Tuesday, September 7, 2010

Cuba going capitalist?

With loosening of government controls, Cuba invites free enterprise.

Cuba, no doubt, is taking lessons from China.
While the communist government in China remains firmly in control, leaders decided years ago to encourage free enterprise at the grassroots level. The result is an emerging economic powerhouse.
Cuba has a long way to go before it becomes a thriving center of commerce. But leaders apparently are ready to introduce some free-market reforms.
That might come as a shock to those who thought the handover of power from longtime ruler Fidel Castro to his younger brother Raul would bring no significant changes. But either Raul has become more than just a caretaker for his brother, or Fidel has seen the need to modernize the island's economy.
Cuba last month issued a pair of surprising free-market decrees, allowing foreign investors to lease government land for up to 99 years and loosening state controls on commerce to let islanders grow and sell their own produce. Both measures were published into law in the Official Gazette on Aug. 26 and were effective immediately.
The modifications in property laws are aimed directly at promoting more tourist development. Leaders hope to spur a flurry of new construction, including golf courses to attract European, Canadian and Asian tourists. They also hope to lure long-term visitors who will live part-time on the island in luxury housing rather than simply hitting the beach resorts for a few days.
The decree on the sale of produce could have a large impact on another group: average Cubans.
Under the new rules, they will be able to produce their own agricultural goods and sell them from home or from special booths on their property.
While that might not seem like a radical change, it represents the first major expansion of self-employment since a government decree on Aug. 1 that state controls on small business would be loosened. And that is significant in a country where nearly everyone works directly for the state.
Cubans already sell produce by the side of the road, but it is something of a black-market operation. They have to flee whenever they see police.
This new policy will allow them to openly operate what amount to farmer's markets with the blessing of the government - which also taxes the proceeds.
It is doubtful that Cuba will expand its capitalist experiment immediately. But, for a cash-strapped island, the temptation is likely to grow.
Who knows? Maybe the communist regime will begin to embrace capitalism even while someone named Castro still rules.

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