Reforms, informal market hit Cuban state’s retail sales

Reforms, informal market hit Cuban state's retail sales
Sun, 16 September 2012

By Marc Frank — RETAIL sales by Cuban state-run businesses declined
significantly over the last two years, the government reports, as
privately imported goods and a growing "non-state" sector took their
toll. The report, which would be shocking in any other economy as it
would signal a drastic fall in consumer spending, in the case of Cuba
reveals the difficult balancing act of Cuba's communist leaders as they
attempt to reduce the state bureaucracy and encourage private sector
growth in a major transformation of its centrally planned economy.
Retail sales fell 17 per cent, or from 11 billion pesos in 2009 to 9.3
billion last year, the National Statistics Office said in its 2011
statistical year book, which is gradually being released on its Web Page
(www.one.cu).
The most dramatic decline came in durable goods, from 1.2 billion pesos
in 2009 to 266 million last year, as Cuban Americans brought in
flat-screen TVs, video game and DVD players and other domestic
appliances for relatives and sale after US President Barack Obama lifted
all restrictions on interaction with their homeland.
Hygiene and cleaning products fell from 920 million pesos in 2010 to 338
million in 2011 as the Cuban Americans joined thousands of Cubans who
took advantage of lax visa regulations to move to Ecuador in recent
years, where some set up trading schemes to move clothing, personal
hygiene and other products to the island for sale through informal
networks of door to door distributors and the mom and pop businesses
like those in central Havana.
Up until this month, when import duties were drastically increased at
airports, ports and post offices, presumably to slow the decline in
retail sales, the informally imported goods were cheaper and often of
better quality than those at the state-run stores, chipping away at sales.
A walk along Neptuno or San Rafael streets in Central Havana, one of the
busiest areas in the city, tells at least part of the story.
Dozens of private makeshift shops in people's doorways and living rooms,
which began opening over the last two years, sell privately imported
clothing, hardware and other items right next door to state-run stores
with similar goods.

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