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AUDIE CORNISH, HOST:

It's ALL THINGS CONSIDERED from NPR News. I'm Audie Cornish. Now, a story about the tensions between communism and capitalism. Recently, Cuba's communist leaders have tried to encourage entrepreneurship and small business growth. But the closing of a vibrant new restaurant and club is testing the limits of Raul Castro's commitment to private enterprise. Nick Miroff has that story from Havana.

NICK MIROFF, BYLINE: Ulises Aquino was one of Cuba's best-known baritones before he founded his own company, Opera de la Calle or Opera of the Street, in 2006. By combining Cuban rhythms and dance with his formal musical training, he won fans at home and abroad.

(SOUNDBITE OF MUSIC)

MIROFF: Aquino considers himself a good revolucionario, meaning he's a loyal supporter of Cuba's socialist system. And when President Raul Castro urged Cubans to increase productivity by starting small businesses, Aquino answered the call. He cleaned up a vacant, trash-strewn lot in Havana and built a restaurant and cabaret, El Cabildo, where his Opera of the Street could finally have a home.

(SOUNDBITE OF MUSIC)

MIROFF: True to socialist principles, Aquino split earnings among his 130 employees, held free children's theater on weekends and kept his prices low. It didn't last a year. Here's Aquino.

ULISES AQUINO: (Foreign language spoken)

MIROFF: On July 21st, Aquino says a team of inspectors sent by Havana City authorities interrupted his Saturday night show as the stunned audience looked on. They ordered me off the stage and began a four-hour inspection, Aquino says. They told us to shut down the kitchen and freeze all sales. The officials ordered El Cabildo closed and Aquino's business licenses revoked for two years. His supplies lacked proper receipts, they said, and he had too many chairs.

But the most severe charge was personal enrichment, saying Aquino wasn't authorized to charge a $2 cover at the door. No hearing, no appeal, just a stern letter from officials who weren't too interested in helping bring him into compliance. But Aquino is not blaming Raul Castro.

AQUINO: (Foreign language spoken)

MIROFF: This kind of thing is the exact opposite of what our government has been telling us, says Aquino. The people behind this are the midlevel bureaucrats who see Cuba changing and know they're going to lose their power. They're the ones holding our country back. Raul Castro himself told Cubans in a recent speech that bureaucrats who stand in the way of change will be swept aside. He's laid out plans to resuscitate Cuba's state-run economy by creating millions of jobs in new small businesses and cooperatives.

But the process is dragging, and closing El Cabildo has killed 130 of the few new jobs that have been created for Cubans like Angel Basterrecha, who's now waiting to see if he'll be unemployed again.

ANGEL BASTERRECHA: (Foreign language spoken)

MIROFF: Life has changed for me and my family since I started working here, says Basterrecha, who Aquino hired to help build El Cabildo and work as a night watchman. I've made 120, even $160 a month, he says, and that's more than I've ever made. No one is getting rich on that sort of wage in Cuba, where the average state salary is a meager $20 a month.

But even a modest display of success may have led to Aquino's downfall. Just before he was busted, the cabaret was featured in a Reuters article that called it Cuba's largest private business and laid out Aquino's profit-sharing model for socialist enterprise. Aquino insists he broke no laws, and that he's the one on the side of the Cuban Revolution, not the local officials who shut him down.

AQUINO: (Foreign language spoken)

MIROFF: I'm a revolutionary because I'm not a conservative, Aquino says. This was done by people who pretend to be revolutionary but are fakers, lacking in any ethical principles. This is not what the revolution is about, he says. Aquino's case is a test for Raul Castro and his reformers as they begin an experiment converting state-owned companies into employee-run cooperatives. If they intervene and help Aquino reopen, it'll send a message to lower-level officials that small businesses that create jobs deserve support.

If they let El Cabildo remain shuttered, they'll be sending a different signal: that the skeptics are right, and Cuba hasn't changed much after all. For NPR News, I'm Nick Miroff in Havana.

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