One project that Cuba abandoned because of Special Period hardships was the schools-in-the-countryside (ESBEC) program. In practice, the students turned out to be mediocre farmers. The citrus crop for which they were responsible languished, and in 1994, Cuba turned to Israel to help revive its citrus industry. In addition, families increasingly opted out of the program, even though the schools continued to provide food, lodging, and clothing for the students. Most of the boarding schools that still operate today are specialty schools in each Cuban province—for aspiring athletes and gifted students—such as the prestigious Lenin School near Havana.
Resolver—to find ways of overcoming hardship—became the catchword term everyone used to signify both frustration and determination. “How are things going?” a visitor would ask. “No es fácil”—nothing’s easy—would be the reply. People waited in long lines for food or buses that seemed never to show up. They rode bicycles instead of cars as Cuba imported more than one million bikes from China. They cheered Cuban Olympic teams that previously had amazed the world by attaining as high as fourth place in total medals, though in 1996 Cuba dropped to ninth place. At the 1993 Central American and Caribbean Games in Puerto Rico, nearly 50 of the 450 Cuban athletes sought asylum and chose not to return to Cuba.10
Philip Brenner was in front of a Havana hotel in 1994 when a rail-thin man on a bicycle wheeled up to him with a hearty, “Hi, Phil.” Brenner searched his memory but could not recognize the stranger. “It’s me, Carlos,” former Cuban ambassador Carlos Alzugaray blurted out. “It seems you have been doing a lot of bike riding,” Brenner responded. Alzugaray, who is more than six feet tall, usually had weighed at least two hundred healthy pounds. Yes, he acknowledged, “but mostly I have lost weight from eating only three or four dinners each week. We have teenagers, and the food goes first to them.” On the other days, he explained, he and his wife relied on sugar water to satiate their hunger.
An Oxfam report described Cuba’s food dilemma by pointing to the disaster Cuban farmers faced:
Imported inputs vanished—no chemical fertilizers, animal feed, tools, seeds, wire, or animal vaccines. Fuel for tractors and irrigation systems was practically unobtainable, as were tires or batteries or spare parts. Cuban-produced goods such as feed, pipes, tools, fertilizers, and pesticides dried up because of the same litany of problems: no raw materials, no electricity to run the factories, no functioning trucks, and no petroleum. . . . Tractors stood useless in the fields, electric pumps went dry and crops wilted . . . and animals died or were slaughtered for food as their feed disappeared.11
Cubans’ poor diet contributed to an increase in health problems just when the end of Soviet subsidies made importing medicine and medical supplies more difficult. Polyclinics, hospitals, and pharmacies had shortages of everything, from aspirin and antibiotics to spare parts for ventilators and monitoring equipment. In 1995, a delegation of physicians from the American Association for World Health found that the US trade embargo made Cuba’s health situation even worse. “Patient charts,” one of the doctors noted, “consisted of microscopic handwritten entries jammed on every square inch of mismatched and reused paper. . . . Water supply and treatment is a serious problem. Cuba is not able to produce enough chlorine to disinfect the water,” he wrote.12
In the first years of the Special Period, Cuba’s oil imports declined from 13 million to 1.8 million barrels annually. Electricity blackouts became so commonplace that Cubans joked about having the occasional alumbrones (periods when lights were available) rather than apagones (blackouts). The energy crisis included insufficient gasoline and diesel for delivery trucks, buses, and private cars. It contributed to the government’s decision to downsize the military from almost 300,000 full-time members to fewer than 100,000. Its budget was cut by nearly 40 percent from 1990 to 1993.13 The Cuban Air Force eliminated 80 percent of its flight training and practice missions because it lacked fuel and spare parts.
Dual-Currency Economy Emerges
As Cuba’s economic catastrophe endured, many of the more than one million Cuban-Americans in the United States sought to help their families. But Cubans were not permitted to spend US dollars on the island. When a family sent money via a courier, a Cuban could use it only on the black market. In order to undermine this rapidly growing informal economy, and to capture hard currency that could be used for national purposes, the government legalized the spending of US dollars in 1993 and opened Shops for the Recovery of Hard Currency, or “dollar stores” as they were known generally, which sold scarce commodities.14 In 1994, remittances rose to $262.8 million, and the next year, they totaled $582.6 million. Nearly one-fifth of Cuba’s hard currency earnings in 1995 came from these monetary gifts from families.15 Thus, the dual-currency economy began: Cubans were able to buy some goods (and later services) only by using hard currency, a currency such as the US dollar that was freely convertible in the international market. For everything else, they used Cuba’s national currency, the peso (CUP).
Those who had access to hard currency generally fell into one of two groups: (1) Cubans with relatives sending remittances from abroad and (2) Cubans with jobs in the newly emerging tourist sector that enabled them to earn hard currency from gratuities. Hard currency recipients in either category unquestionably had an easier life than other Cubans. Even a monthly remittance of fifty dollars from a relative in Miami could mean the difference between suffering and comfort.
The uneven distribution of hard currency undermined the Cuban Revolution’s proud achievement of broad economic, social, and racial equality.16 Before the 1990s, the highest paid Cubans—such as doctors and engineers—earned four to five times more than the lowest paid workers. The difference between managers and workers was even less. That system of reward contributed to the egalitarian character of the society, a reduced emphasis on individualism, and incentives that enabled Cuba to develop a society notable for its educated and healthy population. But the dual-currency economy engendered new levels of inequality. If you wanted cheese, it was an import that you had to purchase in a dollar store. Adhesive tape, needles and thread, and even the most basic items associated with Cuban culture—coffee, rum, and fine cigars—were available only in dollar stores.
Cuban scholars characterize the new inequality as an “inverted pyramid.” Sociologist Mirén Uriarte explains that the term describes “a phenomenon that reflects the devalued return on education and professional preparation in the new economy.”17 A doctor might have earned 1,200 CUP in one month, but a taxi driver could earn that much in one week from tourists’ tips because one US dollar was the equivalent of about 27 CUP in the 1990s. Suddenly the incentive to study many extra years in order to be a professional and contribute to the common good was overwhelmed by the need to earn money in order to resolver, or even to survive. During the two-year period from 1993 to 1994, 8 percent of Cuba’s teachers took jobs that required only a minimal education in the tourist sector.18
Families soon invented novel ways to earn extra income to make up for low salaries, which was facilitated by a 1993 law that made self-employment legal for 117 occupations—the most significant turn back to private enterprise since the start of the Revolution. Individuals were now allowed to engage in small businesses of their own, such as family restaurants known as paladares (derived from the Portuguese word paladar, which means palate), bed and breakfast accommodations in their homes, and craft stands. A 1998 study reported that nearly half of the self-employed Cubans, or cuentapropistas, were involved in “services and repair,” though accurate data on the number of self-employed Cubans at the end of the 1990s is not available.19 While 209,000 individuals were licensed to conduct their own business in the peak year of 1996, there were reports that the true number of self-employed businesses might have been twice as great as the official count.20
Most paladares operated illegally. These began as food carryouts from homes and then expanded into eat-in restaurants. Legal palada
res could accommodate no more than twelve guests at a time, and only immediate family members were permitted to work in a paladar. But the most popular ones featured items such as lobster that one could obtain only on the black market and were illegal to sell in a paladar. Indeed, hard times engendered corruption. Many daring entrepreneurs drove unlicensed taxis or rented rooms for travelers without registering in order to avoid high taxes. Despite stiff penalties for those caught, others sold scarce goods—tires, car batteries, copper wire, cement, tools, and the like—on the expanding black market.
Some black-market products were provided by fishermen, farmers, or skilled craftsmen who withheld a portion of their output from the official distribution network. But many of the available items were stolen from government supplies, which led to further breakdowns in service. In 1995, Fidel called for a crackdown on corruption, which was taking a significant toll on Cuba’s recovery and undermining a culture of shared sacrifice for a common national purpose. He charged that foreign investment was the root cause of corruption.21 Yet the more likely source was scarcity and the growing inequality fostered by the dual-currency economy. A few months before Castro’s speech, for example, a Cuban friend of ours described how he was able to afford paying for the gasoline he used in his unregistered taxi business. He knew a service station attendant who short-changed each customer by a hardly noticeable 0.1 liter of gasoline. At the end of the day, the attendant had enough “surplus” fuel to sell gasoline cheaply to his family and trusted friends.
Renewing the Tourist Industry
The 1993 law that created the legal space for some small businesses was motivated in part by the need for tourist facilities. Yet the decisions to seek salvation via remittances and tourism were not made lightly. In a speech on July 26, 1993, a chastened Fidel Castro suggested that they were taken because Cuba was at a point where “we are willing to do whatever is necessary to save the homeland, the Revolution and the achievements of socialism.” He hoped the solution would be temporary so that one day hard currency that came to Cuba “by way of remittances from abroad . . . tips, tourism, etc.” could be used for the common good instead of enriching the few.22
Another concern about tourism on which top Cuban officials collectively agreed was that it would lead to the acceptance of behavior the Revolution had tried to devalue: conspicuous consumption, prostitution, and the glamorization of non-Cuban culture. Indeed, prostitution returned to the island between 1992 and 1996. The government had suppressed and effectively shut it down in the early years of the Revolution. But during the first years of the Special Period, it turned a blind eye to sex tourism. It only began a crackdown in 1996.23 Today, prostitution remains only a minor albeit visible element of Cuba’s attractiveness to some tourists.
An additional problem associated with tourism, as Marguerite Rose Jiménez explains, is “that local artists tend to skew their own social reality so that it conforms to tourists’ expectations.”24 For example, while visiting foreigners often want to hear the “authentic” songs of the Buena Vista Social Club, Cubans themselves no longer embrace this pre-revolutionary style of music. Much more popular, especially among young Cubans, is a distinctive form of hip-hop that Cuban artists developed in the early 1990s. Musicians initially mimicked rap songs they heard from Miami, but their music evolved into a variant based on Afro-Cuban rhythms and Cuban instruments, and became a vehicle for popular criticism of problems in Cuba.
Despite the leaders’ well-founded misgivings about tourism, it seemed to provide the only short-term means of earning the hard currency that the country needed to recover from its deep depression. Yet two technical problems confronted the government in trying to use tourism as the leading sector for recovery. First, net earnings in hard currency tend to be low in the first years of developing a tourist industry because so many of the comforts that international tourists expect—new taxis, functioning air conditioners, hot water showers—require products that must be bought abroad. As much as eighty-eight cents out of every tourist dollar that Cuba initially received was spent on the purchase of foreign goods.25
Second, Cuba’s hotel capacity could not accommodate the large increase in the number of tourists the government suddenly sought, and many facilities were not up to international tourism standards. Prior to 1959, Cuba had been a popular destination for US vacationers. But, recall from chapter 6, its popularity was fostered partly by gambling and prostitution, which were controlled by organized crime. In 1957, about 275,000 tourists had gone to Cuba. In 1972, while other Caribbean islands drew five million visitors, fewer than 100,000 went to Cuba.26
In order to increase the stock of hotel rooms, Cuba needed a quick infusion of foreign investment. Under a 1982 constitutional amendment, modified by a 1992 law, foreign entities had been allowed to own only 49 percent of an enterprise. In September 1995, the Cuban government approved a new law that allowed foreigners to own 100 percent of a business. Cubanacán, a semi-autonomous state agency, was set up to facilitate foreign investment in tourism, mainly hotel construction, as well as to lure international companies to manage hotels, which had been notorious for their poor service. It promised investors that they could expect a full return on their principal within five years.27
The reforms produced the desired result, an increase in the number of available hotel rooms from 12,900 in 1990 to 37,200 in 2001. Foreign participation in running the hotels jumped from 10 percent to nearly 50 percent in the same period. Even by the mid-1990s, gross revenues from tourism already had surpassed those from sugar.28 In 2000, Cuba hosted 1.78 million tourists, and more than 2 million in 2003. (The total reached four million in 2016.) The largest number came from Canada, followed by Germany, Italy, and Spain.
The United States Tries to “Wreak Havoc” on the Island
As the Soviet Union began its months-long descent into oblivion in 1991, Cuban leaders felt increasingly vulnerable. In September, Soviet leader Mikhail Gorbachev announced the withdrawal of all Soviet military forces from the island. Pointedly, he did so without consulting Cuba in advance and after meeting with US secretary of state James Baker.29 The Soviet Union seemed more willing to placate the other superpower, Cuba’s avowed enemy, than to give even the mere courtesy of prior notification to Cuba. Gorbachev’s announcement reminded Cubans of the 1962 missile crisis when Nikita Khrushchev publicly declared on October 28—prior to informing Castro—that the Soviets were withdrawing the missiles from Cuba.
The Soviet abandonment of Cuba encouraged the most determined anti-Castro hardliners in the United States to strike what they imagined would be the final blows that could overthrow the regime. This assumption was reflected in the House Foreign Affairs Committee’s report on the 1992 Cuban Democracy Act (CDA), which asserted:
The committee believes that the demise of Cuba’s patrons in the former Soviet Union and Eastern Europe has intensified and brought to a head the inevitable crisis of Cuban communism, and that the United States now has a unique opportunity to influence the course of change in Cuba in a democratic direction. The bill sets forth a series of measures, consisting of both carrots and sticks, designed to hasten a democratic transition in Cuba by increasing the isolation of the regime while creating openings to democratic opposition groups that will shape Cuba’s future.30
The CDA tightened the embargo by prohibiting foreign subsidiaries of US firms from trading with Cuba, which had been authorized by the Ford administration in 1975. It also denied foreign ships entry to US ports within six months of having docked in Cuba. The latter provision was intended to raise transportation costs for Cuba. International cargo vessels typically could not fill their capacity with goods destined for Cuba because of its small market, and would need to convey a portion of their hold to the United States for the trip to be economical. Robert Torricelli (D-NJ), the principal House sponsor of the CDA, almost gleefully told an academic audience in 1993 that his intention was to “wreak havoc” on the Cuban economy.31
The legislation became law because of presidential electoral politics. Arkansas governor Bill Clinton’s campaign funds were drying up after allegations surfaced in January 1992 about his relationship with Gennifer Flowers, an actress and model. While he sought to control the damage by appearing on the CBS News program 60 Minutes with his wife, Hillary Rodham Clinton, his campaign contributions did not increase sufficiently. Desperate for funds, he came out in support of the CDA at a fund raiser that garnered $275,000 for his campaign from Cuban-Americans.32 Even though President George H. W. Bush had opposed an earlier version of the CDA on grounds that portions were inconsistent with US treaty obligations, he felt political pressure to accept the legislation once Clinton endorsed it. It became law two weeks before the election.
Rafter Exodus
While the CDA did not topple the regime, it did contribute to the misery Cubans were suffering. By the summer of 1994 daily life—the lack of food, money, and hope of improvement—had become intolerable for many Cubans, especially in the cities. Despite the danger they faced in crossing the perilous Florida Straits, an increasing number of people (known as balseros, or rafters) attempted to leave the country in fragile rafts made of inner tubes, wood slats, or anything that might float (see one such raft in figure 18.1). In all of 1993, the US Coast Guard rescued 3,600 balseros. Nearly that many balseros were rescued in the single month of July 1994. In August, nearly one thousand departed Cuba each day.33
Cuba Libre: A 500-Year Quest for Independence Page 31