What´s next for bankrupt Cuba? More Freedoms…..?

You don´t need much imagination to establish that Cuba´s recent “easing” of regulations is a desperate attempt to appease an increasingly frustrated populace. The cold reality however is, the country entered bankruptcy in early 2010 and all measures being taken are to bring in more cash to prop up the communist government and those few elite remaining members of the coup that overthrew Fugencio Batista. With an eye on world events, Raul, Fidel and their elite friends are growing increasingly worried about the rest of their lives. Even as PAST presidents. With Mubarak heading to court after being overthrown and Gaddafi heading the same way, and multitudes of their past followers either being executed by the people or pursued for crimes, Cuba´s past and present leaders are looking more vulnerable by the day. From what was once a constant fight with the US and the subversion of thoughts about the “northern neighbor” in the minds of Cuba´s population, through propaganda and reminders of the past, Cuba´s leaders are grappling with the very real prospect of lack of confidence and potential revolt. While the revolt in Cuba is likely to be more pacific than those in the Middle East, there is an undercurrent of discontent that is proving hard to quell.


One subtle change after another is being vocally presented by Raul Castro at each and every opportunity. Gone are the days of “all our problems are created by the U.S” to a more self condescending “we are the problem”. Recently, Raul Castro blamed paternalism and lazy government workers for the countries financial meltdown. This did not go down well at all with everyday Cuban´s. Information poured in from government moles, state security intelligence officers and even the farcical labor unions that the population was at boiling point. Raul Castro quickly did full about turn and, state workers that were to be sent to the chopping block were quickly assured that the elimination of their posts could take “years” instead of the previous publicly stated “months”. Why this abrupt about turn? Well, Fidel, Raul and 1000´s of their ageing supporters know that if they lose power abruptly they could end up standing trials or worse, end up assassinated. There is nothing like self preservation to evoke change.


The change is however more “appeasing” than real change. In a closed room somewhere in Cuba, 80 something’s are analyzing national intelligence data amassed from 1000´s of disciples in order to make decisions based upon one premise “what do we have to do to stay in power”? Not, what do we have to do to increase GDP, what do we have to do to create jobs or what do we have to do to make our citizens happier but “how to stay in power”. This must be new territory for the Castro brothers. They´ve had such a hold over the lives of Cubans for 5 decades that these “concessions” must seem surreal. However, deep analysis of each change shows that these meetings between themselves are tense moments. Clearly grasping at ideas that are quickly put out into the public domain, only to be retracted, modified or forgotten when new national intelligence data is amassed. Some of the changes however are cunning attempts to get more cash to sustain the regime. The recent “cuenta propista” or self employment agenda for instance is a wholly imaginary scenario for those in power and something more akin to a fiction novel than reality. After all, 99% of Cuban´s live from day to day, they have no savings and have nowhere to neither learn about nor achieve self employment. It’s the “achieve” point that is most intriguing because, to be self employed you need materials, products and money, way before your entrepreneurial spirit is required. In Cuba, all products and materials are imported by the state. Not 50%, not 70% but 100%. So how is one to open, for instance a hairdresser, when even the scissors or hair cropper, never mind chairs, mirrors or shampoo are the sole domain of the state? Some ask their family in Miami to bring in supplies but even those are taxed heavily at Havana´s airports. Cuba is probably the only nation in the world that persecutes its own returning nationals in this respect. Most don´t know that flights from anywhere in the world arrive and passengers are greeted with nothing more than a passport check. Whereas, flights from the largest nucleus of Cubans in the world, the USA, have special teams of customs agents opening EVERY suite case and valuing each item for tax. I.E – Heavy tax. Most Cuban Americans know that the items they buy will cost the same again just to get them into Cuba. So we can safely eliminate this as an option for starting a business. We should however return to the point. The Castro´s need money and quickly so, the self employment joke is focused more intently on MONEY from these Cuban Americans than products or supplies. Cold hard cash.


Cuban Americans are being played at their own game by the Castro´s. For years Cuban Americans have preached to their less fortunate relatives in Cuba the benefits of self employment and entrepreneurialism. The Castro´s are acutely aware of this and know that instead of having young “Jorge” call his brother in Miami for more remittances he could call with a hair brain scheme to open street Pizza joint. But he needs money… Chi-Ching goes the Castro´s cash register


Several more perverse proposals from the Castro´s will soon be deployed… They´ll start allowing Cubans to buy cars and even property…but not the buying process we in the west are all accustomed to but, one designed to “extract” money more from the U.S, this time in the BILLIONS. A scenario where they “sort of” own the car or house but, after legal inspection, really have little tangible ownership after all, remember, these schemes are ONLY designed to bring in money in the crudest of ways but, young “Jorge” will fall for it and place the necessary pressure on family in Miami to get what he wants. Great!! More money.


You see the Castro´s have propped up their regime on remittances for several decades, these being the single largest influx of cash into their coffers after tourism. So a quick fix is more of these remittances no? In these closed Castro meetings someone obviously said: “Let’s increase the value of things Cubans can buy” Great scheme eh? Gullible relatives will fall prey to the constant whining of their family in Cuba but, this time, chipping together to buy a car! Maybe a house those relatives can stay at when they arrive? In theme of all these changes though, shortly after receiving the cash, the Castro´s will introduce rules or “orientations” that tax are leave less attractive the previous dream. Whether it be the car, house or business, once the money is “in the coffers” all rights will be violated and the incentive removed or heavily taxed. That’s the impending out come. They only need the money but understand that to get it they need to fabricate “freedoms”. Seems to work every time…


These Castro schemes are not new. In 2004, Fidel introduced the CUC as a currency, offering Cubans a few months to cash all their dollars in before the introduction of the 10% “gravamen” or fine on the USD. Gullible Cubans quickly lifted their collective mattresses and changed their entire valuable USD into the worthless CUC monopoly money. The scheme was a tremendous success and Cuba´s coffers expanded with real (USD) money while offering their people worthless CUC. This scheme also had a double advantage of introducing currency control in order to extort 18% (really 23% after Cadeca charges) from every subsequent dollar that entered the country. However, feeling their plans allotted time had expired just this year the Castro´s have devalued this worthless currency back to the previous 1-1 with the USD. Chi-Ching goes the Castro´s cash register AGAIN


Not to be outdone, mid way into the CUC scam the Castro´s imposed tariffs on all commercial goods, including food, sold in CUC´s which inflated their values to 240% over cost. Worthless old stock of CD players, washing machines, old Chinese and Japanese refrigerators and many more rubbish items poured into the Dita, Carlos Tercero and TRD stores to absorb even more of the remittance money which invariably left the government with 1 of every 1 dollar that was sent by gullible relatives abroad. Chi-Ching goes the Castro´s cash register AGAIN


To much fanfare, Raul Castro declared that Cuban´s earning an average of 24 USD per month were allowed the “freedom” to visit their own national hotels. Cuban´s cued to visit the Melia Hotels in Varadero. 120 CUC per night was not apparently a problem for “Jorge” after making a call to his brother in Miami… Chi-Ching goes the Castro´s cash register AGAIN


So what is next for Cuba or more importantly the Castro´s? We can expect to see more disguised “freedom” related changes in the vein of those previously rolled out. Cars, Houses, Businesses, etc. Not boats or travel abroad though! With travel or boats, Cuban´s could leave, removing the need for relatives to send the Castro´s more money. So, neither travel nor boats…


Hopefully after reading this, you´ll be able to identify each “change”, supposedly designed to empower Cubans as just another “cash call” from the Castro´s. If you´re foolish enough to think that offering Cuban´s the right to buy 20,000 USD cars or even higher priced houses, the same Cuban´s that earn 24 USD per month, is designed liberate them and offer them more freedoms then so be it.


Most Cuba watchers know that all these “freedoms” are nothing more than a well orchestrated plan to prop up the Castro´s for the next year or so.



Comments are closed.

image image image