Dan Lundberg/flickr, CC BY-SA In Cuba, unlike in many Latin American countries, when you see children on the street, they’re not begging; they’re playing. And therein lies Castro’s dilemma: how to reform Cuba’s stagnant economy without losing what’s working?

In Cuba, unlike in many Latin American countries, when you see children on the street, they’re not begging; they’re playing. And therein lies Castro’s dilemma: How to reform Cuba’s stagnant economy without losing what’s working?

When US President Donald Trump imposed new restrictions on Cuba in June 2017, he professed his administration’s aim was to “encourage greater freedom for the Cuban people and economic interaction”.

Raúl Castro, who took over from his brother Fidel in 2008, has been trying to figure out that last part for years. In 2010, Castro spoke of the need to “update the economic model”, but the world has regrettably few models for a communist country in transition can follow.

As Rafael Hernandez, editor of the Cuban journal Temas, informed America’s National Public Radio in 2012, “a new model for Cuba is still taking shape, but it would be foolish for the island to try copying China or Vietnam”.

In both of these countries, but particularly in China, the transition to a market economy in recent decades has created gross economic inequality and come at a high social cost. Such outcomes would be unacceptable in Cuba, where the revolutionary spirit of egalitarianism lives on.

Cuba’s cuentapropistas

In the meantime, Castro is giving Cuba’s stagnant economy a cash injection by pursuing a simple premise: maintain state control of the economy but give the private sector more room for manoeuvre.

At the March 2011 Sixth Congress of the Cuban Communist Party, Castro spearheaded the approval of 300 historic measures to unlock the country’s entrepreneurial spirit, including reducing public sector jobs, decentralising the state apparatus and encouraging self-employment.

Rickshaw drivers are among Cuba’s burgeoning self-employed class.

Antonio Castillo, Author provided

After a half-century of prohibition on where and how they could earn money, Cubans jumped at the opportunity to start their own small businesses.

Ramiro is one of them. “It was unbelievable, I took more than a hundred photos of Obama,” he told me on a crisp April afternoon while walking along the Malecón, the eight-kilometre esplanade along Havana’s north coast.

Barack Obama and his family landed at José Martí international airport in March 2016, the first US president to set foot on the island since Calvin Coolidge in 1928.

Ramiro, who sells churros in touristy Old Havana, is also a freelance photographer, and he followed the Obamas around the city, documenting their stay.

“Look at this one,” he said, showing me an image of the former president entering a restaurant with his wife and two daughters. “This is Obama when he went to have dinner at San Cristobal”, one of Cuba’s top-rated paladares, or private eateries.

“You should try the food there, you know Mick Jagger ate there, too?”

Tourism is the engine that fuels Havana’s upscale private eateries, called paladares.

The tourist engine

Ramiro’s recommendation is tongue-in-cheek: I can’t afford San Cristobal and he knows it.

Happily, there are more affordable options among Havana’s 1,700 paladares. These in-home restaurants are part of the new economic model that encourages cuentapropismo, or self-employment, in Cuba.

By the end of 2016, there were more than 535,000 cuentrapropistas on the island. Self-employment now represents 26% of non-state employment, and it is projected to rise to 35%.

Other than owning a paladar, Cuban entrepreneurs may now legally engage in 202 other private activities, including being an electrician, animal trainer, gardener, hairdresser, street vendor and rickshaw driver.

Tourism is the engine of this change. According to Cuba’s Ministry of Tourism, more than 4 million tourists are expected to land on the island in 2017.

US tourism has long been banned here, even under Barack Obama, so Americans must seek one of 12 specific licences to avoid violating US sanctions against Cuba.

Lester and Laura, a Catholic couple in their 60s, told me that they “came in under the religious activities” license, citing one reason Americans can get authorisation to travel Cuba.

Both schoolteachers, Lester and Laura were staying in an affordable casa particular (private home) on Old Havana’s Plaza Vieja. Like the paladares, these bed and breakfast-style accommodations are part of the cuentapropista economic plan.

The average host makes US$250 per booking, according to Fortune magazine – good money in a country where the average monthly salary is US$23. Business is clearly booming.

A casaparticular is much more than just a room in a person’s apartment are quite nice and very beautiful.More https://t.co/n54Gb0dde3 pic.twitter.com/Fyk0x1Pg71 — Quebolaacuba (@quebolaacuba) June 6, 2017

Jaime and Mario, the owners of the casa particular hosting Lester and Laura, have impeccably renovated the fourth floor of their six-floor apartment building, splitting it into two self-contained bedrooms.

They’d like to add a third, they told me, but navigating Cuban bureaucracy is as slow as dancing merengue. Approval to expand will take months.

An equitable society

Fidel Castro, who died in 2016 at the age of 90, remains a revered figure among Cubans. He is buried 800 kilometres from Havana, in the Santa Ifigenia cemetery in Santiago de Cuba, the birthplace of the Cuban revolution.

Don Raúl, a Santiagueño engineer who drives an unpainted 1954 Chevrolet, met me at the cemetery on one of those steamy, scorching Santiago mornings. He directed me to Fidel’s tomb (“Walk to the entry and then turn left”).

Fidel’s ashes are encased under a bulky granite boulder bearing a minimalist dark plaque engraved with just his first name. To pay respects to the legendary comandante, just as with so many things in Cuba from buying coffee to accessing the internet, one must queue.

Fidel Castro remains a hero for many Cubans.

Antonio Castillo, Author provided

“Without Fidel we are heading to an unequal society,” Don Raúl told me. He is suspicious of cuentapropismo, which enriches some and leaves others out. “It’s not good.”

He doesn’t consider himself an entrepreneur. “I’m just a driver,” he said.

Don Raul, who still gets emotional when he speaks of Fidel, worries that Miguel Díaz-Canel, Raúl Castro’s designated successor, will push Cuba to become a “US-style country” when he takes the reins in 2018.

A girl, perhaps ten years old, leaves a bunch of red roses at Fidel’s tomb.

“He was a friend,” she told me. “He fought for the country and for the education of children.”

She’s onto something. Unlike elsewhere in Latin America, kids in Cuba don’t beg or sell candy on the streets. Education levels rival those of the developed world and childhood malnutrition is almost nonexistent.

These are key indicators of human development. Even in bad times, Cuba has been an equitable society. And herein lies the existential dilemma facing Castro (and, soon enough, Díaz-Canal): Cuba is poor, but it has also avoided many of the maladies facing its neighbours.

Raul Castro has described his vision for the country as “prosperous and sustainable socialism”. Now he just has to figure out what that looks like.

Antonio Castillo, Director, Centre for Communication, Politics and Culture, RMIT University

This article was originally published on The Conversation. Read the original article.