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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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24 April 2003

Clear Title - A Problem For Post-castro Cuba

© 2003, IRED.Com, Inc., Simeon Mitropolitski

After decades of vain economic experiments Cuba is slowly returning to its roots as first class tourist destination. Having failed to build a heavy industry to compete with that of the most developed western countries, Havana, with some success, tries again to gain market share where it did best before the communists took the power in 1959. It seems to me that the days of Castro's political regime are counted and that it won't survive its founding fathers. Yet some unpredictable obstacles could restrict the attractiveness of this country for the international investors when the democracy takes place. One of them, if not the main one, is the land title.

For a very long time before 1959 Cuba was considered primarily as sugar exporting country and as a tourist destination for wealthy Americans. For the first 30 years of the communist regime Cuba remained sugar exporting country with its main market the Soviet Union and its satellites, and also a tourist destination for wealthy Europeans and for not so wealthy Russians. More than a decade after the Berlin Wall was brought down Cuba continues to follow its communist rulers with no major economic changes on the horizon, as was the case with China or with Vietnam on a lesser scale.

The communist regimes as every totalitarian regime seem very powerful until people decide not to follow the party prescriptions. One day the ordinary men and women just wake up and without fear say loudly as was in the old tale: "The king is naked!" We all saw how this happened in Baghdad. The same thing happened in Eastern Europe some 14 years ago. Then the rulers have two options left: to massacre its own people as they did in Hungary in 1956 and in China in 1989 or to disappear from the scene.

Communism today isn't the revolutionary movement of the early and middle 20th century. The countries it still keeps under its grip serve their masters by fear, by the fear of political persecutions but also by the fear of the unknown that will inevitably follow the regime break up.

To understand these fears we have to look briefly to the history of the so-called Cuban revolution or if you prefer the rebellion led by Castro in late 50's. Before that date huge American companies economically ruled the country and major farms owned the arable land. This was the situation not just in Cuba but also in many other Latin America countries. In the Cuban constitution of 1940 there was a limit for individual land owning that was put at 1,000 acres but it this wasn't enforced by any law till 1959. The major social support for Castro rebellion came not from the almost inexistent working class but from the thousands of land tenants who saw the opportunity to take over the lands they worked on.

What happened next? In 1963 Castro introduced a second land reform, expropriating holdings larger than 165 acres. Following the Soviet and East European models, Cuba established two types of land property rights: for the individuals grouped in collective farms and for the state. The government took over the land expropriated from the foreigners and from the wealthy emigrants. The small farmers were gradually forced to make different types of collective farms. In some cases they preserved their initial land titles without any right to sell it except to the state. In the 90's the state farms were gradually taken over by a new type of collective farms without individual titles.

In general the situation in Cuba today is somewhat similar to this in the 50's, with the state de facto the only owner and the peasants reduced to mere workers. This is the situation "de facto", but the farmers in Cuba don't think so. For them the fact that there isn't any individual landowner standing above them is the proof that they are the real owners of the land. This makes them the real supporters of Castro. If you look elsewhere today, in Russia or Eastern Europe, you'll see that mainly actual or former farmers support the Communist parties. We should have no illusions that this will repeat itself in Cuba the day of the first free election.

There is bad news for anyone living outside Cuba who owned land there and who expects to have it one day fully restituted. As the example of Eastern Europe suggests, only a limited restitution in kind of the small ownership is possible. The rest could be received as a financial compensation. Another bad news is for the present investors who make joint ventures with the Cuban government using some land for tourist purposes. These investors should know that the previous landowners could claim the right on it. One day with no communist government to enforce these joint ventures the new investors would have to spend additional funds to protect their assets and eventually to compensate the previous owners.

The day the communists in Cuba step down will mark the beginning of a long process of land restitution and/or compensation that will hinder the investment. In some countries in Europe that said farewell to communism in 1989 this process hasn't been accomplished yet. So beware when you make investment decisions for Cuba. It could turn out to be very profitable but it could also be the most unpredictable decision you have ever made.

Country profile:

  • Area: total: 110,860 sq. km
  • Population: 11.2 million (July 2002 est.)
  • Population growth rate: 0.35% (2002 est.)
  • Life expectancy at birth: 76.6 years
  • Ethnic groups:
    • mulatto 51%,
    • white 37%,
    • black 11%,
    • Chinese 1%
  • GDP per capita: purchasing power parity $2,300 (2002 est.)
  • Exports commodities: sugar, nickel, tobacco, fish, medicaments, citrus, and coffee.
  • Main trade partners: EU, Russia, Canada.
  • Internet users: 120,000 (2002)
(Source: CIA - World Factbook 2002)

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See also the directory of companies providing real estate services in, and general real estate information of Cuba.

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