Cuba cuts bulk prices to support private workers

HAVANA (AP) — Cuba is lowering bulk prices for goods ranging from marmalade and mayonnaise to tools and CDs to support newly independent workers and small businesses that lack a wholesale market, official news media said Monday.

The measure addresses a central complaint by many operators of private restaurants, cafeterias and other operations authorized under a wide-ranging economic overhaul launched last year by President Raul Castro.

Under an order from the Ministry of Finance and Pricing, a 1.3-gallon (5-liter) container of cooking oil that used to sell for $11.50 can be had for $9.80, labor newspaper Trabajadores reported. A 7-pound (3-kilogram) container of tomato pure formerly worth $8.70 now goes for $7.00.

“The measure also includes tools and pneumatic and electrical equipment, all with the goal of enhancing sales to independent workers,” the article said.

Other products like tobacco, alcoholic beverages and bottled water are not covered by the order. Trabajadores did not say when it took effect.

Although the initiative targets private businesses, the same prices will apply for anyone making bulk purchases.

Cuba began allowing increased private enterprise at the end of 2010, issuing licenses for people to launch small businesses and hire employees independently of the state.

The government, which currently employs 80 percent of the labor force, plans massive layoffs although those plans have been put on hold.

Many entrepreneurs have complained about a lack of access to a wholesale market or to credit, as well as high tax rates. Cuba has said it plans to extend loans, but details have not been released.

The government fixes prices, and while some products are heavily subsidized and discounted, many other imported goods go for more than double their value elsewhere.

Marketplaces dot Havana for new private vendors

HAVANA (AP) — Marketplaces full of vendors hawking everything from food to religious items may be common sights across Latin America, but they’re springing up for the first time in the Cuban capital as the island’s Communist government opens its tightly controlled economy to some private-sector activity.

Nearly 140 official points of sale in abandoned structures, parking lots and crumbling old buildings have been established in recent months and are accommodating about 2,600 independent vendors, the Communist Party newspaper Granma reported Friday. The number of markets “should grow steadily,” Luis Carlos Gongora, vice president of Havana’s Provincial Administration Council, told the newspaper.

Cuba only recently began licensing a broad spectrum of private sector activity, giving rise to a nascent and growing class of self-employed people.

Former health care worker Andres Lamberto Diaz, who took out a license for to sell clothes, shoes and jewelry, said he pays 40 pesos ($1.60) a day — on top of his taxes and license fees — for the right to set up shop on a lot where few traces remain of what was an old mansion in busy Central Havana.

“Things are organized here, and the flow of people along the avenue is good,” Diaz said. “Nevertheless, I think it’s a lot to pay each day for the space.” Official salaries average about $20 a month in Cuba.

Faustino Agramonte, the state administrator of the market, said it houses 21 independent merchants, and officials are looking at possibly expanding into a little-used parking lot on the site of another collapsed building.

Buckets, spatulas, cheese graters and soup pots hung from one stand Friday. Colorful clothing was on offer at another, strung up underneath a canvas tarp to protect it from the intense tropical sun. The market launched in early 2010.

Under the new rules governing independent businesses, many people have set up shop in their own houses. Not all Cubans, however, live in spaces appropriate for home businesses, and many are taking to the streets. The government has accomodated the trend by creating authorized vending zones where sellers can gather.

Officials are considering adjustments to the tax structure for independent operators, Granma said.

Mired in deep financial woes and hamstrung by inefficiency in state-run businesses, Cuba announced last August that it would be implementing major changes in hopes of rescuing its troubled economy. From the end of 2010 through May, more than 200,000 Cubans became licensed independent workers.

President Raul Castro insists that the new private-sector activity is meant to “update” Cuba’s socialist model, not replace it with the free market.

Cuba, Now: Viva la Commercial Revolución


With President Obama working to lessen Cuba Travel restrictions, the focus on future trips to the country is growing wildly. A Jaunted special secret correspondent just returned from a period in Cuba, and she’ll be sharing her impressions of the country, the people and their hopes all this week.

What struck me most powerfully on arriving in Havana was the complete absence of advertising.

Traveling to Cuba from the world’s commercial super-center—the USA—is like diving from a hot, sweaty and crowded monkey cage into a refreshingly vast and empty pool. There is nothing in most Cuban shops beyond a packet of dried black beans and some powdered custard—the same brand, always the same brand. You can’t buy or sell a car made after Castro’s 1959 communist revolution. Toasters and other domestic essentials were until recently banned. Decadent, capitalist toasters!

So the question is: are Cubans ready for the commercial revolution that will sweep through the island like a rainy-season hurricane the moment the US embargo falls?

The answer: a qualified yes. Havana’s streets buzz with the first signs of commercialism, appearing like spring daffodils out of hard, barren soil. Privately-owned restaurants (paladares) and guesthouses (casas particulares) are reaching a critical mass; there are art and photo galleries, mobile phone stores, the odd shop (with uniformed guard) selling Adidas sneakers. You can even, in some places, get hold of a can of real Coke.

The delicate sensibilities of tourists are increasingly being understood, particularly in the tourist haven of Habana Vieja (Old Havana). Gleaming hotels part-owned by Spanish investors serve pumpkin ravioli and pungent French wines, and crumbling mansions are being scrubbed clean and brought back to life with the help of tourist dollars and a sprightly, visionary City Historian named Eusebio Leal.

Cubans have already developed a taste for tourism, thanks to the 2.5 million or so Canadians and Europeans who already visit the island each year. Which is lucky, because apart from nickel, cigars, Ché memorabilia and medicines made from sugar cane and placenta (not lying), there isn’t much else sustaining the stagnant Cuban economy.

Anti-American sentiment is still rife in propaganda—George Dubya and Ronald Reagan share a ‘Cretins’ Corner’ in the Revolution Museum—but on the streets people talk enthusiastically about a possible influx of American tourists. Standing in a shaft of sunlight on Plaza Vieja, a bookseller with a neatly pressed necktie and eyes burning with revolutionary zeal told me how, thanks to socialism, he could read, write, feed his family and last October have a much-needed hernia operation. “I’m socialist hasta las entrañas,” he said—right to my entrails (perhaps, I thought, due to the hernia operation). “Viva la revolución! But you know, I’d love to sell these books to Americans.” The fire in his pupils turned to a glint.

The moral of the story:

If you like your beaches to come with clean toilets, ice, window-shopping and all the other trappings of a fully developed commercial culture, then wait at least ten years after the embargo is dropped.

If you want a glimpse of another world—twisted, surreal and colorful as a Picasso painting, where people still eat to live and wear clothes for warmth—then come now, or just as the Cuban people break down their wall. In between will be chaos.

Government legalizes private roadside stands

Expanding a private retail experiment from eastern Cuba to the entire country, the government indirectly legalized roadside sales stands selling agricultural products at unregulated prices.

In Resolution 206 published in the Gaceta Oficial Aug. 27, the Ministry of Finance announced it will raise a 5-percent sales tax on “kiosks and sales points located in communities adjacent to roads and highways.” The roadside stand owners must be supervised by a state agricultural entity or agricultural cooperative, according to the resolution.

The business owners can only sell products grown on their own farm or backyards, unless they are produced by another agricultural entity in areas difficult to access. Sales must be registered daily, and taxes must be paid monthly. The state also charges a 2-percent fee for the use of state-owned right-of-way, and the business owners must deduct 25 percent for Social Security.

The roadside sales points are a potential outlet and additional source of income for a fast-rising number of private farmers. In an effort to boost food production, the government has turned over more than 1 million hectares of state agricultural land under long-term leases to private farmers and cooperatives; roughly half of the land is dedicated to cattle, and the other half to cultivating crops. However, bottlenecks in the state-operated distribution system are still causing crop losses.

More than half of the new farmers are younger than 35, according to the Juventud Rebelde daily.

Cuba says “SI” for private taxis

HAVANA TIMES, January 12 — The Cuban government approved the renewal of registrations to grant permits to private taxi drivers in urban and rural areas — they had been suspended since 1999 —, reported IPS on Monday. Transport was one of the sectors most affected by the economic crisis that began in the early 1990s and which has forced the authorities to invest hundreds of millions of dollars in its ongoing recovery.