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Barack Obama in Cuba: Hello, Barry

20160319_AMP002_0The promise and perils of a historic visit.

“THIS country will rock when he arrives,” predicts Leo, a taxi driver in Havana. He is not talking about Mick Jagger and the Rolling Stones, who will perform in the city on March 25th for an audience of perhaps 400,000 fans. He means Barack Obama, who four days earlier will become the first sitting United States president to visit Cuba since Calvin Coolidge in 1928. When Leo was 14 years old, in the 1980s, his teacher ordered him and his classmates to throw eggs and shout abuse outside the home of a schoolmate whose family had emigrated to the United States. “Now, thank God, the hate is over,” he says.

Mr Obama’s trip is a symbolic culmination of a process of rapprochement that he and Raúl Castro, Cuba’s president, began in December 2014. Since then the United States has eased the half-century-old trade and travel embargo on Cuba, removed the country from its list of state sponsors of terrorism and restored diplomatic relations, cut in 1961. On March 15th America’s government eased restrictions further, allowing Americans to travel to Cuba on their own for “educational” purposes and Cubans to be paid salaries in the United States. Mr Obama argues that such interchange will do more to hasten the liberalisation of Cuba’s repressive socialist regime than continuing to isolate it.

When he arrives, he will find modest grounds for hope. Cuba is visibly changing, in part because of economic reforms begun by Mr Castro before his accord with Mr Obama. But the changes so far have done more to enhance the lifestyles of a few than to bring freedom and opportunity for most Cubans.

They are most palpable for the half-million Cubans who have registered as self-employed, especially those who cater to tourists. Guesthouse owners, restaurateurs and taxi drivers are profiting from a rise of close to 80% in the number of American visitors (excluding those of Cuban descent) in 2015. A further rise is sure when commercial airlines begin scheduled flights later this year. Some 300 restaurants and bars have opened in Havana over the past two years, says the owner of a paladar (owner-managed restaurant).

A decade ago, when Raúl Castro’s brother, Fidel, was still in charge, the few Cubans with money dared not show it. That, too, has changed. Now the well-heeled like to pay for a sense of exclusivity, says the Italian owner of a bar in Havana. “Cubans just love a VIP area.” At the rooftop bar of the Fábrica de Arte Cubano in the district of Vedado, a vast hipster complex conceived by X Alfonso, a Cuban musician, gin and tonics cost $14 apiece. Young Cuban tipplers outnumber the tourists.

For foreign investors hoping to launch something more ambitious than a bar, and for their prospective employees, conditions are less plush. The government is “updating” its socialist economic model cautiously. When the regime permits foreign firms to do business, its officials are often clueless about how to make it happen. American trade delegations seem “confused” by their meetings with the government, says one European diplomat. A group visiting the sugar monopoly found the experience so odd they thought they had gone to the wrong building.

The regulations for doing business in Havana are “mind-boggling”, says a foreign entrepreneur. Some of these are designed to ensure that the benefits flow to the government rather than to workers. Investors in joint ventures pay salaries in convertible pesos, equivalent in value to American dollars, directly to the government. The government then pays the workers a fraction of the value in “national” pesos, and pockets the difference.

No satisfaction

You might think such fleecing would leave the government with cash to spare. But foreign businessmen whose firms supply it say they have trouble getting paid; two have been waiting since November. Some European and Canadian companies have long planned to sell their Cuban operations to Americans as soon as they are finally permitted to invest. “It’s part of the business plan,” says a Canadian executive. New hotels have been built to American safety specifications for that reason.

During his visit Mr Obama may announce a Cuban investment by one or more American companies, perhaps in energy, telecoms or hotels, under a waiver issued by the Treasury Department. An experienced investor has prepared his greeting: “Welcome to our pain,” he says.

Political reform is even more tortuous. Cuba’s government has released many long-time political prisoners; in what looks like a change of tactics it has increased the harassment and short-term detention of dissidents. It has modestly expanded citizens’ access to the internet. But Mr Obama’s opening to Cuba has so far yielded meagre political benefits. “All the movement has been on the US side,” says a European diplomat. “The Cubans have done remarkably little.”

Reform could accelerate at the Communist Party’s seventh congress, to be held in April. Some analysts expect the party to give citizens a choice among (currently handpicked) candidates for seats in the National Assembly, whose modest powers may be expanded. It might also devolve some power from the central government to the regions. Bigger changes may follow in 2018, when Raúl Castro, who is 84, will step down and probably hand power to Miguel Díaz-Canel, the first vice-president, who is nearly 30 years younger. Little is known of Mr Díaz-Canel, who would be the first leader from outside the Castro family in nearly 60 years (it is known that he is a fan of the Rolling Stones).

Mr Obama no doubt hopes that the very fact of his visit will speed up political reform. He is more popular on the island than either of the Castros, according to a poll conducted last year. “He looks like us,” many Cubans proudly proclaim; at least a third of Cubans have African ancestry, like Mr Obama. As well as taking in a baseball game (between Cuba’s national team and the Tampa Bay Rays), he will meet dissidents and may give a televised speech. He has promised to lobby Raúl Castro for freedom of speech and assembly. “Without democracy there is no possibility that things will get better,” says José Antonio Fornaris, of the Association for a Free Press, a pressure group on the island.

Mr Obama’s biggest contribution may be to deny the regime its main excuse. “All totalitarian systems need an external enemy to sustain themselves,” says Dagoberto Valdés, editor of Convivencia, a Cuban magazine. He thinks that the recasting of America as friend rather than villain will force Cubans to “focus on resolving problems among ourselves”. It will take a real rocker, though, to convince Adrián, a mechanic, that change is coming. Fidel Castro had banned the Rolling Stones as agents of capitalist decadence. Adrián says that he will believe that Cuba is changing when he hears the opening strains of “Satisfaction” ring out across Havana.

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