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Cellphones, computers, DVDs and hotels no longer off-limits to Cubans with cash
CubaNews / April 2008

By Larry Luxner

This was no April Fool’s Day joke. Effective at midnight Apr. 1, ordinary Cubans could for the first time in years stay at tourist hotels formerly reserved for foreigners and even rent cars — as long as they pay with hard-to-get CUCs and not worthless pesos.

And starting Apr. 14, mobile phone service will be available for the Cuban population, following an announcement as we went to press that the new government of Raúl Castro would lift all restrictions on cellphone usage.

In fact, Cuba has introduced more reforms in the last five weeks than in the past five years.

“In the next few weeks, we shall start removing the most simple excessive regulations and prohibitions,” Raúl. 76, said in his first speech as president after officially taking over Feb. 24 from his ailing older brother Fidel.

True to his word, on Mar. 13, the government lifted a long-standing ban on the sale of personal computers, DVD players and other forbidden products. Resolution 43/08 of the Interior Com-merce Ministry permits the sale of computers, video-playing equipment, electric pressure cookers, rice cookers and even car alarms to the general public for the first time since the 1990s.

“The country has had an improvement in the generation and distribution of electric power,” explains to a government document circulated among foreign journalists. The document says the availability of these new electronic devices will be “gradual” in order to ensure that they meet state energy-saving standards.

Meanwhile, says Reuters, agriculture is being decentralized, farmers can decide for themselves what supplies they need and the prices paid to them are rising to boost food production.

What’s going on here?

“The situation is very different from the crisis of the 1990s,” said a Havana-based economist who asked not to be identified. “Fidel is no longer leading the country, we are in better financial shape, we have never had so much support from Latin American governments and Raúl is a no-nonsense manager.”

Another Cuban economist told Reuters correspondent Marc Frank that “this is just the beginning. Decentralization and more individual initiative will slowly spread from agriculture to the entire economy. It’s inevitable.”

Yet considering the Cuban worker’s average monthly salary of 408 pesos (about $17), it’ll be a long time before locals outnumber foreigners on the beaches of Varadero.

“These are not bread-and-butter issues,” says Cuba analyst Phil Peters, vice-president of the Lexington Institute in Arlington, Va.

“Buying a cellphone and staying in tourist hotels may not be the top priority of most Cubans, but it’s still a positive step,” he told CubaNews. “How many times have we heard legitimate criticism about tourism apartheid? Well, that’s gone now.”

Even so, said Peters, “these measures do not tackle the big problems of growth, new jobs and fixing the purchasing-power problem caused by the dual-curency system that affects most Cubans.”

Oscar Esinosa Chepe, a well-known dissident economist, says “now the struggle becomes one of earning higher salaries.”

Ramón Linares Torres, first deputy at the Ministry of Communications, told the Communist Party newspaper Granma that users will be able to sign up for cellphone service with Etecsa, the Cuban telecom monopoly.

Etecsa will establish 30 offices around the island for this purpose. Another 20 branches are to be opened in a second phase, said Linares, adding that Etecsa will keep its current price of $111 CUC (about $120 at the prevailing rate of exchange) to activate the mobile equipment. According to a 2006 study by the UN Con-ference on Trade and Economic Development, Cuba has one of the world’s lowest mobile telephone penetration rates, with only 134,000 cellular subscribers for its 11.2 million inhabitants in 2005.

That translates into a penetration rate of just 1.2 per 100, which is on par with Eritrea, the Solomon Islands and the war-torn Demo-cratic Republic of Congo. Even impoverished Haiti, the poorest country in the Western Hemisphere, has over a million lines in use.

With the ban lifted, some of the estimated 60% of Cubans who have access to hard currency will rush to acquire mobile service and stay in oceanfront hotels — though both luxuries remain prohibitively expensive for average people who earn the equivalent of $17-20 a month in relatively worthless pesos.

“The government recognizes that around 15% of the population has 85% of the pesos in the banks,” said one of the Cuban economists. “It is tempting the new rich — from farmers to black-market dealers — to exchange their pesos for CUCs to buy goods, and thus reduce the pesos in circulation and strengthen the currency and wages of everyone,” he said, adding increased food production had the same strategic aim.

Panama’s new ambassador in Cuba, Luís Gómez, told reporters that two shipping companies hauling electronics to Cuba twice a week are now carrying four times the usual number of containers.

In yet another departure from the past, on Mar. 25 the government lifted a rule that forced people to pick up prescription drugs from a pharmacy assigned by the state. Reuters reported that Cubans can now buy prescription drugs at any pharmacy.

Previously, they had to fill prescriptions at a single pharmacy attached to hospitals or local clinics — a measure introduced during the crisis of the 1990s when resources were scarce due to the collapse of the Soviet Union.

The restriction was deeply unpopular, and was one of those “excessive regulations” which Raúl had promised to eliminate.

“There were lots of complaints. The authorities want people to be happy,” said a Havana pharmacy manager, who did not want to be named because she wasn’t authorized to speak to reporters.

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