Fifty years ago, Fidel Castro swept into Cuba’s capital on January 8, promising to establish a socialist state that would promote collectivism over individualism.

But the anniversary celebrations, which culminated in an evening rally in Havana on Thursday, have put less emphasis on social spending and more on rewarding individual labour, as Cuba under the leadership of Fidel Castro’s younger brother Raúl moves away from its decades-old commitment to communism.

In a series of speeches and interviews dedicated to the anniversary, President Raúl Castro hammered away at the theme that workers did not appreciate many government benefits – with the exception of free health, education and subsidised culture – and should be given higher wages instead.

“It is well known that the vast majority of people do not appreciate a gratuity or generally high subsidies of goods and services as part of the return for their labour, for which they look only at wages,” he told parliament on December 27.

In the same speech, he said subsidised vacations at tourism resorts were being scrapped, along with 50 per cent of government travel abroad and other unnamed gratuities.

Many Cubans applaud the new policy but worry that wages will not rise as quick-
ly as gratuities disappear.

Cuba has had a second world war-style food ration system since the revolution. Public transport and utilities are heavily subsidised, as are many workplace rewards, even though an economic crisis following the Soviet collapse, combined with remittances sent by relatives from abroad, have long since undermined income equality.

“Why, after working 24 years, is my ration the same as people who have never worked?” asked Nancy Artigas, a Havana resident. “What’s more, their rights and benefits are the same as mine. That doesn’t seem fair – nor is it a way to get people to work.”

Although 85 per cent of workers receive no hard currency from their jobs, an estimated 40 per cent of the population receives some money from abroad.

Cuba reports annual per capita income, including gratuities and subsidies, as being $6,000 (€4,380, £3,960), although the average yearly wage is the peso equivalent of only $240 at the official exchange rate.

After taking over from his ailing brother Fidel last February, Raúl Castro has freed up sales of computers, mobile phones and other consumer goods and lifted caps on wages and on what farmers may earn. Cuba is struggling with mounting deficits, low productivity and the need to import 70 per cent of its food.

In an interview carried by the official media to mark the anniversary of the revolution, Mr Castro said wages should reflect the real value of one’s work, and that those who did not work should feel economic pressure to do so.

“If we do not take measures to ensure people feel the necessity of working to satisfy their needs, we will not get out of the hole we are in, and we are going to get out of it,” he said. Cuba’s trade and budget deficits soared and its current account balance deteriorated in 2008, despite a 4.3 per cent increase in gross domestic product – casting a pall over the anniversary celebrations that wound up in Havana on Thursday.

In recent years, the country has helped to pay for its trade deficit through revenue from tourism and from services exports – mainly for health and education to its oil-rich ally Venezuela, which now faces a big drop in oil revenues. Tourism and services revenues did increase last year, but not by enough to compensate.

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.