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Cuba Reforms Fail to Reduce Inequality

Cuba Reforms Fail to Reduce InequalityCuba Reforms Fail to Reduce Inequality

(IPS) - One of the major challenges assumed by President Raul Castro when he launched a series of reforms in Cuba is improving living standards in a country still suffering from a recession that began over 20 years ago and has undermined the aim of achieving economic and social equality.

Inequality has been growing since the start of the crisis triggered by the break-up of the Soviet Union and East European socialist bloc – Cuba’s main trade and aid partners – in the early 1990s. The “special period” – the euphemistic term used to refer to the lengthy recession – “has even morally affected the concept of inequality,” economist Esteban Morales told IPS.

To ease the recession in the 1990s, the government of Fidel Castro (1959-2008) opened the doors to foreign investment, fomented tourism, legalized the dollar, and created the “foreign currency recovery stores”, among other measures whose economic benefits also came accompanied by greater social inequality.

However, Maria Caridad Gonzalez appreciates the sense of equality that still exists in Cuban society, which she says has made social inclusion possible for her 10-year-old son, who knows that “to do well in life he just has to study and become a professional.”

Since the 1959 revolution, free universal healthcare coverage and education have been important tools for achieving social equality in Cuba.

Gonzalez says now there are a lot of stores and farmers’ markets, and what is lacking is money to buy things.”

Other people are worse off than Gonzalez, who manages to add to her monthly income working as a domestic in the homes of families she knows, which brings her another 80 CUC – the Cuban peso convertible to dollars – or 1,920 pesos ($81.6).

That is more than four times the average public sector salary of 470 pesos (19 dollars) a month. “Thanks to my income we survived the months when my husband, who is a cook in the tourism industry, was out of work,” said Gonzalez.

She is in a much better position than her neighbor, a 55-year-old primary schoolteacher who earns 750 pesos a month and has no source of dollars or other foreign currency – a mainstay for many Cuban families, who receive remittances from relatives abroad or who work in tourism, where they earn tips.

The inequality gap has widened as the differences in incomes have grown.

Those who only earn a public salary – the state is still by far the biggest employer, despite a reduction in the public payroll as part of the reforms – or who depend on a pension or are on social assistance find it impossible to meet their basic needs.

According to statistics from the Centre for Studies of the Cuban Economy, food absorbs between 59 and 75 percent of the family budget in Cuba.

Financialtribune.com