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| A Havana vendor selling bread |
By Nick Miroff, Global Post, January 23, 2013
HAVANA, Cuba
— Cracker Man’s cry echoes down the streets of Havana's Buena Vista
neighborhood, trailed by the clatter of his shopping cart over potholes.
“Crackers! Crackers!” he barks. “Fresh from the oven!”
He’s one of roughly 400,000 Cubans now working as
state-licensed entrepreneurs in the communist country's small but growing
private sector.
Cracker Man, as he’s known in the neighborhood (“el
Galletero”), sells his product for about $1 a bag. He doesn’t make the
crackers, but buys them from the state-owned bakery.
He’s what Cubans refer to as a “revendedor,” a reseller
who buys scarce state-subsidized items from government stores to sell at a
mark-up.
That’s made many people here angry. Complaints abound in
the “letters to the editor” section of Cuba’s Communist Party newspaper Granma,
where resellers are disparaged as parasites and good-for-nothing speculators
whose main contribution to the economy is to make basic products more expensive
for everyone.
They’re also entirely the creation of Cuba's new halfway
capitalism.
Raul Castro’s recent reforms — the government calls them
“updates” — have provided a place for market forces to exist alongside the
centrally planned, state-controlled economy. Cubans have been granted new
opportunities to become tradesman, DVD vendors, pizza makers and licensed
small-scale retailers whose tiny shops and stalls have bloomed along Cuba’s
main streets and thoroughfares.
Other entrepreneurs navigate pushcarts through the
streets as itinerant peddlers, hawking goods under the hot Caribbean sun.
The government wants the private commerce to stimulate
Cuba’s moribund economy and substitute costly imports. But experts say the
authorities have yet to take the next necessary step: allowing entrepreneurs to
innovate and manufacture their own products.
Cracker Man, for instance, has nowhere to buy the kind
of industrial ovens, bakery equipment and wholesale supplies he’d need to make
crackers. Shipping those items from abroad would trigger steep import duties,
never mind the logistical obstacles.
“We still haven't created the mechanisms for a
productive economy,” says economist Julio Diaz Vazquez, a Soviet-trained expert
on China
and Vietnam's so-called market socialism. He criticizes the government for
wanting to encourage entrepreneurship while tightly controlling it through an
obtuse bureaucratic regulatory system.
He believes that’s a lost cause. “You can't play games
with the market,” he says.
The authorities say they want to sharply reduce the
number of Cubans working in low-paid, unproductive government jobs by moving
them into cooperatives and small-scale private businesses.
They’re setting up pilot programs to convert state-run
enterprises into worker-managed cooperatives, and have expanded the range of
occupations for which Cubans are allowed to obtain self-employment licenses.
But the list remains very small, with fewer than 200
officially sanctioned professions from which Cubans can choose, including
obscure jobs such as “party planner” and “palm-tree pruner.”
Not the kind of thing to lift millions out of poverty or
free Cuba from having to import soap, snack foods and other bare necessities on
which the government spends billions of dollars abroad while its own state-run
manufacturing sector withers.
Many of the newly licensed entrepreneurs sell
hardware-store items and household essentials such as bleach and dishwashing
detergent. As their stalls have proliferated, many of the items they sell are
disappearing from state stores because private vendors are rushing to buy up
supplies.
The government says it’s working to set up wholesale
markets to supply the new businesses, but it has yet to do so, with a few
exceptions. The authorities seem nowhere close to allowing island residents to
invest in the kind of infrastructure that could help give rise to private
manufacturing and industry.
Until that happens, economists say, resale economics
will continue to rule.
In one area of Havana known as the La Copa, private
vendors offer plumbing supplies and other items not available in the
state-owned hardware store next door.
Some of their goods are imported while others — such as
crudely fashioned pipe fittings — are made on the island. Like most everywhere
else, the rest are bought in government-owned stores.
The vendors respond to criticism about selling
state-manufactured goods at higher prices saying that as long as they can show
receipts proving they acquired the items legally, there’s nothing illegal about
reselling them.
“I’m providing a service to my clients and to the
government,” says Yormani Alayu, a plumbing-supply vendor who says he pays
taxes and goes to great lengths to acquire scarce materials. He points to
several rolls of flexible plastic tubing that would be nearly impossible to
find in state-run stores.
“These are from Las Tunas,” he says of a city more than
400 miles from Havana.
One customer, Tania Alvarez, says she appreciates
personal attention from private vendors, in contrast to the poorly paid clerks
at government stores who are often indifferent toward shoppers, if not surly.
“I also appreciate the convenience,” she adds. “I don’t
have to go all over town to look for these things.” She says she doesn’t mind
paying slightly more.
Other resellers says they’re adding value to products
they acquire from state stores.
A 21-year-old hardware vendor named Moises Amador points
to colorful rum bottles on his table filled with different kinds of paint, each
labeled with instructions. The paint is sold by the gallon in government
stores, he explains, but often clients don’t need to buy that much. “And not
everyone can afford a whole gallon,” he adds.
“I’m providing a service,” he says somewhat defensively.
“I make my own labels and print them. I buy the bottles from a recycler. It’s
an investment I make.”
Despite the controversy about them, the new business
licenses do appear to be sparking some degree of industriousness.
Vendor Jose Bueno says he’s been making and selling
shoes for 20 years, first with a license, then on the black market, and now
with a license again.
“Almost everything you see here was made in Cuba,” he
said about rows of leather loafers, brand-less sneakers and elaborately
decorated women’s flats.
“These are good shoes, with the right materials for our
climate,” he added, holding up a pair of $50 leather wingtips. “Not like those
synthetic ones from China.”
Acquiring the leather, fabric and other materials was
another matter, however. Most had to be brought in from abroad or purchased on
the black market.
“But at least I’m still manufacturing something,” he
says. “There’s nothing speculative about that.”
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