Market Scene : On the Outside, Looking In? : As Cuba reels in more tourists, the new ‘dollar economy’ splits workers into two classes.

To hear German tourist Anna Maria Kulczak tell it, there’s practically nowhere left in the world to vacation but Cuba.

“We went to Yugoslavia every May for 20 years. The last time, the church bells started ringing and they said the war had begun. We threw everything in the car and ran,” Kulczak said.

“We went to Israel, and five Palestinians started shooting outside the hotel. Then we went to Kenya, and there were elections and military police on the beach,” the 64-year-old housewife said from her seafront chaise lounge.

“Spain and Italy are too expensive. . . . We like Cuba. It’s a beautiful island, and we like the people,” Kulczak said.

The Cuban government is banking on appraisals such as Kulczak’s to develop a tourism industry big enough and profitable enough to lead the country out of its terminal economic crisis. Promoting the Caribbean island’s white beaches, low package prices and peaceful climate, the Communist government hopes to turn tourism into its No. 1 industry by the end of the century. Now it is second to sugar.

Cuba took in about 500,000 tourists and $500 million in tourism dollars last year--a 35% increase over 1991, according to Abraham Maciques, president of Cubanacan, the government’s top tourism developer. The goal is to double the draw by 1995 while preserving the country’s Communist system.

But the strategy has serious drawbacks. Some observers are skeptical that tourism can grow much larger than it already has as long as the U.S. trade embargo remains in effect, preventing Americans from recreational travel to Cuba. The United States would be Cuba’s natural market, just 90 miles from the island.

These observers also doubt that tourism can pull the country out of its foreign-currency crisis because the industry reinvests too many of its dollars in food, furniture and other imports to guarantee consistent quality supplies.

As a result of tourism, the government also faces social problems such as prostitution--an ugly reminder in hard times of the pre-revolutionary days when the impoverished island was a decadent playground for rich Americans. Called jineteras , or jockeys, young women in tight skirts--and some young men--cruise the main boulevards flagging down cars and tourists in the hopes of being invited to restaurants, discotheques or stores that are effectively off limits to them.

The proliferation of dollar-only hotels and businesses has given rise to resentment over what is called “tourism apartheid.” Most Cubans are not allowed to own foreign currency and so cannot enter these establishments unless they are accompanied by foreigners.

Many jineteras say they are not hookers but bored teen-agers looking for fun and a few dollar goods during bad times on a bankrupt island. Others admit they are looking for cash to feed and clothe their young children.

Perhaps the most serious problem for the government’s Communist ideology is the fact that tourism is creating two classes of Cuban workers. Tourism workers generally are paid more than their colleagues in comparable jobs in other industries. And now, some are allowed to keep their dollar tips--a measure that can double and triple their salaries.

Despite these contradictions, the Cuban government defends the development strategy as necessary. Officials point to high hotel occupancy rates and new construction to show that it is working.

“We don’t have petroleum--we have sun, the warmth of our tropical seas and our natural beauty,” President Fidel Castro told reporters recently. “These are the resources that we must use.”

Referring to the social problems, Castro added: “We have tried to develop a healthy tourism that does not include gambling and officialized prostitution. But we are not going to administer the conduct of each person in the country. There are a number of drawbacks to which we must resign ourselves because we need the resources.”

To speed up development and improve quality--service had not been a hallmark of Cuban socialism--officials are aggressively courting foreign investment, offering tax breaks, profit repatriation and 50% ownership to foreigners. The government has signed on to nearly 80 joint ventures with foreign companies, most of them in tourism, and is letting its capitalist partners take the lead in management.

“The Cubans have not interfered in any way with running this hotel,” said Carlos Martinez Vidal, the Spanish manager of Sol Palmera Hotel, a Spanish-Cuban joint venture that opened in Varadero in May, 1990.

Varadero is a beach town about 80 miles east of Havana that has grown dramatically in the last three years and undergone a face lift giving it the manicured but generic look of most resorts. The Varadero airport receives direct flights from Canada and Europe, Cuba’s target markets along with South America.

Martinez is an enthusiastic hotel manager, quick to stress to visitors that he is a capitalist who operates under traditional rules of the game--efficiency and profitability. As in most joint ventures in Cuba, he says, workers in his hotel are paid 20% more than in Cuban-owned hotels or other comparable jobs. (The average wage is about 300 pesos a month--$300 at the official exchange rate or about $6 at the black market exchange.)

But many of the employees get only seasonal contracts--a novel idea in Cuba--and Martinez boasts that his ratio of employees per hotel room is about a third that of most Cuban hotels.

Martinez said he must respect the laws of the ruling Communist Party and the labor union inside the hotel. He meets monthly with employees to give them an evaluation of the business and must contract new employees through the government hiring agency.

In theory, those employees have been screened by the government for their political correctness. But Martinez said if he wants to hire a maid the agency will send as many job candidates as he wants to interview until he finds one that suits him. In practice, he said, 86 of his 362 employees are members of the Cuban Communist Party.

To fire an employee, Martinez said, he must issue verbal and written warnings and then take the case to an in-house commission made up of members of the party, union and management. The commission, he said, has never prevented a firing.

“Of course, I wouldn’t fire anyone without just cause. That would be bad for morale,” Martinez said.

Last year, he let 107 people go for offenses such as theft and absenteeism. The figure has dropped dramatically this year as the staff has grown more professional.

The foreigners’ capitalist management techniques are rubbing off on Cubans. Juan Cuevas Ferreiro, general manager of the newly refurbished Hotel Nacional in Havana, has taken marketing and management lessons from a Spanish team helping to run his hotel. “We didn’t have the training or culture of the tourism industry before. And we were used to group tourism. Here at the Nacional we are catering to individuals, and that is different. The client wants personal attention,” Cuevas said.

Tipping used to be forbidden in Cuba. Then it was allowed but workers were told to turn their dollars in for Cuban pesos. Since February, tourism workers in Varadero have been allowed to keep their dollar tips or turn them in for “traveler’s checks” that can be spent at a well-stocked government store called El Encanto.

On a recent Saturday afternoon, dozens of tourism workers waited in line to enter the crowded store with blackened windows. Shoppers filed out with television sets, household appliances, hygiene supplies and canned foods--goods not readily available at peso stores. One of the shoppers, Tani Landa, 31, carried brooms, a pressure cooker and rice cooker.

“This is the result of our labor,” Landa said. “Tips help us to work more, and more enthusiastically.”

The problem with the system is that waiters and maids who earn tips end up making more money than their bosses who do not. Through the union, workers agreed that tip-earners would keep 60% of their take, give 30% to workers who do not have direct contact with guests and 10% to a union fund for social projects.

The government is now under pressure to allow the rest of the country’s 50,000 tourism employees to keep their tips. While good for morale in the industry, the experiment highlights the differences between tourism employees and other Cubans. Now there are three classes of stores in Varadero--dollar stores for foreigners, El Encanto for tourism workers and nearly empty peso stores for the rest of the population.

Canadian tourist Raymond Lanctot, beer in hand, says he feels uneasy about such inequities but that it hasn’t stopped him from coming back four times.

“This is the most beautiful beach I’ve ever been to,” Lanctot said.