Cuban Flag
Cuba is allowing for a limited amount of free-market activity. Image: Flickr / Alex Graves / CC-BY

The country of Cuba has been one of the longest-operating socialist economies in the world. The Cuban government, however, has been taking slow and careful steps toward a freer economy. Starting Nov. 10, Cuban citizens will be allowed to buy and sell residential property.

Limited private property in Cuba

As reported by the Communist Party daily paper Granma, citizens of Cuba are going to be allowed to buy and sell property. The property transactions must be done through a Cuban bank and are subject to an 8 percent transaction tax, payable to the Cuban government. Initially, it is expected that not many transactions will take place. The transactions will also be heavily regulated, with no citizen allowed to own more than one primary residence and one vacation home.

Legalizing illegitimate transactions

Though this move by the Cuban government is a significant move toward a freer market, it mostly legitimizes transactions that have already been happening. Cuban citizens have been allowed to swap homes for many years with no money transferring hands. Money or things of value would often transfer under the table if one home was particularly larger than another. By legalizing home sales, the Cuban government gains the ability to regulate these transactions.

Slowly moving forward

This freer market mentality in Cuba is happening very slowly, but it is happening. The private market in Cuba has been growing, as the government approves entrepreneurship and small-business ownership. Currently, more than 80 percent of employment in Cuba is private and 20 percent is private. The Cuban labor federation will have to lay off more than 4 million workers in order to maintain financial stability. The goal for the Cuban government is to move 35 percent of the population to the private labor force. Cuba, technically, is the only economy to meet the World Wide Fund for Nature’s definition of sustainable development. Sustainable development, however, does not measure economic stability.

Sources

NPR http://www.npr.org/blogs/thetwo-way/2011/11/03/141986460/cuba-approves-buying-and-selling-of-residential-real-estate
New York Times http://www.nytimes.com/2011/02/04/world/americas/04cuba.html?_r=1&pagewanted=all
Christian Science Monitor http://www.csmonitor.com/World/Americas/2011/1103/Cuba-legalizes-private-real-estate-transactions
Human Development Index http://en.wikipedia.org/wiki/Human_Development_Index

Post By bryanh (1,420 Posts)

Connect

Do you have a fantastic idea related to this article, but just don't have the money you need to start your own company or side-business? Get the loans you need from https://personalmoneynetwork.com to help get your new company underway, from the small loan professionals at PersonalMoneyNetwork.

PG&E to pay $70 million for pipeline tragedy

PG&E to pay $70 million for pipeline tragedy

Pacific Gas and Electric Co., a northern California utility, has agreed to pay $70 million to the California town of San Bruno for a pipeline explosion that killed eight people in 2010. Company says it’s remorseful The San Francisco-based power company’s president, Chris Johns, released a statement Monday, saying PG&E is sorry and eager to […]

Judge stabbed and deputy shot in Washington courthouse

Grays Harbor County Courthouse

Following a standoff in a Washington state county courtroom Friday, a man reportedly escaped after shooting a sheriff’s deputy in the shoulder and stabbing a judge in the neck. The man is still at large. Treachery among the tree farms The incident occurred Friday afternoon in the western Washington town of Montesano, which bills itself […]

Microraptor was one flashy little dinosaur

Microraptor fossil

A team of Chinese and American scientists have found that Microraptor, a small four winged dinosaur that went extinct about 130 million years ago, was likely black and almost certainly had glossy, iridescent feathers. Until now, the coloring of extinct creatures was a matter of pure speculation. That may no longer be the case. The […]

Autocorrected message leads to school lockdown

Homage to the Sun

Adjacent schools in Georgia were locked down for two hours Wednesday after a text message reportedly warned of a “gunman” on campus. Later, it was learned that the message was the result of a smartphone autocorrect function, attempting to “fix” the misspelled slang word “gunna.” A series of mixups A series of mixups led to […]