In Cuba Most Small Businesses Are Still Illegal

By Eileen Sosin Martinez   (Progreso Semanal)

HAVANA TIMES — Mairim Rodriguez* used to spend her days looking through Revolico and other ad websites, seeing “what jobs were out there on the market.” She quickly found out that there were lots of other people in the same position as her, and others wanting to find employees for their private businesses.

Then, Mairim had an idea: “there isn’t a job center for the self-employed, which links owners to employees. So I had the idea of putting out a job management ad, to connect both parties. And I got called one day.”

In the beginning, everything was experiential, until I managed to set up a job fever system. Owners of restaurants, hair salons, home rentals… contact her when they need staff with so and so requirements. On the other hand, those who seek out opportunities outside of the public sector also call her or send her an email.

She draws up a customer file where she collects all the essential information; then she matches this information and sets up an interview. If the employer and employee agree, and the person is hired, Mairim charges them 5 CUC (5.70 USD) each. Given the time and energy she saves them, the price is very reasonable.

“I started out with this because I came across a niche in the market. Over 20 people call my house everyday, and while I’m talking, other people leave me several messages on my answering machine,” she tells me and confirms that her initiative has been a great success.

Mairim is a chemical engineer and after having started up her job agency, she has studied legal and economic issues. “In fact, I’m taking a small business management course.”

In spite of her interest and the tried-and-tested usefulness of her business venture, what she’s doing isn’t allowed. Like a kind of legal lifeline, she has taken out a license as a “Collector-payer” and wants to present a “new activity project” to include what she really does to the Ministry of Labor and Social Security, “let’s see if they accept it.”

That’s it?

When we talk about the private sector in Cuba, some officials boast that in 2010, 178 jobs had been accepted, and there are over 200 today. 201, to be exact. Several economists have warned about the fact that even though the number of self-employed people increased, licences continue to be restricted, because it’s being regulated the other way around.

That is to say, the State should limit itself to stating what is banned (instead of what’s permitted); which would specify that you can do anything except x, y and z. “No marijuana and coffins, but everything else yes,” says a black market salesman.

“Sometimes, self-employment awakes a lot of people’s imagination, who are tired of spending more time traveling to get to work than they do in the company of their families,” researcher Librada Taylot wrote in her book “Me? Self-employed!”, which was published in 2013.

And this imagination, the Cuban people’s proverbial creativity, is too much for any list, it doesn’t matter whether there are 201 or 500 authorized jobs. “You can’t make laws which creativity then overcomes,” explains lawyer Ernan Garcia*.

So, let’s take a look at licenses. There are 19th century activities, such as Palm tree pruner, woodcutter, shearer and shoe-shiner. Others seem to have come out of a vernacular fair: Gypsum figure manufacturer/seller, Pinata manufacturer/seller, Dandy, Havana woman, Artificial flower seller… It would be very interesting if the Ministry of Labor published stats on just how many people are Button liners.

Without wanting to belittle the people who practice these jobs, we’re talking about a country which spends around 25% of the State budget on education.

“The kinds of self-employment approved for the non-governmental sector don’t correspond to the profile outlined for Cuba’s work force. The vast majority of jobs included on the authorized list can be classified as low-value aggregates, where the requirement for complex skills is reduced,” rounds up economist Ricardo Torres.

However, it keeps progressing… just in the background. If there is a demand, supply will follow. For example: Cynthia Rodriguez* set up a “travel agency” for Cubans who want to travel to other provinces. She is in charge of buying the tickets, depending on her customer’s ideal date and if they want, she can also arrange accommodation and other services at the destination. Is what she’s doing wrong? Does it go against the principle of socialist society in any way? Then why is it illegal?

Last October, several restaurants in Havana received “special” inspections. The authorities used several arguments, among them, that they were operating as clubs or nightclubs. Just think about how many problems would have been simply side-stepped if they just allowed private bars to exist. How is that risky business? OK: let’s discuss it, let’s establish rules, and make them pay taxes… But insisting on the ban of these activities just means banging your head against the door again.

“Let’s think about a weird case,” the lawyer puts forward, “if I want to earn a living by dancing on one foot on top of a tree, and suddenly I have a large audience who pay to see me, are you going to tell me that I can’t do it?”

Freelance work, which is so common in the rest of the world, isn’t officially recognized in Cuba. Damian Fleites* is an architect and works of his own accord or as he puts it: “freelancing”. “Of course, I would love this to be legal; it would give you peace of mind being able to practice your profession without fear. There are a lot of people who, like me, want to formalize their businesses, have a logo, a place, place ads, pay taxes…”

The benefits of broadening job opportunities are clearly obvious: transparency, job security, greater financial incomes… Meanwhile, the country would take advantage of its greatest asset: the Cuban people’s high education level.

Sixty-eight percent of people who undertake private ventures, have no link with their past job. Let’s put it like this, they were unemployed at home, or on the street, “inventing”, “struggling”, until they saw an opportunity to work for themselves. Many others continue “to work behind the curtain”, waiting for the day when what they do is legalized.

[*) Names have been changed at the interviewees’ request.