Prostitution in Cuba
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    In Cuba, black market thriving

    In Cuba, black market thriving
    Economic changes aim to drag shadow economy into light
    PAUL HAVEN Associated Press
    Posted July 3, 2011 at midnight

    HAVANA – Want some paprika-infused chorizo sausage? How about a bit of
    buffalo mozzarella? Or maybe you just need more cooking oil this month,
    or a homemade soft drink you can afford on paltry wages. Perhaps you are
    looking for something more precious, such as an imported air conditioner
    or some hand-rolled cigars at a fraction of the official price.

    In a Marxist country where virtually all economic activity is regulated,
    and where supermarkets and ration shops run out of such basics as sugar,
    eggs and toilet paper, you can get nearly anything on Cuba's thriving
    black market – if you have a "friend," or the right telephone number.

    An abundance of economic changes introduced over the past year by
    President Raul Castro, including the right to work for oneself in 178
    approved jobs, has been billed as a wide new opening for
    entrepreneurship, on an island of 11 million people where the state
    employs more than 4 in 5 workers and controls virtually all means of

    In reality, many of the new jobs, everything from food vendor to wedding
    photographer, manicurist to construction worker, have existed for years
    in the informal economy, and many of those seeking work licenses were
    already offering the same services under the table.

    And while the black market in developed countries might be dominated by
    drugs, bootleg DVDs and prostitution, in Cuba it can cover anything. One
    man drives his car into Havana each day with links of handmade sausage
    stuffed under the passenger seat. A woman sells skintight spandex
    miniskirts and gaudy, patterned blouses from behind a flowery curtain in
    her ramshackle apartment.

    Economists, and Cubans themselves, say nearly everyone on the island is
    in on it.

    "Everyone with a job robs something," said Marki, a chain-smoking
    44-year-old transportation specialist. "The guy who works in the sugar
    industry steals sugar so he can resell it. The women who work with
    textiles steal thread so they can make their own clothes."

    Marki makes his living as a "mule," ferrying clothes from Europe to
    Havana for sale at three underground stores, and has spent time in jail
    for his activities. Like several of the people interviewed for this
    article, he agreed to speak on condition he not be further identified
    for fear he could get into trouble.

    Merchandise flows into the informal market from overseas, but also from
    the river of goods that disappear in pockets, backpacks, even trucks
    from state-owned warehouses, factories, supermarkets and offices.

    There are no official government statistics on how much is stolen each
    year, though petty thievery is routinely denounced in the official
    press. On June 21, Communist party newspaper Granma reported that
    efforts to stop theft at state-run enterprises in the capital had "taken
    a step back" in recent months. It blamed managers for lax oversight
    after an initial surge of compliance with Castro's exhortations to stop
    the pilfering.

    "Criminal and corrupt acts have gone up because of a lack of internal
    control," the paper said.

    An extensive study by Canadian economist Archibald Ritter in 2005
    examined the myriad ways Cubans augment salaries of just $20 a month
    through illegal trade – everything from a woman selling stolen spaghetti
    door to door, to a bartender at a tourist hot spot replacing
    high-quality rum with his own moonshine, to a bicycle repairman selling
    spare parts out the back door. Ritter and several others who study the
    Cuban economy said it was impossible to estimate the dollar value of the
    black market.

    "You could probably say that 95 percent or more of the population
    participates in the underground economy in one way or another. It's
    tremendously widespread," Ritter, a professor at Carlton University in
    Ottawa, told The Associated Press. "Stealing from the state, for Cubans,
    is like taking firewood from the forest, or picking blueberries in the
    wild. It's considered public property that wouldn't otherwise be used
    productively, so one helps oneself."

    Cubans even have a term for obtaining the things they need, legally or
    illegally: "resolver," which loosely translates as solving a problem.
    Over the decades it has lost its negative connotations and is now taken
    as a necessity of survival.

    "Turning to the black market and informal sector for nearly everything
    is so common that it has become the norm, with little or no thought of
    legality or morality," said Ted Henken, a professor at New York's Baruch
    College who has spent years studying Cuba's economy. "When legal options
    are limited or nonexistent, then everyone breaks the law, and when
    everyone breaks the law, the law loses its legitimacy and essentially
    ceases to exist."

    There is evidence, however, that Castro is persuading at least some
    black market operators to play by the rules and pay taxes.

    In the last seven months, more than 220,000 Cubans have received
    licenses to work for themselves, joining about 100,000 who have legally
    worked independently since the 1990s. Of those, some 68 percent were
    officially "unemployed" when they took out their license, 16 percent had
    a state job and another 16 percent were listed as "retired," according
    to statistics on the government website Cubadebate.

    Many of these jobless and nominally retired people were likely making
    ends meet by working in the informal market, and even the former
    government workers were probably connected in one way or another.

    "You have to find a way to survive," said Manuel Rodriguez, the former
    head of a Cienfuegos medical center for children with disabilities.
    Rodriguez said his monthly government ration card plus his and his
    wife's meager salaries covered only two weeks' worth of food. "I sat in
    the park one day and thought, 'What can I do?' "

    He began bicycling around town on Sundays, renting out bootleg DVDs of
    the latest Hollywood films, which others had downloaded from the
    Internet. Rodriguez, who moved to Miami in 2009, defended his decision
    to turn to the black market to put food on the table.

    "I wasn't hurting anyone," he said. "It's not pornography. It's not drugs."

    In fact, the sale and rental of pirated DVDs now is one of the 178 jobs
    that can now be done legally in Cuba, which ignores U.S. intellectual
    property rights in response to Washington's 49-year economic embargo.

    New license holders complain the taxes and social security payments can
    be well over 50 percent of sales, raw materials are hard to come by
    because there is no wholesale market, and government promises to provide
    bank credits and retail space have been slow to develop.

    But many say they jumped at the chance to go legit anyway, tired of
    always looking over their shoulder.

    "We started off illegally, years ago, but when they started to give out
    licenses we got one because it means peace of mind," said Odalis Losano,
    a 46-year-old single mother who got a license in December to sell
    lunches she prepares on her home stove. "Now we don't have to be afraid
    of the police or the inspectors."

    Paradoxically, the expansion of a legal free market may be increasing
    the size of the black market, particularly for the goods and services
    the new entrepreneurs need to survive. Newly legalized pizzerias must
    have a steady supply of cheese, flour and tomato paste, self-employed
    construction workers must have building materials, manicurists must find
    nail polish.

    One man profiting off the legitimate economic opening, albeit illegally,
    is Roberto, who uses stolen canisters of CO2 to make carbonated drinks
    for sale to the scores of downmarket private cafes opening up all over
    Havana. He charges just 7 pesos (28 cents) for a 1.5-liter bottle, a
    sixth of what a bottle of state-made cola costs in the supermarket.

    "This business is not totally legal," he said. "I can't get a license
    for it because the state will not sell me the CO2. I need to get it on
    the black market."

    And then there are the many activities that by their nature must remain
    hidden under Cuba's controlled system.

    The Internet is strictly regulated in Cuba, so those who sell time on
    accounts that belong to doctors, professors and computer technicians do
    so on the sly. The government maintains a monopoly on that most
    quintessential of Cuban products, the cigar, so the hundreds of
    underground stogie-rolling factories will stay underground.

    Likewise, the sale of gold is regulated, so those who melt it down for
    false teeth won't get licenses any time soon.

    "Even if they legalize this, it wouldn't be worth getting a license,"
    said one practitioner, who spoke on condition of anonymity for fear of
    earning the ire of the state. He charges up to $40 per tooth, using gold
    melted down from jewelry and trinkets he buys from secret suppliers.
    "They would regulate it so much it would be impossible to get the gold
    and other materials I need. The authorities would bother me so much it
    would be worse than doing it in hiding."

    Marki, the mule, said he would happily open an imported clothing
    boutique if the island's leaders ever scrapped Cuba's Marxist economy
    for capitalism. Until then, he said, he and many of his countrymen will
    carry on living and working on the margins of the law – and no amount of
    fines, seizures or jail time will dissuade them.

    "Half of Cuba lives off the black market," he said with a gruff smile.
    "And the other half depends on it. To me, it is unstoppable."

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