Cuba Moves Forward on Reforms, Leaving Islanders Confused

Currency, business, farm policies stir concerns over inequalities

LAW student ``Daniel'' lugs a Chinese-made bike up a flight of stairs. He has just finished his daily 15-mile commute to Havana University. His only meal today: a plate of rice and cooked bananas.

Intense, lean, and a high-ranking member of the Communist Youth Union, Daniel sits on the edge of a neatly made dorm bed and talks in a low, animated voice about graduating next year - not to practice law, but to wait tables.

``Everybody I know is looking for a way to earn dollars in the tourism sector. As a lawyer, I would make 198 Cuban pesos a month. That is about $3 - a waiter's tips for one day,'' he explains.

``Legalization of the dollar is the legalization of inequality,'' he says, choosing his words carefully. ``Socialism, I don't know what it means anymore. What counts is who you know in the hotels and restaurants. It seems more like socio-ismo [socio means club member or partner] than socialismo.''

Cuba, like Daniel, is going through a confusing period.

``There is no economic blueprint. Everything is on the table,'' a Western diplomat here says. Another adds: ``The debate within the government is no longer whether to reform, but how to do it with the least social and political cost.''

The collapse of the Soviet bloc brought an abrupt end to 70 percent of all Cuban imports - everything from food to spare parts. The United States trade embargo is biting harder now than at anytime in Fidel Castro Ruz's 34-year reign. Shortages abound. More and more of the daily needs are met on the black market. The 1992-93 sugar harvest - a crucial source of foreign currency - was the worst in decades. This year's harvest isn't expected to be much better.

Some analysts predict the end of Castro's rule is close at hand. But others see a government surviving an economic nadir and slowly changing.

``If you look at Russian tanks firing on their parliament, the riots in Venezuela, the street murders in Brazil, the amazing thing is that we are still here and nothing dramatic has happened,'' says Raul Taladrid, director of Cuba's State Committee for Economic Collaboration, a ministry for foreign investment. ``We're adapting to the new realities,'' he says.

On July 26, Castro announced the ``unpleasant'' concession of legalizing foreign currency to draw more of it out of the black market and into government coffers. So in August, it became legal to do business in dollars and open a foreign currency bank account. A few weeks later, to reduce underemployment and unemployment, private enterprise was allowed in 117 types of services, from plumbers to handicrafts.

In September, the government took steps to boost agricultural productivity by creating smaller-scale farm cooperatives out of large state farms. Individual wages will rise and fall based on each farm's productivity.

The ``dollarization'' of the Cuban economy has been the most controversial move. It creates inequalities by giving Cubans with families overseas and workers in certain industries, like tourism, access to dollars.

``A sugar worker labors twice as hard as a tourism worker. Sugar is the main source of hard currency. But who gets the dollars and nice clothes?'' asks Daniel, the law student.

Mr. Taladrid agrees that the change creates inequalities. ``But how do you create a dollar tip for sugar workers? And what about the workers in the nickel, citrus, fishing, and biotechnology industries?''

Cuban officials argue that dollarization is a necessary evil that brings more hard currency to the state for more equitable distribution.

Before granting Cubans access to the well-stocked dollar stores, the government hiked prices by 50 percent. Taladrid hints that more taxes will be levied on dollar earnings to reduce the gap between the dollar haves and have-nots.

A Pastoral Letter, distributed by the Cuban Catholic Bishops in September, warned that Cubans are ``building up a reservoir of aggression that could boil over at the slightest provocation.''

On Oct. 14, the point was underlined when demonstrators (estimates range from hundreds to thousands) stopped a funeral procession in the Havana neighborhood of Regla. According to official and unofficial sources, the crowd broke the windows of the funeral car and took the casket to the police station. The next day, pro-government ``revolutionary forces'' broke up a demonstration outside the cemetery. Two people were injured, reported the government weekly, Trabajadores. Some 40 to 60 people were arrested, Cuban journalists interviewed say.

The protest was over the death of a Regla resident killed by border police when caught trying to escape the island Oct. 12. ``This is a significant sign of discontent,'' says a European diplomat. He notes that this protest was organized, probably by the Abakua, an African sect that controls the area's black market. The man killed by police is believed to be a sect member. Official reports say many protesters had police records.

Other observers played down the protest as an isolated incident. But the Catholic Church and Latin American and European diplomats here express concern that the US trade embargo seems aimed at pushing Cuba into chaos rather than encouraging a peaceful transition to more ``acceptable'' economic and political policies.