Cuba: Small Businesses Hindered by New Regulations

Leydis Luisa Hernandez Mitjans  (El Toque)

HAVANA TIMES – When there’s only just over a month before the Cuban government’s “package” of new regulations for self-employment come into effect, doubts and uncertainty are still prevalent in a sector that is calling them “arbitrary measures that have not been approved by anyone who will have to comply by them.”

This is what lawyer Lilian Romero Moreno, the Clandestina store/workshop’s legal adviser, says, who feels that these regulations have disrupted her professional stability, which she has managed to achieve with a great deal of “effort and sacrifice”. Especially the regulation that relates to a self-employed person only being able to have one license, which has given her more than one headache.

“I have two licenses. I am a shop assistant and I also have an artisan’s license because we have a space at the Fabrica de Arte Cubano (FAC) where we sell our products.

Lilian recalls that months ago, she and other self-employed she knows were summoned to attend a meeting in which government authorities would explain “the new regulations published in the Official Gazette.”

She says that people who went already knew what was going to happen and that they also knew that their opinions weren’t going to count for anything. “That meeting didn’t even clear up some of our doubts.” Government representatives called it a “seminar” or “training meeting”.

Up until the end of September, only 14% of the over 500,000 private-sector workers who were supposed to go, received this training. The government hasn’t given any reasons to explain this figure. Nevertheless, some self-employed know exactly why this is.

“Everyone who went to that meeting came out of it dissatisfied. Very few of our doubts were cleared up and only a few specific cases were solved, which weren’t very many at all. The majority of us who went, with important concerns and being affected a great deal, didn’t even receive an alternative.”

Luckily, the lawyer “discovered” a “legal loophole” to hold onto her professional status: “By giving up my license as an employee hired by designer Idania del Rio (one of Clandestina’s owners), she can rehire me as an artisan at FAC and so I can keep on working at the workshop in this way.”

However, not everyone affected by this regulation has found an “alternative”. “We still don’t know what we are going to do,” Gisela Vilaboy explains, who runs the Bambu Centro socio-cultural project with her husband Carlos Martinez.

Carlos has two licenses: Independent artisan and Artist’s assistant. If he loses one, his ability to run and, as a result, develop a business that they have invested “financial resources, wishes and hopes to grow economically and to help others with their work” will be limited.

“I belong to the Cuban Fund of Cultural Patrimony (FCBC),” Gisela says, “which allows me to exhibit my work at the different fairs that the Fund organizes. As an independent artisan, Carlos only has access to these events via his artist assistant license.”

This also works the other way around: As an independent artisan, he has access to commercial spaces that she doesn’t as a FCBC affiliated artist. Having two licenses has allowed them to not only work at different times in the same spaces, but also to give their projects more visibility, has now become a problem.

“The issue of having more than one license to do our job has put us at an impasse because it stops our entrepreneurial activities. We have been working like this for years, we have created a dynamic that brings in revenue and has established our business. Why does this have to change?” Gisela asks.

“We agree that there are certain things that need to be regulated and we are in favor of order and control. However, everything should be in moderation. People need to be listened to, they have to analyze how much these regulations will affect us and, more than anything else, decision-makers really need to change the way they think. We entrepreneurs are here to help the national economy, we only have one function in society and they need to understand that,” the artisan explains.

With Bambu Centro, Gisela and Carlos hold workshops and cultural activities with children in the local community, they build bridges with women from the neighborhood and help unemployed youth find work; plus, they are constantly on the watch for keeping surrounding areas clean.

Even though they are demotivated, Gisela says that they will continue to defend the concept of social responsibility in business, and they will keep their space going as it has been up until now: “We are going to carry on, although I do believe that self-employment in Cuba is suffering a dangerous setback.”

Norberto Martinez Perez, director of the Online Marketing Agency clikkuba, also thinks the same thing. He has been operating for over seven years and he still hasn’t been able to find a way to give his business a “legal status”.

Having two licenses isn’t his only problem; his business being a publicity agency and advertising is “still frowned upon” in Cuba.

Norberto works with his licenses as a Exterior Decorator, I.T. Programmer and Telecommunications Agent, a combination that he will have to let go: this just “makes my uncertainty greater, as well as that of my partners and the people who receive our services too, of course.”

According to him, his agency works with 45 clients; “but keeping credibility in these conditions is no easy task. How do you explain that you don’t have an office for your business, for example? The landscape for private ventures has always been complex, and these new laws aren’t proposing any improvements.”

He has heard about the training seminars from others: “nobody has called me to explain anything and, to tell you the truth, I don’t want them to call me for that reason. I want them to listen to me and for my opinion to hold some weight, I want somebody to really care about what I think.”

Talking about the amendments made to the number of licenses allowed per person, Marta Elena Feito Cabrera, the first vice-minister of Labor and Social Security (MTSS) said that “there are jobs that can’t be carried out in the same space or time because of their very nature.”

“How can someone take on running a restaurant and working as a manicurist or car washer, at the same time? Independent workers need to do the jobs they have been authorized to do, every day. They aren’t an owner of different businesses, because this moves away from the principles that uphold this approved policy,” the vice-minister stated.

The whole point of these regulations is to wipe out illegal practices in the private sector, but it seems that the nuances of each and every profession and the autonomy that a self-employed person should have about how they spend their time, have been left out. The cases mentioned in this article prove that a person can do more than one job (at different times or on different days of the week). And this is a factor that these regulations, as they appear right now, don’t take into consideration.

Plus, holding more than one license puts another problem under the spotlight. Feito Cabrera has said that “no professional activity is disappearing” with this restructuring, but other activities that have been going on for years now aren’t being legalized either.

In the face of no concrete legal support to work, there are many entrepreneurs who seek protection in the many licenses that justify their work in some way or another. This “solution” exposes the need for the Cuban government to recognize other professionals who already form a part of the private sector, such as publicity agencies for example.

These new regulations will come into effect on December 7th, but the self-employed are saying that it won’t solve the private sector’s main problems and that it will only open new doors for illegal practices.