Vlad Demochko
Have changes really got to Cuba as well, the famous Island of Freedom - one of the last and most steadfast bulwarks of socialism in the world? Now quite many people, including investors, are concerned about this question. Details of what is happening in Cuba are, unfortunately, rather scarce. But it is clear already now that it is not following the 'Middle East scenario' with massive civil unrest. On the contrary, it started the so-called 'revolution from the top' - something in the league of Gorbachev's perestroika.
Reforms dedicated to an anniversary?!
1. The Sixth Congress of the Communist Party of Cuba started on 16 April in Havana. No congresses had been convened for a long 14-year period. It isn't hard to guess that something important, not to say crucial, is planned;
2. the Congress will work for three days during which delegates have to adopt a new program of the country's social and economic development;
3. the opening of the party forum was preceded by a grand military parade (the first one over the past 5 years) and a mass procession dedicated to the 50the anniversary of declaration the Cuban Revolution as socialist and the 50th anniversary of defeat of American subversives in the Bahía de Cochinos (Playa Girón);
4. Cubans that attended the demonstration had to support that the country's socialist course was correct and invariable. Therefore, the timing of the reform congress is just perfect: residents of the Island of Freedom showed to the entire world how united they are with the government, while the country's authorities announced forthcoming changes to show everyone that it is not acting under a threat or pressure but is taking a decisive step consciously and independently. This might be preemptive action, but the effect was significant because nobody can criticize Havana for allowing itself to be led by some opposition or Washington. The anniversary of defeat of American mercenaries and the military parade had to mean that, even if the Cuban revolutionary authorities do agree to change, this was done exclusively from a position of strength.
Did the changes come as a surprise for Cubans?
• thousands of delegates arrived to the 6th Congress from all over the country. Judging by official documents, economy was the main agenda item for the assembly. All staff teams discussed about 300 theses put forward by the Party's administration for a few weeks before the assembly;
• The Republic's head, Raul Castro, previously stated several times there was a need to correct the mistakes made over the past 50 years of construction of socialism;
• on the eve of the Congress national media already discussed the issue of whether it was necessary to make a reshuffle in the membership of the Party's Central Committe, so everyone expected talks on other subjects as well, rather than economy alone. At any rate, Cubans felt, if not knew for sure, changes were coming.
What reforms are prepared for the Island of Freedom? 
• Cuban leader, Chairman of the State Council of the country, Raul Castro, made a speech on the first day of the Congress. His brother and invariable leader of the Party, Fidel Castro, could not attend because of an illness. 'I thought everyone understood that I can no longer do what I did so many times' - this is how he addressed his compatriots in his article;
• according to estimates of many observers, statements made by Raul Castro are really revolutionary by nature;
• he suggested limiting tenure of top governmental officials to only 10 years. After a 50-year rule of Fidel and Raul Castro this sounds sensational. He said the Party's leadership 'requires renewal'. The Congress plans to elect new members of the Central Committee of the Party, the Politbureau and the Secretariat. Everyone expects noticeable 'rejuvenation' of the top echelon of the Communist Party of Cuba. Remember that today's leader of the country, Raul Castro, will soon turn 80, and his brother Fidel - 84;
• other novelties were really connected with economy. When announcing that reforms were necessary, the Cuban leader made a reservation straight away that 'under socialism, Cuba will never allow 'shock therapy' aimed against the most needy'. He added that measures developed by the party would be very different from steps 'taken on the mandate of IMF and other international economic organizations to harm nations'. Therefore, it is premature yet to speak of Cuba's transition to a model of market economy.
As the Cuban leader put it, the main objective of the country's government is to safeguard citizens' social rights. Nevertheless, economy simply needs changes (Cuba believes them to be the only rescue for the socialist order) and, done with the 'sedative' part, Raul Castro proceeded with specifics:
• Cuba plans to drop the card system under which 'two Cuban generations lived'. Food deliveries based on cards have become today an unbearable burden for the economy of the insular state;
• the country will gradually wind up the practice of subsidizing all Cubans, without exception. It is only the needy that will get aid;
• the nongovernmental sector. In Raul Castro's opinion, 'it is an alternative form of employment protected by current laws' and as such 'should be supported and protected by the government on all levels'. It should be said that Cubans started receiving permits for independent labor under 178 specialties in October last year. Peasants are allowed to freely trade in agricultural products. Some hairdressers, beauty parlors, restaurants, cafes, taxi parks started operating on the cooperative principle. Real estate rent limitations have been lifted;
• there are plans to accompany these processes with a reduction in redundant jobs in the public sector. About 500,000 jobs at state-owned enterprises were cut as early as in January this year (or 10% of all working population of Cuba). There are plans to cut a total of about 1.3 million jobs;
• there are plans to allow unlimited purchase and sale of properties and cars. Until now, real estate could only be exchanged in Cuba and only cars manufactured before 1959 could be bought and sold. It should be said this is one of the most expected reforms in the island. In conclusion of his two-hour speech, Raul Castro clearly stated that the social and political system in Cuba will remain unchanged. Nothing can threaten socialism in the Island of Freedom.
What conclusions does the above warrant?
According to experts of the , the Castro brothers perfectly understand that they can't live forever and are preparing decent successors at a fast pace. However, it is very questionable whether younger Communists will be as fanatically devoted to interests of the revolution as their predecessors, especially in the context of the announced liberalization. So far, everything shows that reforms will only expand. It's enough to remember the experience of the USSR in 1985-1990:
• Cuban economy must be in a really poor condition if the authorities were forced to publicly admit its inefficiency;
• finally, Cuba opens the path for investments. So far, this is a small window but soon the gates will be wide open. Agriculture, real estate, construction, tourism, car trade, deliveries of food and staple goods - this is only an inexhaustive list of areas attractive for investment. In the future market processes in Cuba will invariably deepen, and investors' prospects will surely expand.
A survey at the traders’ forum: In your opinion, what is in for Cuba in the next couple of years?
• there will be no significant changes;
• limited market reforms will be held, but the Communist Party will keep its monopoly of power (the Chinese model);
• collapse of the socialist system.
Vlad Demochko
