14ymedio, Madrid, 10 March 2021 — Beyond the fury unleashed on social networks, the appearance of Fidel Castro’s grandson, Sandro, showing off while driving a Mercedes Benz has exposed an issue about which little is known in Cuba: the figures relating to inequality. The data, impossible for the public to find, would reveal a gap difficult to justify for a government that, over 60 years ago, made a revolution to abolish social classes.
Although it has been clear for years that there are inequalities in Cuba based on professions (artists or athletes who went abroad), currency (the arrival of the Cuban convertible peso (CUC) and remittances versus those who must live on a state salary paid in national currency) and, more recently, employment status (self-employed versus state workers), there are no numbers that allow us to establish the dimensions of the gap, as Deutsche Welle has found in Spanish in an extensive article in which it has sought the voices of economists who provide insight about this issue.
According to Ricardo Torres Pérez, professor and researcher at the Center for the Study of the Cuban Economy (CEEC) at the University of Havana, the number of rich people in Cuba may be around 1%, some 112,000 people, representing approximately 30,000 households. According to this expert, they are distributed among civil servants, small businessmen, farmers and artists.
The numbers are hidden and in Torres Pérez’s opinion, it is no coincidence that the few studies that exist are not public and are “very focused on certain communities.” Although he acknowledges that the phenomenon is not investigated, much less to regarding those who are in circles of power, he believes there is not a precise count of the entire privileged population is not there.
Because what is it to be rich in Cuba? For Torres, having a “large house in specific areas, a modern car, frequent trips abroad, including for pleasure, and the satisfaction in quality (not quantity) of basic needs.”
“Except for a very small group, the rest of the civil service nomenclature does not enjoy exorbitant privileges, and the reason may be that Cuba is a fairly poor country,” he says. In his experience, most officials, including those in the government, have no wealth of their own beyond their home and an old car.
“The day they leave their positions, they become fairly average citizens. And this explains why, although only in part, they cling to their positions: because it is the only way to have a significantly different standard of living from the country’s average and not have to worry about a lot of problems,” he tells Deutsche Welle.
The Cuban economist explains that Cuba’s own economic structure already differentiates the ways of measuring wealth. While in the rest of the world millionaires tend to be millionaires because of their wealth, or politicians amass money from corruption, in Cuba many of the privileges cannot be monetized and the equity value is measured in a complex way by the age of many possessions. But in addition, Torres points to another issue, the importance for senior officials of being able to escape regulations.
Another of the economists consulted by Deutsche Welle, Mauricio De Miranda Parrondo, a professor at the Javeriana University of Cali (Colombia), agrees with this opinion, and considers that wealth in Cuba should be measured largely by the ability to have what the majority do not have. “Enjoying goods or services that are not available to the rest of society marks privileges. And, in some cases, that could mean being considered rich in Cuban society, although not by international standards, in which, normally, wealth and economic privilege are associated with business property, real estate, or land.”
De Miranda Parrondo notes that, in the absence of public studies on income distribution and with the impossibility of conducting surveys independently, it is impossible to determine the proportions of inequality, although he believes that calculations could be made. They do not appear in the Social Panorama of Latin America prepared annually by ECLAC, since the Cuban government does not provide the necessary data.
Pavel Vidal, also an economist based in Colombia, adds another complexity. “We know that the reforms widened the levels of inequality, with individuals in the private sector earning around 10 times more than those in the state sector.” In his opinion, the complicated thing is to establish the influence of access to privileges and he points out that the income of mixed and foreign companies is very high, while hiring in this sector is controlled by government agencies*. “But there is no information on what that implies,” insists Vidal.
De Miranda Parrondo agrees that in the private sector you can access better salaries, but on the other side of the balance is the tax burden**, the risks faced by the self-employed, and the submission to greater control. In addition, with the exception of those who are well connected to the Power, they cannot benefit from the privileges granted by corruption or, in other words, the exemption from the controls that an official may have over them.
In so-called socialist societies (in which egalitarianism has been elevated to a value, although it was not for the founders of Marxism, because equality is not equal to egalitarianism), Mauricio De Miranda insists, that is a problem: “It wouldn’t be in capitalist or feudal societies, where privileges are part of the system, but it is in a society that calls itself socialist.”
*As a rule, foreign companies operating in Cuba must hire through the government, which then collects the payments for the workers and passes on only a portion of that sum to the workers themselves.
** Commonly, licenses for self-employment come with a base monthly tax burden, regardless of income (or profit), plus additional taxes on income. For a license holder who cannot pay the monthly base tax (for example a private restaurant closed because of Covid), the only option is to surrender the license.
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