What happened in 1991 in Russia is now happening in Cuba. With the privatization of state assets in the 1990s in Russia and Ukraine, the rapid accumulation of wealth happened. What came next was the collapse of the Soviet Union. With the state in disarray, informal deals were made with former officials, resulting in the transfer of state property to private individuals.
Now, for the last few days, Cuba is also witnessing similar changes. This is happening at a time, when the economy of Cuba is tumbling. Is the end of communism finally here? If the answer is yes, you should also know that its replacement is not a desired one.
Reportedly, Cubans and Foreigners linked businesses have taken over State companies without competition. Several known business chains and firms in Cuba have suddenly become privately owned.
Sylvain establishments, which is famous in Cuba for its sweets and bread, has now transitioned from being state-owned to privately owned. While Sylvian is just a meager example, there have been numerous enterprises that are following the same path in Cuba. Several firms are being rented out by people on short notice and over the course of the night.
In August 2022, the Cuban newspaper Sierra Maestra published a list of state premises that were going up for tender in Santiago de Cuba, they all now are privatized. But, the results of tenders are unknown.
Soditos, the state-owned cafeterias spread over various neighborhoods that sell everything from ice cream to condoms, including bread, tea, juices, and soft drinks, with great success among the population has also got privatized.
As a matter of fact, this privatization became clearer last week when Cuban President Miguel Daz-Canel and Kremlin adviser Boris Titov met.
The leaders confirmed this pattern that has been observed in public for months. The meeting demonstrated that Cuba wants to, as the island’s president put it, bring its relations with Russia to “a higher moment.”
This includes letting Moscow lead in a potential opening. Russia is soon going to open a new trading house in Cuba. The establishment of a center to revamp Cuba’s economy “from private companies” has been agreed upon by the two countries. For several think tanks, this means that the “Russian market mafia scheme” will soon replace the “model with a nationalized economy.”
A really confusing state
But, this new model is turning into a real headache for some Cubans. Ever since the privatization started, Cubans are seeing inflation crossing all boundaries even for basic commodities.
A packet of cookies is 380 pesos, an 8-ounce tetra pack of fried tomato sauce for 630 pesos, some even smaller containers of mayonnaise for 280 pesos, and a 3.5-ounce bag of chips for 150 pesos. Whereas, powdered milk’s price has skyrocketed to 1,800 pesos for 2.2 pounds.
On the private side, almost everything is available to Cubans. But, at a price which is definitely too high for them. This oligarchy could be troublesome for Cuba.
As a business oligarch is generally a business magnate who controls sufficient resources to influence national politics. So, eventually, the person who is getting the Cuban business chains would have the sole power to turn the tides in Cuban politics. It’s always something far from the “transparency” and “publicity” that the law establishes.
Cuba needs to transition away from ‘Communism’. But, falling into the lap of oligarchy is not a solution.