Domingo, 17 de Febrero de 2019
Última actualización: 12:23 CET

The complex state system of 'discounts' and 'subsidies' in Irma's wake

A house in Havana three days after Irma hit. (AP)

One week after Hurricane Irma hit Cuba, the Government announced that the way in which it will subsidize construction materials for those affected will be similar to the one used when Sandy passed through from south to north, with all its destructive force. But this time there are changes in the form of the benefits.

In the case of Sandy —in October of 2012— high prices for materials through the Inner Commerce network were a recent development. Therefore, there was great uncertainty after the announcement as to whether the victims had to buy them. Even with the credit terms offered, there was a dangerous popular uprising in the provinces affected.

Soon State Security forces, forming part of the Defense Council implemented in each People's Council for these events, identified the danger. With a subsequent announcement of discounts and subsidies, the popular outcry was partially mollified.

This time, after the destruction wrought by Irma, although there was a delay in deciding the system for the subsidies, the people assumed that it would be the same.

In an announcement published in Granma on September 17, 2017, the format for the subsidies was announced. As we have already noted, there was a difference in the reaction of the Government to the two disasters: when Sandy struck, all those affected were given 50% price reductions and, even going above that figure, they could range up to 100% subsidization, for the most needy. Each case was evaluated on an individual basis by a multi-sector commission, where the judgment of the social worker prevailed.

The form of the "subsidy," granting an amount of financing to the needy, was not employed until 2016, after the passage of Hurricane Matthew, when the list of those affected seemed endless. By eliminating the direct price reductions of over 50% and replacing them with subsidies (not delivered in cash), the authorities made the process more cumbersome and tedious. The bureaucracy is dreadful, between the Council of the Municipal Administration, the Work Committee, Housing, the bank, the materials store, and those in charge of the transportation and execution of the works.

Moreover, the prices of the construction materials are out of all proportion to Cubans' salaries. A bag of 43 kg of cement, for example, cost 4.30 pesos (CUP), according to one’s salary. But when marketed freely to the population, it rose 25 times or more, and the cost varies in the different territories.

In Mayarí it is 108 CUP, but in Holguín and Havana it is much more. A fiber cement tile used to cost 12 CUP, and is now 105 CUP; and a galvanized zinc roof tile costs 500 CUP, the monthly salary of a Cuban professional.

If a retiree who lost his zinc roof during the storm gets a 50% break on some 20 tiles, he still has to pay a whopping 250 CUP. How many years will he need to pay that back?

The reality is that with retail prices so high and out of synch with wages and pensions, more than 70% of Cubans are considered "social cases." And those who are not are saved, in large part, by the remittances sent from abroad by relatives and friends, or activities in the private sector.

If a household has two wages or paychecks that total more than 500 CUP (20 dollars), the Government already considers the family solvent, with a right to a price reduction of only 50%. The result is long-term debt for a handful of overpriced materials.

If they have an income of 300 CUP ($12), however, they no longer have to pay anything, as they receive full subsidization from the State. However, in Cuba 300 and 500 CUP are almost the same thing —a miserable salary that cannot even buy a pair of shoes. How will a person feel when he has to pay an huge debt, knowing that his neighbor, with a similar standard of living, will not have to pay a thing?

These things were avoided when Sandy hit, thanks to the sliding scale reduction going over 50%. In addition, many people do the numbers and conclude that the State is actually "giving away" nothing, because with one person buying a zinc tile at that incredible 500 CUP price, the Government can "give away" 50 tiles, without losing a penny.

Another scourge that proliferates in the wake of cyclones is corruption. The bureaucracy mediates, handling price differences and restrictions on direct purchases. This creates a hotbed of opportunism and a chance to make easy money. They begin by trying to make up for the insufficient wages, but then end up abusing both the people and the State.

Irma left, leaving behind a Dantean scene of death and destruction. But it has also left the agony of recovery, which is a long and very wearisome process, involving many factors. The slogan spread that "the Revolution will not abandon any Cuban" could mask many injustices.