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Cuba shows signs of freeing up the flow of information

HAVANA, Cuba — A recent one-hour briefing at the International Havana Fair about the efforts of several Latin American and Caribbean countries to create a common currency was newsworthy — not so much because of what was announced, but thanks to the more open atmosphere at the event.

The leftist ALBA bloc — first created by Cuba and Venezuela and now joined by several other nations — is trying to establish a currency called the sucre to reduce dependence on the U.S. dollar and the euro.

The panelists, including a Cuban Central Bank official, an Ecuadorean government economist and the Cuban minister of foreign trade and investment, explained to an audience of mostly Cuban state company executives how the common-currency mechanism could help them increase exports and imports with ALBA member countries. The move, they said, would save them a bundle by eliminating the need to convert payments from one national currency to the U.S. dollar or euro, and then to another national currency.

Sounds like a great idea.

During the speeches, though, the Cuban executive sitting next to me became increasingly restless. Finally his impatience bubbled over. He leaned over to whisper a question: Is the use of the sucre obligatory? I whispered back I knew as much as he did, and that I was an American journalist. In the past, this often would have been the end of the conversation.

Not this time.

The executive continued our low-voice exchange, explaining that his state company exports construction supplies to Bolivia, a participant in the sucre mechanism. He added that he needed the U.S. dollars his Bolivian partners have been paying him, because that allowed him to buy many of his company's supplies and all of the machinery. He was worried that he wouldn't be able to make those purchases using the sucre. They were available only in hard currency, and he couldn't find them in Cuba or Venezuela, let alone Bolivia, Ecuador or Nicaragua.

In a nutshell, the executive was voicing the main challenge facing Cuba's ALBA strategy: Many businesses can't rely on the sucre to make big purchases, and if those businesses can't use the sucre, it won't become a viable currency.

My neighbor didn't show any signs of trying to wrest an answer from the officials. So, after the speeches were over, I walked down the aisle to the stage and headed to Rodrigo Malmierca, Cuba's minister of foreign trade. When the photographers and TV crews were gone, I gave him my business card, told him I was an American journalist and asked him about my neighbor's concern. The minister gave me a straightforward answer (no, sucre use is not obligatory), and proceeded politely to explain. On my way out, I briefed my neighbor.

What's the big deal? While this kind of open back-and-forth with an American journalist is a given at public business events in many places around the world, it's been fairly unusual for Cuba.

I also know from Google Analytics and anecdotally that more Cuban officials rely on sites like www.cubastandard.com to satisfy their information needs, despite the difficulty of Internet access. And they do this in an increasingly open way.

If you ask me, that's exciting change.

• • •

Talking about change: Barely three weeks after the government announced it would grant 250,000 private-business licenses for 178 additional activities, some 80,000 Cubans have expressed interest or already applied for self-employment licenses.

While that number is impressive, I reserve my judgment for later. For one, 43 percent of the applicants are retirees. In other words, the 1 million state employees who are in the process of losing their jobs as a result of the government's tough adjustment policies have not yet jumped en masse at the new opportunities.

What's more, the Cubans who have spent years working outside the public light in black-market activities are not exactly excited about starting to pay taxes, in return for some security and predictability.

For now, the 41-year-old who shuttled me around Havana in November in his equally young blue Lada is skeptical. Since graduating from the University of Havana with an accounting degree in the mid 1990s, Amaury has never been formally employed. Instead, he has been running a series of "informal" businesses, often under duress. Even so, he doesn't think that what the government has to offer in return for a 50 percent income tax makes legalization worthwhile.

Case in point: Because he can't run his taxi business legally, Amaury must continue having his Lada serviced by a state-employed mechanic who not only uses his employer's workshop on Sundays for private business but also pilfers car parts.

However, the government seems to recognize the challenges. Just last week, officials announced Cuba will spend $130 million on imported goods in 2011 to supply the new businesses with whatever they need. Considering the current cash crunch, this is a major sacrifice. It also seems the government is eager to work with foreign funders regarding microcredit for private businesses.

A commitment to improving the flow of information combined with pragmatic economic moves — as a I said, exciting change.

Johannes Werner is editor of www.cubastandard.com, a Web site featuring real-time news about the Cuban economy. He can be reached at johanneswerner@cubastandard.com.

Cuba shows signs of freeing up the flow of information 12/11/10 [Last modified: Saturday, December 11, 2010 3:31am]
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