Shocking: Despite Raul's "Reforms," Chronic Shortages Persist

Sunday, May 11, 2014
There's no greater indictment of the fact that Raul Castro's economic "reforms" are cosmetic and simply serve as bait for the international community to react with financial concessions.

(We've made a couple of important corrections to Reuters' reporting below.)

From Reuters:

Raul Castro's reforms fail to end Cuba's chronic shortages

In a land where the potato is scarce, black marketeers peddle tubers in hushed tones, like drug dealers on a big city street corner. A months-long reduction in the beer supply has made Cubans cranky. Worse still, some lovers have struggled to find condoms.

Despite market-oriented reforms enacted by President Raul Castro, the communist-run country still encounters chronic shortages [...]

The persistence of shortages reveals the limits of reform.

While a nascent retail market has proliferated, Cuba has yet to establish a wholesale market, impeding some new 450,000 small business owners who need inventory.

(CHC Editor: "Cuentapropistas" are not business owners. They are licensees with no legal ownership rights, including real or intellectual property. All they have is temporary "permission" to perform a service.)

Agricultural reforms have been among the most successful after the government handed over idle or unproductive land to farm cooperatives, but for unexplained reasons potato-growing remains firmly in state hands.

(CHC Editor: According to Reuters itself, agricultural reforms have been among the most resounding failures. Don't they check their own reporting?)

"The consequences are devastating in economic terms," said Sebastian Arcos of Florida International University's Cuban Research Institute. "(Raul Castro) has indicated that economic progress is one of the fundamental sources of his political legitimacy. If the economic situation doesn't improve in the short or even the medium term, his political legitimacy is reduced to being Fidel Castro's brother."

Most shortages pass without official comment, but the recent lack of beer sounded so many alarms that government-controlled media reported a wave of complaints.

Demand was being met for only 55 percent of bottled beer and 73 percent for canned beer, officials said.

After the shortage dragged from February to March without explanation, Cuban brewer Bucanero S.A., a joint venture with the global beer company Anheuser-Busch InBev SA, finally addressed it on Tuesday in the official daily, Granma, saying there were delays in the import of Czech malted barley.

No further explanation was given, and Bucanero said the problem was resolved in the first half of April, implying the shortage should soon be over because it takes 23 days to produce beer for retail sale.

The recent condom shortage was due not to a lack of product, officials said, but to a batch of condoms with the wrong expiration date stamped on the wrapper. An emergency order was placed, and teams went to work erasing the old date, November 2012, and stamping them anew with December 2014. Condom supply should stabilize in the second quarter, the official weekly Trabajadores said.