- The Washington Times - Friday, March 16, 2001

Last in a series

HAVANA —To pull out of a deep economic slough it entered after the fall of its Soviet patron, Cuba has begun applying capitalist management techniques to shore up its socialist system.
Roberto de Armas, the Cuban Foreign Ministry's U.S. specialist, told visiting American opinion writers that Cuba has practiced a "different kind of socialism from the beginning, although this is not always apparent to foreigners."
Mr. de Armas said that for the past 10 years, especially, Cuba has been "following its own path, which has nothing to do with traditional socialism known in Eastern Europe and involves a new set of ideas some of them very close to ideas in the United States." Cuba has adopted some incentive schemes to boost productivity.
Mr. de Armas reported Cubans are studying management techniques of businesses in the U.S. and Europe: "Knowhow has nothing to do with capitalism or socialism. If it's good for us, it's good for socialism."
He said Cuba is adopting certain market theories but not in order to create a capitalist society. He said China and Vietnam face a very different set of challenges as they are "not blockaded countries, not under such economic war" from the United States.
Maria de la Luz B'Hamel of the Foreign Commerce Ministry said Cuba has halted the decline in its economy by diversifying its market. Ten years ago, 80 percent of Cuba's foreign trade was with the East European Bloc. Today, 40 percent of Cuba's trade is with Europe. Latin America and Canada together account for a like amount.
While U.S. laws strictly limit economic ties with Cuba, and may hamper Cuban trade with other nations, many American businesses are hedging their bets that one day Cuba will be open to them, too. More than 3,000 U.S. trademarks have been registered in Cuba by more than 700 companies, Mrs. de la Luz said.
But just how does doing business with Cuba work? Evidently, the key is a joint partnership with the Cuban government, which also provides the work force.
Ernesto Senti, first vice minister for foreign investment, said, "Cuba is not a fiscal paradise, but imposes a mild tax system, and generally exempts investors from paying these taxes during the initial period of recovering his investment cost. They may repatriate 100 percent of dividends, or profits, with no additional tax."
There are hundreds of international corporations from Spain, Canada, Italy, France, the United Kingdom and Germany, as well as Latin America involved in 32 activities in the economy, he said. These include oil and gas production, mining, tourism, light industry, food and agriculture, construction and telephonic communications. The Cuban government guarantees the investors' anonymity, Mr. Senti said.
Last year, Cuba attracted nearly 2 million visitors. Mr. Senti said there are many joint ventures between foreign enterprises and the Cuban government, involving tourist hotels but a few are "are wholly owned by the enterprises."
A fundamental policy, Mr. Senti said, is that "You cannot buy Cuba. We do not sell the land. The property of the joint venture involves the right to the surface uses for 50 years, extendable by another 25 years." Twelve percent of Cuba's hotel rooms are joint ventures, a percentage the government plans soon to nearly double.
He said, "Sixty-four percent of these business ventures were approved in Cuba after passage of the Helms-Burton Act" which tightened U.S. restrictions on dealings with Cuba and extended possible sanctions to foreign entities exploiting assets taken by the Cuban government from U.S. nationals. "No firm has left even with the tightening of the embargo," he said. Trade restrictions mean Americans are "losing a market, at a certain historical moment, that would naturally have been theirs."
Cuba offers, he said, "highly trained professionals, who can quickly assimilate new technologies." Mr. Senti noted Cuba does not practice income equality, which he said would produce "an absurd society." But salary differentials provided are not huge, which he termed "the most fair, the most Christian way… . We do not provide equality of incomes, only equality of opportunity."
Mr. Santi added, "You must not forget the Cuban concept of the extended family. My wife and I are both professionals, as are our children. So even though our salaries are modest, we live quite comfortably." Moreover, "a doctor or a government minister receives social recognition " not equally available. Nevertheless, he said, the movement of trained professionals into tourist services represents "a loss of our investment in their education."
Miguel Alejandro Figueras of the Tourism Ministry said Cuba's most modest projections call for tourism to more than double to 5 million foreign visitors to the sunbathed island by the year 2010.
Lasting repercussions: Reporters quizzed Dagoberto Rodriguez, director of the North American division of the Foreign Ministry, about the shooting down by Cuban MiGs five years ago of two civilian airplanes, resulting in the deaths of American citizens who belonged to the anti-Castro organization Brothers to the Rescue, which aids escaping rafters. Reporters noted this occurred as Congress deliberated on the Helms-Burton Act, resulting in more stringent restrictions than otherwise might have passed and also securing President Clinton's signature.
Mr. Rodriguez termed the event "regrettable" but said Cuba at the time "felt besieged." He claimed there was fear the Cessnas might even drop a bomb, rather than the anti-Castro leaflets they customarily off-loaded without lethal consequence. He noted that at the time of the shootdown Havana was holding oceanside carnivals that had attracted up to 300,000 people.
The U.S. maintains Cuban intelligence was pre-informed by an infiltrator of the flight plan. Contradicting evidence submitted in a U.S. court, Mr. Rodriguez denied Cuba had such advance knowledge.
Mr. Rodriguez said that in January 1996 Cuba had received assurances from "the highest U.S. circles that there would be no more overflying."
He said the military had been authorized to stop such flights but that "the political leadership did not take the decision" to shoot down the planes. U.S. and international authorities have held that the shootdown occurred in international, not Cuban, air space.

Benjamin P. Tyree is deputy editor of the Commentary pages of The Washington Times. He recently visited Cuba under the aegis of the American Journalism Foundation.

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