Cuba forced to rethink system of paternalism

Cuba forced to rethink system of paternalism
By Marc Frank in Havana
Published: September 18 2009 03:00

Communist Cuba has begun dismantling a vast system of state gratuities
and subsidised goods and services in favour of higher wages, more
individual choice and targeted welfare.

The move is part of President Raúl Castro's drive to modernise an
economy in which, he recently admitted, two plus two often equals five
in terms of spending and three when it comes to performance.

The process represents a seismic shift away from social distribution to
individual reward and from state-directed consumption to personal choice
in one of the world's most paternalistic societies.

In Cuba, authorities have long viewed work and the distribution of goods
and services as more of an ideological than an economic matter.

"Social expenditure should be in accordance with real possibilities . .
. eliminating spending that is simply unsustainable, that has grown from
year to year and which moreover, is not very effective, or even worse,
is making some people feel that they have no need to work," Mr Castro
said in a recent speech in which he talked of a "new socialist model".

The speech is currently being debated across the island.

Mr Castro has already eliminated subsidised beach holidays for exemplary
workers, hotel stays for newly-weds and free meals for those
accompanying hospital patients.

Fidel Castro, before ceding power to his brother for health reasons in
2006, introduced discounts for tickets to sporting events and a sliding
scale for electricity charges.

Somewhere along the line, no one seems quite sure when, birthday goodies
for children, five cases of beer and bottles of rum for weddings, and
subsidised supplies for quinces , or coming out parties, disappeared.

Now on the chopping block are the world's longest-standing food ration,
heavily subsidised monthly gas and water bills, millions of cheap
chocolate mother's day cakes and countless holiday greeting cards,
subsidised meals at work and universities, and many other items.

Mr Castro said free healthcare and education, and social security and
full employment - all guaranteed by the constitution - would remain.

The state still pays for funerals and 13 vaccines for children under five.

Medicines are also free during hospital stays and are heavily subsidised
at pharmacies.

"After installing his own team of economic planners in March, Raúl is
making good on promises to fundamentally restructure the dysfunctional
economy he inherited," Brian Latell, a former Cuba analyst at the US
Central Intelligence Agency and author of After Fidel , said.

"But he is also warily looking over his shoulder, anticipating bitter
opposition from Fidel," Mr Latell said.

Growing inequality due to access to foreign exchange through
remittances, self-employment, and the black market is making the
egalitarian distribution of the nation's wealth obsolete, Cuban
sociologists argue.

They estimate that 50 per cent of the population has been left behind
and 20 per cent impoverished. Meanwhile, a Cuban elite has emerged with
a lifestyle many times grander than the norm.

This social breach is expected to be widened by an influx of Cuban
Americans bearing gifts and unlimited remittances deregulated by US
President Barack Obama this month.

"I understand we can't go on like this, but they should be careful.
Wages and pensions are too low to eliminate everything if they do not
take other measures," Julián González, a public works employee, said,
expressing widespread public anxiety over the elimination of the food
ration.

But in a harbinger of what local economists said could be future policy,
the government has nearly doubled office worker wages at various
ministry office buildings in Havana, as it closes lunchrooms in a pilot
programme aimed at eliminating huge theft and waste of imported food
supplies.

"The country's economy needs to place its feet firmly on the ground,
which means it has to be totally reorganised," a local economist said.

"You can't live only on ideas, no matter how good they are. You cannot
give away what you do not have."

FT.com / UK - Cuba forced to rethink system of paternalism (18 September
2009)
http://www.ft.com/cms/s/0/3e8ee78c-a3ea-11de-9fed-00144feabdc0.html