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Cuba Encourages Capitalism While Marking the 58th Anniversary of the Start of Communism

When Cuba marked its 58th anniversary of the start of the Communist Revolution this week, a key message from Vice President Jose Machado was that Cubans need to work harder.

Machado, 81, who spoke for 25 minutes while President Raul Castro who attended the ceremony sat silent, blamed corruption and inertia for Cuba’s economic woes. In past years the holiday was marked by lengthy speeches from Fidel Castro lauding the revolution and attacking the U.S. government. 

But this year leaders of the island nation of more than 11 million people are trying to encourage different ways of thinking, including allowing limited private enterprise.

Three hundred thousand Cubans have entered the private sector in the past year -- small businessmen and women who work out of their homes or yards -- or a 1956 Ford Victoria, like Juan, a Havana taxi driver and new entrepreneur.  

And people are buying, even if it means spending more money. For example, a government haircut in Cuba costs about eight cents. A private-sector barber costs five times more, but for some, style is worth the extra pesos. 

“Having a license from the government to do this just makes my life easier,” Juan says. “It means I don’t have to hide from the inspectors anymore.”

The piecemeal capitalism is doled out by an increasingly desperate Communist leadership trying to keep the Cuban economy afloat.

Eighty percent of Cubans still work for the state, and the country imports 80 percent of its food.  

There is some skepticism that Castro, who just turned 80, will be able to manage any real transition.

“I call it putting a Band-aid on a 12-inch cut, because after 50-plus years with the economy being in terrible shape, now you’re telling the Cubans that have depended on the government a great deal to provide for them, 'We’re cutting you off.' That’s a pretty tough thing to do,” says professor Andy Gomez of the University of Miami.

For those who have made the plunge, like sunglasses salesman Noel, who hawks his wares on Havana sidewalks, not even a 35 percent government tax on profits can temper his enthusiasm.

“It is amazing,” Noel says. “Before, the police would arrest you for this. I was just making enough to eat, but now for the first time I have a little bit of money in my pocket.”

The next stage of reforms in Cuba – which could happen this year – would allow Cubans to buy or sell cars and houses, something currently against the law. 

But there would still be limits. No one would be allowed to own more than one house, and for average workers, whose salary is currently about $19, even the possibility of owning one house could remain out of reach.

Steve Harrigan currently serves as a Miami-based correspondent for Fox News Channel (FNC). He joined the network in 2001 as a Moscow-based correspondent.