I previously pointed out that the post-Fidel Castro Cuba has broken the proverbial ice of electing to take the road of economic liberalization.
Eric Margolis at the lewrockwell.com examines and predicts Cuba’s future…
Thanks to Raul’s recent reforms, small private enterprise is bubbling up everywhere. Aid and oil from Venezuela has kept the island afloat. People are more outspoken, a little less wary of the secret police and informers. One feels growing energy pulsating into Havana’s delightful old city. With its beautiful buildings, friendly, attractive people, and little music bars with their electrifying salsa bands, Havana is poised to resume its role of 50 years ago as the most fun – and perhaps wickedest city – in the world. All it needs are more hotels, better food, and waves of young Yankee partyers. Already, some 100,000-200,000 Americans sneak into forbidden Cuba each year.
America’s Great Satan, Fidel Castro, is sidelined by age and illness, but Cubans still love their national papa figure. Brother Raul, now pushing 81, has gained respect for his leadership. But once the Castro era is over, what will happen?
Either a power grab by the military and old guard, or the half million Miami-based Cubans will return and rebuild Cuba. A tsunami of US money will swamp Cuba, washing it into the modern world but erasing much of its austere charm and sense of community. Many friends of Cuba do not look forward to this change, though Cubans desperately need relief from their threadbare existence.
More evidence of Cuba’s reforms from Kansas City.com (bold emphasis added)
Across Cuba, there are entrepreneurs like Suarez and Hidalgo, striking out on their own as locksmiths, plumbers, electricians and the like. They've always existed, but operated on a smaller scale, illegally, in the informal economy.
"I can make more money," Suarez said, comparing his take with the official government monthly salary of $20.
In the past 24 months, Cuba's communist government has announced a series of economic openings intended to ease its announced plan to trim the country's bloated government payroll by 1 million jobs and to buy time as the country transitions away from the reign of the two Castro brothers who've ruled since 1959 but now are in their 80s.
The reforms include expanded self-employment, a liberalization of rules for family-run restaurants, more flexibility for Cuban farmers to sell their products, and even creation of fledgling real estate markets in big cities such as Havana and Santiago.
Most of the 181 newly allowed self-employment categories involve menial labor, and services such as beauty salons, barber shops and plumbers. The government says it has granted 371,000 licenses.
The reforms, however, remain far from free-market capitalism. Not included among the openings are medicine, scientific research and a range of technical jobs that the government has kept under its control. There are no wholesale businesses to provide goods and services to entrepreneurs.
What Cuba’s gradualist reforms has done so far has been to legitimize parts of her huge informal economy.
And the direction of Cuba’s reform will likely deepen and accelerate overtime as political leaders realize that their survival will depend on a wealthier citizenry from economic freedom.
Perhaps like Myanmar, whom has been slated to open a stock exchange by 2015, Cuba may even consider reviving the Havana Stock Exchange which was closed in 1960.
Bottom line is that globalization vastly aided by the internet, or the information age, have begun to pry open formerly closed economies. Forces of decentralization have swiftly been diffusing across the world.
And given the huge potentials of the reformist nations of Cuba and Myanmar, especially coming from a depressed level, investors ought to keep an eye on these prospective frontier markets.
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