Finest things dollars can buy

HAVANA—Contrary to conventional wisdom, Cuba is a land of material plenty. Store shelves are full. Meals of pork and lobster abound. Homes are decorated in the finest tile and newest furniture. Doctors and nurses stand by, ready to stitch the smallest wound.

It's an amazing but real world-for those Cubans who possess American dollars. The government of Fidel Castro may proclaim its revolutionary principles and flaunt its independence from America, but in Havana the greenback rules. Pesos paid by the government to an electrical engineer buy very little. The dollars he earns driving a pedicab are what ensures that his family has enough to eat.

Cubans desperate for dollars swarm Westerners in Havana. "Where are you from?" "Are you looking for a nice restaurant?" "Would you like some cigars?" Most Cubans who begin these conversations with a come-on in the end plead for dollars to buy food for the family or milk for the children.

Cases in point: Mike is a 22-year-old dance instructor. Alejandro is a 21-year-old construction worker. Mike lives with his family in a decrepit ground-floor apartment, one of a half dozen down a narrow alcove off a side street. Alejandro's family of six lives in a small, two-bedroom walk-up apartment. Their worn-out furniture consists of two beds, a small sofa, and a couple of chairs. The Soviet refrigerator is usually filled with chicken feet. A large metal pot serves as a bathtub.

Each family gets a 3-inch by 15-inch block of soap, one box of laundry detergent, and one bottle of cooking oil per month. Each person also is entitled to a kilo of beans, two kilos of rice, a small portion of meat, and three eggs per month. The eggs, however, aren't always available. Only children 7 and under are allowed to receive milk, and then not every day. Mike's family shops at a small corner bodega, with a concrete floor, wooden counter, and small metal scale.

Just three blocks from his outdated grocer is a large supermarket, its shelves full of soda, mineral water, soap, and food. Prices there are all in dollars. The supermarket serves Cubans like Carlos, who relies on funds from abroad and says he "represents Spanish capital." His two-story house in a nice Havana suburb is filled with modern furniture and a monster television set. A fine oil painting hangs on the wall and a large porcelain statue graces the entry. A security fence surrounds the home, which also includes a swimming pool and generator. The compound is patrolled by two Dobermans and a German Shepherd. A Mercedes sits in the driveway.

In short, Cuba is divided by access to dollars or other foreign currency. About one in five Cubans receives remittances from abroad. With their foreign earnings, people like Carlos can shop at the supermarket or smaller "dollar shops" that sell appliances and other luxury items. They can also eat in fancy government restaurants or paladares, private eating establishments, dealing only in dollars. Another 40 percent work in foreign ventures or the tourism industry, or, like Mike and Alejandro, solicit tourists directly for dollar transactions.

Havana likes to blame the U.S. trade embargo for its economic problems. For his first three decades in power Mr. Castro relied on abundant subsidies from his patron in Moscow. The Soviet Union's collapse ended Cuba's free ride. Mr. Castro courted foreign investment and a modicum of private domestic activity. Last year nearly 2 million foreign tourists, mostly Europeans, contributed some $2 billion, supplemented by $800 million in family remittances from Cuban-Americans.

Yet the Cuban economy is failing. The Castro regime is preparing to close half of its archaic sugar industry. Falling plaster and peeling paint afflict nearly every building. Potholes turn driving into an obstacle course. A jogger would risk life and limb on the uneven streets. American cars from the 1950s mix with Soviet vehicles, particularly the small, box-like Lada. The smattering of modern luxury cars, which go to foreigners and well-connected Cubans, suggests to many a future without the U.S. embargo or a communist regime.

For now, the only path for upward mobility for most Cubans is to search for foreigners with dollars to supplement incomes that average about $10 a month. Most Cubans earn only enough dollars this way to buy a little extra for their families when their rations run out.

Elizardo Sanchez Santa Cruz, who heads the Cuban Commission on Human Rights and National Reconciliation, observes: "The government in Cuba owns everything. It owns all the economic enterprises, all the media, the telecommunications system, the banks, and foreign trade." The nation's economic problems, he says, are due to a regime that is "repressive and inefficient."

The U.S. embargo on trade with Cuba aimed to bring down the regime by just this sort of economic squeeze. And while the embargo hamstrings Cuba's economy, it also denies American businessmen a market they increasingly covet. That is the reason it is coming under fresh attack, even from conservatives like House Majority Leader Richard Armey (R-Texas). Last month Mr. Armey told reporters in Kansas that the United States needs access to Cuban markets. If economic sanctions continue for another year, he said, "it will be the last year they last." Even though the Republican leader plans to retire from Congress this year, his comments have dealt a blow to the pro-embargo camp.

"We're working hard and we know the odds are against us," said Cuban-born Ileana Ros-Lehtinen, Republican congresswoman from Miami. "He [Rep. Armey] should know better than to pump money into a failed, totalitarian regime," Rep. Ros-Lehtinen said.

Roberto Alarcon, who after Fidel and Raul Castro is the country's No. 3 government official, is casual about his country's blatant inequality. Lounging in a finely tailored suit and holding an unlit cigar, Mr. Alarcon defends the situation by saying it is fairer than a decade ago, when it was illegal for anyone to hold dollars (even though some did anyway). "Technically speaking, you now don't have a legal border. You have an economic border," he said. But the "economic border" makes the inequality even starker for Cubans with no dollars.

Alfredo Gonzalez Gutierrez, adviser to the Minister of Economy and Planning, wants to raise the salaries of other Cubans, such as government workers, who earn perhaps a third of what those in tourism, even hotel employees, make.

The education and health systems, observes Mr. Sanchez, "form part of the official propaganda system." Cuba's elite claim the country's social services are open to all. Social-service professionals, while publicly defending socialist ideals, privately acknowledge practical shortcomings: inadequate resources, malfunctioning equipment, and nonexistent supplies. The only way to get many pharmaceuticals is to buy them with dollars. Average citizens say their monthly rations stretch only through three weeks. Mr. Gonzalez acknowledged the shortcomings, particularly inadequate milk production: "If we could give more, we would. If we could raise the age to 12, we would." Mike, the dance instructor, says simply: "My family is hungry."

Freeing the economy is the only way for Havana to lift its people out of their misery. Ending the embargo alone won't end the hardships. After all, currently Europeans are free to visit and invest in the island. But trade with America would increase the access of individual Cubans to dollars, argue those who favor lifting the embargo, improving Cuban lives while profiting U.S. enterprises.

Already the dependence on American dollars draws attention to the economic inequalities created by communism. The regime works hard to vacuum up dollars for its own purposes, but it can do so only by creating visible class distinctions. Moreover, American trade, investment, and travel might pose an even greater challenge to the Castro government, perhaps the most significant yet, say those, like human-rights commissioner Sanchez, who advocate lifting sanctions.

For more than 40 years the Castro regime has maintained the fiction that equality can be purchased only at the price of tyranny and poverty. In the last 10 years, the poverty has been ameliorated only by increased reliance on dollars. Ironically, the result is the sort of social inequality against which Mr. Castro originally premised his revolution. Like pre-Castro Cuba in 1959, U.S. dollars in Havana now will buy anything you want.