Wasn't Obama's Cuba Policy Supposed to "Empower" Private Entrepreneurs?


To the contrary, it has "empowered" the Cuban military to take absolute control of the island's tourism industry.

It has led to the eviction of "self-employed" Cubans from key tourism areas, the imposition of price controls and the confiscation of goods.

As a result, there has been a net decrease in the number of "self-employed" Cubans.

Read the story below about the Cuban military's business coup in Old Havana very carefully.

(We also forewarned this last month -- see here.)


This means that every tourist that travels to the island overwhelmingly and directly benefits the Castro regime's repressive apparatus.

Over 90% of tourists in Cuba frequent Old Havana. The other 10% don't leave the Cuban military's all-inclusive beach resorts.

From The Miami Herald:

Cuba historian confirms military taking over operations

In the early 1990s, with Havana in ruins and Cuba mired in a devastating economic crisis, the island's government granted historian Eusebio Leal Spengler and his office broad and rare powers to return Old Havana to its former glory.

Under his guidance, and largely reinvesting its own funds, the Office of the Historian of the City of Havana (OHCH) rescued at least one third of the buildings in the historic heart of the Cuban capital and won lavish international praise.

But Leal's autonomy appears to have come to an end, with all OHCH operations now under the control of the Grupo de Administración Empresarial S.A. (GAESA), a holding company controlled by the Cuban armed forces.

“You see that building? Ten years ago it was full of putrid water, rats and garbage. The balconies could fall on people walking under them any time. Today they are apartments, thanks to Eusebio's work,” said Mirna, 68, a retiree who added that she's worried about the future of the OHCH.

Leal confirmed the change in an email response to questions from a reporter but chose his words carefully. The OHCH, he wrote, “was not transferred to the armed forces but to (GAESA), a development enterprise that has the prestige and capacity to invest, while the Historian's Office retains the power to advise on preservation and new construction projects.”

Cuba's government-controlled news media has not reported on the change. Some independent journalists have described the shift as a direct takeover by the armed forces.

Leal, however, said that OHCH employees are not worried because “the preservation work is being extended to (other) cities important to Cuba's heritage.” But he went on to take a sharp jab at unidentified critics of his efforts to protect the national patrimony.

“We have been hurt, it's true, because at a moment that requires the utmost respect for life, mediocre people who never achieved anything and are spiritually poor are taking advantage to injure and damage the many others who have worked so many years to preserve the patrimony of a nation, either in Cuba or any other part of the world,” he wrote.

Leal took over the OHCH in 1967 after the death of Emilio Roig de Leuchshering, who had led the agency since its founding in the 1930s. It began to grow, in size, revenue and autonomy as it renovated and sold or rented buildings in Old Havana.

Its almost total autonomy — rarely seen in Cuba's communist system — was assured in the 1990s with a government decree that empowered Leal to create an enterprise that could earn revenues and reinvest them in Old Havana, a UNESCO World Heritage site.

The decree ordered the OHCH to report directly to the national Council of State rather than to the municipal government. The office also has its own special legal code and judicial standing, as well as permission to import and export goods directly instead of going through the cumbersome national system for foreign trade.

One of its most important benefits is the power to require payments from companies that are based in Old Havana but are not under direct OHCH control. They pay the office 1 percent of revenue if they work in Cuban pesos and 5 percent if they work in convertible pesos known as CUCs.

Among the entities are the Habaguanex hotel chain, the San Cristobal travel agency, the Opus Havana cultural magazine, the Habana Radio station, the Bologna publishing house and several businesses with web pages that advertise and sell OHCH products.

OHCH also controlled the Aurea and Fénix real estate companies, more than 50 cafeterias and two dozen restaurants, museums, concert halls and shops, an import company, a trade school and three construction companies.


In the past two decades, it created 13,000 jobs directly and thousands more indirectly, according to studies carried out by the organization. Sixty percent of the $500 million in revenues it brought went to “social” projects such as a home for the aged. The OHCH also received more than $30 million in foreign assistance.

About 55 percent of the tourists who go to the island visit Havana, and 90 percent of them walk around the historic city center. Per capita tourist income in Old Havana is estimated at 2,185 convertible pesos, compared to 245 in the rest of the capital, studies show.

“The biggest slice of the cake is in Old Havana. Everyone knows that, and that's why they are taking away of all of Leal's enterprises,” said one employee of a senior citizen's home financed by the OHCH.

Leal's email said OHCH will retain the power to impose a 5 percent charge on any public or private activity in Old Havana, and will still run “heritage” shops such as those in museums. Other state institutions also will continue to contribute to the historian's office.

Leal's office grew even bigger in 2003, when it took control of the redevelopment of the old part of the seaside Malecón boulevard, and then in 2005 when it began running the Chinatown section of the capital.

Some of the small private businesses in Old Havana said they felt protected by the OHCH and expressed concerns about its transfer to GAESA.

“The government always promotes its own restaurants, hotels and businesses ahead of the private sector,” said Reinaldo, who runs a clothing shop in Old Havana.

Hairdresser Camilo Condis said the small private businesses in Old Havana have thrived under the OHCH umbrella.

“Without the Historian's office, the work we do would not have been possible,” said Condis, who works with Gilberto Valladares, the beauty shop owner who met with President Barack Obama during his visit to Cuba.


But since GAESA's takeover on Aug. 1, the institution that preserved at least one third of Havana's historic center has been limited to “managing museums, promoting cultural activities and the care of our patrimony,” said a source at the Vitrina de Valonia museum in Old Havana.

It's not clear how the military will manage the restoration projects in Old Havana, but many expressed fear that they will not know how to maintain Leal's legacy, and will seek more immediate profits without taking residents into account.