- Photos by Bruce Byers
I was in Havana on August 14th, the day the American flag was reinstated in front of the American Embassy, still in lock-down. John Kerry must have sensed, as I did, the continuing gamesmanship with the Cuban government. The Stars and Stripes stood forlornly on a standard sized pole, overshadowed by the field of gargantuan flag poles Fidel Castro defiantly built facing the embassy with dozens of Cuban flags the size of small fishing boats. But it’s a start.
The Cubans seem to be thrilled about the possibility of a return to normalized relations with the U.S., having had the American coast in their sightlines for over five decades of imposed isolation. But they have no idea how their lives are going to change. And it won’t be anytime soon. U.S. companies are already meeting and planning to bring our commercial culture exports to this island caught between its colonial past and a future not yet realized. But that won’t be anytime soon, either. Meanwhile, the Chinese are busy ramping up, already building a hotel near the Museum of the Revolution. But anyone who thinks Cuba is a golden opportunity might want to recalibrate.
Let’s get the elephant in the room out in the open. The average Cuban receives $20 a month from the state. And there are over 11 million average Cubans.
Every Cuban citizen is also given a ration book each month that entitles him or her to government-subsidized staples: one pound of chicken, 5 eggs, rice and beans, and cooking oil. No subsidies for vegetables, and no one is allowed to buy any fish unless they have a doctor’s order for dietary reasons. These provisions have to be paid for in pesos, and those pesos come from the $20 monthly stipend. Just to make life more complicated, Cuba has a dual currency. Pesos for the average Cuban, CUCs (Cuban convertible peso) for the tourists and Cubans working in the tourism trade. From an economic perspective, the peso is keeping them down at the farm. Fruit and vegetables are sold off food carts from local farms. Canned goods are scarce in the sad and understocked food stores, which is a generous description. If you aren’t living on food coupons, you pay much higher prices in the very few food centers outside central Havana.
The level of poverty in Havana is palpable. Yet it provides paler-faced tourists an opportune setting to snap endless photographs of the picturesque urban ruins. There is an ambitious program funded by the government to restore the extraordinary colonial buildings in Old Havana to their former glory. But that noble effort isn’t doing much for the majority of the population that’s been living in temporary housing for the past 20 years. Nor for the people living just on the outskirts of Havana, in completely undeveloped, fourth world conditions.
What is impressive is the Cuban spirit of resilience. We know about the music; also Cuba is a rich haven for contemporary art. All those 1950s Chevys have been rebuilt, and rebuilt again. With a resource-constrained economy, stainless steel scrap is repurposed into formerly chrome bumpers and trim. Those cars continue to be a highlight for every visitor. It is as though they have been in stasis for 60 years. There is a very small wave of independently owned restaurants, though most are still government owned. Cuba will be the ideal place for micro-financing: the resourceful Cubans are ripe for building their own businesses.
The population is aging, and by 2030 about 30 percent of Cubans will be over 60. Resignation may etch the faces of the older population, but the next generation of Cubans is restless and ambitious. The government pays for everyone’s education and healthcare, and subsidizes basic living expenses including housing, electricity, and water. But for the Millennials, who do workarounds to connect with the outside world via the Web, graduating from college with a degree in economics provides little hope for a job future. There is no MBA program, but a two-year stint in the military is compulsory once they graduate. Many of them choose not to complete university to avoid the military duty. It’s a tough proposition to have a great degree, and nowhere to use it.
One 27-year-old graduate I met teamed up with his college friend to start a restaurant that has the most sophisticated food I found in Havana. His degree? Mechanical engineering. Now he is a bartender constructing complex cocktails and engineering architectural garnishes adorning the glasses. He is proud of his creations, and he co-owns the business. The Millennials are less interested in supporting the traditional constructs of Cuban society; they just want to make money.
Retail on the Rocks
So, retail. The prospects are slightly bleak, in light of that $20 monthly stipend. In Old Havana, there is Benetton and the absurdly overpriced Paul and Shark, a Ralph Lauren wannabe with branded yachting logos plastered on everything (both in Plaza Vieja); a brand-new leather goods store and one stylish shoe store (both on charming Calle Oficios). All of these shops are Italian. The only reason they can be in business is to appeal to the tourists they hope will arrive sometime soon on oversized cruise ships. The residents of Havana could never afford $177 ballet flats or $100 leather bags. There are no jewelry stores. No lingerie boutiques. The one local retail apparel store in Plaza San Francisco offers perfume, and cheaply made clothes in the $20 to $50 range. Even that exceeds the monthly income.
On the carnival weekend while I was there, groups of families, dates, friends and teenagers strolled down the Malecon. Women in vivid leggings and form fitting tops, most with lace or net inserts, looked like a flock of brilliantly colored tropical birds. The men were in jeans and bright logo-emblazoned athletic jerseys and T-shirts. There is a lot of glitter, sparkle and gold on the clothes, a signature of Caribbean clothing culture.
So where are the Cubans getting these brightly colored clothes? There is the Galerías Paseo shopping center near the Tropicana selling upscale labels, but that’s beyond the reach of most Cubans.
When you fly to Cuba you get a pretty good idea where the apparel is coming from. Suitcases and boxes the sizes of refrigerators arrive on the carousels, stuffed with merchandise. Resourceful entrepreneurs also offer catalogue sales for stylish women, manufacturing the clothes in Mexico and delivering them personally.
So back to that $20 monthly income. Any way you cut it, there’s not a lot left over for clothes, accessories, shoes – let alone Pizza Hut or McDonald’s snacks. The purists resist the commercial colonization of Cuba with fast-food brands and other mass-market icons of American culture. But to the Cubans, this is a sign of success.
Personally, I think the Cubans are in for some major reality checks when credit cards, wireless internet and foreign goods eventually flood their system. Entrepreneurship will flourish, but consumers are still going to need the cash to buy things. Cuba will likely become another Caribbean tourist mecca, but without the infrastructure to sustain it. They have so far to go to catch up. My prediction? Online retail sales of apparel will leapfrog over brick-and- mortar for Cuban consumers. Amazon and other online retailers are going to have an absolute field day five years from now, when the Cuban gates are truly open for business.