But just where is it going?
By Roger Fontaine. UPI. Virtual New York. Tuesday, 22 August 2000 0:18 (ET)
HAVANA, Aug. 21 (UPI) - A return visitor to Havana would scarcely recognize the old capital these days. In the 1950s, it was the luxurious and decadent center of Caribbean tourism. By the 1970s, it had turned Soviet-era gray as the economy wheezed along with a $4 billion subsidy courtesy of
Moscow while its long-suffering people worked a failure-prone command economy.
Today, much of Havana has been at least repainted. Its colonial past is being restored in an impressive way with more than 300 projects underway. The pre-revolutionary hotels have taken on some of their old luster - no more peeling wallpaper and missing toilet seats - and new ones are being
thrown up by the dozens in anticipation of more European tourists.
And Americans? Despite the travel restrictions, they are everywhere here these days taking in the sights, but also prospecting for future business opportunities. And these are not just corporate CEOs, but everyone from anesthesiologists to television commercial makers. A tourism ministry
official offering a power point briefing to visiting journalists has a gleam in his eye contemplating the return on North Americans en masse. After all, who else will fill up all those hotels in the of-season that is, the hot summer months here when yanquis like to take their holidays?
"Maybe they will come here and not Orlando," the official said somewhat wistfully. Cuba has, in fact, a good deal to offer the visitor these days in comparison to the grim days of Soviet tutelage.
There is a night life. Cuban jazz clubs proliferate and stay open until all hours. Private restaurants have mushroomed since 1993 when the U.S. dollar became in effect Cuba's second currency. Old favorites like Ernest Hemingway's hangout, La Floridita, have been restored to their former glory.
And instead of Bulgarian plonk to drink, a fat, leather bound wine list at La Floridita is offered replete with French, Italian, and Spanish wines.
Sorry, nothing from California.
The menu also now bulges with seafood specialities where 20 years ago, the customer was lucky to find on entree available. As for the comfort factor, the blackouts so common a few years ago have for the moment become a relic of the dark past.
Cuba's new economy, in fact, is geared toward luring the foreign tourist and Cuban officials claim that sector now is the country's chief source of hard currency.
Sugar has sunk to second place and after years of subpar four million ton performances does not seem likely to ever return to its former status. Considering the secular trend of sugar prices - invariably low - that may be just as well. But there are inherent risks attached to this strategy.
The government expects that the number of visitors to the island this year will be two million. Their low ball estimate for 2010 is five million. By way of contrast, Cuba had 30,000 foreign visitors in 1961. To accommodate this expected flood of tourists, Cuban officials say they need $11.2
billion for new hotel construction and infrastructure development. But even now, hotel occupancy is 50 percent and far lower in the hot summer months. Americans are expected to plug that hole, but that requires better bilateral relations and the lifting of U.S. travel restrictions. With all those
dollars sloshing about the economy - one never needs a peso for anything here now - and perhaps at least a million Cubans directly tied to the cash nexus (which means 40 percent of the population is dependent on the greenback for survival), the question arises how can the regime remain socialist in
rhetoric and substance?
Cuban officials quizzed on this become vague or just shrug their shoulders. Others like Fidel Castro seem in deep denial and some analysts believe the aging caudillo is intent on tightening things up. Even the dreaded phrase, "a new special period," which recalls the deep depression
Cuba fell in after the collapse of the Soviet Union is beginning to resurface.
There are risks, of course, in tightening up. Cuba is increasingly dependent on the dollar and other hard currencies to keep the economy ticking over. Too many Cubans have gotten used to having dollars in their pockets allowing them to purchase consumer goods for the first time in a long time.
Long gone are the days when a Cuban durable consisted of a tiny Soviet refrigerator or television set that had an alarming tendency to explode. Damming up that kind of pent-up demand could be risky to a regime that otherwise looks solidly in place - or at least until Fidel Castro departs the
scene.
Meanwhile by all accounts, Castro remains in good health despite his 74 years. He could easily hold onto power for another decade, and certainly shows no sign of retiring.
Castro is also showing no sign of giving up his socialist illusions as demonstrated by a hard line speech given earlier this month in Pilar del Rio.
In the meantime, further major market reforms are unlikely. As a central banker here explained, Cuba, despite transforming its Soviet-style banking system in 1995, has no intention of creating a stock or bond market. No mortgage banking. At least for now. "We must be careful. Step by step.
We don't want to spoil anything," said the banking official. For now, that seems to be Cuba's economic motto.
Copyright 2000 by United Press International. | 