Tiffany A. Sippial: Cuba’s New Economic Policies: Event Horizon or Business as Usual?
Today we welcome a guest post from Tiffany A. Sippial, author of Prostitution, Modernity, and the Making of the Cuban Republic, 1840-1920. Between 1840 and 1920, Cuba abolished slavery, fought two wars of independence, and was occupied by the United States before finally becoming an independent republic. Sippial argues that during this tumultuous era, Cuba’s struggle to define itself as a modern nation found focus in the social and sexual anxieties surrounding prostitution and its regulation. Sippial shows how prostitution became a prism through which Cuba’s hopes and fears were refracted. Widespread debate about prostitution created a forum in which issues of public morality, urbanity, modernity, and national identity were discussed with consequences not only for the capital city of Havana but also for the entire Cuban nation.
In this post, Sippial lends us her expertise in order to provide enlightening context to Cuba’s new economic policies.
Cuban officials recently invited foreign journalists (including CNBC’s Michelle Caruso-Cabrera) to visit Cuba in order to witness—and spread the word about—economic changes taking place on the island. These changes are the result of a series of new legislative efforts to boost private enterprise on the island.
The new laws (most of them passed in the last two years) allow Cubans to hold more than one job, own and operate a private business, and even assume ownership of a select number of state-controlled enterprises. These reforms follow on the heels of other recent moves to “open up” the Cuban system, such as providing internet access to a greater number of Cubans via a new national chain of cybersalons. The net effect of these changes, the Castro government hopes, is to encourage a paced shift toward what is being termed “sustainable socialism”.
Judging from the flurry of op-ed pieces and blogs posted by the journalists who toured Cuba, the lingering question on everyone’s mind is: What exactly does “sustainable socialism” mean?
Following an extended absence from Cuba, I had the opportunity to return for three weeks last fall. Immediately upon my arrival in Havana, I was struck by several changes: more Cubans have cellphones; more Cubans have internet access in their home (or in the home of a neighbor); and many more Cubans are openly engaged in some form of private enterprise.
I was prepared for the cellphones and internet access, as a number of my Cuban friends and colleagues participate actively in social networking sites like Facebook. I was more impacted by the number of individuals who were linked to private sector entrepreneurial endeavors. An estimated 80 percent of Cubans work in the public sector, but most individuals I met are finding ways to supplement their government salary, which averages about US$19 per month. Chauffeurs-for-hire, private tour guides, artisans, and café owners are integral players in the economy of both the capital city and the nation as a whole.
The real change in the Cuban economy today is not that Cubans are suddenly embracing private enterprise, but rather that the new laws ratified by the Castro government allow these entrepreneurial endeavors to take place in the open. In my seventeen years of traveling to Cuba, I have noted that Cubans have always sought supplemental income. Some might even argue that the goods and services supplied by these men and women have, in fact, done a lot to “sustain” socialism in the face of continued economic challenges on the island.
When I visited Cuba for the first time in 1996, I noted that “black market” maneuverings were ubiquitous. Cubans clandestinely traded goods and labor in order to counterbalance the extreme shortages of the so-called Special Period that followed the collapse of the Soviet Union. Surviving on the state-provided libreta (ration card) was difficult, to say the least. That same summer, for example, I remember that many of my friends were eager to acquire lye to begin making their own soap—as government stores had not carried any for weeks—and they handled cooking oil like liquid gold.
In addition to participating regularly in black market trading in the 1990s, many Cubans hired themselves out as private taxi drivers, rented rooms to tourists, and operated small restaurants and cafés out of their homes. Some of these Cubans were licensed to do so; others were not.
One man I met in 1998 bemoaned the fact that after working a full shift at his public sector job, he started a second shift to try to earn some extra money to supplement his family’s income. The money he earned driving his car as an unlicensed taxi barely covered his gas expenses, however, and he feared being fined for his activities. Another young man I spoke with, who crafted homemade piñatas to sell from the front porch of his home, was annoyed that he could not offer his patrons a one-stop shopping experience. He was licensed to sell piñatas, but not the candy to put in them.
There are Cubans, however, who have maintained long-standing licenses to operate relatively lucrative private businesses. My closest friend in Cuba, for example, has operated for two decades what is arguably the most popular casa particular (private home with rooms to rent) in Havana’s affluent Vedado neighborhood. After years of depending primarily on word-of-mouth business, she is now cultivating a global reputation thanks to an in-home internet connection that allows her to directly email clients. While my friend’s case may not be typical—she has been able to secure a very comfortable income for her family, even by U.S. standards—it points to an important fact about the recent changes in the Cuban economy: private enterprise is not really new in Cuba.
In my opinion, the most interesting topic for discussion is not that Cubans are finally embracing private enterprise, but rather that the new legislation will surely change the existing face of private enterprise on the island. Talk to Cubans about the new business, property, and internet reform measures and you are less likely to hear them marveling at the wonders of capitalism than to hear them debate the variety of state-imposed taxes that often leave them with only a few CUC (Cuban Convertible Pesos that carry a 1:1 exchange rate with the U.S. dollar) at the end of each month.
Accepting the new legislation as merely an acknowledgment that Cuba already maintains a mixed economy prompts us to ask a different set of questions. What is the government’s long-term plan to help Cuba participate in an increasingly global economy? How will this new approach to securing the country’s economic, political, and social goals help (or hinder) Cubans as they negotiate the reality of their daily lives? Specifically, will the range of state taxes that accompany the new legislation encourage or stifle entrepreneurship on the island? (Coincidentally, it strikes me that one might hear these same questions at any local Starbucks in the United States.)
We will undoubtedly see changes as a result of Cuba’s new legislation. I would encourage us, however, to contextualize these changes within the broader story of Cubans’ multi-faceted engagement with their national economy over the past (at least two) decades. Private enterprise may increase in Cuba with the new legislation, but Cubans are more experienced capitalists than many U.S. citizens know.
Tiffany A. Sippial is associate professor of History at Auburn University, where she teaches graduate and undergraduate courses on the history and historiography of Latin America from the colonial to modern periods. Her book, Prostitution, Modernity, and the Making of the Cuban Republic, 1840-1920, was published today.
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