Tuesday, July 5, 2011

Cuba tries to drag shadow economy into the light)...

Cuban economic reform aims to bring a world of secret businesses into the light

, On Tuesday July 5, 2011, 9:47 am EDT
HAVANA (AP) -- Want some paprika-infused chorizo sausage? How about a bit of buffalo mozzarella? Or maybe you just need more cooking oil this month, or a homemade soft drink you can afford on paltry wages. Perhaps you are looking for something more precious, such as an imported air conditioner or some hand-rolled cigars at a fraction of the official price.
In a Marxist country where virtually all economic activity is regulated, and where supermarkets and ration shops run out of such basics as sugar, eggs and toilet paper, you can get nearly anything on Cuba's thriving black market -- if you have a "friend," or the right telephone number.
A raft of economic changes introduced over the past year by President Raul Castro, including the right to work for oneself in 178 approved jobs, has been billed as a wide new opening for entrepreneurship, on an island of 11 million people where the state employs more than four in five workers and controls virtually all means of production.
In reality, many of the new jobs, everything from food vendor to wedding photographer, manicurist to construction worker, have existed for years in the informal economy, and many of those seeking work licenses were already offering the same services under the table.
And while the black market in developed countries might be dominated by drugs, bootleg DVDs and prostitution, in Cuba it literally can cover anything. One man drives his car into Havana each day with links of handmade sausage stuffed under the passenger seat. A woman sells skintight spandex miniskirts and gaudy, patterned blouses from behind a flowery curtain in her ramshackle apartment.
Economists, and Cubans themselves, say nearly everyone on the island is in on it.
"Everyone with a job robs something," said Marki, a chain-smoking 44-year-old transportation specialist. "The guy who works in the sugar industry steals sugar so he can resell it. The women who work with textiles steal thread so they can make their own clothes."
Marki makes his living as a "mule," ferrying clothes from Europe to Havana for sale at three underground stores, and has spent time in jail for his activities. Like several of the people interviewed for this article, he agreed to speak on condition he not be further identified for fear he could get into trouble.
Merchandise flows into the informal market from overseas, but also from the river of goods that disappear in pockets, backpacks, even trucks from state-owned warehouses, factories, supermarkets and offices.
There are no official government statistics on how much is stolen each year, though petty thievery is routinely denounced in the official press. On June 21, Communist party newspaper Granma reported that efforts to stop theft at state-run enterprises in the capital had "taken a step back" in recent months. It blamed managers for lax oversight after an initial surge of compliance with Castro's exhortations to stop the pilfering.
"Criminal and corrupt acts have gone up because of a lack of internal control," the paper said.
An extensive study by Canadian economist Archibald Ritter in 2005 examined the myriad ways Cubans augment salaries of just $20 a month through illegal trade -- everything from a woman selling stolen spaghetti door-to-door, to a bartender at a tourist hot spot replacing high-quality rum with his own moonshine, to a bicycle repairman selling spare parts out the back door. He and several others who study the Cuban economy said it was impossible to estimate the dollar value of the black market.
"You could probably say that 95 percent or more of the population participates in the underground economy in one way or another. It's tremendously widespread," Ritter, a professor at Carlton University in Ottawa, told AP. "Stealing from the state, for Cubans, is like taking firewood from the forest, or picking blueberries in the wild. It's considered public property that wouldn't otherwise be used productively, so one helps oneself."
Cubans even have a term for obtaining the things they need, legally or illegally: "resolver," which loosely translates as solving a problem. Over the decades it has lost its negative connotations and is now taken as a necessity of survival.
"Turning to the black market and informal sector for nearly everything is so common that it has become the norm, with little or no thought of legality or morality," said Ted Henken, a professor at New York's Baruch College who has spent years studying Cuba's economy. "When legal options are limited or nonexistent, then everyone breaks the law, and when everyone breaks the law, the law loses its legitimacy and essentially ceases to exist."
There is evidence, however, that Castro is persuading at least some black market operators to play by the rules and pay taxes.
In the last seven months, more than 220,000 Cubans have received licenses to work for themselves, joining about 100,000 who have legally worked independently since the 1990s. Of those, some 68 percent were officially "unemployed" when they took out their license, 16 percent had a state job and another 16 percent were listed as "retired," according to statistics on the government Web site Cubadebate.
Many of these jobless and nominally retired people were likely making ends meet by working in the informal market, and even the former government workers were probably connected in one way or another.
"You have to find a way to survive," said Manuel Rodriguez, the former head of a Cienfuegos medical center for children with disabilities. Rodriguez said his monthly government ration card plus his and his wife's meager salaries only covered two weeks' worth of food. "I sat in the park one day and thought, 'What can I do?'"
He began bicycling around town on Sundays, renting out bootleg DVDs of the latest Hollywood films, which others had downloaded from the Internet. Rodriguez, who moved to Miami in 2009, defended his decision to turn to the black market to put food on the table.
"I wasn't hurting anyone," he said. "It's not pornography. It's not drugs."
In fact, the sale and rental of pirated DVDs now is one of the 178 jobs that can now be done legally in Cuba, which ignores U.S. intellectual property rights in response to Washington's 49-year economic embargo.
New license holders complain the taxes and social security payments can be well over 50 percent of sales, raw materials are hard to come by because there is no wholesale market and government promises to provide bank credits and retail space have been slow to develop.
But many say they jumped at the chance to go legit anyway, tired of always looking over their shoulder.
"We started off illegally, years ago, but when they started to give out licenses we got one because it means peace of mind," said Odalis Losano, a 46-year-old single mother who got a license in December to sell lunches she prepares on her home stove. "Now we don't have to be afraid of the police or the inspectors."
Paradoxically, the expansion of a legal free market may be increasing the size of the black market, particularly for the goods and services the new entrepreneurs need to survive. Newly legalized pizzerias must have a steady supply of cheese, flour and tomato paste, self-employed construction workers must have building materials, manicurists must find nail polish.
One man profiting off the legitimate economic opening, albeit illegally, is Roberto, who uses stolen canisters of CO2 to make carbonated drinks for sale to the scores of downmarket private cafes opening up all over Havana. He charges just 7 pesos (28 cents) for a 1.5-liter bottle, a sixth of what a bottle of state-made cola costs in the supermarket.
"This business is not totally legal," he said. "I can't get a license for it because the state will not sell me the CO2. I need to get it on the black market."
And then there are the many activities that by their nature must remain hidden under Cuba's controlled system.
The Internet is strictly regulated in Cuba, so those who sell time on accounts that belong to doctors, professors and computer technicians do so on the sly. The government maintains a monopoly on that most quintessential of Cuban products, the cigar, so the hundreds of underground stogie-rolling factories will stay underground.
Likewise, the sale of gold is regulated, so those who melt it down for false teeth won't get licenses anytime soon.
"Even if they legalize this, it wouldn't be worth getting a license," said one practitioner, who spoke on condition of anonymity for fear of earning the ire of the state. He charges up to $40 per tooth, using gold melted down from jewelry and trinkets he buys from secret suppliers. "They would regulate it so much it would be impossible to get the gold and other materials I need. The authorities would bother me so much it would be worse than doing it in hiding."
Marki, the mule, said he would happily open an imported clothing boutique if the island's leaders ever scrapped Cuba's Marxist economy for capitalism. Until then, he said, he and many of his countrymen will carry on living and working on the margins of the law -- and no amount of fines, seizures or jail time will dissuade them.
"Half of Cuba lives off the black market," he said with a gruff smile. "And the other half depends on it. To me, it is unstoppable."

Associated Press writers Andrea Rodriguez in Havana and Laura Wides-Munoz in Miami contributed to this report.
Paul Haven can be reached at http://www.twitter.com/paulhaven

LPP Archive...Bolivia to withdraw from drugs ...

Bolivia to withdraw from drugs convention over coca classification

President Evo Morales says chewing coca leaves is a cultural heritage and ancestral practice
  • guardian.co.uk,
  • A Bolivian woman dries coca leaves
    A woman dries coca leaves in the Yungas valley, 75 miles north of La Paz in Bolivia. Photograph: Aizar Raldes/AFP/Getty Images
    Bolivia is set to withdraw from an international narcotics convention in protest at its classification of coca leaves as an illegal drug. President Evo Morales, who is also the leader of one of the country's main coca producers' unions, has asked Congress to pass a law that would take Bolivia out of the 1961 United Nations Single Convention on Narcotic Drugs. The government says that the convention contravenes the Bolivian constitution, which states that the country is obliged to preserve and protect the chewing of coca leaves as a cultural heritage and ancestral practice. Bolivia has long argued that coca in its natural state is not an illicit drug. The plant is legally grown in the country for medicinal and traditional purposes. An international attempt to remove its chewing from the UN list failed in January, so the government now wants to withdraw from the convention altogether. Under the draft law, which has already passed the lower chamber of Congress and is likely to pass in the Senate, where Morales's party has a two-thirds majority, Bolivia would keep its international obligations in the fight against drug trafficking. Foreign minister David Choquehuanca said the country could rejoin the convention next year, but with a reservation: that it be allowed to consume coca legally. "[This] is an attempt to keep the cultural and inoffensive practice of coca chewing and to respect human rights, but not just of indigenous people, because this is an ancient practice of all Bolivian people," Choquehuanca said. Opposition politicians argue that the government is surrendering to traffickers. "Internationally, we're giving a bad impression as a country," said opposition congressman Mauricio Muñoz. "There will be disastrous and irreversible consequences for Bolivia. And we think this is the wrong path the president is taking, not to fight drug trafficking head on." Bolivia is the third largest coca producer in the world, much of which is diverted for making cocaine for Brazilian and European markets. But while recently admitting that coca cultivation has grown in the country, Bolivia maintains that it cannot defeat drug traffickers without a reduction in the consumption of cocaine in the west.

Cuba and Bolivia close military ties...

"Bolivia and Cuba are united by a long history, and have a more continuous exchange between their forces armed, "said Armando Pacheco Bolivian military leader, on arrival  Cuba.
Photo: (EPA) EFE
The high command of the Armed Forces carry out their oath to Bolivian President Evo Morales. (Second from left.) Chief of Staff Armando Pacheco.
The Chief of Staff of the Armed Forces of Bolivia, Admiral Armando Pacheco arrived in Cuba on Monday for a visit five days, in order to boost military ties two countries, news agency Efe.
"Bolivia and Cuba are united by a long history, and have a  more continuous exchange between their armed forces, "said Chief Bolivian staff upon arrival to the island, told  quoted by Prensa Latina.
After placing a wreath at the mausoleum where he is buried  the hero of Cuban independence wars, Antonio Maceo, the Bolivia admiral expressed a desire to "strengthen" links with island.
During his second visit to the island commander Bolivia is scheduled to meet with his Cuban counterpart, Chief of Staff  General of the Revolutionary Armed Forces (FAR), Alvaro Lopez Miera, and visiting military units and schools.
Cuba and Bolivia have significantly improved their relationships bilateral since President Evo Morales of Bolivia took presidency in 2006.
Agencies July 5, 2011/http://www.martinoticias.com

UK wants to increase ties and investment with Cuba and support reforms...

07.05.2011 / 19:00
The two countries signed today in a statement Havana expand political cooperation, scientific, cultural, economic and commercial, and consider it a step forward in their relationships, influenced by the politics of "common position" of the European Union (EU).
The document was signed at the headquarters of the Foreign Ministry of the Havana by Cuban Deputy Foreign Dagoberto Rodriguez, and the British Ambassador on the island, Dianne Melrose, who said he is "a rare opportunity important. "
Speaking to journalists, the British diplomat said benefit sharing declaration on issues of importance each other as climate change, disaster response natural, human rights and trade and investment.
Without giving figures, he lamented that bilateral trade remains "Very low" but noted that "there are many possibilities to increase investment "of their country on the island, particularly in the tourism sector.
According to Melrose, major British companies are interested in the development of tourist resorts and golf courses in Cuba, the UK has one of its main tourism source alongside countries such as Canada, France and Russia.
"Really what we want is that the investment support for the major changes being carried out in Cuba with the 'guidelines', "Melrose said in reference to economic reforms implemented by the government of President Raúl Castro.
Regarding London's position to the common position European Union, said the policy "will remain there in force" but warned that his country does want the EU "a step forward about having a bilateral agreement with Cuba. "
Together with Sweden and the Czech Republic, the UK has been countries most opposed to flexible "common position", which remains in effect since 1996 and conditions the bilateral relationship between Cuba and the block to giving progress on rights and democracy on the island.
Without removing this figure, the EU decided last October to explore ways of approaching the island, and its diplomatic service is consensus among all member countries of the bloc to move towards normalization of relations with Cuba.
The EU decision to undertake such an approach was after the government of Raul Castro to release a group of political prisoners thanks to an unprecedented dialogue with the Church Supported by Catholic Spain.
http://www.abc.es/EFE     arj / sam / dm