Cuba Examines Asian Model For Economic Reforms

Cuba's President Raul Castro and Vietnamese Communist Party Secretary General Nguyen Phu Trong review an honor guard during an official welcoming ceremony at the presidential palace in Hanoi in July. The Cuban leader flew in from China for the second leg of his Asian tour to Cuba's two Asian communist allies.

Cuba's President Raul Castro and Vietnamese Communist Party Secretary General Nguyen Phu Trong review an honor guard during an official welcoming ceremony at the presidential palace in Hanoi in July. The Cuban leader flew in from China for the second leg of his Asian tour to Cuba's two Asian communist allies. Hoang Dinh Nam/AFP/Getty Images hide caption

itoggle caption Hoang Dinh Nam/AFP/Getty Images

Cuba is one of the world's last remaining communist states. Cuba's allies in China and Vietnam also maintain firm one-party rule, but have prospered by introducing market principles to their economic models. With Cuban President Raul Castro easing government controls on property rights and private enterprise, many are wondering if the struggling island is looking to Asia for a way forward.

The intersection of 23rd Street and 12th Avenue in Havana's Vedado District is a Cuban landmark in Cold War history. It was here during the Bay of Pigs invasion in April 1961 that Fidel Castro dropped his democratic assurances and declared at the peak of a fiery speech that Cuba "had carried out a socialist revolution right under the United States' nose." It was the first time he'd openly used the S-word to describe his leftward plans for the island.

People, one holding an image of Cuba's President Raul Castro  and his brother Fidel Castro, wait in line at a bus stop in Havana last month. i i

People, one holding an image of Cuba's President Raul Castro and his brother Fidel Castro, wait in line at a bus stop in Havana last month. Franklin Reyes/AP hide caption

itoggle caption Franklin Reyes/AP
People, one holding an image of Cuba's President Raul Castro  and his brother Fidel Castro, wait in line at a bus stop in Havana last month.

People, one holding an image of Cuba's President Raul Castro and his brother Fidel Castro, wait in line at a bus stop in Havana last month.

Franklin Reyes/AP

What Cubans ended up with was a tropical version of Soviet economics, defined by centralized planning and the elimination of most private property. Even Cuba's ice cream vendors had their Popsicle carts seized by the state in the name of ending inequality.

That same Havana intersection is changing. The dreary state-run businesses that were long ago nationalized now compete with private restaurants, snack bars and newly licensed entrepreneurs like Yoel Gonzalez, 31, who sells Puma and Adidas sneakers where Castro once rallied the crowds of Cuban militiamen.

"You have to work a little harder when you have your own business, but you get to see the benefits," Gonzalez says. "When you work for the state, your salary is guaranteed, but it's not enough to survive on."

To advocates for change, Gonzalez is precisely what's wrong with Cuba's current model. Gonzalez was trained as a computer programmer but quit his government job to make ends meet by selling shoes.

Starting a software company or working as a private computer engineer isn't among the 181 occupations that have been permitted so far by Cuban authorities. Licenses are available for stone cutters, horse cart drivers and birthday clowns, but not architects, scientists or other educated professionals.

And unless that changes, the mentality of Cuba's Communist Party will remain decades behind China and Vietnam, says University of Havana economist Julio Diaz Vazquez.

Cubans pass by a billboard celebrating the 86th birthday of former Cuban President Fidel Castro, on Aug. 13 in Havana. Castro celebrated his birthday quietly and out of the public eye, while political allies and Cuban citizens paid tribute from afar. i i

Cubans pass by a billboard celebrating the 86th birthday of former Cuban President Fidel Castro, on Aug. 13 in Havana. Castro celebrated his birthday quietly and out of the public eye, while political allies and Cuban citizens paid tribute from afar. Adalberto Roque/AFP/Getty Images hide caption

itoggle caption Adalberto Roque/AFP/Getty Images
Cubans pass by a billboard celebrating the 86th birthday of former Cuban President Fidel Castro, on Aug. 13 in Havana. Castro celebrated his birthday quietly and out of the public eye, while political allies and Cuban citizens paid tribute from afar.

Cubans pass by a billboard celebrating the 86th birthday of former Cuban President Fidel Castro, on Aug. 13 in Havana. Castro celebrated his birthday quietly and out of the public eye, while political allies and Cuban citizens paid tribute from afar.

Adalberto Roque/AFP/Getty Images

"Cuba's model continues to be for the state to own and distribute everything. That has nothing to do with Marx. It's not possible to have socialism if you don't have a productive economy to sustain it," he says.

On the scale of liberalism, Cuba is still closer to North Korea than China, a country that looks relatively open to Diaz Vazquez. Chinese citizens have access to the Internet, he notes, and can publicly criticize corruption or pollution.

But economic changes are bringing subtle political shifts, according to Rafael Hernandez, editor of the Cuban journal Temas. He says a new model for Cuba is still taking shape, but it would be foolish for the island to try copying China or Vietnam.

"These are Asian societies with their own cultural traditions and history. So I don't think that economic policy is something you can develop like a vaccine, this is not about a lab test that you can apply elsewhere. The social, historic and cultural circumstances in which you are going to develop an economic and political model is fundamental," Hernandez says.

Raul Castro, 81, made a rare trip abroad to visit China and Vietnam in July, promising closer ties. But while those countries churn out iPhones, textiles, cars and nearly anything else the world economy wants, Cuba still struggles to make its own laundry detergent and grow enough food.

Opponents of the 50-year-old U.S. trade embargo against Cuba point out that Asia's communists have been transformed by business ties to the U.S. market. But the embargo's backers insist the Cuban model won't really change until the Castros are gone.

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