Some Press reports.

1. Cuba's paladars serve up memorable dining experiences, creative and satisfying fare

2. Rock climbing by Cubans discouraged

3. Home_Rentals

4. Cuba’s casas offer rooms with social views

5. Experts question sense of revaluing Cuban peso

6. Cuba ends consumer use of US dollar

7Havana plans crackdown on army of self-employed

8. Economy-Cuba: Landlords On The Verge Of A Nervous Breakdown


Cuba's paladars serve up memorable dining experiences, creative and satisfying fare

HAVANA (AP) - Diners trek up a curving staircase of white cracked marble, past a decapitated statue of a robed woman, and along a broad landing crisscrossed with lines of drying laundry to reach the weathered wooden door opening into one of the most memorable dining experiences in communist Cuba.
Inside is La Guarida, Havana's bestknown paladar, or private restaurant, and its exquisite Nuevo Latino offerings available nowhere else in the city. There's a tuna steak grilled with sugar cane, a grouper fillet cooked with orange sauce, rabbit lasagna, pork medallions with a mango glaze, and spinach crepes stuffed with chicken and drowned in a creamy mushroom sauce.
Three rooms on the third floor of a weathered mansion in rundown Centro Habana, the apartment was the setting for «Fresa y Chocolate» (``Strawberry and Chocolate»), a 1994 Cuban film about a friendship that blossoms between two men _ one gay and one straight _ despite their different lifestyles and politics. In the movie, the older gay man Diego refers to his apartment as «la guarida,» or «the den>>.I especially like La Guarida,» says Beverly Cox, an American cookbook author who traveled to Havana twice in recent years to visit the paladars and other Havana eateries for her luscious cookbook, «Eating Cuban.» «When you ring that bell, you step into another world.
Hundreds of the private home restaurants opened up after they were legalized by Fidel Castro's government in the mid 1990s amid severe economic crisis. Significantly fewer have survived the strict rules they operate under now, including high taxes and a prohibition on beef and premium seafood such as lobster and shrimp, which are reserved for export and state-run restaurants catering to foreigners.
But with new President Raul Castro lifting consumer and economic restrictions in recent weeks, rumors are rampant that he will soon allow more Cubans to become self-employed and operate private businesses.
«The tourist industry needs better services. The paladars are almost gone. The government shut them down,» said Carmelo Mesa-Lago, Cuba economics expert and professor emeritus at the University of Pittsburgh.
«What Cuban economists and I are expecting is that there will be some return to the situation before 2003,» when Fidel clamped down on self-employment.
Government inspectors currently check the paladars occasionally to ensure that the owner's license is current, that they are paying their taxes, and they are not violating any health codes or other regulations.
Paladar employees are required to be family members.
The restrictions on certain foods, along with regular shortages of other ones, often force paladar chefs into minimalist rethinking of their menu. If there is no cream for the pumpkin soup, they'll create a less rich version with milk. If there is no spinach for the salad, they'll substitute Swiss chard.
Run inside the homes of their owners, paladars typically serve filleted fish, pork or chicken, and occasionally sheep and rabbit, with most entrees costing US$12 (¤8) to US$15 (¤10). With drinks and sides, a meal for two runs about US$60 (¤38).
La Guarida's owner, the 39-year-old Enrique Nunez del Valle, estimates there are about 80 paladars of varying quality and type still operating in Havana.
Nunez and his wife, Odeysis, sat one recent afternoon at a table surrounding by the old movie posters, timeworn candelabras and the other shabby bohemian items she collected to decorate the premises.
Nunez grew up in the large apartment in a crowded, economically depressed neighborhood of once-fashionable homes now stripped of paint and crumbling from decades of disrepair.
In 1993, at the height of the economic crisis caused by the Soviet Union's collapse, Cuba's cinema institute asked to rent the Nunez family apartment as the setting for the movie. The institute didn't offer much _ 40 pesos a day, or about US$4 (¤3) at the time. But the deal came with free breakfast, lunch and dinner daily during a time of severe shortages.
After the film was released, foreigners occasionally found their way to the Nunez apartment and asked to look inside. Some suggested he open a private restaurant there under a new government initiative to create new kinds of income during financial hardship.
Nunez got a license and opened the restaurant in 1996. But popularity came slowly.
«We spent afternoons playing dominoes on the balcony for months, waiting for people to come,» Nunez recalled. But when he hosted an exhibit by Cuban photographer Korda, famed for taking an iconic image of revolutionary Ernesto «Che» Guevara, La Guardia suddenly became a sensation.
Since then, Queen Sofia of Spain and American actor Jack Nicholson have dined there. It now even has its own Web page.
Traveling here twice with food photographer Martin Jacobs, Cox visited La Guarida and numerous other paladars for her cookbook, which includes 120 recipes from kitchens around Havana. They also visited state-run restaurants and private homes, sampling dishes, collecting recipes, talking with cooks.
Because the decades-old embargo and travel restrictions bar most Americans from traveling here, they came with a U.S. license as
consultants for an American food company. «We just immersed ourselves in the food,» she said.
Cox said she was impressed by Cuban chefs' resourcefulness in a country plagued by frequent shortages, making «the best of what they have, using pure, clean flavors and practicing simplicity in number of ingredients.
Most paladars have menus far less sophisticated than La Guarida's _ with the most common dishes being basic chicken, pork or fish dishes. But all have an overabundance of ambiance.
«The paladars are magical places, stylish and eclectic,» Cox said.

At La Esperanza paladar in Havana's leafy Miramar neighborhood, guests sip minty mojito cocktails waiting for their table in overstuffed sofa and chairs in the living of the restaurant owner's family home, decorated with weathered statues of popular Catholic saints, old white-and-black family photographs, and other eclectic bric-a-brac.
La Esperanza's tables are set with mismatched porcelain china and silverware. The house specialty is a 1950s-era dish of tender pork stewed in a popular malt soft drink. Also on the menu is a spicy Thai-style chicken dish, and a simple grilled fish filet. Visitors to the Cocina de Liliam paladar, where former U.S. President Jimmy Carter ate during his May 2002 Cuba trip, sit on a patio
surrounded by lush ferns and a trio of burbling fountains as they munch crunchy fritters of a root vegetable called malanga.
And at Cactus de 33, Fernando Barral, retired psychologist and former comrade of «Che» Guevara, displays Cold War-era mementos including a Communist Party newspaper clipping of him interviewing U.S. POW John McCain, now the presumptive Republican U.S. presidential candidate, during a 1970 trip to Vietnam for research on the North Vietnamese.
At Cactus de 33, guests dine on juicy grilled chicken breasts accompanied by white rice and black beans as they sit on the front porch of the huge white mansion, surrounded by towering cactus plants.
«There is a lot of creativity,» Cox said. «I don't think it is a mistake that a place that has created such great artists and dancers and
musicians has also created such great cooks.

On the Net
La Guarida:


Rock climbing by Cubans discouraged

Rock climbing -- an extreme sport brought to Cuba by foreigners -- has begun to irk the Castro regime as an outside influence.
The Wall Street Journal

VINALES, Cuba - Seventy feet up a sheer limestone cliff known as La Cuchillita, or Little Blade, 17-year-old Roylandi González held onto a
ledge by his fingertips. Then he glanced down to check the harness around his waist, grabbed hold of the rope that was tethered above him
and started shimmying downward.

Over the past several years, adventurous Cuban youths like González, schooled by an influx of foreign rock climbers, have turned this western
town into an extreme-sport magnet. Climbers test their mettle on dramatic crags, barely touched by man, which soar above a green valley
designated as a U.N. World Heritage Site.

But climbers who have conquered Viñales' jagged peaks are now up against a more formidable obstacle: the Communist political system.

González cast a wary eye for park rangers and police.

''There's something about rock climbing that really seems to worry our government,'' he said.

As Cubans begin contemplating life after Fidel Castro, rock climbing has emerged as an improbable battleground between the government and young
Cubans eager to embrace the latest foreign fashions.


In 2003, amid a broad crackdown on civil liberties and fraternizing between tourists and Cubans, the government announced that rock climbers
henceforth would be required to obtain a special permit. But the government has never granted the required permit to the many climbers
who have requested one.

Adrian Pérez Martínez, a 20-year-old art teacher, says that police showed up at his house recently to warn him against climbing, especially
with foreigners. ''Good Cubans don't do this,'' he says they told him. ''Climbers use drugs. And you shouldn't take foreigners to militarily
significant areas.'' Indeed, some caves in Viñales are designated as civil-defense sites in the event of a U.S. invasion.

Some of the official anxiety over climbing seems to be based on Cuba's revolutionary history. The revolution that brought Castro to power in
1959 was launched from a clandestine encampment in the Sierra Maestra Mountains on the eastern end of the island. ''The Revolution was the
work of climbers and cavers,'' Castro is reported to have said.

Now the government may be worried that history will repeat itself. 'The system is paranoid about Cubans' private activities, but especially when
those activities are occurring in hills away from sight and when foreigners are involved,'' says Vitalio Echazabal, one of the first
Cubans to take up rock climbing in the 1990s. 'The authorities would ask, `Are they spies? What are they plotting up there?' ''

Echazabal got so fed up that he defected to Spain during a climbing expedition in 2001, one of three Cuban climbers who have escaped the
island during international sporting events. About a half-dozen others got off the island after marrying foreigners they met on the hills.

The exodus of climbers has only served to intensify official suspicion of the sport. ''Climbers are very independent people, and the Cuban
government has a real hard time with anything it cannot control -- even a form of recreation,'' says Armando Menocal, a 65-year-old Wyoming
lawyer who is the leading international proponent of Cuban climbing. Menocal, who runs the website, has been caught in the backlash himself.


Beginning in the late 1990s, Menocal, who has family ties to Cuba, started training Cuban climbers, mapping local routes and importing
donated equipment. But after about 15 climbing trips to Cuba over the past eight years, Menocal has been turned back by immigration officers
at the Havana airport the last two times he tried to visit, most recently earlier this month. The authorities, he says, offered no explanation.

The 100 or so climbers remaining in Cuba would certainly welcome his return. Without official funding, Cuban climbers rely on equipment sent
by Menocal or donated by tourists. José Luis Fuentes, a 20-year-old climber, says his shoes were given to him by an Italian, his rope by a
Canadian and his harness by an American. ''You speak a common language with other climbers no matter where they come from,'' he says.


He isn't sure it's a language Cuba's leaders could understand. ''Older people just think we're a bunch of crazy kids,'' says Fuentes.

Climbing has attracted a special breed of Cuban youth since Menocal and some American friends used a slide show to recruit a core group of about
half a dozen Cuban climbers in 1999. One Cuban went AWOL from his military unit to go on an outing with Menocal, subsequently earning two
weeks in the brig.

Official eyes were watching. ''The Cubans were always being persecuted because it was not looked upon favorably to socialize with foreigners,''
says Craig Luebben, a rock-climbing guide and journalist from Colorado who has made several trips to Cuba. As the pressure increased, the
Cubans and their American climbing partners would avoid appearing together publicly, arranging separate transportation to a rendezvous at
the secluded climbing site, Luebben says.

Climbers say official government climbing policy has been inconsistent. A few years ago, Hollywood, a cigarette brand partly owned by the
government, launched an ad campaign featuring a climber. Yet at around the same time, a visiting Menocal was called before two different
government authorities and told climbing wasn't permitted.

The inconsistencies continue today. On a recent day at the park visitors center near the Viñales climbing site, there were large posters of
climbers in action. Nevertheless, the park ranger on duty insisted that climbing without a permit wasn't allowed under the 2003 law. ''It's not
something one should even consider,'' he said, though he had no idea how one might go about getting a permit.

The climbers are regrouping under the leadership of Alexei Suarez, a medical worker who sometimes reaches his second-story Havana apartment
by scaling the wall. He has been talking with government officials, trying to better climbing's image, and he says the Cuban sports ministry
has been very supportive. ''We are loyal Cubans who want to make Cuba famous for climbing champions,'' Suarez says.


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Home Rentals (casa particular).

By Philips Peters. Lexington Institute.


Along the main street of Vinales, a small town that is a major tourism center in western Cuba’s spectacular tobacco country, 33 of the 107 houses display signs that show they are licensed to lodge foreign visitors. Locals say there are about 300 private home rentals; if accurate, the private rentals outnumber the 173 rooms in the area’s three state-owned hotels.
On the other end of the island in the historic town of Baracoa, private rentals are available throughout the town. A long-time employee of the town’s only hotel says that they outnumber the hotel’s 34 rooms.
The renters’ prosperity has led to many renovations, he said, leading some to call their sector “Little Miami.”

In Ciego de Avila, a provincial capital that is not a tourism hot spot, a cuentapropista who rents a room to tourists says he is one of 43 with a housing rental license. He obtained his license in 2004, with difficulty.
Tired of tussling with inspectors in his former pizza business, he decided to switch to a different line of self-employment. He prodded local housing officials for more than two years for a license to rent his spare room with a private bath and old Russian air conditioner. The main point of contention was the need to demonstrate that his family would not be overcrowded in its remaining space. He understands the Economics 101 concept of “elasticity of
demand;” he charges the low rate of $15-$25 per night that reduces nightly profit and sometimes makes it hard to pay his monthly tax, but he attracts more first-time customers.

A 2005 academic study of Cuba’s tourism industry noted that in addition to Cuba’s 41,000-room hotel capacity, there are 5,000 to 6,000 rooms available for tourists to rent in private homes. Our survey included twelve home rentals. On average, they had been in business three years and nine months and their average profit was $438 per month after paying an average tax of $267. The lowest tax per room rented was $100 in Ciego de Avila, the highest $250 in Havana’s Miramar neighborhood.

Housing rental is a lucrative but challenging line of selfemployment, made more difficult by taxes and regulatory requirements that have grown steeper in recent years. A 2003 law increased taxes by levying tax on common areas used by guests such as hallways, living and dining rooms, and patios, in addition to the per-room tax. A special license is required to offer food service to guests. Proprietors are required to keep a log of guests, their dates of stay, and their passport information, and they must keep records of their revenues.
The main challenge that these cuentapropistas cite is drumming up business, because they must make their monthly tax payment even if their revenues are zero.
Many advertise on the internet, using sites developed and hosted by friends overseas. Many also collaborate in informal referral networks and, following what one calls “the unwritten law of home rental,” they pay commissions to people outside those networks who bring them clients.
A woman who has rented two rooms in Havana since 1997 struggled to establish her business. “At first, no one knew me,” she said. She strived to achieve good quality and thereby establish a good word-of-mouth reputation. Her first big break was to rent to a group of Americans who generated lots of referrals and return business. But “the best thing that ever happened” was when her home was listed in the Lonely Planet tourism guide—a bit of free free publicity  that now generates steady business.

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Cuba’s casas offer rooms with social views
By andrew scott

Our high-ceilinged, second-storey rooms resemble a set from a Humphrey Bogart film. Tall arched doors and louvred windows open onto a street-front balcony and a private roof garden shaded by mango trees. The plumbing in the big, tiled bathroom looks as ancient as the rest of the 19th-century house but manages weak flows of hot and cold water. We have no phone, no television, no mini-bottles of shampoo and lotion—no air conditioning, even. At night, we turn on fans to move the air around. And this is Cuba, not Casablanca. We are in the historic town of Trinidad, in a casa particular—a private home with accommodation for tourists. It may not be ritzy, but it’s spotless and has plenty of style.

Amparo, the proprietor, loves to talk. Our Spanish is rudimentary, and she, like all the casa owners we meet, knows only a few words of English. She’s patient with our Spanish efforts and enjoys teaching us new words. Her neighbours, she claims, say she talks all the time. “Habla, habla, habla,” they tease. This sounds just like “blah, blah, blah” in English and means much the same, allowing us to share a cross-cultural joke. Amparo occupies the rambling ground floor with her husband, twin daughters and their husbands, and two much-treasured infant grandkids. She yaks mostly about her family, but she’s often surprisingly candid about Castro—or Fidel, as everyone refers to him—and his policies. As we travel around, we find that casas particulares, besides being great places to meet real Cubans, also offer an intimate glimpse into the progress of the country’s extraordinary social experiment.

We arrived in Trinidad by bus after an overnight stop in Havana. The town’s colonial architecture has earned it a UNESCO World Heritage designation, and its baroque church towers and red-tiled roofs are a delight. The restaurant fare, though, is bland and unvaried. In Cuba this is often the case, as the pick of the produce is reserved for the big tourist hotels. We usually eat breakfast and dinner at our casa. Despite the food restrictions they face, Amparo and her daughters never fail to serve up tasty home cooking—chicken, pork, and, for a special treat, shrimp, along with the ubiquitous rice, red beans, and cabbage-and-tomato salad.

After dinner, before we head out along narrow streets to find son, salsa, and jazz groups performing on cobblestoned terraces and in cool courtyards, Amparo usually stops by for a chat. If Fidel is making one of his frequent speeches, we join the family in front of their TV. According to our hosts, Fidel has improved his act in recent years; now he cracks jokes, and extols the virtues of refrigerators and stereos as well as socialism. Before, says Amparo, he was just too boring.

Amparo is as curious about us as we are about her. She’s especially fascinated by my energetic spouse, Katherine, who is roughly her age. One day Katherine and I rent bicycles and spend a leisurely day pedalling to nearby Playa Ancón, a long fillet of white sand washed by warm azure waters. This is a 32-kilometre roundtrip under a hot sun, and Amparo is flabbergasted that a woman past 50 would choose (or could manage) to do this. What are taxis for, anyway?

It’s normal, of course, for those in an emerging segment of the tourist trade to have preconceived notions about their guests’ plans—especially when tourism seems in a state of constant reinvention. In Havana, especially, where dining out is feasible, and intriguing paladares, or private restaurants, are springing up faster than guidebooks can keep track of them, the casa operators’ recommendations can be worth paying attention to.

On our first visit to the bustling capital, we stay on Avenida de Italia, a noisy thoroughfare with easy access to Centro and Vedado, two of Havana’s main residential and commercial districts. The neighbourhood lacks charm but not so our casa hosts, Elizabeth and Güicho, worldly Habaneros in their mid-40s. Elizabeth, high-strung and affectionate, dresses with typical urban flair, in short skirts and revealing blouses cut to her navel. Güicho is an easygoing jack-of-all-trades: buyer, seller, fixer, enabler. Few Cuban men seem to work at the occupations they were trained for, and everyone has a mysterious sideline or part-time gig.

The casa is a worn but spacious upper- storey apartment with two guest rooms, and it’s busy enough to employ a live-in maid. We take breakfast in the family dining room and sometimes join other guests at nearby restaurants and music venues. Here, we also encounter Leo, equipped by his casa particular organization with a cellphone and doomed to spend his days riding Havana’s slow, ultra-crowded buses, checking up on guests and seeing to their needs. Sweet, youthful Leo speaks good English and willingly fields the questions we’ve saved up that are too complex to negotiate with our hosts. How is housing assigned in Cuba, for instance, and why do some people get better houses than others? (If your family owned a home before the revolution, you have first claim to it.) And how can eight people squeeze into an “unofficial” Lada taxi? (It’s still a mystery, but tinted windows help shield such infractions from the eyes of the police.)

Havana is intense. A few days at a time are all we can handle. Soon we’re headed by bus to the rambling village of Viñales, 170 kilometres west, where the landscape is the draw; eroded limestone hills, or mogotes, erupt in a profusion of strange shapes from a red-earth valley quilted with green fields. A rock-climbing scene attracts young travellers, but we’re content to hike through this astonishing countryside, spying on Cuban birds and learning about tobacco agriculture from friendly farmers.

Every second home in Viñales announces itself as a casa particular. Ours is run by husband-and-wife doctors, whose place (imagine!) is no fancier than any of the others. We sleep in a separate air-conditioned guesthouse in a quiet back yard thick with orange and banana trees, palms, and coffee bushes, but we eat and hang out on a pretty patio attached to the main house. A steady stream of patients drops by for consultations and prescriptions. José works 24-hour shifts in the Viñales clinic and in a neighbouring village, while Dianelys is taking time off to look after the family’s two young children. They sort out the Cuban health system for us, in which care is universal and well-trained medical personnel abound, but supplies, equipment, and pharmaceuticals are virtually nonexistent.

We spend our last days back in Havana, in pedestrian-heaven Vieja, the old colonial section of the city. Also a World Heritage site, it’s a jigsaw puzzle of mellow squares and restored plazas. Our casa is another vast, high-ceilinged apartment, with three guest rooms and an array of high-end appliances and home-entertainment gear. The two hard-working elderly sisters who run the place are careful to display no outward signs of affluence but clearly rake in a small fortune by Cuban standards, despite the high government fees and stringent regulations that all casa operators are subject to.

Tourism, we see, is allowing Cuba to rebound from the economic collapse and desperation that followed the fall of the Soviet empire. It is also permitting a few individuals to prosper—a potential problem in a country that guarantees equality for all. But the nation’s leaders seem willing to endure, or even encourage, a little private enterprise in order to keep those all-important tourist revenues flowing. -

ACCESS: We flew Air Canada to Havana via Toronto, a long and perhaps unnecessary trip when you consider the number of charters shuttling back and forth between Vancouver and the beach resort of Varadero (Canadians comprise about one quarter of Cuba’s total tourists). Savvy travellers wishing to stay up to two weeks may be able to save money by booking only the flight portion of a charter package to Varadero, then arranging a three-hour Astro or Viazul bus ride to Havana (four trips daily, CAD$10-13).

A quick Google reveals numerous on-line casa-particular networks. By virtue of its listing in Lonely Planet’s Cuba (the best guidebook going, with its own lists of casas, though the 2004 edition is already badly out of date), Casa Particular Cuba (www.casaparticularcuba .org/) is perhaps the most prominent organization. You can read about and view photos of the individual casas on-line by region and make free e-mail reservations; you pay on arrival. Staff answer e-mail queries promptly, in English, and are efficient and friendly. All the casas we stayed in had en-suite bathrooms with hot and cold water; they varied in price between $25 and $40 per couple. Rooms with shared bathrooms are cheaper. Prices are higher in cities. Big breakfasts run $4 to $5 per person and dinners $8 to $12.

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Experts question sense of revaluing Cuban peso
The Cuban currency has gained ground against the U.S. dollar as Fidel Castro tries to bridge the gap between Cubans who earn pesos and those who get U.S. dollars from abroad.

Cuba's recent strengthening of its currency is designed to close the gap in the purchasing power of those who earn only pesos and those who receive U.S. dollars from abroad, analysts say.

But the peso's revaluation makes no economic sense because the communist-ruled island's economy is not strong enough to back up the 7-8 percent increase in the value of its currency, the experts added.

When coupled with a government decision in November to charge a 10 percent fee on all dollars converted into pesos, the changes amount to a 17-18 percent strengthening of a currency that is not accepted anywhere outside Cuba.

The currency shifts -- the first changes in the peso's official exchange rates since 2001 -- came in two critical decisions:

• On March 18, the value of the common peso was strengthened by 7 percent, from 27 to 25 to the dollar.

• Effective Saturday, April 9, the value of the convertible peso -- a paper chit known as a chavito and introduced in 1994 as equal to the dollar -- will strengthen in value by 8 percent.

The common Cuban peso generally is used only for state salaries and the purchase of goods deeply subsidized -- and rationed -- by the government. Dollars and convertible pesos are required to purchase non-rationed goods, such as extra food and clothing, and electronics.

Cuban leader Fidel Castro has said the convertible peso's one-to-one peg to the dollar had to be changed because the U.S. currency has been losing huge ground against other world currencies.

''Every day using the dollar gets riskier,'' Castro said. ``The dollar isn't behaving well.''

Strengthening the peso is now possible, Havana officials claim, because of an economic surge due in large part to help from Venezuela, which is providing oil at below market prices, and China, which is investing in the island's valuable nickel industry.


But the real goal behind the currency shift, the experts said, was to close the gap between those Cubans who earn only pesos and those who receive the $400 million to $1 billion sent a year by Cubans abroad -- an embarrassing gap in a communist-ruled island.

Havana resident Rafael Guerra, for example, recalled how his machine operator's salary once was enough to cover his family expenses in the 1980s.


''I lived very well with the money I earned. But then things got tough, the peso lost its value and a lot of people left their jobs because the salaries weren't worth it,'' Guerra, 34, said in a telephone interview. ``With the peso worth more [now], people will want to go back to work.''

But the currency shifts also will have a negative effect on Cubans who receive remittances from abroad.

''People who rely on dollars see themselves really affected,'' said Oscar Espinosa Chepe, a dissident Havana journalist who was released from prison in November. ``Since I got out of jail, prices have gone up tremendously. People are very worried.''

Experts on the Cuban economy say, in fact, that the peso revaluations make no sense given the long, near-catastrophic state of the island's economic system.


A study released recently by Carmelo Mesa-Lago, one of the top U.S. experts on Cuba's economy, called the currency changes ''a symbolic, political decision geared to the outside world and . . . Cubans who only have pesos.'' The report was released at the University of Miami's Institute for Cuban and Cuban-American Studies.

''The most important facet of what's going on here is that the basis Castro is using to trumpet these successes is solely the generosity of others'' such as Venezuela and China, said John Kavulich, who monitors Cuba's economy. ``How is that a sustainable economic policy and how can they be proud of that rationale?''


The currency shifts also created an additional burden for Cubans in the United States who send money to their relatives on the island.

''I have to send more, so that my family in Cuba doesn't end up with less,'' said José Vela, a Miami handyman who has increased his monthly remittances to his son on the island to $120 from $100. ``Things have gotten very expensive over there. They can't afford to lose any money.''


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Cuba ends consumer use of US dollar

Giles Tremlett and agencies in Havana
The Guardian

Fidel Castro has ended Cuba's decade-long, bitter-sweet romance with the dollar.
The announcement that US currency notes will in a fortnight no longer be accepted as payment in the country marks a radical change.

Cubans have become used to shopping for all but basic goods with the greenback. Now they, tourists and others on the island can longer pay for
anything in dollars cash, though bank transfers will still be legal.

President Castro, with one arm in a sling, appeared in uniform on state television, five days after a fall had left the 78-year-old with a fractured
knee and arm.

He blamed the decision on the US administration of George Bush, citing restrictions placed recently on dollar remittances to Cuban families by
Cuban American relatives, and attempts to prevent international banks providing Cuba with dollars (the Cuban peso cannot be used for international

"The empire is determined to create more difficulties for us," said President Castro.

He said that it would not be illegal to hold dollars but, as from November 8, these would have to be exchanged for pesos to be spent, and there would
be a 10% commission.

"As of November 8, the dollar will not be accepted in our shops, which will only take convertible pesos," a central bank statement explained.

The euro and other currencies, accepted in some resorts, will also have to be exchanged but will not carry the 10% commission. With an estimated $1bn a year (£540m) sent home, the commission could net the Cuban state up to $100m.

President Castro, however, suggested that emigrants might like to switch to the euro, the pound, or the Swiss franc. "In the short term, there may be a
slip in the remittances," John Kavulich, president of the US-Cuba Trade and Economic Council, told Associated Press yesterday.
The dollar was legalised in 1993 after the fall of the Soviet Union put the island in economic crisis and forced it to open up to tourism and foreign

It is unclear just how willing ordinary Cubans will be to part with their coveted greenbacks. Observers speculated that a vigorous black market
currency exchange may spring up, and that the island's black market in cigars and other goods may continue in dollars.

Cuba took the first step to curb the dollar last year when it banned state corporations from using it as hard currency in their domestic transactions
with each other, and said dollar export earnings had to be sold to the central bank.

President Bush, meanwhile, launched a strategy in May to undermine President Castro's regime by tightening restrictions on travel by Cuban Americans and on the amount of dollars they could take home.

The US federal reserve decided the same month to fine the Swiss bank UBS $100m for allegedly sending dollars to Cuba, Libya, Iran and the former
Yugoslavia in violation of sanctions.

President Castro, who has outlasted nine US presidents and survived the demise of the Soviet Union, said that Cuba's socialist system would prevail:
"The destiny of this country was decided long ago and nothing can intimidate us."

Cuba has been seeking to draw attention to a UN vote due tomorrow over the US trade embargo on the island, imposed in 1963 following the abortive Bay of Pigs invasion backed by the CIA.,11983,1336696,00.html

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Havana plans crackdown on army of self-employed

By Marc Frank in central Cuba

In the words of Maria, who works in a sugar-producing town in central Cuba, the region's cash-starved workers have to "invent" ways to buy essentials such as food, clothing and soap.

"The state's wages are very low and state prices very high," says Maria, who earns 231 pesos ($8.56, £4.72, €7.08) a month at her state job - just below Cuba's average wage of 245 pesos.

"I sell ice for a peso a tray, three or four trays a night," she says. "I need at least twice my income to just get by."

Tourists in Havana are accustomed to meeting locals who have found a variety of ways to supplement their state wages. But from October, the government will begin to close 40 broad categories of self-employing businesses.

The directive from the Labour and Social Security Ministry means that no new home-based restaurants or pizza stands, bed-and-breakfast inns or garages can open - nor "self-employed" clowns, magicians, flower sellers, metalworkers, booksellers or mouse-trap makers.

This is the latest move by Cuba's communist authorities to draw back from cautious market-oriented reforms. After the collapse of the Soviet Union, Cuba's main benefactor, some private initiatives were allowed by the government to help draw Cuba out of depression. But Fidel Castro, Cuba's president, has always insisted the state would reclaim that economic space.

Popular sentiment is opposed to the move. "The state should put all its efforts into important economic matters like energy, utilities, tourism and nickel," says one economist. "It has no place running coffee shops, fixing watches and repairing televisions."

The government's decision will hit Havana and areas close to tourism resorts the hardest. The economic recovery has been strongest in the capital and small businesses have flourished - at least by Cuban standards.

Outside Havana, the impact is harder to gauge. Most of the country still has few licensed small businesses or self-employed people.

There were 150,000 individuals among Cuba's 11m people licensed as self-employed this year, the government reported. In 1995, when the permits - along with stiff regulations and taxes - were imposed on an already active, but illegal, small business sector, there were well over 200,000.

"Under the Labour Ministry around 20 per cent of licences were granted in the city of Havana and 40 per cent including the adjoining provinces," says a Cuban academic with access to previously unreported self-employment data. "At least a third of those licences were for small business, like food services, now on the chopping block."

The government provides a food ration for about 40 pesos per month, as well as free health and education and subsidised utilities. An internal government study says the rationed rice, beans, sugar, a bit of protein, milk and yoghurt for children, perhaps a bar of soap and some pasta, meets 40-60 per cent of the population's nutritional needs. Children under seven receive 120 per cent of their nutritional requirement, the report says.

In reality, Cubans must resort to state and private farmers' markets, where a pound of rice or beans can cost more than a day's pay, a pound of pork three days' pay, and salad vegetables a day's pay or more.

State dollar stores sell even more expensive cooking oil, milk, meats, pastas, cheese, herbs, soap, detergent and other personal hygiene products.

Then there are clothes, household appliances and other "luxuries" that can cost many times a month's salary.

Outside Havana and a few other cities, Cuba is a patchwork of rural towns such as the one Maria lives in, with 20,000 to 50,000 residents. Supplementary work is even more ad hoc than in Havana: "Everyone knows each others' business, literally," she says.

Maria's neighbour, a teacher, hitchhikes to the coast every weekend with an empty suitcase, bringing it back full of fish. Another neighbour paints pictures and signs. Others sell their services as vintners, seamstresses, handymen, gardeners, bicycle repairers, messengers, cigar vendors or make-up artists.

"Just about everyone who isn't working for the tourism industry or getting money from relatives in the US does something," says Maria, who is a Communist party member. "Most are unlicensed, but no one does anything about it because everyone is just trying to survive."

The Bush administration announced a series of measures in May to limit remittances from Cuban-Americans to relatives. The Cuban government responded by raising prices at the dollar stores.

"We are all really traumatised," Maria says, recalling the early 1990s, when the lights were off for 18 hours a day, there was no food even if one had money and the buses that connected her town with the provincial capital stopped. "Do you think that could happen again?"


Economy-Cuba: Landlords On The Verge Of A Nervous Breakdown

(IPS/GIN via COMTEX) -- "We live in a state of permanent stress, worrying about whether we'll have enough guests, or waiting for more restrictions to be slapped on," complained a 58-year-old Cuban woman who rents out two of the five bedrooms in her home, mainly to foreign tourists.
New rules for private landlords about to be put into effect by the socialist government of Fidel Castro have begun circulating among renters over the past few days, said the landlord, who agreed to talk to IPS on condition of anonymity.

The circular, dated June 5 and signed by the president of the National Institute of Housing, Victor Ramirez Ruiz, states that "negative tendencies and behaviors have emerged in the exercise of this activity that distort the very essence of renting."

The new provision, which is to go into effect shortly, as soon as it is published in the Official Journal, mentions -- as examples of "negative behaviors" -- the use of homes as "brothels", and the "excessive enrichment" of landlords.

"That is offensive," said the renter who was interviewed. "I am an honorable person who has worked all my life, and only after retiring did I decide to rent out rooms to improve the income of my large family."

The licence to rent rooms out to foreign tourists costs her $520 a month - $250 per room, plus $20 for the garage. In addition, at the start of each year, she must pay between $300 and $350 in taxes on the private income earned over the previous 12 months.

"Of course you earn something, no one does business to lose money. But there are months when I barely make enough to pay the set monthly fee. For most people, this is a way of living a little bit better, and has nothing to do with getting rich, much less with 'excessive enrichment'," she said.

It costs around $30 a day to rent a room in a private home in this Caribbean island nation of 11.2 million, while hotel rooms run from $40 to $150 a day, depending on quality, location, and range of services offered.

The new government resolution will create a tax that landlords will have to pay the state for providing meal service, even if renters insist that they do not serve meals to their guests.

Taxes will also begin to be charged on the common living spaces used by the residents of the house, under the government supposition that the lodgers also make use of those parts of the house.

Further, it will become illegal to rent out a room for less than 24 hours, or to rent out a room to more than two people. Nor will landlords be able to hire people from outside the family for work related to the renting of rooms.

Another new restriction is that authorization to rent out rooms will not be granted to homeowners who travel abroad for more than three months.

"Frankly, many landlords have the impression that they want us to stop renting, as if we did not contribute revenues to the country," said the source, who owns a beautiful home on the west side of Havana.

She and other renters who spoke with IPS said there are so many restrictions on their activity that "it is hard not to cross the line and break the rules."

"There are fines of up to $3,500 - now THAT is excessive!" said another source who did not want to be identified. She also complained about the unfair competition from unlicensed renters, "who can charge less because they don't pay taxes."

The Cuban government authorized the renting of private rooms in May 1997, thus legalizing an activity that was already widespread. "I began to rent out rooms about three years before it was officially authorized," said the source.

An economist who also asked not to be named said that in Havana, which receives the greatest number of visitors to the country, there are currently 2,705 people with licenses who rent - charging dollars - to foreigners, and 1,067 who charge pesos.

In addition there are an estimated 8,750 unlicensed renters around the country who charge pesos, and nearly 5,200 who charge dollars or other foreign currency. "On my block alone, there are three people who rent without paying taxes, against four of us who do," said the first source.

According to the economist's estimate, private renters in the Cuban capital, where 80 or 85 percent of all of the country's landlords are located, paid some six million dollars into the public coffers in 2000.

In his view, the government feels that the private landlords draw off foreign tourism revenues from the state by offering cheaper rooms than those available in hotels, which are owned, or partially owned, by the government.

"Private renters earn income that escapes the hands of the state, which wants to capture all revenues," said the economist.

Official statistics indicate that there are currently 40,000 rooms in a total of 266 hotels catering to foreign tourists in Cuba, 40 percent of which are four or five-star hotels.

The economist also said that the number of licenses has been reduced in the past few years for all free enterprise activities, although the number of people who run privately-owned businesses or services without being officially registered has not shrunk.

The total number of licenses granted by the state for personal initiative fell from 208,500 in 1995 to 153,800 in 2001 and 100,000 today, he said.

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