Socialist model tweaked to encourage work amid crisis

HAVANA (AP):

For more than 60 years, Cuba supplied at least some rice, milk, beans, sugar, chicken, electrical power and even cigarettes to its people nearly free of cost, regardless of whether they worked, allowing many to survive without a job or depend solely on remittances.

But this year, the government is implementing a deep financial reform that reduces subsidies, eliminates a dual currency that was key to the old system, and raises salaries. It hopes to boost productivity to alleviate an economic crisis and reconfigure a socialist system that will still grant universal benefits, such as free healthcare and education.

“It’s a major shift in focus for a society that has lived and functioned one way for 62 years,” said Cuban economist Ricardo Torres. “This sends a message: If you want to be in a fairly comfortable situation, then you have to get a job.”

The changes come as Cuba struggles with the pandemic, an 11 per cent drop in gross domestic product, and the loss of what the government estimates is nearly $5.6 billion as a result of economic sanctions imposed by outgoing US President Donald Trump.

Until December 31, Cubans would pay 75 cents for a monthly basket filled with 19 basic products, including meat, coffee, eggs and soap. Now that will cost them $7, according to Betsy Díaz Velázquez, minister of internal trade.

Education and health services remain free, and the government will still subsidise milk for children up to age seven and provide food to vulnerable groups, though some worry the reforms will lead to problems.

“It increases inequality without there being a concrete plan to reduce it,” said Harold Cárdenas, a political analyst living in the US who is part of a group that advocates a more democratic socialist Cuba.. “It would be an exaggeration to say this is how the aspiration to socialism in Cuba ends, but this is definitely not how it is achieved.”

But he said that encouraging people to work rather than discouraging it “will make the difference between success and failure for years to come”.

About seven million of the island’s 11 million inhabitants are of working age, with some 2.7 million unemployed or not looking for a job. As a result, it hasn’t been unusual to see young people playing dominoes on street corners, idly talking with friends for hours, or leaving work early.