Yahoo Finance Welcome to the new Cuba, where dog baths cost what some state workers make in a whole paycheck
Havana, Cuba
If there’s anything more anathema to the ideals of the Cuban Revolution than a chihuahua-sized hoodie, I don’t know what it is.
Yet a Havana pet boutique I came across on a recent visit was selling dog coats in both female and male designs for the equivalent of $18, not far off an entire monthly salary for the average state worker. The pet specialty shop, one of several in the Cuban capital, also had doggie nail polish and American dog treats, likely smuggled in a suitcase on a flight from Miami.
In today’s Cuba, the Castro brothers stick to their communist spiel in speeches, tourists continue to drool over Old Havana’s crumbling facades, but Cubans have moved on. Their sights are on branded sneakers and all-inclusive beach vacations, the latest MacBook Air and a car to get to work in. And thanks to legal changes in both Cuba and the US, a growing number of them can actually afford those things.
As one local observer put it, the well-off have become the neediest people in Cuba. And new businesses to serve those needs abound. For $60 a session, the island’s nouveaux riches can get rid of tacky communist-era tattoos. For $10 more, they can have a facial mud mask—another superfluous vanity in a country where much of the population is seemingly blessed with near-flawless skin.
The rise of this consumer class is the new Cuban revolution. Its members are sidestepping the island’s schizophrenic, half-planned, half market-driven economic model, and going full-blown capitalist. Give them a few years, and they will turn Cuba around.
First, though, they need their dogs groomed.
Capitalism, self-multiplied
The whims of the wealthiest Cubans are contributing to a chain reaction that’s pulling everyone up the socioeconomic ladder. How it started dates back to the final days of the Soviet Union.
Desperate for cash after the Soviet collapse, Fidel Castro flung Cuba’s doors open to tourism, and released Cubans to strike out on their own, albeit in a highly restricted set of economic activities.
The pace of reform quickly picked up after Raúl Castro took over from his more dogmatic older brother in 2008. He opened up more sectors to cuentapropistas, or private entrepreneurs. In a stunning break with previous rules, he even allowed them to hire workers who were not actually related to them.
Meanwhile, in the US, president Barack Obama opened up the remittance floodgates and in not-so-many-words told Americans it was now okay to visit Cuba as tourists. Money orders worth roughly $2 billion a year started gushing in, along with dollar-toting rubberneckers. The cuentapropistas catering to them and the lucky Cubans with rich relatives abroad had cash to burn. Thanks to the paquete semanal, the stash of foreign media delivered weekly on USB sticks—a kind of pre-internet internet—they also got ideas on how to spend it.
Other enterprising Cubans obliged, opening up spinning gyms, party-planning companies, and private kindergartens. All those businesses have employees, also considered cuentapropistas, earning several times a state salary. This has added yet another layer of consumers to the economy.
To be sure, even the richest Cubans would be considered middle-class elsewhere. And many in Cuba’s new private sector are barely making enough to survive. But they, too, seem to be driven by the intoxicating promise of stuff—everything from $67 Puma sneakers to new Audis, which stand out amid Cuba’s otherwise dilapidated fleet like American tourists on the Malecón.
The officially estimated number of cuentapropistas has now reached some half a million.
That’s 10% of the workforce, and it doesn’t include another 600,000 or more making money in the underground economy, according to Richard Feinberg, a Cuba scholar at the University of California, San Diego.
On May 24, the government announced that it would grant legal recognition to small and medium-sized private businesses. Though details on what this means are scarce, it could potentially lift many of the current barriers that have stunted private enterprise.
Quick studies
The speed at which Cuba has caught up to standards outside the island is mind-boggling. When Kché, a beauty salon, started out 11 years ago, it consisted of one office chair and an antique sewing-machine table that had been turned into a manicure counter.
Its owner, Cassandra López Tirado, had studied business management back when “business” meant a slightly more independent branch of the government. But a financial statement is a financial statement, she says, whether you’re at a state firm or a private company. She’s gone from being a state-employed shoe buyer making 300 pesos ($11) a month to earning enough for a nanny, spinning lessons, and pet-parlor visits for her dog.
Not that it’s been easy. López Tirado has to buy nail polish at state stores, at retail prices, because she has no access to the wholesale market. Loans are hard to get and, when available, tend to be small, so she had to rely on her savings, and the ornate apartment she inherited from her aunt, to set up her newest salon on Havana’s happening Calle 23.
The clucking chickens and the goat tied in the driveway a few buildings down take Kché’s classy ambience down a notch. Still, it’s way more sumptuous than many of the strip-mall salons that dot the US. It has crystal chandeliers, perfectly restored, double-height ceilings, and a gigantic vase of fragrant tiger lilies to greet customers.
It also has a much wider array of services than I’m used to back in the US, all priced in CUCs, Cuba’s secondary currency, which trades one-to-one with the dollar. I had to Google some of the beauty treatments on the list: Diamond-tip dermabrasion (essentially dead-skin-cell vacuuming) and radiofrequency (or sagging-skin repair without undergoing the knife).
There’s also tattoo removal, made possible by a machine López Tirado imported from the US in her suitcase. She reserves that service for clients with smallish tattoos, because after all, this is still Cuba. Who can afford the multiple $60-an-hour sessions needed to clear a large swath of inked skin?
Actually, who can afford any of this stuff? I asked several experts that question, and they said the answer is hard to pin down, because the Cuban government doesn’t acknowledge this social class, much less put out statistics on it. Roughly speaking though, it’s a heterogeneous group of remittance recipients and independent entrepreneurs—people who range from artists to babalaos, the Afro-Cuban priests commissioned to perform other-worldly services. The academics I spoke with did not mention prostitutes, but one business owner I interviewed whispered to me that they, too, have small fortunes to drop on clothes and beauty salons.
Kché’s clientele doesn’t want the out-of-date techniques imparted at state-run beauty schools. So the manicurists dutifully study the latest international styles on YouTube beauty videos included every week in the paquete. I got a pedicure adorned with a cute sparkly flower. It cost me two CUCs and I left another two as a tip.
The ultimate middle-class indulgence
On a recent Friday morning, all the kennels at iDog, a pet salon in one of Havana’s nicer residential neighborhoods, were occupied by slightly irritated dogs and one sleeping cat.
Since it opened three years ago, the business has exploded. Yorkies alone take up six pages of the ruled notebook that serves as iDog’s client directory, says Anitée Vidal, one of the groomers. After studying veterinary medicine, she’s now getting an education in the kind of marketing that spurs consumers to buy things they don’t really need, like polka-dot doggie bows. And I get why she’s there, trimming dog ears and paws. It’s way better than working at a threadbare animal clinic, or inspecting pig parts at a meat-packing plant, some of the state-job alternatives.
iDog is covered in minimalist red tile and pictures of cute dogs. There is a clear divider between the small receiving area and the grooming stations so owners can see first-hand the devoted care doled out to their pets. The air-conditioning is always on.
It wasn’t that long ago that dogs were just another animal to Cubans, says Vidal. But a growing number of Cuban families now treat their dogs the way dogs are treated by the affluent in other countries—like spoiled children. A client who dropped in while I chatted with Vidal couldn’t stop kissing her baby pit bull. It’s named “Limbo,” after the new restaurant/bar her family is opening. The puppy sleeps with her, she says, and gets a helping of her restaurant meals.
Another client, who pulled up in a modern Chinese sedan, was less affectionate with his fluffy white dog. He takes her to iDog because he has too much work to do to bathe her himself. Our conversation quickly petered out after I asked him what it was that kept him so busy. He loaded his perfumed dog into his new car and drove off.
Veterinarians can’t yet get cuentapropista licenses. But if and when they do, and if she can cobble together enough capital, Vidal hopes to open her own clinic, going after the kinds of clients who come to iDog. Like many of the Cubans I met during my visit, she’s caught the entrepreneurial bug.
The American dream, Cuban style
Castro came to power partly on the back of resentment at the excesses of a small, corrupt elite. But two generations on, many Cubans say that when they see the new elite’s ballooning prosperity, they want to reproduce it, not expropriate it.
It’s hard to see the state’s staid bureaucracy holding them back, much less competing with them. A taxi driver pools his family savings to buy one of the dilapidated American cars pictured in nearly every Cuban postcard. He restores it and is now getting ready to sell it at several times its original value. With the money, he plans to buy an even better car to repeat the process.
A mathematician repurposes himself as a photographer of quinceañeras, or girls turning 15. He promotes his services, which cost around $300 a session, on Facebook, and on the glitzy virtual pages of Primavera, a paquete-distributed magazine in PDF format and devoted to the teen market. He proudly shows me his latest photos; they show a gangly girl, posing provocatively, half-immersed in the Caribbean. The idea for the setting came from his art director—a necessity, he says, to stand out in his competitive line of business.
Then there’s Sandro Fernández López, a personal trainer who wants to spread the tropical version of spinning he’s developed. He’s doing all the right things. He came up with a catchy name: “Q’suin”, which is how a Cuban would say “What swing!” He has a logo, and is in the process of registering a trademark. He assembled a crowd of more than 700 last year to watch sweat-dripped Q’suin practitioners dance atop stationary bikes. Red Bull was a sponsor.
And yet he’s not making any money off his idea. He needs a partner to launch Q’suin classes at hotels in Cuba, or gyms abroad, but cuentapropistas are not allowed to strike direct deals with government entities or foreign companies.
For now, his business plan requires way more than what Cuba’s confining private-business rules allow.
But even as Fernández López struggles within Cuba’s weird breed of socialist capitalism, the achievements of the revolution are not lost on him. A while ago, as he was planning a trip abroad, his heart failed. He spent 15 days in the hospital, for free. “Had I left,” he says, “I would be dead.”
Unlike the thousands of Cubans who are abandoning the island to try their luck abroad, he’s staying put.
“I’m hoping for my dream to come true,” he says of Q’suin, “and that it’s here in Cuba.”
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