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Cuba Reforms Economy in Effort to Preserve Political System

Ovidio Ulloa swings open his iron gate and lets in a group of women who had seen the handwritten "Se Vende," or For Sale, sign in the window of his home. He gives them a tour of the dining room, the brightly lit patio and the kitchen, pointing out selling points including high ceilings and colorfully patterned hydraulic floor tiles.

The women appear unimpressed, but that does not seem to bother Ulloa. He already has several offers for the home in Havana. And he is eager to move out after living there for 20 years.

"Because this place is too big for me," he said. "I want to downsize, look for a smaller place for me and my son, and have money left over to live on."

That is allowed under a law passed last year that permits the sale of real estate in Cuba. Already, there's a bustling real estate market, with homes being sold at informal street exchanges as well as on websites such as and

A timeline of events in Cuba:

  • 1959: Fidel Castro ousts U.S.-backed dictator Fulgencio Batista and later introduces Communist Party rule.
  • 1991: Dissolution of Soviet Union leads to economic crisis, severe fuel shortages.
  • 1998: Pope John Paul II visits Cuba.
  • 2006: President Fidel Castro undergoes gastric surgery and temporarily hands over power to his brother, Raul, a former revolutionary commander.
  • 2011: U.S. President Barack Obama allows cultural and educational travel to Cuba. About 400,000 Americans visit Cuba.
  • 2011: Cuba's National Assembly passes law permitting the sale of real estate for the first time in half a century and eases limits on private businesses.
  • 2012: Pope Benedict visits Cuba. Government official announces plans to remove restrictions on foreign travel for Cuban citizens.

Recently, President Barack Obama faced criticism from other leaders at the Summit of the Americas in Colombia for insisting on democratic reforms in Cuba before the United States will lift its 50-year-old economic embargo against the island nation. But Cuba is pushing through economic reforms in the hope of preserving the political status quo.

"In Cuba, we are updating the Cuban economic model to make our socialism sustainable," the official in charge of privatization, Vice President of the Council of State Manuel Murillo, told reporters covering Pope Benedict XVI's recent visit.

Billboards in Havana and Santiago show smiling mothers and victorious athletes clutching the national flag and proclaiming: "THE CHANGES IN CUBA ARE FOR MORE SOCIALISM."

Another home for sale is a palatial neo-classical structure. At $90,000, it would be a bargain in many other markets, but it needs work. Crumbling Corinthian columns are buttressed by wooden struts. Plaster has crumbled from the ceiling to reveal rusted steel reinforcing bars.

Owner Francisco Prats says President Raul Castro's reforms are necessary. "The world is developing and this society is part of that world and also has to develop," he said.

Across Havana, street after street of dilapidated architecture harks back to a more prosperous era. So do the classic automobiles - 1950s Studebakers, Cadillac Fleetwoods and de Villes - that now can also be sold by individuals.

Since taking over from his brother Fidel, Raul Castro has recognized the need for change, says Philip Peters of the Lexington Institute research group near Washington, D.C. "It is an economy that does not produce enough and the government has been very blunt about saying that," he said.

After the dissolution of the Soviet Union, Cuba suffered severe shortages and economic crisis. But the farm sector was restructured in the 1990s and markets now teem with the organically grown produce. On the streets, the reforms of the last year-and-a-half have increased the number of small entrepreneurs selling ice cream, eggs and crafts.

La Casa is one of a growing number of home restaurants known as paladares that have been around since the 1990s.

Co-owner Silvia Cardoso reveals her secret of success."Lots of work and trying to obtain quality products even if it means less earnings," she said.

Although largely for foreigners, the paladares increasingly cater to local clientele. Cardoso's husband, Manuel Robaina, worked in restaurants before Cuba's communist revolution and says his business is not about profits. "I have never looked at it like a capitalist because I have bad memories of that," he said.