Political Risk Latin America Blog @PolRiskLatam

Cuban Parliament Holds off on Deeper Economic Reforms

Posted in News and Articles, Political Risk by politicalrisklatam on August 3, 2011

by Roque Planas for Americas Society / Council of the Americas, August 2nd, 2011.

Cuban head of state Raúl Castro surprised observers Monday by announcing the possibility reforming the island’s restrictive immigration laws. Cuba remains one of the few countries that requires its citizens to apply for permission to leave. Castro said the rule made sense in the 1960s when the revolutionary government adopted it as a way to protect itself from hostile political exiles, but did not make sense today, given that most Cuban migrants leave for economic reasons. Castro has previously indicated intentions of reforming a state-dominated economy that has grown sluggishly since the onset of the worldwide recession in 2008, posting GDP growth of 1.4 percent in 2009 and 1.5 percent in 2010. While the possibility of immigration reform stole the show at Monday’s day-long congressional session, the National Assembly did not publicly address Cuba’s many pressing economic challenges.

Some observers expected the Cuban Parliament to finalize game-changing rules permitting home sales at its Monday meeting for the first time since the 1960s. The body did not do so. Despite putting the task off, the Cuban government says it will finish crafting rules governing home sales by the end of the year. Even without the law on their side, The Miami Herald points out that Cubans have already begun advertising their homes on Revolico—a website for classified announcements. And foreigners may soon get the right to buy Cuban property. Canadian company Standing Feather International, which has a contract to build a luxury golf resort in Holguín, says the Cuban government will allow both foreigners and nationals to purchase property there in perpetuity. Previously, foreigners could only lease Cuban property for 50 years, a ceiling Raúl Castro raised to 99 years in September of last year.

Cuba is also struggling just to feed itself. In preparation for Monday’s legislative meeting, Minister of Agriculture Gustavo Rodríguez announced Friday that the government would have to import even more food this year than planned, because the state failed to produce as much as it anticipated in 11 categories of foodstuffs during the first six months of 2011. It was the second time this year the government was forced to bump up its outlay for foreign food purchases. Costs continue to mount despite a 2009 agricultural reform that distributed usufruct rights to 150,000 families to farm fallow land. BBC correspondent Fernando Ravsberg says the reform has yet to boost production because it does not address the main problem of lack of access to basic resources such as fertilizers, tools, seeds, tractors, and other inputs. Cuba imports somewhere between 60 percent and 80 percent of its food (official and private estimates vary widely).  (continue reading… )

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