What’s Happening in Cuba
I've been back home for nearly two weeks after a productive trip to Havana. The afterglow and the post mortems always linger for some time after my return. This time, there were some rumblings that left me wondering about the future, and concerned about the pace of change that has been pushed along by President Obama's decision to ease some of the old restrictions on American's travel and business investment.
The rumors revolved around political infighting between the Old Guard and reformers, with some evidence that the government wanted to slow down some of its economic reforms. Like most things in Cuba today, there is a danger in reading too much into the tea leaves and trying to figure out what's behind the things you see and hear.
There are some facts. In the week before I arrived, many bars and nightclubs were either shut down, or their activities severely curtailed. I walked into one my favorite places one night around 11 p.m.—granted that's a little early—and there were more bartenders than people sitting at the tables. Another watering hole, which I don't frequent, had been shuttered, allegedly for drugs, and that the closure was permanent. In other news reports since my trip, full-time correspondents in Cuba were saying that many of the bars had violated their original permits, and had become major nightclubs, not something allowed under those permits. But then late last week, most bars and nightclubs were operating again. Is it one step back, and two steps forward? No one knows yet.
Another fact is that while I was dining in one popular paladar, a privately owned restaurant, government inspectors showed up and demanded to see the accounting books. The manager on duty that night told us she was getting calls from other paladars around Havana who said the same thing was happening to them. None of the restaurants were shut down, but it would be foolish not to see the visits as a warning shot across the bow of these establishments.
Privately owned restaurants have become the best and most successful in Havana, and the highest profile example of the government's new economic reforms. But these restaurants compete directly with government owned and operated restaurants. Under the original rules for private business, the restaurants were are under strict limitations of how many seats they can have (50), and they pay high taxes to the government on their revenues. Although I've never counted seats in every restaurant I frequent, many of them, although not all, have more than 50 seats, and like restaurants anywhere, it would be easy to skim money without paying taxes. I would expect these restaurants to be under much closer scrutiny in the months ahead, and, I'm told, that the government has suspended issuing new licenses for restaurants under development.
I have been saying ever since the United States began to ease travel and other restrictions on Americans going to Cuba in December 2014 that the influx was going to put a strain on the local economy, and not just from a lack of infrastructure. Those new customers were going to make local, private Cuban businesses even more successful and test the resolve of the government to allow the restaurants to flourish. There may be no other choice, however. The new tourists have put a strain on entertainment options in Havana, and it's now not uncommon to call up a restaurant for a table and they have nothing available. If the government can't handle the new waves of tourists, the only option may be to let the private ones continue to operate.
The same sold-out phenomenon also exists in the hotel industry, and it has spilled over into AirBnB, which calls Havana one of its fastest growing markets. Some Mexican friends tried to reserve an AirBnb back in July for an October trip, and everything was already booked. They shifted to an early December travel date and found two separate locations. But it also hard to find decent hotel rooms on short notice, and any trip requires long lead time without any guarantee, especially during peak travel times in the winter season.
In general, I firmly believe the changes have been good for Cuba. There is more business activity, and if the repair of buildings and houses is any indication, there is a lot of money flowing into the country for those purposes. Businessmen I speak with say that progress is slow in working out contracts with government agencies, but there is a willingness on both sides to hash out differences. Trying to find common ground in a centralized economy where the government insists on keeping 51 percent control of every foreign investment is not easy, and the Cuban government is still struggling to come to terms with all the interest from outside entrepreneurs.
The real question now is where does it lead? Expectations for change are higher among the Cuban people than they have ever been. With expanding Internet access through public WiFi hotspots, people are better informed about the outside world, and they communicate more easily with each other. What seems clear to an outsider who has traveled there for 20 years, (and who admittedly has not done political reporting inside the country) is that the country is changing for the better. That is an outcome I always had argued would happen once the U.S began to open its doors and ease its restrictive policies toward Cuba.
But everyone, on both sides of the border, will have to have plenty of patience to see the reforms through to a beneficial outcome for everyone. That old, tired cliché—only time will tell—may never be more appropriately applied than today in Cuba.
