Capitalism meets communism head on in Cuba

Normalised Cuba-US relations could result in a hybrid economic model blending socialism and entrepreneurial spirit.

A man lights his self-made cigar during a rolling seminar in Havana, Cuba [EPA]
A man lights his self-made cigar during a rolling seminar in Havana, Cuba [EPA]

San Luis, Cuba – One must follow three rules when smoking a fine Cuban cigar, the man with striking blue eyes says at the 170-year-old tobacco farm.

“Never inhale, it makes you sick. Never smoke a cigar on an empty stomach. And last, never ever smash it out – let it die with the dignity it deserves,” says Ivan Rodriguez, 42, a tour guide at the Vegas Robaino cigar company’s Chuchillas de Barbacoa plantation in western Cuba.

Three generations of the Robaino family have grown tobacco here since 1845.

Cuba’s renowned cigar producers are poised to gain greatly after the end of 55 years of discord between Cuba and the United States – and Rodriguez is excited at that prospect.

“It’s going to be great for the American people, they know high quality. They’ll come here and bring our cigars back home. It’s part of our culture – cigars make people friends,” he says.

Ivan Rodriguez shows off tobacco leaves at the Chuchillas de Barbacoa plantation in western Cuba [Robert Kennedy/Al Jazeera]

Strong dose of capitalism

It remains unclear how long the barriers between the Cold War rivals that hold back billions of dollars in trade will last, but change now appears inevitable. After December’s historic declaration of rapprochement, it was announced embassies could be opening for business as of July 20.

For small and medium-sized Cuban businesses, a strong dose of capitalism shot into the communist economy can’t come soon enough.   

The owner of Chuchillas de Barbacoa, Hirochi Robaina, pulls no punches when discussing the lackadaisical government handling of his prized tobacco leaves.

It’s the end of the growing season and he’s upset because enough tobacco for 14 million cigars is drying out in storage and prone to pests while it awaits slothful government buyers to buy it for state-run cigar manufacturers. 

“This tobacco is of the highest quality, but now it is declining the longer it sits,” says Robaina from a wooden rocking chair as he watches the Cuban baseball championship on an old television set.

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Once trade sanctions are lifted, the US’ mammoth cigar appetite – representing 65 percent of the global market – will be hungry for Cuba’s best-known product. But Robaina says years of communist control over the industry threatens any boom.

“Our cigar production is in decline, mostly because of neglect and incompetence,” he says. “Tobacco is a very important part of the economy. I criticise because these problems need to be solved. I love my country – that’s why I point this out.”

A roller deftly spins up a cigar at the Vegas Robaino company’s Chuchillas de Barbacoa plantation in western Cuba [Robert Kennedy/Al Jazeera]

Learning capitalism

Back in the capital Havana 200km northeast, a husband-and-wife team have jumped all over the relaxation of communist rules that for decades banned entrepreneurial endeavour, after President Raúl Castro’s economic reforms were launched in 2008.

Julio Alvarez and his wife, Nidialys Acosta Cabrera, personify the burgeoning capitalist spirit on the Caribbean island of 11.3 million people.

Alvarez is a car mechanic and the couple opened a repair shop in 2012. But after travelling to the US under bilateral initiatives for Cubans to learn how to run a small business – their entrepreneurial spirit took off.

The auto-shop now refurbishes American cars from the 1950s for tours or to rent to the surging number of tourists arriving here. Not only that, the couple organised a cooperative with other classic-car owners to pool their vehicles for the effort. Business is booming, they say.      

“Every single year over the past three years we’ve grown,” Alvarez says proudly. “We’re very hopeful our success will continue.”

Julio Alvarez and his wife Nidialys Acosta Cabrera opened their car restoration and tour business three years ago [Robert Kennedy/Al Jazeera]

‘All of this is new’

At the auto-shop, workers pass by to use a nearby lathe from 1949 to hone a car part. Two graphic designers show up with a large banner advertising the company – NostalgiCar – that’s set to hang on the concrete wall.

The couple is proud to mention they met Assistant Secretary of State Roberta Jacobson while in the US studying American capitalism, and their excitement is palpable when discussing the future.

Previously, Alvarez and Acosta had to rely on their savings to prop up the business, but now Cuban banks are offering lines of credit – something virtually unheard of here.

“All of this is new – loans, tax credits. I saw this in the US and was very impressed. I’m learning to be a proper businessman from all of this experience,” Alvarez says.   

Small-scale businesses known as trabajadores cuentapropistas have multiplied over the past 20 years with about 435,000 now on the island, up from 138,000 in 1995. About one million people, 20 percent of the workforce, are now considered part of the private sector.

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Yet, challenges remain after five decades of Soviet-style economic planning.

Pedro Vázquez is an architect and urban design consultant who also gives American tourists government-sponsored history lessons on Cuba.

While détente takes hold and economic prosperity presents itself, Vázquez says his greatest concern is that the Cuban people – long accustomed to proletariat relegation – will miss out on new opportunities. 

“There’s no discipline among the people here,” he says. “It’s a cultural constraint and it happens in every aspect of life. Cubans are very good at doing nothing.”

Images of staunch communists Che Guevara and Fidel Castro are omnipresent around Cuba [Robert Kennedy/Al Jazeera]

Not just anybody

As Cuba transforms its centrally planned Soviet-styled economy, many observers are wondering just how far the government will go. Several economists here told Al Jazeera the ideals of the 1950s socialist revolution will hold firm while accommodating the most desirable aspects of capitalism.   

From his sunny Havana office, Hugo Pons Duarte, director of Cuba’s National Economist and Accountant Association, says the “management model” will have three pillars: state enterprises, cooperatives, and the self-employed.

“The policy is not to open up the country to just anybody who wants to come,” says Pons. “The government has a strategy for guiding investment.”

Vázquez notes the communist rulers are well aware of the dangers of giving multinational corporations carte blanche. “Money is power and the government has a very narrow path for business,” he says. 

Source: Al Jazeera


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