News and Facts about Cuba

Social reforms that may be in Cuba’s sights

Social reforms that may be in Cuba's sights
Published on Friday, February 22, 2008

HAVANA, Cuba (AFP): Even before announced his decision to
leave power this week, Cubans have been stirring over the possibility of
social reform.

A video of students boldly challenging the communist
government circulated on the Internet earlier this month and appeared in
state media, a sign that their specific concerns could be under
government consideration.

Interim has also suggested lawmakers will soon be
handling potential reforms.

Here are some of the key issues at stake:

- The two-currency system

Cubans earn an average of 12 dollars per month (about 310 Cuban pesos).
The government gives Cubans free basic foods, but they need to buy
clothing, shoes, appliances and personal hygiene products at state-run
stores that accept only hard currency.

Prices of those goods are paid in CUC, what Cuba calls its convertible
peso, that it created. One CUC currently costs 24 Cuban pesos or 0.80
dollars in government-sanctioned outlets.

Both the CUC and standard Cuban peso of old are in circulation but few
things are paid in standard pesos: fares, or perhaps a slice of pizza.

Most Cubans do not have easy access to hard currency. Some of Cuba's
more than 11 million people have hard currency sent by relatives living
abroad, working in the industry or received as small bonuses at

- Restrictions on travel

Cubans are troubled that they are required by the government to obtain
an exit permit, which can be denied. If granted, it sets a limit on how
long the person may be outside the country, usually 30 days.

The permit is also costly: 150 CUC (180 dollars) and an additional 40
CUC per month up to the 11 months maximum someone can be out of the country.

A Cuban earning the average 12 dollars a month would have to spend
around 400 CUC (500 dollars) on Cuban government-mandated expenses to
travel out of the country legally.

The expense means most people would have to save an average of 15
months' salary to afford an exit permit. That is, unless they are sent
money from abroad, or earn the hard currency somehow under the table.

Once a Cuban travels outside Cuba for over 11 months, he or she is
considered an emigrant, and is not allowed to return home to live, only
to visit.

- Restrictions on stays

Cubans are not allowed to stay in hotels, most of which exist
exclusively to serve foreign tourists. Years ago Cubans were not allowed
to set foot in these hotels, in a practice some critics abroad decried
as tourism apartheid.

Now, a Cuban whose relatives sent him hard currency for an anniversary
present could take his wife to a posh in a Havana hotel and
spend that cash. But if the couple wanted to get a room and make a night
of it, they would not be allowed, even if they were paying in hard currency.

The only exception is in a handful of hotels, where civil servants or
newlyweds may be awarded by the government the right to a one-time stay
– if they are able to pay in standard pesos.

- Small businesses

Private business is very limited. A small door toward economic reforms
was opened in 1993 when Cuba was in financial free-fall and had lost its
support from the ex-Soviet bloc. Eleven years on, government regulations
began shrinking the limited private sector with greater fees and taxes;
now there are 100,000 self-employed workers down from 200,000 in 1995,
according to official data.

Sales of homes, cars

- About 90 percent of Cubans own their homes. Homeowners do not pay
taxes on their houses, but they cannot sell them. A reform law approved
in the 1980s has been frozen such that it is basically not operational.
Houses can be exchanged (called a permuta) in a complicated fashion, for
one deemed of similar value. The government also heavily restricts the
sale of cars. Cars sold before 1958 can be purchased freely.

- Internet access

The only ones surfing the Web in communist Cuba are people at
universities, government offices and some selected professionals. The
government claims the US makes it impossible to extend service
due to what it says is inadequate bandwidth on undersea cables and high
satellite costs. Many Cubans don't agree.

As with many things, the two-currency system perpetuates societal
divisions. Those who have access to hard currency can use it to pay high
fees for a look at the Web in cybercafes.

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