Slowly, Cuba Is Developing an Appetite for Spending

Slowly, Cuba Is Developing an Appetite for Spending
Jose Goitia for The New York Times
Published: July 6, 2013

HAVANA — When a 3-D movie theater opened in his neighborhood two months
ago, Manuel Alejandro snapped up tickets. It was no IMAX, just a small
lounge in a converted apartment with a 55-inch television and an M&M's
dispenser in the corner. But for $3 a person, Mr. Alejandro and his
friends donned special glasses and watched the movie of their choice.

A consumer class in Cuba has caught the eye of entrepreneurs, some of
whom outfit their apartments with 3-D equipment.
"This is novel — at least in Cuba," said Mr. Alejandro, 33, who on a
recent evening was waiting to see his second 3-D movie, "Journey 2: The
Mysterious Island."

"If people have a little more money to spend, they look for ways to
spend it," said Mr. Alejandro, who works at a state-owned recording
studio by day and builds Web sites for his own clients by night. "Now,
you have a few more options for going out and entertaining yourself."

Mr. Alejandro is part of a small, but increasingly visible, consumer
class in Cuba whose appetite for luxuries, albeit modest ones by
American standards, has caught the eye of the island's entrepreneurs.

Some savvy businesspeople are transforming their homes and garages into
small movie theaters, others are renting out swimming pools or opening
sports bars, cafes with video games, carwashes and even pet-grooming shops.

"It's not consumption as such — not yet," Mr. Alejandro said. "It's the
seed of consumption."

People like Mr. Alejandro are strictly a minority in Cuba, where the
state pays its four million workers an average salary of $19 a month and
pensioners receive just over half that. Though they get food rations,
health care, and, in many cases, remittances from relatives or money
from black-market trade, most Cubans live humbly, with even toilet paper
a luxury.

A woman who requested that she be identified only by her first name,
Yunesky, said her husband's salary of $80 a month as a private security
guard was barely enough to cover food, soap and detergent for her family
of five.

"A 3-D movie? No, no," she said, pointing to her two daughters and her
grandson. "I can't even afford to buy them an ice cream."

But the number of Cubans who have spending money has grown over the past
four years, as President Raúl Castro opened the economy to limited
nonstate business and farming.

Today, about one million Cubans, or 9 percent of the population, work or
farm in the private sector, up from about 600,000 in 2009, according to
government statistics.

At the same time, new markets for used cars and houses have flushed
money into the system, economists say, while the Cuban diaspora has
pumped cash and goods into businesses.

The new entrepreneurs and farmers have joined the others who make up
Cuba's peculiar consumer class: waiters, artists, musicians, black
marketeers, corrupt government workers and a clutch of longstanding
business owners.

And they are spending more and more openly.

On an island where everyone is supposed to be equal, the privileged
often keep a low profile, building scruffy walls around a well-appointed
house, say, or drinking beer in their living rooms rather than in the
local bar.

But that is changing, said Liván Beltrán, 47, who two months ago opened
a carwash and a diner in the yard of his house. There, he cleans 60 cars
a day, the majority belonging to Cubans, for $3 to $7.

Mr. Castro has repeatedly railed against egalitarianism, which he
loosely defined as one worker loafing while another works hard. Cuba
must strive for "a society that is less egalitarian, but more fair," he
said in a speech to the National Assembly in February.

Soon after taking office in 2008, Mr. Castro opened the way for more
consumption by allowing Cubans to stay in hotels for the first time and
to buy mobile phones and laptop computers.

Since then, the economic overhauls have legalized many businesses that
formerly operated underground and have reduced the stigma attached to
having money, Mr. Beltrán said.

"The question is not whether there are Cubans with money," said Mr.
Beltrán, gesturing at the Cubans and foreigners sipping beer while his
workers sprayed their cars with power hoses and vacuumed the interiors.
"It's where do you spend it? How do you spend it?"

With ease, apparently. Figures published by the National Statistical
Office indicate that nearly 1.5 million Cubans stayed at hotels or spent
money on tourist activities in 2012, up from 1.3 million in 2011. A
worker at a hotel sports club, where monthly membership costs about $50,
said the ratio of Cuban clients to expatriates had risen significantly
over the past three years.

In Havana, privately owned restaurants that a year or two ago catered
mainly to expatriates now have more Cuban clients. Outside nightspots
like the comedian Roberto Riverón's 3-D Café — where customers can watch
a stand-up routine or a movie through a mist of dry ice — the many
yellow license plates, which denote cars owned by Cubans, are a clue to
the heavily local crowd.

Joseph L. Scarpaci, a professor emeritus at Virginia Tech who is one of
the authors of a book on consumption in Cuba, said private-sector
workers were a "new shade" of middle class, the petite bourgeoisie in
Marxist terms, that emigrated after Fidel Castro's 1959 revolution or
evaporated when he nationalized businesses in the 1960s.

He said there was now "much more class stratification," but predicted
that Cubans' reserve about flashing their money would endure, while a
residue of socialism would temper the islanders' love of luxuries.

"It's a Cubanized version of middle-class activity, in that it's not
that ostentatious," he said. "A Cuban guy once told me, 'You need to
know when to flash your gold chains and when to hide them.' "

Certainly, mistrust lingers. One Cuban, who rents out equipment for
children's parties at $60 per half a day, said his family routinely
threw its garbage out a few blocks away to avoid too much attention on
all he is consuming.

"Everyone watches," he said, speaking on the condition of anonymity
because he feared drawing attention to his business. "Cubans are very
envious."

Some worry that the economic changes — which have generated a busy
retail sector and thousands of food kiosks, bars and restaurants, but
almost nothing in the way of manufacturing — have created an aura of
well-being that belies Cuba's staggering lack of production.

"On the positive side, the private sector is raising the quality of
services," said Lenier González, co-editor of Espacio Laical, a magazine
financed by the Roman Catholic Church. "But it is not linked to the
production of tangible goods," he added. "It's just money in a closed
circuit."

Unless the government stimulates production and raises state salaries,
the social fissure will widen, Mr. González said.

"The country is fractured," he said. "There are people who have money
and people who don't. Nowadays, it's more obvious."

Whether this newfound prosperity some Cubans are feeling will last,
Cuba's new spenders are a good source of business.

Karina Martín, 50, a former accountant who three years ago started
renting out the pool of her spacious home about half an hour from
Havana, said she was booked until September. Ms. Martín charges $5 a
head for a day at the pool and a hearty lunch — a fraction of the cover
charge at most state-run hotel pools. Blanca Rosa Cabrera, a laboratory
technician who was spending a recent Sunday at Ms. Martín's pool with 20
friends and relatives, said it was a treat she could afford thanks to
her husband's work renting inflatable castles in a park for about $6 a
day and her side business baking cakes. "We sacrifice a lot so we can
come here," said Ms. Cabrera, 46.

Mr. Alejandro makes a few hundred dollars for each Web site he designs,
enough to cover rent, food and clothing for himself and his wife. They
both send some money to their parents each month, and the rest they save
or spend on extras.

The other day, he said, he was reminiscing with some friends about an
occasion, a few years ago, when they pooled the money in their pockets
to buy one can of beer. He laughed.

"We said, 'Wow, we have changed.' "

Source: "Slowly, Cuba Is Developing an Appetite for Spending -
NYTimes.com" -
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