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Raul Castro leaves Cuba with new freedoms, deep problems

AP  |  Havana 

In 2008 took over a country where most people couldn't own computers or cellphones, leave without permission, run most types of private businesses or enter hotels.

Castro set about re-engineering the system he had helped create and opened dramatically over his decade in office. But when Castro steps down Thursday after two terms as he will leave his successor a host of problems that are deeper than on the day his brother formally handed over power.

has nearly 600,000 private entrepreneurs, more than 5 million cellphones, a bustling and one of the world's fastest-growing airports. Limited is expanding fast, with thousands of Cubans installing new home connections this year.

Foreign debt has been paid. Tourism numbers have more than doubled since Castro and re-established diplomatic relations in 2015, making a destination for nearly 5 million visitors a year, despite a plunge in relations under the

On the other side of the ledger, Cuba's Soviet-style command economy still employs three of every four Cuban workers but produces little. Private sector growth has been largely frozen.

The average monthly state salary is USD 31 so low that workers often live on stolen goods and handouts from relatives overseas. Foreign investment remains anemic. The island's infrastructure is falling deeper into disrepair.

The break with dashed dreams of detente with the US, and after two decades of getting Venezuelan subsidies totalling more than USD 6 billion a year, Cuba's patron has collapsed economically with no replacement in the wings.

Castro's inability or unwillingness to fix Cuba's structural problems with deep and wide-ranging reforms has many wondering how a successor without Castro's founding father credentials will manage the country over the next five or 10 years.

"People in really haven't processed yet what it means to have a without Raul or leading it," said Yassel Padron Kunakbaeva, a prolific 27-year-old blogger who writes frequently from what he describes as a Marxist, revolutionary perspective.

"We're entering unknown territory." Tens of thousands of highly educated professionals are abandoning the island each year, leaving with the combination of third-world economy and the demographics of a graying European nation.

After a 2016 recession, said growth was 1.6 per cent last year, although official accounts remain opaque and questioned by experts. The single-party controls virtually all forms of expression and organization, with near-zero tolerance of public criticism or dissent. The mood on the street is pessimistic, with few expecting a better future anytime soon.

"The political future of whoever takes over in April depends on the economic question," said Jose Raul Viera Linares, a former first

"It's the possibility for young people to dream, to design their own future. That's all based in the material wealth that this country is able to achieve." The greatest immediate challenge for Castro's expected successor 57-year-old Vice is unwinding a byzantine dual-currency system featuring one type of Cuban peso worth 4 cents and another that is nearly a dollar.

The system was designed to insulate a state-run, egalitarian internal market using "national money" from trade with the outside world denominated in "convertible pesos."

The barrier between the two worlds swiftly collapsed and the system has fostered big economic distortions. Inefficient state enterprises receive mammoth subsidies by obtaining expensive convertible pesos for the price of the cheaper "Cuban peso."


The dual-currency system also allows private businesses to receive subsidized goods and services like water and in Cuban pesos, then turn around and charge their relatively wealthy clients in convertible pesos at a significant profit.

Castro called for elimination of the dual currencies from the beginning of his presidency, but never got around to it. Unlike his brother Fidel, who extended his time in office until illness forced him to retire, Raul has long made clear that he would step down as in 2018 as part of a coordinated handoff to a new generation of leaders.

He will remain of the Communist Party, the country's guiding body, but many Cubans expect him to move into semi-retirement in Santiago, the largest city in Cuba's east, where he was born and led rebel troops in the country's 1959 revolution.

"We've risen up economically. The new possibilities have changed my life, of course," said Yanelis Garcia, a 44-year-old mother of three who saved money from raising pigs in her backyard to slowly build a prosperous six-room bed-and-breakfast and taxi business in the central city of

"I've always liked having my own business to be able to provide for my family. It's been really good." Cubans fill thousands of flights a year to Miami, and Cancun, where they cram duffel bags with gym socks and Xboxes for the vibrant private sector and rising middle class.

But last August, the Cuban froze new licenses for private bed-and-breakfasts, restaurants and other popular businesses, leaving many Cubans questioning how their envisions a path to prosperity.

"We've seen necessary reforms and I think that in the future there will have to be more," said Norma Chiang, a 77-year-old state "Self-employment needs to be broadened, little things like bakeries or stands that can be in the hands of individuals and not the state.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 20:45 IST
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