Inequality Becomes More Visible in Cuba as the Economy Shifts

Inequality Becomes More Visible in Cuba as the Economy Shifts
By RANDAL C. ARCHIBOLD FEB. 24, 2015

HAVANA — The river where Jonas Echevarria fishes cuts through
neighborhoods brimming with new fine restaurants, spas and boutiques,
springing up in Cuba's accelerating push toward private enterprise.

Tattered mansions and luxury apartment blocks speak of old wealth and
new. A bounty of private restaurants known as paladares serve pork
tenderloin, filet mignon and orange duck to tourists, Cuban-Americans
visiting relatives and a growing pool of Cuban entrepreneurs with cash
to spend.

These were things Mr. Echevarria, with only a few eggs, some plantains
and a handful of rolls in his pantry, would not be having for dinner.

In his neighborhood, a shantytown called El Fanguito (roughly, "Little
Swamp") on the fringe of the Rio Almendares and the margins of society,
few people have relatives sending money from abroad, food rations barely
last the month, and homes made of corrugated tin, wood scraps and
crumbling concrete fail to keep out floodwaters.

Nobody goes to paladares, much less has the money to start one.

"Never," said Mr. Echevarria, whose livelihood depends on the catch of
the day. "I guess I could not even afford the water."

As Cuba opens the door wider to private enterprise, the gap between the
haves and have-nots, and between whites and blacks, that the revolution
sought to diminish is growing more evident.

That divide is expected to increase now that the United States is
raising the amount of money that Americans can send to residents of the
island to $8,000 a year from $2,000, as part of President Obama's
historic thaw with Cuba.

Remittances, estimated at $1 billion to nearly $3 billion a year, are
already a big source of the capital behind the new small businesses. The
cash infusion has been one of the top drivers of the Cuban economy in
recent years, rivaling tourism revenue and mineral, pharmaceutical and
sugar exports.

Raising the remittance cap, along with allowing more Americans to visit
Cuba and other steps toward normal diplomatic relations, will help
"support the Cuban people," the Obama administration contends.

But some will enjoy that support more than others. Cuban economists say
that whites are 2.5 times more likely than blacks to receive
remittances, leaving many in crumbling neighborhoods like Little Swamp
nearly invisible in the rise of commerce, especially the restaurants and
bed-and-breakfasts that tourists tend to favor.

"Remittances have produced new forms of inequality, particularly racial
inequality," said Alejandro de la Fuente, director of the Afro-Latin
American Research Institute at Harvard University. "Now the remittances
are being used to fund or establish private companies, that is, not just
to fund consumption, as in the past."

The Cuban government argues that the shift to more private enterprise, a
pillar of its strategy to bolster the flaccid economy, will allow it to
focus its social programs on the neediest. As a billboard on a busy road
in Havana proclaims, "The changes in Cuba are for more socialism."

But many poorer Cubans are frustrated by what they see as the
deteriorating welfare state and the advantage that Cubans with access to
cash from outside the country have in the new economy.

"As Cuba is becoming more capitalist in the last 20 years, it has also
become more unequal," said Ted Henken, a professor at Baruch College who
studies the Cuban economy. "These shantytowns are all over Latin
America, and Cuba's attempt with revolution to solve that inequality
succeeded to a certain degree for a time. But as capitalism increases,
you have some people more well positioned to take advantage and others
who are not."

At Starbien restaurant, one of the most popular in Havana, the owner,
José Raúl Colomé, said it was not unusual for a majority of the
clientele to be Cubans who live on the island, rather than tourists or
expatriates.

"Some are artists who are doing well or entrepreneurs who have had
luck," Mr. Colomé said. "A lot are tourists, naturally, but we are
getting more Cubans who might be called middle class."

In poorer neighborhoods like Little Swamp, many describe feeling like
foreigners in their own city, watching the emerging economy but lacking
the means to participate in it.

They note the predominance of white Cubans in the new ventures but
broach the subject carefully, noting the gains that the revolution
brought to Afro-Cubans in education and health but also the hard
economic times that darker-skinned Cubans continue to endure.

"I look in those new places and don't see anybody like me," said Marylyn
Ramirez, who works at a tourist hotel in the Vedado neighborhood and
passes new restaurants on the way to work.

Asked if she received financial help from relatives abroad, she smirked
and swept her hand around her small living room, which floods repeatedly
in heavy rains.

"If I had that," she said, "do you think I would be living here?"

After the so-called special period of the 1990s, when the collapse of
the Soviet Union plunged Cuba into an economic crisis, thousands of
desperate people moved from the countryside to Havana without
permission, hoping to find work.

Many still live as virtual refugees in their own country, in
neighborhoods like Little Swamp, unable to register for government
services like ration books because it is almost impossible to change
addresses without prior authorization.

"Erosion of poverty has always been a concern, but they have not managed
to eliminate these kinds of neighborhoods in the best years of the Cuban
welfare state," Mr. de la Fuente said, "and it is much less likely they
can do it now."

Many residents mention the free education and health care the government
has provided but lament that both seemed better in years past, with
shorter lines for care and better teachers. The few poor residents who
do receive remittances are known to pay private tutors to ensure that
their children advance to upper grades, several people in the
neighborhood said.

One resident mentioned a government program that offered refrigerators
to those without them, for a price of about $300. But the monthly
payments, made with government salaries that are rarely more than $20 a
month, can last for years, "longer than the refrigerator lasts," he said.

Cuba's two-tier currency puts residents at a further disadvantage. One
currency, known as the convertible peso and used for tourism and foreign
trade, is pegged to the dollar. But most Cubans are paid in the local
peso, worth a fraction of the other. Many consumer goods and other
amenities from abroad are paid for in convertible pesos, keeping such
comforts out of reach for many.

A government program to build housing has not kept up with demand, and
residents often refuse to leave their homes when floodwaters threaten
because they fear that squatters will take over or the authorities will
not let them return. Jerry-built electrical wiring sprawls along walls
and rooftops, a clear fire hazard.

Stagnant state wages have also shut many Cubans out of the real estate
market that emerged after the government allowed the buying and selling
of homes last year, said Carmelo Mesa-Lago, an emeritus professor at the
University of Pittsburgh who has long studied the Cuban economy.

"Reforms like the authorization of selling homes benefit those that have
the best homes, as they can sell them and buy a smaller one, but not
those with the worst housing," he said.

Still, for all the problems, few talk openly about leaving the country,
mostly because they have no relatives abroad or money for visa
applications or plane tickets. The alternative is setting off in rickety
boats or makeshift watercraft, a journey that could end in death or
detention and reprisals by the Cuban authorities.

"They catch you, you go to jail, and they won't let you fish anymore,"
Mr. Echevarria said.

Eugenio Azcaly, 61, a cook at a state restaurant, figures that he has
the skills and experience to open or run a paladar, but he has no
capital and no support from relatives overseas. The state, he said, has
been good to him, providing him the experience of traveling abroad, to
East Germany in his youth. But he has been watching the restaurants open
and wondering about his coming retirement.

"I will have to continue working, but I don't know where," he said.
Touching his skin, he added, "I don't know if the new businesses would
accept me."

Mr. Echevarria said he usually made about $15 a month, a little below
the average of $20 for Cuban workers.

"It's never enough," he said. "But we have to keep trying to get by."

Source: Inequality Becomes More Visible in Cuba as the Economy Shifts -
NYTimes.com -
http://www.nytimes.com/2015/02/25/world/americas/as-cuba-shifts-toward-capitalism-inequality-grows-more-visible.html?_r=0