Will Democracy Follow Capitalism Into Cuba?

THANKS disproportionately to their mother, my kids have a gratifyingly acute sense of the urgency of addressing the dire straits in which far too much of the world’s population lives.

For my part, I wanted them to understand the key role that capitalism, which has brought more people out of poverty than any economic system in history, can play in that important effort.

So I took them to Cuba, ranked along with North Korea as the least free economy in the world and one that is described as a “basket case.”

We marveled at stunning unrestored old buildings (legacies of Cuba’s past prosperity) and droves of colorful American cars from the 1950s that were almost as beautiful. We also saw a country whose per capita gross domestic product is roughly equal to that of Sri Lanka and Swaziland.

About three-quarters of Cubans work for the state, earning meager salaries — a doctor there makes about $75 a month or less.

For the average Cuban, access to Western goods is almost nonexistent, as my kids saw when I took them to a shabby “department store” that accepted only pesos, the local currency. Only low-quality, Cuban-made merchandise was on offer.

To be sure, Cuba provides a substantial safety net that both ameliorates the low salaries and helps those at the bottom cope with the country’s extreme poverty. But taking care of the needy isn’t incompatible with capitalism, as many European countries have demonstrated.

I wanted my children to see firsthand the ineffectiveness of socialism at creating prosperity. And I was eager for them to appreciate that the country’s salvation could be the very system that Fidel Castro decried: capitalism.

With its economy crumbling after support from Russia and Venezuela evaporated, Cuba began in 2011 to liberalize very gradually, allowing private enterprise to flourish in certain sectors, particularly those related to tourism, like restaurants.

“Either we change course or we sink,” pronounced Raúl Castro, who succeeded his brother as president.

Today, in part because of the opening of relations with the United States, Havana is filled with foreign visitors and abuzz with chatter about the vast potential hordes yet to arrive.

The colorful vintage American cars, which were an integral part of the transportation system when I first visited 14 years ago, now seem more a tourist attraction as the streets fill with an increasing number of Hondas, Kias, Volkswagens and even an occasional BMW.

Old Havana, whose restored section made up just a couple of uncrowded blocks in 2000, has mushroomed, as those breathtaking old buildings have been refurbished. The picturesque quarter is now jammed with tourists who descend on it from omnipresent sleek Transgaviota tour buses.

A free-trade zone has been established in the small port city of Mariel, and the country’s leadership now publishes annual “wish lists” of projects seeking foreign investment, many of them in the health care, tourism and transportation sectors. This year, $8.2 billion is being sought for 326 projects.

All of this has been greeted with enormous eagerness by Cubans who work in the private sector, doing everything from running restaurants to selling art to foreign collectors and museums. They get paid in CUCs, Cuba’s convertible currency, and can shop in stores offering an array of better quality foreign-made goods.
Excitement about potential real estate development projects — still more rumor than fact — is at fever pitch. Representatives from Four Seasons and Marriott have reportedly visited recently to scour sites. As many as a dozen new hotels are supposedly in the planning stages.

The burnishing of old structures continues. More than five decades of isolation from American-style development have made Havana ideal for restoration into the ultimate tourist destination — a theme park that is not merely a collection of facades.

The American presence is growing. In a modern restaurant in Old Havana, a waiter took our orders using a gleaming white Apple iPad mini. Airbnb is doing a bustling business. Even golf courses — banned by Fidel Castro — have begun to creep back. Coming soon: better Internet access, a condition for the recent deal between the two countries, and along with it, the freer flow of ideas and information.

This is the Cuba — the two Cubas — that President Obama will see on his planned trip there next month, the first by a sitting United States president in 88 years. Commerce between the United States and Cuba may still be highly restricted, but his visit is one more sign that the American presence and our ideas of economic freedom are growing.

Whether political liberalization will occur is at best uncertain. In some ways, Cuba reminds me of China — a country whose populace seems to put a lower priority on achieving democracy than on prospering economically.

With so much of the economy remaining under state control, Cuba has an exceptionally long “to do” list. But while our embargo didn’t succeed in reforming the country, the slow, steady infiltration of capitalism just might.