For the first time since Fidel Castro overthrew Batista in 1959, the Cuban government is finally allowing the sale of private property. Many steps have been taken by Raul Castro in Cuba to make the government style a bit more like a free market.
Currently, Cuba has a socialist economy. The Cuban citizens as well as the government are either poor or in great debt, which is why these small steps towards a free market have been taken. However, there are many limitations to these transactions. Only Cuban residents or foreigners with a permanent residence in the country will be able to participate. Citizens are limited to one house in the city and one vacation house in the country so that one family does not own too much land. Buyers will be forced to swear under oath that they do not own any other property and must do the transaction through the Cuban banks. The state has the right to confiscate and make property public if the person who owns the land does not live in the house for the majority of time. The upside to the law is that property will be sold even in cases of divorce, death, and desertion. The hope of this new law is that private capital will begin to move in the economy with private real estate.
In the attempt to create revenue in Cuba, commercial flights are now being flown directly from the United States to Cuba. On November 6, 2011, a direct flight from New York’s John F. Kennedy International Airport was made. Round trip tickets are only available for specialized people through Marazul Tours. People with relatives in Cuba, business travelers, professionals, students, and potential travelers have been allowed on this flight. As of December 7, flights to Cuba will occur nine times a week. This is the United State’s major attempt to break down the barriers with the communist country.
The United States has not traded with Cuba since 1959 when Fidel Castro came into power and jeopardized the United State’s agricultural and commercial businesses. President John F. Kennedy extended the trade restrictions in 1962 prohibiting travel, and financial transactions to occur after the failure of the Bay of Pigs operations and the Cuban Missile Crisis.
These new laws are a step closer to a free market; however, the Cuban government is looking for a balance between political control and a free market. The Cuban government terminated 500,000 positions and created some opportunities for independent jobs. Castro feels the need to “update Cuba’s economic model” but wants to continue with a socialist government. Politically, the government has made very few reforms though, some of which started in the 1990s anyways. With a slowly loosening economy, the United States will begin to trade with Cuba again. For Cuba as well as the United States, being able to trade with such a close neighbor would be beneficial for both countries.