The Myth of Raul's Ballyhoed Economic Reforms: A Blast from the Past?

It has been well-noted that the recent economic "alterations" (e.g., allowing Cubans access to hotels and beaches, permitting the purchase of cell phones and computers, etc.) instituted by Gen. Raul Castro on the heals of his brother's withdrawal have generated much "ballyhoo" both inside and especially outside of Cuba.

Some observers (and including some posters on this site) have myopically argued that these are strong signals of Raul's and his cadre's willingness to engage in an eventual economic and political "apertura" (or opening). Others have pragmatically argued for a "wait and see" approach noting that we have been down this road before (e.g., the "Special Period", etc. ) and often during the Castro brothers' near 50-year tyrannical rule of Cuba. The latter point to the formula that has been revisited time and time again by the Castro brothers: meager economic adjustments cloaked in the veil of something approaching substantive economic reform, followed by a muddled and dysfunctional economic policy, followed by a reactionary halt to further reforms and of course an increase in repression.

In his article "Back to the Past with Raul" (full excerpt below), Prof. Jaime Suchlicki makes the case for the latter camp and posits compelling evidence that this "tried and true" formula is being revisited by Raul and his cadre today. In it, Suchlicki succintly notes that the "recent rise to the Politburo of the Cuban Communist Party of Ramiro Valdez, the dreaded former Interior Minister, and of General Alvaro Lopez Miera, Chief of Staff of Cuba’s Armed Forces" ensures that "the most anti-reformists, hard line leaders are in the succession line after Raul, signaling an unwillingness of the Cuban regime to open up the economic process further and certainly not to open the political process." So, at least in the case of Cuba, what is old is new and what is new is old.

Where do you fall? If neither, what do you think is most likely alternative scenario in the short term?

----------------

"An Information Service of the Cuba Transition ProjectInstitute for Cuban and Cuban-American StudiesUniversity of Miami

Issue 96
May 27, 2008

Jaime Suchlicki*

BACK TO THE PAST WITH RAUL

The economic adjustments initiated by General R\aul Castro after assuming total power on February 24, 2008, seem to be coming to an end. The rise to the Politburo of the Cuban Communist Party of Ramiro Valdez, the dreaded former Interior Minister, and of General Alvaro Lopez Miera, Chief of Staff of Cuba’s Armed Forces, indicates a hardening of policy. As Cuba stands now, the most anti-reformists, hard line leaders are in the succession line after Raul, signaling an unwillingness of the Cuban regime to open up the economic process further and certainly not to open the political process.Why the change? Or why the unwillingness to continue the process of opening? First, Raul is no Gorbachev and no Deng Xiaoping. He is willing to correct some of the glaring irritants in Cuban society – not allowing Cubans access to hotels and beaches, permitting the purchase of cell phones and computers (without Internet access), borrowing land to produce food, etc. Yet, he is unwilling to move the island much beyond.His emphasis has been on discipline, productivity and efficiency, particularly in the agricultural sector. To this end he is reorganizing and streamlining Cuba’s Communist Party to act as the watchdog over agricultural production. The same way he entrusted the military with running Cuba’s major industries and businesses, General Castro is now turning to the Party to do the same in the agricultural sector.The second reason for halting the adjustments is that the Cuban leadership has seen the reaction of the Cubans and fears possible instability. The recent changes have unleashed the Cubans’ long suppressed expectations and desires. Dissidents have been emboldened and are pushing for reforms, particularly political ones. The population at large is not satisfied with the limited changes and is asking for more. Divisions between the haves and have nots have increased, as well as between the whites and blacks that do not have family abroad and have little access to foreign currency.The most likely scenario, therefore, in the short run, is a muddling through economic policy, a halt to further reforms, and an increase in repression. The death of Fidel Castro will also usher in a period when his legacy will be proclaimed, repeated and studied – a legacy of anti-Americanism, strict Marxist orthodoxy and discipline. This back to the past is a bad omen for the future of the long suffering Cuban people.
_____________________________________

* Jaime Suchlicki is Emilio Bacardi Moreau Distinguished Professor and Director, Institute for Cuban and Cuban-American Studies, University of Miami. He is the author of Cuba: From Columbus to Castro and of the recently published Breve Historia de Cuba."

------------------------

A Truly Evil Corporation

Here's a thought experiment, imagine a corporation that:

• holds a complete monopoly, both vertical and horizontal, in all sectors of the economy, and is, in essence, the only legal employer;
• that restricts all aspects of a worker's life, both in and out of the workplace;
• that does not recognize any right of association or freedom of expression, and will fire you and possibly have you incarcerated for such violations;
• that outlaws independent trade unions and jails its leaders, permitting only the "union" controlled by the Corporation;
• that does not permit collective bargaining or any form of demonstration against the Corporation;
• that barely pays a subsistence wage, and nowhere near a "living wage", except for its executives who enjoy the full perks and luxuries of power;
• enables the exploitation of its workers by foreign corporations who can bypass the typical labor and human rights afforded to citizens of their home nations;
• that allows for only limited external investment, and then only by exploitative foreigners who the Corporation never cedes a controlling interest to;
• that does not allow its workers or stakeholders any say in management decisions;
• that is supposed to provides for its workers education, health, and retirement, but funds none of these adequately, does not permit workers to use providers not owned by the Corporation and then permits no complaint about their poor quality;
• that works in an environment where all competition is outlawed and has absolute barriers to entry;

Sounds like a corporation that no one, much less a progressive supporter of worker's rights, let alone human rights, should ever support, right? Although this sounds like an entity taken from the pages of Orwell's 1984, such a corporation does exist in reality, and it's named the Republic of Cuba.

What boggles the mind is how many in this country (from both sides of the political spectrum) and in supposedly more progressive Europe, support the further exploitation of the workers of Cuba by lifting or weakening the embargo and thereby enriching this corporation and its partner corporations, and rewarding and empowering its executives.

While most international labor groups (AFL-CIO, ICFTU, etc.) commendably condemn Cuba for its oppression of workers, why don't many of our political leaders or candidates speak out about these and other human rights abuses in Cuba?

Obama’s Cuba policy – more information needed.

This past Friday, Barak Obama addressed the Cuban American National Foundation in Miami, FL, where he disclosed not only his Cuba policy, but his policy towards all of Latin America. I had the good fortune to attend and hear Obama’s speech first hand. As most of his speeches, it was passionate and rousing…however, I was there for the details. On the details, he said some good things, and some potentially worrying ones. Here’s my take on his proposal (Obama, hope you’re reading this!), starting with the easy points.

· His policy will be based on “libertad”. Check. Love it. Who can argue with a policy based on freedom?
· When crafting the super-details of his Cuba policy, he will consult the Cuban-American community to get our input. Check again. Makes sense to consult the folks who obsess about the topic on a daily basis.
· He will maintain the embargo. Check yet again. Contrary to some current opinion, the embargo is a critical source of influence on the Cuban regime. In fact, since Castro took power, there has been one period of liberalization in Cuba: the beginning of the so-called “special period” after the collapse of the Soviet Union and before the new subsidies from Venezuela came in force. During this time, Cubans were allowed to start businesses for the first time and today’s dissident movement was born. Not surprisingly, this is when the full weight of the embargo was felt in Cuba.
· He will reverse Bush’s restrictions on travel and remittances by Cuban-Americans. This is more complicated. The “old-guard” is opposed to this since it certainly provides support to the regime. The “newer-guard” is in favor since a) many still have family in Cuba and b) conditions in Cuba are tough. For folks who don’t know, here’s what currently happens to a dollar sent to Cuba. First, you can use the US dollar to transact in the black market to buy whatever you can find, e.g., gas for your car, cement to fix your roof, or a haircut. (it is currently legal to hold dollars, though this has changed before) – these are things by the way, the State is supposed to guarantee. If you can’t find what you need, or are in need of basic staples (i.e, food) you need to convert the dollar to a third currency, commonly referred to as “chavito”. The government happily does the exchange, for a ~20% tax. Then you can use your 80 cents to buy products at state stores which charge an abomination for the product. So, you are cheated three times: scrounge for what the state is supposed to provide, if you don’t find it, pay an exorbitant fee, and then succumb to gouging. Nonetheless, the family receiving the dollar gets a little help. Back to Obama – rather than just lifting the policy, why not ask for something in return? Say, stop charging the freaking 20% fee!!
· He will engage with the Island. Ok, this is the biggest potential roadblock. What does that mean? What’s the worst case scenario? Obama meets with Raul to have a chat and tells him that it would be good if Cubans had a few more freedoms. This would be disastrous. What business does a US President have talking to a man who has personally executed God knows how many people, and ordered the execution of God knows how many more? Who, for 49 years, has made it his sole purpose to trample on every freedom that Americans hold dear? This is more so if it’s just a conversation so they can “exchange ideas”. Mr. Obama, you’re not going to learn much. Ok, so what would be good engagement? Send a mid-level State Department official to Cuba to reiterate that Cuba’s oppressive regime is unacceptable, and that change must happen. That’s keeping with the past. However, he should make a few changes:
o Publicly specify that the US has no interest in invading Cuba.
o Acknowledge that the death of Fidel (hopefully soon) is a historic moment, one primed for a transition to normalcy (i.e., democracy and capitalism).
o Confirm that the US is willing to be a partner in this transition, so long as Cuba acts in good faith.
o Present a holistic framework on tit-for-tat exchanges: reforms on the island for improved relations with the US (i.e., partial lifting of the embargo, etc.).
o Mr. Obama, the day Raul moves to free and fair elections, hey, have all the tea you’d like with him.

Ok, we all know that Presidential candidates are busy people, having hundreds of topics in their heads at any one time, and probably crafting their policies “just in time”. So it is a bit unreasonable to have expected Obama to share a super detailed approach. However, three statements would have gone a long way:

· My administration’s engagement will be objective-based, rather than just for the “relationship”.
· I, personally, as President of the United States, will not meet with Raul Castro until significant reforms in the island are underway.
· The embargo should be viewed as neither a failed policy nor an iconoclastic one never to be changed – it is one of the best negotiating tools the US has in its tool-kit.

Please share your thoughts…would love to read other opinions from readers.

Is Speaking to Raul Castro a Necessary Evil?

While attending the Cuban American National Foundation’s Cuban Independence luncheon, I heard Senator Barack Obama’s describe how he would be willing to meet with Raul Castro if such a meeting included a clear agenda that would lead to Cuba attaining democracy without accepting any compromise on Cuba’s freedom. He makes a nuanced distinction between requiring that the Cuban government take specific prior steps to earn such a meeting (preconditions) and setting an agenda narrowly focused on bringing democracy to Cuba.

Whether it is with preconditions or only with a defined agenda, the notion of meeting with Raul Castro is, understandably, emotionally and intellectually difficult for many, particularly us Cuban-Americans, including me, to accept as a fruitful approach to regain Cuba’s freedom. Both Castro brothers have been unwavering and ruthless dictators who betrayed the hopes of a revolution that they hijacked and took down a path that, over nearly fifty years, has brought nothing other than suffering, repression and destruction to our homeland. We all have stories about the damage that these tyrants have brought upon our families and there is a legitimate argument that an encounter with Cuba’s oppressors could potentially legitimize them and / or may demoralize the opposition movement on the island. As a result, it may be preferable for Senator Obama, should he become President, to instead extend repeated and overt invitations for dialogue to any true reformist who, from his current position within Cuba’s power structure, would be willing to organize a group to push Raul and his ailing older brother from power. This scenario could make things difficult for Raul Castro and, if successful, would be far preferable to negotiating with the principal culprits of Cuba’s tragedy. However, this approach requires persistence on the part of the U.S. and it may require it to burn political capital internationally. There is also a material risk that such an approach could ultimately bare no fruit given the strength of Cuba's police state and the vested interest that those in power have to maintain the status quo as a means to secure their well-being. If that is the case, should we just sit around with our arms crossed and keep waiting for a day of change that we do not help to precipitate?

As a Republican, I am frustrated by the fact that during the last two terms of a Republican administration not a lot has been accomplished to bring about democracy in Cuba. It is particularly frustrating when one considers that this particular Republican administration owes a lot to the support it received from the Cuban American community in Florida. As a result, I am quite tired of empty promises that lead to no action while Cuba continues to suffer.

If sitting down with Raul Castro meant his disgraced departure from Cuba and Cuba regaining its freedom, would it be worth to swallow the bitter pill of dealing with a malevolent despot for the sake of our 11+ million brothers and sisters on the island? This is not a pleasant alternative, but nothing would be worse than the Castro dictatorship transitioning from its current state of high dependence on its individual leaders to institutionalized communism that can lasts for many more decades. This is exactly what is currently at risk. The answer is not easy, but what is your take?

Cuban Independence Day Luncheon

The Cuban Independence Day Luncheon lunch has begun and Senator Obama is scheduled to address the attendees at 1:20PM. There is no internet access in the ballroom so I’ll do my best to update the comment section as often as I can with highlights of the event and crowd reaction.

Calling a Bluff

The President proclaimed this past Wednesday, May 21, to be a Day of Solidarity with the Cuban People, and so he gave a speech in which he reminded his audience of the struggle for human rights on the island and highlighted the hypocrisy of the Cuban regime's recently announced reforms "permitting Cubans to own products that virtually none of them can afford" (read full text here). The President seemingly sought to call out Raul Castro's bluff by announcing that Americans would now be allowed to send mobile phones to their families in Cuba.

While news of the original reforms have been viewed by some in the media as an encouraging sign of openness by the "new" regime (see here: Guardian Article), this should not be viewed as anything like a Cuban Glasnost, but rather as another method by which the Cuban state can extract hard currency from the Cuban Citizenry and its American and European benefactors. Even if the Cuban regime allows these transfers (and it must have anticipated such a move by the US), it still requires that Cubans purchase a special $65 phone chip and pay $120 to activate service and must then use the state mobile phone monopoly, Cubacel, which charges around 50 cents per minute for phone calls. Charging 9.5 times the average monthly salary to be able to use a mobile phone, even before the first call is made, is not a way to encourage its use, but a way to fund state coffers (as well as Telecom Italia's, which is a big investor in Cubacel). There's probably no doubt that phone calls from this system will also be susceptible to eavesdropping and will be subject to other measures of control (e.g. disrupting the system or a local transmission tower should the state want to stop mobile phone usage and the possibility of news leaking out, or any type of civic mobilization, in the event of a major protest, etc.).

So while I envision the gifting of mobile phones as having less of an impact than the Administration might (outside of the immediate monetary benefits the Cuban state will reap), it does bring up an interesting possibility. Should the Cuban regime maintain these type of "reforms", rather than reversing them after the public relations benefit has subsided, and thereby legalizing and keeping a whole range of consumer items and conveniences available, while ordinary Cubans remain unable to afford them outside of those who receive sizable remittances or operate in the underground economy, might this lead to enlarging the schism of the haves (such as high-ranking government officials and other elites) and the have-nots (the great majority of the Cuban public)? Would this not accentuate the fundamental hypocrisy of Cuba's un-egalitarian society?

Alternatively, suspend disbelief for a moment, and imagine if mobile phone usage were somehow allowed to become widespread, it could possibly allow for a democratic, if limited, dissemination of information, the whole concept of which is anathema to the state and its controlled media. Other technologies that have been legalized (although practically unaffordable), such as DVD players and personal computers, or hoped for, such as widespread internet access, can potentially be even more destabilizing, as information can become democratized and harder for the authorities to restrict.

For these reasons, I believe that Cuba's authoritarian regime, whose primary interest is its own survival, will probably reverse these "reforms" and restrict other disruptive technologies before any real democratic progress can begin to take shape. However, I still foresee the Cuban regime announcing additional measures, disguised in the rhetoric of reform and openness, to extract hard currency as transport and global food prices continue to rise, since Cuba imports just over 80% of its basic food products.

But in the end, the bluff will be revealed and short-sighted Cuba watchers will once again be disappointed as the same, tired song and dance of tidbit reform followed by complete reversal unfolds, yet again, as Cuba attempts to stave off economic collapse in every way except then only viable one -- by permanently moving from a Marxist to a Market Economy. We all wish it were different this time, but the only song that comes to mind is The Who's "We Won't Get Fooled Again."

Can you hear me now? What do recent changes mean for Cuba?

Cuba has recently received significant press regarding the “reforms” Raul Castro has been pursuing on the island, with the focus being on the newly acquired “freedoms” Cubans can now enjoy. For example, they can now purchase a wider range of consumer products, with the cell phone being the most popular, and visit tourist hotels. (For a fuller discussion of the enacted changes, see the Miami Herald article here http://www.miamiherald.com/news/americas/story/537358.html)

When I read of these reforms, my first reaction was “wow, that’s right, they have no cell phones in Cuba!?!” My second reaction was to ponder how this could be…aren’t cell phones everywhere? Indeed, while traveling, I’ve seen them everywhere from the favelas in Rio, to the villages of Thailand. There are few places on Earth where you can go without seeing locals chattering away on their cell phones. Until 2008, Cuba was one of them. Given that in 1959, Cuba was one of the wealthiest countries in the western hemisphere, one has to ask … is this is really progress? Or is it a vivid example of the economic destruction wrought by the Castro regime?

Nevertheless, these changes do improve the quality of life for Cubans at the micro-level. But why did Raul enact these changes? And more importantly, will he keep going?

The optimistic interpretation is that Raul is different from his brother, understands the plight of the Cuban people, and is willing and able to be the heroic leader that leads Cuba to liberty. I truly hope this is the case.

However, it is too easy to view this in a pessimistic light, a light much more consistent with past behavior. By enacting these changes, Castro gains plenty, while losing little. First, it will be easier for him to deflect criticisms about how impoverished Cuba is – he will point to the cell-phones and flat screen TVs on display while knowing that this is unattainable for most Cubans. Second, this will increase government revenues by sucking more money from the exile community. Cuba’s landline phone system is ancient, decrepit, and difficult to use. Many Cubans do not even have a home phone. Hence, it is highly probable that Cuban exiles will fund the purchase of phones by relatives on the island to facilitate communication. Of course, these purchases will be at official exchange rates (~20x market rate), ensuring high revenues for the government. Finally, Raul temporarily assuages the Cuban people, giving him time to solidify his power base post Fidel. As one prescient Cuban phrased it in the Miami Herald article:

''Cubans are like battered wives,'' said Eduardo, a 30-year-old Havana bachelor who spent a recent afternoon admiring the latest $5,000 flat screen TVs on sale here. ``The husband beats the wife every day. Then one day he doesn't beat her, and it's like, `He's so good to me; he didn't beat me today.'

So, no, I am not optimistic. To me, the changes thus far are not a sign of more significant changes to come.
However, I hope I am wrong. I hope rumored reforms, such as allowing all Cubans to travel freely and officially own property, materialize. If they don’t, I hope current reforms backfire on the Castro regime, as it may not anticipate the social change wide-spread use of cell phones can bring (as oppressive governments in eastern Europe and Asia have learned - to their detriment).

As Cuban Americans, we continue to hope.

Is it time to shake the tree?

With the Cuban Government in a transitional state and an election year in the U.S. destined to infuse Capital Hill and the White House with new leadership the Cuban issue is once again up for debate. The leading Presidential candidates differ on their approaches to handling the Cuban regime, as do the Cuban-American candidates running for congressional seats.

Is now the time to maintain the embargo and restrictions on Cuba? Will easing it provide legitimacy and breathing room for Raul Castro’s administration?
Is the time right to ease restrictions and set forth in motion plans to open up lines of communication with the Cuban Government? Obviously the policy up until now has not proven to be effective.

There’s a school of thought out there that believes it’s time to shake the tree and see what fruits may fall. But what is the best way to squeeze some progress out of Cuba? Is it by engaging in dialog and easing the embargo or is it by tightening restrictions even more?

At the very least the push for a democratic Cuba is back on the candidates list of talking points. It’ll be very interesting to see how their positions evolve throughout the remainder of campaign season.

Cuba's Independence Day

The exiled Cuban community celebrates May 20th as Cuba’s Independence Day. The Republic of Cuba gained formal independence from Spain on May 20 1902 and went on to ratify a new Cuban Constitution. The current Cuban regime does not celebrate May 20th, but instead October 10th, as the first declaration of independence and also July 26, the date of Castro’s first attack on Moncada Barracks.

The Cuban American National Foundation holds an annual lunch with its members in celebration of May 20 and to honor all Cubans past and present who have fought and continue the fight for a free and independent Cuba. This year, Senator and Presidential candidate Barack Obama has agreed to speak at CANF’s lunch and address Cuba and other important topics in this year’s election.

We will be blogging live from the event so we hope that any of you that are interested in Senator Obama’s stance on Cuba will join us on the blog for updates.

We’re also curious to know how Cuban-Americans celebrate May 20th. Is it recognized in your families as an important date or has its significance dwindled amongst the Cuban-American community?

A Glimpse into Daily Life in Cuba

The Article below from the L.A. Times provides a sad, but vivid glimpse into day to day life in Cuba. I will add to it a couple of points:

Rosa's perils, while augmented by her inability to participate in the black market as an older woman are not so "marginal". Sadly, those that live in conditions similar to hers number in the millions in Cuba. To put it into context, many PhDs, medical doctors and other professionals in Cuba earn in the range of $300 to $800 pesos per month, depending on tenure, specialty, etc. This translates into $12 to $28 CUCs, or 10% less in U.S. dollars. In all cases, this translates into less than one dollar per day, the worldwide mark for absolute poverty. Even with access to the black market or foreign remittances, something that only a minority of the population has access to, living conditions in the country are deplorable compared to all but the poorest nations in the world. This condition is true today and it was also true during the days of Soviet subsidies when I lived in Cuba. It is the sad result of the command economy imposed by an unelected government that has brought to these depths of despair a country whose GDP per capita prior to its turn to communism was higher than that of Spain's and a number of other countries in Europe, not to mention nearly all countries in Latin America. This, coupled with the nightmare of living under a brutal police state, is why close 20% of Cuba's population is outside of Cuba and why if given the smallest opportunity, nearly all others would seek to escape since trying to change the government would cost them endless prison terms or their lives.

The L.A. Times article is below.
----------------------------------------------------------

Cuba's two-currency system adds up to a social divide
Those who earn the old peso are seeing its purchasing power decline. To them, powdered milk and sweet potatoes are luxuries.

By Carol J. Williams

Los Angeles Times Staff WriterMay 8, 2008

HAVANA — Pushed to the fringes by a money-driven social divide, Rosa is what Cubans call a "marginal" person.

She's lived all of her 72 years in a shabby enclave of Marianao, a neighborhood where crude wooden cottages, their rotting boards held together with coats of paint, descend into a gully strewn with refuse and sewage.

Her two-room shack was an early gift of the revolution, back when the idealistic brigades of social levelers were at work lifting the poor and teaching the long-neglected how to read and write and care for their children. Rosa's sturdy metal-framed eyeglasses, a more recent state handout, magnify tired gray eyes that turn to Cuba's three state-run channels for diversion now, having lost the desire to read because of a dearth of books and practice.

Widowed 22 years and left with only a tethered mongrel named Mochito for company, Rosa is among the considerable ranks of Cubans in the country's population of 11.2 million who find themselves lost in poverty as the flow of money from trade, tourism and the black market has broken its once-egalitarian foundation.

The problems faced by Rosa and others like her, complicated by factors such as the country's loss of Soviet aid years ago, appear to be getting worse. Cuba's system of two currencies may be at least partly to blame.

Cuba uses the dominant convertible peso known as the CUC -- introduced four years ago to replace the U.S. dollar, which had been circulating for more than a decade -- and the Cuban peso known as moneda nacional.

Those with jobs in hotels, airlines and shops and on the thriving black market earn CUCs, referred to as "the dollar" and worth about 25 times the peso. The peso is the currency given to all state workers and pensioners, which must be converted to CUCs to purchase most goods. The Cuban government retains the peso because it lacks sufficient foreign reserves to back and circulate only CUCs.

The U.S. dollar, which circulated in Cuba from the mid-1990s to late 2004, was removed by then-President Fidel Castro and now is subject to a 10% tax whenever it is converted to CUCs -- in effect a devaluation by the state. The tax is felt most by tourists and the estimated 10% of Cuban households receiving money from relatives abroad.

Those like Rosa, who have neither foreign benefactors nor the vigor to run their own dollar-earning schemes, watch the buying power of their moneda nacional recede each month as more goods become available only for "dollars."

Rosa survives on her late husband's 164-peso monthly pension, about $7, and the ever-shrinking basket of staples issued by the state each month.

"The rice is gone in 10 days, and then only if I'm careful," laments the widow, stout from a diet of bread rolls and rice. "What I have after the electricity is paid I spend on food, nothing else."Like many Cubans, Rosa won't tell a foreigner her full name for fear of official retribution, although it's difficult to imagine how her circumstances could worsen.

Dressed in a faded blue floral dress worn thin as a hankie, beige socks and flip-flops advertising Cuba, she spends her days washing the concrete-slab floor of her hovel and cooking rice for her two daily meals.

For the first four days of each month, she boils a single cup of coffee at midday from the quarter-pound packet that is her most treasured item in the ration basket. She quickly uses the two cups of beans, the small bottle of cooking oil and the single chicken leg.

Once the ration of rice runs out, she must convert her pesos to CUCs to buy food for the rest of the month. She subsists mostly on rice simmered in bouillon, along with the single white bread roll she can collect each morning from the state bakery at the top of her alley.

Her joy, she says, is having a few precious minutes with one of her eight grandchildren on the rare occasion when her daughter or one of her two sons can take time from their own daily scramble for sustenance to visit. Another reprieve is sweet potatoes, to break the monotony of her meals, an indulgence she affords herself once a week if nothing has come up to divert her meager funds.

She takes her rice from a chipped earthenware bowl as she sits on a lumpy, sheet-covered sofa, the black-and-white TV in the corner switched to one of the three state channels. She pays little attention to which one it is tuned to; often all carry the same official speech or cultural program.

A two-burner gas hot plate on the dented metal counter is the only appliance in the kitchen. A small fridge, dotted with plastic beer-bottle magnets, stands kitty-cornered in the sitting room, unplugged to save on the power bill as there is seldom anything perishable in it. A towel draped across the top displays a collection of white ceramic figurines and a candle. A scrawny calico cat she never bothered to name probes the scrubbed floor in fruitless pursuit of a dropped morsel.

Scavenging her sustenance is both an ordeal and an occupation for Rosa. For all but the few grains and tubers that can be bought with the old pesos, she must change her monthly pension for CUCs.

The nearest market is about a mile away, a trying journey for a woman with diabetes, hypertension and depression. Rice was only 12 cents a pound recently, but she goes through half that much a day after the ration runs out, and it costs her nearly a quarter of her monthly pension. Vegetables and fruits are only a few pesos a pound or apiece, but they consume most of the rest of her money.

Powdered milk is an unimaginable luxury at more than $7 for enough to make a gallon, and even the least desirable cuts of meat thick with flies on the butcher block cost nearly $2 a pound. The single serving of chicken and six eggs provided in the ration are usually her only protein.The closest clinic that will treat her is three miles away, a difficult distance considering that public transportation does not reach her at the bottom of her steep, rutted road.

"The buses don't come down here," she says of the narrow, descending alley that drops off on one side into a culvert.

Medical care in Cuba is free, but Rosa pays with her time, waiting outside all day until the public service doctor can see her. The pills to combat depression cost about 50 cents each, and a vial of 15 would use up her entire monthly income. She rarely buys them, preferring to spend the money on food.

She walks to the market and the clinic when she needs to, saving the one-peso fare for the food budget.

With other wooden and stucco hovels like hers lining the alley, no vehicle wider than the Russian-made Lada owned by her neighbor's nephew can make it within 200 yards of her porch, which consists of a concrete slab surrounded by a rusted chain-link fence and is padlocked against nocturnal dangers.

Across from Rosa's house of whitewashed wooden slats and closed louvers, three men are perched on concrete stumps that once supported fencing. Each sips from his own bottle of cheap rum, warily watching the unaccustomed visit by two strangers with the Lada driver.

Unlike younger Cubans or those with marketable skills like hairdressers and seamstresses, Rosa has no means of boosting her income.

Her oldest son, Carlos, 51 and disabled, often spreads a few humble wares for sale on a tea towel on Rosa's porch: lollipops, bouillon cubes, gum balls and, from his mother's ration basket, cigarettes, which are given only to those older than 60. He sometimes takes in 25 or 30 pesos, which he can convert to a single CUC to buy his own family supper."He can't help me much. We all have the same conditions," says Rosa, explaining with a mother's protectiveness why Carlos keeps her cigarette proceeds.

The government of Raul Castro, the 76-year-old younger brother of the ailing Fidel Castro, has acknowledged since Raul was named president in February that the two-currency economy has produced social strains and a class divide. He has pledged to restore equality by reunifying Cuba's monetary system.Many foreign economists, however, deem that impossible unless everyone is forced back to the dysfunctional system in which prices are arbitrarily fixed by the state and goods disappear from stores when their production cost exceeds what they can sell for.

Havana shops today are full of luxuries Cubans hardly knew about when Soviet subsidies and communist-bloc trade reliably provided the basic necessities. Microwave ovens, cellphones, Chinese-made appliances and European foods now perch alluringly on store shelves, albeit at prices only the minority of Cubans flush with CUCs can afford.

Rosa laughs at the absurdity of owning anything more than the few comforts already in her home: the TV, the refrigerator and a telephone. She prefers the old days, without the tease of goods she cannot afford.

"It was better before," Rosa says.