also absent from Castro's agenda is substantive electoral reform. A multiparty democracy, say top officials, would bring a return to the Caribbean-style vote buying and false promises of Cuban politics in the 1950s.

But influential players like Foreign Minister Robaina say it is impossible to separate political change from sweeping economic reforms. Already the neighborhood Committees in Defence of the Revolution have been rendered practically defunct now that most of the underground economy has moved aboveground. And Cubans are far less worried about speaking their minds to each other and to curious visitors - even criticizing Castro himself, formerly impossible.

As for La Barba, the bearded one, he seems to have grasped instinctively that the most coveted human right of the late 20th century is the right to shop. Analysts expect him to continue introducing his market reforms step by step, in order to keep a stiff grip on the pace of change while granting just enough freedoms to act as an effective pressure valve. As long as the monster of scarcity that awoke in the early 1990s can be held at bay, Castro can plan the next phase of his revolution. But he is caught in the fear that American capitalism could overrun both socialism and, perhaps more important, Cuba's hard-won sovereignty. Buoyed by their initial successes in attracting foreign investors and by the promising growth in the economy, Havana officials are confident they will be the one group of Communist reformers to get it right. But in Washington and elsewhere, some analysts fear that their successes to date will slow, rather than quicken, the pace of reform. Says Cuba specialist Preeg: "The Castro government doesn't feel the pressures of a year and a half ago so, if anything, he has been rolling back somewhat on the reforms thus far."

The wild card remains the U.S. embargo, which, if lifted soon, could open a Pandora's box of overwhelming economic and cultural influences. Ironically, the blockade has served to unify Cubans behind Castro. Given the volatility of a leader who has only reluctantly given the green light to his young reformers, Cubans can only hope there is no Latin American version of a Tiananmen Square crackdown looming in the future. Cuba is, after all, still the most militarized country in Latin America. Pessimists believe substantive change is possible only after Castro is gone.

But with or without Fidel, many Cubans believe theirs will be the country to show there is indeed a Third Way, a mixed economy of market forces and a social net. The "Socialism or Death" posters are disappearing. But there is a billboard outside the former U.S. Embassy that surely will be around for a while. It warns: "Imperialists, we have absolutely no fear of you."

Maclean's January 15, 1996