Thursday, November 3, 2011

My take on Cuba's real estate reforms

This is from Damien Cave at the NYT.

This is from Paul Haven at AP and an update here.

And here's the Granma announcement in Spanish.

My quick take:

This is a very positive step in the right direction toward greater economic freedom and individual and family rights of private property. It will immediately increase the personal wealth of millions of Cubans as it restores to them one of the fundamental rights of private property - that of buying and selling it freely.

However, as with all of Raul's reforms to date and especially with the automobile flexibilizations - the devil is in the details. There are at least two key restrictions still in place here as I understand the announcement:

1) Sales are only allowed among Cuban citizens resident on the island (or to and from foreigners with permanent residence - which is understandable at this point and clearly designed to prevent a "giant sucking sound" of the transfer of title to foreigners with much much more cash than the average Cuban property owner). But of course Cuban émigrés will get around this by giving money to friends and relatives resident in Cuba so that they can purchase property for them.

2) Cubans are still limited to owning just two pieces of property: a home and a vacation home. This is clearly designed to prevent the accumulation of wealth - a constant concern of the government of Raul over the last year as he moves to "mix up" and "modernize" Cuba's rigid, inefficient statist economy.

Stay tuned...

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