Sunset for '50s cars in Cuba?

Sunset for '50s cars in Cuba?
By THE ECONOMIST
April 28, 2008

Those stately American sedans from a bygone era, finned and chrome-bedecked, may be central to the tourist image of Cuba as a romantic time warp. But their survival has little to do with any Cuban predilection for collectors' cars.

"I'd swap it for a Volkswagen any day," grumbled Miguel, as he fired up his powder-blue 1956 Chevrolet in a Havana backstreet. For decades Cubans have not been allowed to buy freely any car made since 1959, the year of Fidel Castro's revolution. But it is just possible that the ban soon might be lifted.

Since formally taking over the presidency from his ailing brother on Feb. 24th, Raúl Castro has swiftly discarded several "excessive" restrictions. Cubans can now stay in the fancy hotels previously reserved for foreign tourists, and rent their own mobile phones. Bans have been lifted on the sale of microwaves, DVDs and computers. There have been strong hints that the government will scrap the requirement that Cubans obtain exit permits to leave the country.

Could the right to buy cars come next? At present, vehicles are divided into two categories: those registered before 1959, and those after it. The former (mainly 1940s and 1950s American imports) are viewed by the government as relics from the island's capitalist past and can still be legally bought and sold.

Cars imported after that date are deemed state property (initially handed out to loyal workers and Communist Party officials), whose ownership can be passed only within families. Cubans, famed for their ingenuity in circumventing rules, have been known to get married simply to gain legal possession of a car, and then divorce.

Even if Raúl Castro, who is driven around in a BMW, does decide to ease the rules on car ownership, few Cubans will benefit -- at least in the short term. With average wages at just $17 a month, a mobile phone, let alone a car or a stay at a tourist hotel, is out of the reach of all but a tiny minority (mainly those with generous relatives abroad). A change in the rules might nevertheless be welcomed by one group the government is keen to keep loyal.

The first batch of doctors who have served in Venezuela as part of a swap for oil is now returning to Cuba. Each has been given the right to buy a car. To do so, they can draw on the $4,000 annual salary paid during their five-year assignments abroad and kept frozen in a bank account.

Under current rules, they can withdraw only $5,000 or so for a car. But all post-1959 cars must be bought through the state, which imposes a 100 percent markup. A secondhand Lada will be all that most returning doctors can afford.

On the black market, where cars are bought and sold without the original title of ownership, prices are no lower. A 1940s Jeep goes for $7,000, while a 1980s Mercedes 190, which would be considered as scrap in the United States, may fetch as much as $35,000.

Whatever their immediate practical impact, these nods to the consumer society send a message. "Fidel set up all these rules to prevent the Cuban 'haves' from displaying their wealth to the 'have-nots,'" said a European diplomat in Havana. "Raúl seems much more relaxed on that front."

http://www.startribune.com/business/18349319.html
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