In the past few weeks, Cuban President Raul Castro has begun to implement some of his promised reforms. Initial agricultural liberalisation aims to raise food production and sell more products, including politically sensitive ones such as the tools required to undertake production.
Market expansion also includes highly symbolic steps, such as granting citizens access to hard-currency hotels, but is driven by a need to mop up excess liquidity to stem inflationary pressure. As the government has prioritised increasing the purchasing power of salaries, popular expectations of gradual peso appreciation have led to flight from the dollar-linked convertible peso (CUC) into the non-convertible peso (CUP).
Targeting food production. Agriculture is key to initial economic reform. After steep falls in agricultural production in recent years, the government has prioritised food production for domestic consumption. Official figures estimate that about one-third of Cuba's arable land is uncultivated:
· State-owned land now can be leased to farmers if they credibly promise to cultivate it.
· The state has raised significantly the prices it pays for agricultural products to stimulate production and curb black market activities.
· The state has begun selling agricultural tools and inputs such as herbicides and fertilisers to private producers, which is a clear departure from socialist orthodoxy, which states that these 'means of production' should be in state hands.
As the taboo of selling 'means of production' to private producers is loosened in agriculture, there will be popular pressure for similar moves in urban areas, particularly expansion of micro-businesses, legalisation of more privately offered services and leasing of state-owned cafeterias.
Liberalisation as decentralisation. Rather than sweeping nationwide reform, agricultural changes are being implemented as a decentralisation measure:
· The government announced that newly established "Municipal Delegations of Agriculture" would decide on the lease or sale of land and other resources, rather than the ministry in Havana.
· While this allows daring experiments in some areas, it may favour conservatism in others.
Most importantly, as reforms are not rights granted to citizens, but a combination of vertical political control and formal decentralisation, state authorities retain gate-keeping power. To benefit from opening, Cubans remain dependent on authorities' goodwill, providing a strong incentive for politically disciplined behaviour.
Computers and mobile phones. Computer hardware and mobile phones so far have been available only to official institutions, companies or other state-authorised users. However, the government has announced that they will be sold to ordinary Cubans:
· Computers will be sold in CUCs at high prices, limiting access; similarly, mobile phones will be made available in a "gradual and orderly fashion". · As privately owned computers are legalised, demand will rise for computer-based communication and media services; the ban on private internet access will face increasing criticism.
The ban on the sale of video recorders also has been lifted, while Cubans -- with hard currency -- will be admitted to tourist hotels. Symbolically, this is particularly important, ending a practice of segregation -- sometimes called "tourist apartheid" -- that has become particularly emblematic of tensions between economic realities and the revolution's landmark pledge of equality, and ending foreigner privileges.