Cuba Eases Restrictions, Aims for Economic Boost

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In Havana, some restrictions are easing for Cubans, who can now buy cell phones and other electronics and stay at hotels formerly reserved for tourists. Reuters economics correspondent Marc Frank says the reforms are aimed at improving the value of the Cuban peso.


From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.


And I'm Robert Siegel.

The Cuban government has relaxed restrictions on what Cuban citizens can do with their money. The ban on Cubans entering luxury resort hotels has been lifted. Last week, bans on buying cell phones and others electronics were similarly lifted. The question now is how many Cubans actually have the money to spend on these goods and services that we're previously off limits?

Well, Marc Frank reports from Havana for Reuters. And Marc Frank, first, what is the government of Raul Castro up to here?

Mr. MARK FRANK (Economics Correspondent, Reuters): Well, I think, what the government and Raul Castro is up to is trying to make sure that the socialist system of Cuba survives after his brother, who's very ill, and he are no longer around. So they're beginning to move both to ease some restrictions on daily life but also, almost more importantly, to open up the state-run economy.

SIEGEL: So Cubans now will be allowed to go to luxury hotels and buy cell phones. I gather also computers is another freedom they now have.

Mr. FRANK: Yes, they do. Like, for the first time, ovens, you know, microwave ovens, things like that.

SIEGEL: And can the typical Cuban afford a microwave oven or a computer or a cell phone?

Mr. FRANK: Well, you know, this is a question. I can tell you this, about 60 percent of the Cuban people do get some dollars, some hard currency from different ways - from their families abroad, from their work, from tourists, from black-market activity, et cetera. But more than that, which is very interesting, is that about 10 percent of the Cubans people have the control of 90 percent of the Cuban pesos in the banks here.

So, there's already great deal in a quality in Cuba. And what the Cuban government is doing now is really accepting that inequality for the first time and offering these people of different goods and services. So, they'll turn those pesos into the hard currency, which they can do here and buy these goods with the long-term objective, of course, of strengthening the local currency which is worth less than five cents.

SIEGEL: The system that's being dismantled here is familiar. This used to be the rule in all of communist Eastern Europe, whether there'd be some hard currency stores and the luxury hotels that were available to people with dollars or deutsche marks, but not to people with the local currency. This persists in Cuba to this day.

Mr. FRANK: Yeah, exactly. And I think they're looking in a medium term to get rid of it completely. Right now, there is still a dual currency, a foreign exchange and a no foreign exchange. And product exchange shops are really nice and the local shops are rarely dingy much like the Soviet Union was. But I think there's now a clear decision to begin to move towards eliminating that system, though it'll take sometime because what they want to do again is to strengthen the local currency, so there's not a big shock like there was in Eastern Europe when they do that.

SIEGEL: One cynic on our staff who heard this - when you've heard about the access to luxury hotels, and to own cell phones - said that this is the Cuban call girl liberation act of 2008, in effect.

Mr. FRANK: Well, of course, this is what's interesting. You know, in the early 1990s, Cuban's could enter the hotels, and in fact the U.S. government charged Cuba with trafficking and promoting prostitution because these hotels were government run. So then they limited the access and they were, you know, charged with tourism apartheid. Now they're reintroducing the ability to go in, and we'll see what happens.

Certainly, the situation here has improved quite a bit economically, though there is still plenty of prostitution.

SIEGEL: Mark, with these liberalizations having been announced, what are the steps that Cubans are anticipating as the next logical steps in the similar policy?

Mr. FRANK: Well, again, there's two different levels, which are kind of fit for daily life level, and there's a kind of economic level. On the daily life level, what they're really want to see next are three things. One, that government control over their travel (unintelligible), which I think will be happening at least somewhat in the near future. And then, there's two other things that really bother Cubans. It's one they cannot buy and sell cars. And two, they cannot buy and sell houses. And they're hoping that both those restrictions will change.

SIEGEL: Mark Frank of Reuters in Havana, thank you very much for talking with us.

Mr. FRANK: It's been a pleasure.

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