How to Apologize for Castro's Monopolies

Tuesday, July 15, 2014
No matter how absurd Castro's monopolistic practices are, there's always some Cuba "expert" who will try to rationalize them.

Case and point: The Castro regime's ridiculous "reform" to purportedly allow Cubans to purchase cars (from the government) without special permission (from the government). Moreover, at prices no Cuban can afford (e.g. $262,000 for a Peugeot).

This has earned the Castro regime international ridicule.

But apparently, we're just not sophisticated enough to understand the rationale behind Castro's decree.

(Note how simply ending the Castro's monopoly -- the root of all these economic distortions -- is not the problem or a solution for these "experts".)

According to the AP:

[A]nalysts say it seems the measure was designed to work that way.

"At those prices, they obviously didn't want to sell many cars," said Philip Peters, president of the Virginia-based Cuba Research Center. "And they're not."

Peters suggested officials simply don't see it as a priority and would rather spend what little hard currency the country has on things like food and industrial inputs.

"I think there's only one explanation ... the government does not want to use its foreign exchange reserves to import cars for a retail market," he said. "So therefore the only way that it's worth it to them, to import a car for $20,000 and then sell it retail, is to soak up $50,000 worth of liquidity."

Some islanders initially hoped authorities would adjust prices downward when they got a sense of what the market would bear. That happened when cellphones first appeared in Cuba more than a decade ago.

However, a recent tour of several dealerships in Havana found the same 400 percent markups as before. Not a single potential client was in sight. Employees refused to speak to reporters, though one confirmed that prices have not budged.

There are no publicly available statistics on how many vehicles circulate in Cuba, but visitors to Havana marvel at how empty the streets are for a city of about 2 million people.

Jorge Pinon, a Latin America energy expert at the University of Texas, said Cuba's reluctance to sell cars isn't out of fear of insufficient fuel. The country gets tens of thousands of barrels of oil a day on preferential terms from Venezuela.

But Pinon noted that a huge infusion of vehicles would test the creaky transportation infrastructure of Cuba, where potholes can go unfilled for years and traffic lights are scarce.