10 Reasons to Avoid Cuba (Part 3)

Part 1 is HERE.  

Part 2 is HERE. 

7. Castro's Revolution Has a Dark Side

We've all seen Fidel Castro in military garb, and he has legitimate claims to fending off CIA-backed fighters post-revolution. The problem is what he did after the revolution. As Orwell warned in Animal Farm, revolutionaries have a habit of becoming like previous overseers once in power. An excellent graphic novel, Cuba: My Revolution, shows post-revolutionary changes most people never see. 

"Leaving Cuba is not easy. The regime makes you quit working as soon as you apply for a visa even if it takes years to get it. An inspector inventories all your belongings. When you leave, all bills must be paid, your house left fully furnished, and your car turned in to the police station." 

"Fidel has abolished Easter, Christmas, New Year's Eve, and [the Feast of the] Epiphany." [Note: Fidel did not want holidays to interfere with the all-important sugar harvest. Cuba eventually allowed Christmas celebrations in 1998.] 

"I'm losing the pharmaceutical company. He's [Fidel] nationalizing everything. No one can have more than $800 in savings and all private practice will be abolished eventually." 

"UMAPs are camps established to eliminate counterrevolutionaries. Homosexuals. Jehovah's Witnesses and others are sent to remote areas, and sentenced to forced labor."

Bonus, from Wikipedia: "The UMAP camps served as a form of alternative civilian service for Cubans who could not serve in the military due to being, conscientious objectors, homosexuals, or political enemies of the revolution. The majority of UMAP servicemen were conscientious objectors... about 8% to 9% of the inmates were homosexual men, Jehovah's Witnesses, Seventh-day Adventists, Catholic priests and Protestant ministers, intellectuals, farmers who resisted collectivization, as well as anyone else considered 'anti-social' or 'counter-revolutionary.' Former Intelligence Directorate agent Norberto Fuentes estimated that of approximately 35,000 internees, 507 ended up in psychiatric wards, 72 died from torture, and 180 committed suicide." 

Some revolution, huh? 

8. Nothing Works Consistently in Cuba So Let's Dance Everybody

The prevailing image I'll have of Cuba is the owner of a small bakery holding his head in his hands. 

After a second day of heavy rains, the power went out--again. His bakery sells perishable items, including ice cream. The portable generator didn't work, and he propped the door open to prevent heat from destroying inventory. I wanted to take a picture of the owner but it felt inappropriate. Here he was, doing the best he could, selling excellent products, and it didn't matter--Havana's infrastructure was so poor, no matter how much he prepared, he could suffer losses quickly and unexpectedly. A handwritten sign on the wall asked, in English, "Looking for an investor." 

When small businesses start, they must find the cheapest rents--or the most comfy garages.  They do not get to start up in nicer locations, and if they do, their choice of increased costs might be one reason so many small businesses fail in the first four years (though such statistics are skewed by high-earning professionals creating a "fun" side business to a take a loss against income, then closing it after a few years). It takes time to build a book of business and loyal customers, and most business owners expect to lose money the first two years. 

In my case, when opening a solo law firm, I bought all my furniture from Goodwill and a consignment center and found a cheap annual lease in one of the oldest buildings in the city. (Tip: research the minimum lease period your state and city require for 60 or 90 days' notice to evict without cause, or you might have to move after just 30 days if you have a fickle landlord.) Despite no upgrades in many decades, things still worked. I knew the elevator would work almost all the time, the power would always be on unless the entire city went dark, and so on. It took a long time to get my business telephone and fax lines connected--and far too much money--but they got connected after about two weeks. (I disliked AT&T for many years after getting my costly business lines and eagerly hoped Vonage would gain momentum, but the quality of calls on Vonage was never very good--at least then. Today, I wonder how much the excessive cost of the business lines was due to a tax or fee imposed by the city rather than AT&T.) 

In any case, because of decent infrastructure, I could focus on work. Most importantly, I could open a business without needing to take out loans (I already had student loans), choose a fairly dismal location, and still compete with the rich, established folks in nicer areas. I had to charge lower prices, but that's the flywheel of business: you start out charging little and focus on learning as much as you can, and you can become an expert without needing to be profitable right away because you can pay lower set-up costs somewhere, and things still work. Even in one of Havana's most affluent neighborhoods, things did not work. The flywheel of small business creation, backed by enthusiastic elbow grease, couldn't get moving. 

In such an environment, where you cannot improve even if you work hard, why bother? Why not just dance and sing? 

9. Cuba Does Have Magic

It's not all bad. One humid day, I wanted an ice cream sandwich and asked a neighbor where I could find them. (Without WiFi regularly available, everyone relies on each other for information.)  He thought a store two streets down might have one, but they only had one flavor of ice cream pints, not the famous ice cream sandwiches (aka bocaditos de helado). 

Mmmm, crunchy coating

Before leaving the apartment complex, we had asked around about ice cream sandwiches, and another neighbor suggested the store we visited. On the way back, my neighbor called to a few people on their terraces in Spanish, asking them where we could find ice cream. When we got to the apartment complex, he took me to his apartment, and lo and behold, his little brother was on a small stool in the kitchen, happily scooping ice cream out of a generic tub. Somehow, in 15 minutes, the neighborhood had heard my Cuban neighbor's request and gotten his family ice cream. Show me any other country where that happens. 

My first day in Cuba, when I mentioned I wanted to try Cuba's famous bocaditos de helado, my landlord called out in Spanish through a window and then took me to the narrow hallway between my apartment and the one next to it. An outstretched hand awaited us with a bocadito de helado. The neighbor's side hustle was selling ice cream sandwiches. I exchanged money for ice cream without seeing her face because the alley was too narrow to have a proper introduction. 

I eventually found a place selling ice cream sandwiches with multiple flavors about a mile away, but the sandwiches didn't taste as good as my neighbor's. It's hard to compete with the first impression of an unexpected hand outside a window, offering ice cream. 

10.  Competition and Choices

The Dominican Republic, which also has beautiful beaches, is near Cuba.  Why visit Cuba when you can visit Caribbean beaches in a more comfy environment? 

Dominican Republic. Not Cuba. 

Conclusion

So I suppose I lied. These are not ten reasons to avoid Cuba. They're only nine. I visited Cuba when I was 39, the same age as Che Guevara when he was executed. Had Che lived longer, he would have learned that revolutionary ideals need sound economics and sustainable trade agreements to flourish. To be fair, America and other debt-ridden capitalist countries aren't exactly shining economic models, either. Maybe in the end, whatever label you give any system, it all decays because you're just following someone else's idealized version of society rather than your own moral conscience.

© Matthew Rafat (2017)

Cebu, Philippines: Osmena's Good Governance as a Lesson in Urban Planning

I'm in Cebu, one of my favorite cities in the Philippines. I'm not a beach guy--I prefer waterfalls and forests. If you like diving, Cebu is near Apo Island, but I prefer the forest in Bohol/Panglao, and the waterfall and hike in Kawasan Falls. 

It was the only clean shirt I had that day, I swear. 

I visited Cebu almost exactly one year ago, and it's clear Mayor Tomas "Tommy" Osmena is doing a great job. 

The airport has improved, and traffic conditions have improved since last year. It's challenging to maximize land value without resorting to the usual tactics: build hi-rise condos and neglect parking (ahem, Manila); allow the same generic malls to sprout everywhere, which also increases traffic congestion (ah, Bangkok); and forcibly remove existing residents who lack title to their houses to make way for "progress." 

Developing countries tend to have more poor people than developed countries, but unlike America, the so-called poor aren't as stressed because they tend to have cheap transportation options (e.g., rickshaws, jeepneys, habal-habals) and stable housing, the kind that use corrugated aluminum as roofs. We'd call them "shantytowns," but I call them "Stress-free, non-mortgaged, multi-generational housing." (Say that ten times fast--I dare you.)  

The view outside my Airbnb condo in Cebu.

In fact, most mayors worldwide can be judged on one question: how do they increase land values without selling or leasing too much land, especially beachfront land, to foreign interests while balancing the interests of existing residents, many of whom lack official title to their housing structures but have lived there for decades?

Here's where regulation plays a key role. Mayor Tommy Osmena, along with the national Philippines government, requires new housing and condo units to have a certain percentage of land for open space. Most developers use the open space for swimming pools, small trees (a must-have in humid climates), and basketball courts. This regulation avoids the "Manila problem," where every other block appears to have new skyscrapers being built year-round but no new roads. 

While Mayor Osmena has allowed major malls to be built, he's wisely chosen diversity in developers. It's not just behemoth developer Ayala (OTC stock tickers: AYALY, AYAAY) in Cebu, but also SM and Robinson's. Osmena is luckier than most--Cebu is near the water with a port and lots of open space. The newest mall, SM Seaside, is one of the largest malls in the world, but it's in the middle of nowhere--near mostly undeveloped seaside. As a result, Cebu has managed to accomplish the ideal development trifecta: go big, thereby increasing potential tax and other revenue; use land without displacing residents; and ensure sufficient parking. SM Seaside now has excellent private bus service, jointly owned by two entities, one in Manila and one in Cebu, minimizing upfront capital risk and increasing management expertise. Technology is another way to measure a city's progress, and the private buses here operate on a fairly hi-tech payment system: riders need to purchase payment cards that can be used at multiple locations, including retail. 

To appreciate why I call a simple bus card "hi-tech," one must realize San Francisco, one of the most expensive cities in the world, still allows cash for its buses, segregates each of its transport options (BART, Caltrain, etc.) on different systems, and doesn't allow its cards to be used for retail purchases. In fact, to top up a BART card, one usually goes to a brick-and-mortar store to purchase credits, indicating a relationship between the retailer and the transport authority--but without the ability to use the card in the store. One gets the feeling Americans don't understand capitalism at all, or at least not as well as developing countries. Meanwhile, Hong Kong has a single "Octopus" card that can be used in the subway, buses, and multiple retailers. 

Governments worldwide benefit by lowering or eliminating the use of cash, which reduces money laundering while consumers benefit from convenience and negotiated discounts from retailers who enjoy another advertising venue. There are tradeoffs, of course. Privacy issues exist because as governments promote a cashless society, they could potentially track anyone's spending as well as location history. (The day indebted governments sell everyone's data to balance budgets might not be too far off.) Spending on outside software and security firms also increases, creating potential conflicts with entrenched special interests. Forward-looking governments will pay equal attention to security and privacy issues or eventually lose credibility. 

Mayor Osmena's next challenge is increasing Cebu's port business while maximizing the nearby sea's potential as a tourist destination. Unlike Seattle, which is too cold to have to worry about the latter goal, Osmena has a wealth of options. In fact, I'm already a bit sad because I notice more cars and foreign-owned businesses in Cebu than before, indicating the character of the city might soon change. 

Korean Spa -- one of the many Korean-owned businesses in Cebu. 

Excellent coffee here. Note the small print: "koreaberry." 

As more business-minded players enter any communal culture, they favor more rule-oriented employees. The worst ones take advantage of local workers, demanding they do unpaid out-of-scope work to keep their jobs. Yet, even the best business owners must generate a return on their investment, and many are absentee landlords or joint owners with outside interests who rely exclusively on P&L statements rather than long-term relationships or customer service to measure success. If you don't speak the language and don't live in the country, it's difficult to think long-term. The monthly P&L statement prevails. That's why foreign capital is so tricky--without it, most developing cities cannot grow or produce better-paying jobs as quickly, but too much of it changes a city in undesirable ways. 

Here's where additional background might be helpful.  Cebu is derided in the Philippines as being "countryside," similar to the way coastal Americans portray rural Southerners as "hicks" and "rednecks." People here even have their own dialect, Cebuano, which isn't commonly understood outside the region. Despite their negative reputation, I've had excellent hospitality here, and I have never received poor customer service. My Airbnb landlord just added a brand-new bed after I pointed out her advertised listing didn't match my room's layout. She said, "It was an honest mistake." Cebu is one of the few cities where I'm inclined to believe her. 

I should point out she's from Cebu and lives in the city, so she has a direct interest in preserving the city's reputation for hospitality. As more foreign owners--as well as domestic owners subject to greater foreign competition--change the incentive structure from the cultural norm of "Make the customer happy at any cost, even if it creates lower profits," to "Maximize revenue from each customer," I sense rumblings in the air.

I'm sitting in a cafe I used to frequent a year ago. One of its employees was leaving to Australia for short-term work and another had a birthday. When one of the owners found out I was leaving Cebu, they added my upcoming departure as another reason to throw a going-away party. The party was wonderful, and I got to hear fascinating stories from the people who attended. The cafe I'm in now is not located in the same place. It moved next to a hotel that doesn't serve breakfast, filling a perceived need. By coincidence, the employee who left to Australia recently returned, is married to an Australian, and is waiting for the Australian immigration authorities to clear her return. It's obvious the other employees--whom I don't know--don't have a clue how to make a decent espresso. They hovered over her while she prepared one for me. 

Two other employees from the original location no longer work in the cafe. I Facebook messaged them and was told one the owners suddenly wanted them to clean their houses. When they refused, they were fired. "We apply for barista, not house keeper... They got angry when we refuse to do... It's not part of our job... Thanks for remembering us."  Although Philippine law apparently requires a small severance to be paid if forcibly dismissed, only recently did the owner pay the employees the required money. (Correction: the owner agreed to pay the required severance but "until now [sic] she did not give it to us." They have not been paid yet.) 

The cafe's new menu is more limited than before, its breakfast less hearty, and its WiFi more spotty. The new employees also lack the camaraderie of the old location. One of them is taking a nap in her chair. No one talks to each other for long stretches of time, in stark contrast to the previous environment. No P&L statement will show this reduction in quality, nor the fate of the two employees who were forcibly removed, who are unemployed. I will not be back. I've been here for three hours, and only one other customer came. It's obvious the new location was chosen to prioritize breakfast at the expense of everything else. What happens if the hotel decides to add its own breakfast? In a country where labor is plentiful and cheap, such a development is more likely than not. 

Although not immediately obvious, when Americans talk about socialism vs. capitalism, they are talking about the erosion of communal ties and the displacement of informal obligations as P&Ls and ROI take precedence over the old ways. Without expressly realizing it, civic-minded people are also concerned about a system that lacks incentives for long-term thinking and therefore makes each individual more dependent on random forces and events.  They may use other names to describe their problems--immigration, elitism, globalization, precariat--but at the end of the day, they mean the shift from long-term to short-term thinking and the reduction of the power of the honest individual, even in local affairs. The large-scale political battles in developed countries are encapsulated right here, in the story of a small cafe in Cebu. 

Cebu's undeserved reputation as a city of bumpkins also makes me wonder if big city folks use their advantageous media connections to put down potential competitors. In a world where global capital is always looking for investment opportunities, every city competes with each other, and reputation matters. 

This brings me to my final point: I'm appalled by American media's unfair portrayal of President Duterte. Once you understand politicians in developing countries should be judged by how they've run their cities, it's obvious why Duterte is so popular. As the former mayor of Davao City, he cleaned up the entire place and changed it from a corrupt backwater into a safe tourist destination. Yet, like Batman in Gotham City, he's maligned by journalists who don't understand how things work. (Side note: I'll single out Costa Rica's Alajuela as another well-run place, and I hope Mayor Roberto Thompson enjoys a long career. Like Cebu, Alajuela enjoys status as a mid-sized transport hub. Is this a favorable pattern?) 

The more I travel, the less I rely on mainstream media for anything. In most cases, your own two eyes will give you all the information you need. Right now, my eyes see vast potential in Cebu, but also a changing culture. How will this story end? 

Bohol / Panglao

Bonus: Tommy Osmena's Facebook post on July 4, 2017 is a work of art. He explains everything in a matter-of-fact, clear, and practical way. Some highlights:

On Garbage Collection Difficulties and Corruption: "I would like to assure you that your government is doing the best it can with what it has... Please allow me to explain. There are two major capabilities to consider when discussing garbage: collection and disposal..."

He goes on to discuss a web of incompetence and corruption, insinuating the previous mayor may have been in the pockets of Chinese companies: "The previous mayor purchased P175 million worth of Chinese garbage trucks and now only 18 out of 52 are in running condition. All are faulty and many are beyond repair." [That's right--Osmena is such a bad-*ss, he's calling out Chinese manufacturing on Facebook, hitting China right where it hurts: its perceived reputation--sometimes deserved, sometimes undeserved--for faulty production.] 

Look what he writes after his detailed explanation: "So those are our problems. What do we do to solve them?" He goes on to offer many practical solutions.

Have you seen any American politician with such common sense and clear prose? Are we sure it's the Philippines, not America, that's a so-called "third-world" country? If so, maybe America needs to learn from "developing" countries.

On Taxes: "I will not tolerate a family of billionaires who think they can pay 35 pesos for a whole year. I will fight. They did not elect me, you did. And you did not elect a coward."

Did you get goosebumps? I did. And it gets better: "If you cheat our city, I will kick your *ss." (Cue "Eye of the Tiger.")

I predict Tommy Osmena will become president of the Philippines. I'm not sure when, but it will happen at some point after Duterte's maximum term expires. Hopefully, sooner rather than later.