People with Connections Taking Over Cuba’s State Companies

Havana is filling up with private businesses without the authorities publicizing the tenders for their procurement.

By Juan Diego Rodriguez/Olea Gallardo (14ymedio)

HAVANA TIMES – A tetrapak of fried tomato sauce weighing 8 ounces for 630 pesos, some even smaller containers of mayonnaise at 280 pesos, and packet of cookies for 380 pesos, a 3.5 ounce bag of chips for 150 pesos… All imported and at reasonable prices unattainable for the average Cuba, is the new product line at the Sylvain establishments, which used to sell sweets and bread. And on some vague day at the end of the year they went from being state-owned to ending up in private hands.

[1 USD = 120 pesos on the official market and around 160 on the informal market. The minimum monthly wage is 2,100 pesos.  Most workers earn under 3,000 pesos.]

Or at least, in part. The store on Zanja and Belascoaín, in Centro Habana, located on the ground floor of the famous building known as Super Cake – for the pastry shop it housed before 1959 – is divided into two, according to an employee speaking to 14ymedio: one state-owned and the other private.

In the first, the only thing for sale is garlic paste and the occasional spice for seasoning, but it is closed. “It’s empty because we don’t have materials or products to work with,” explained the worker, who, like other women, is working in the private area “to guarantee us a job while supplies arrive on the other side.”

On the private side, “there is everything,” as the neighbors marvel, “but we cannot afford it.” Not even the powdered milk: at 1,800 pesos for 2.2 pounds.

The Sylvain store on San Rafael Boulevard, in the same Havana municipality, has also been “privatized,” offering imported and expensive products similar to those at Super Cake, and the the store at San Lázaro and Hospital, which sold food before, now offers office supplies, as does as the Belascoaín branch between Monte and Campanario.

The case of the Sylvain chain is not unique, and it is part of a list that has been growing for months: that of state establishments that become rented by individuals overnight, without any kind of notice.

The same thing happened in the so-called Mercadito Ideal at 23rd and C, in El Vedado, whose outdoor area is occupied by a private stall where the items are, according to the visitors, “for the elements.” Namely: umbrellas at 2,300 pesos, soda bottles at 350 pesos or shopping bags at 850.

Another example is the Coppelita ice cream parlor within the Hola, Ola complex, reopened last July, which a few months later accumulated several complaints on=line about the high prices of ice cream – 170 pesos for two scoops – the turbidity of having “reemployed” state workers and the scarcity of products to sell.

“How do they give that place, in a privileged area, just fixed up, to people who have nothing, who offer nothing?” some onlookers wondered at the time.

But if there is a place that has passed to a private owner and offers a service with stratospheric costs, it is the Palacio de los Matrimonios [Wedding Palace] in El Vedado. Nestled at 25th and N, in an old mansion from the early 20th century that fell into disrepair little by little, a couple could get married at the cost of just a 5-peso stamp.

Now, and after a slight remodeling that, according to the neighbors, was carried out by a foreigner to whom they “gave” the business, the place is called ModaHabana Novias, and sold as “Havana’s Italian atelier.” It offers the following, according to information sent to its clients: “We are dedicated to the rental of wedding dresses and men’s suits, the organization and coordination of the entire wedding, venue management, we also offer micro-wedding services in private residences, photography and photoshooting around the city, makeup and hairdressing, catering services, buffets, wedding cakes, management of alliances in jewelry stores, among other options.”

The firm’s offers range from an “economic line,” which consists of a wedding dress between 8,000 and 10,000 pesos and the “maid of honor” dress included, to a “luxury” line: a wedding dress for 70,000 CUP and, “free”, an “Italian” suit for the groom, from the Carlo Pignatelli brand, the tornadoda (reception) dress, those for the bridesmaids and the ladies and gentlemen, make-up and hairstyle service at home, the bouquet with imported flowers and a garter belt.

In addition, the company offers a hairdressing service for 4,000 pesos and a bouquet with five imported roses for 5,000 pesos, prices that are equivalent to the monthly salary of a state worker.

“They are privatizing the country little by little and silently,” lamented a client who left the place in terror after asking about prices. “What worries me is that they are the ones keeping things for themselves. Nothing is said in the state media or on television.”

Last week’s meeting between Miguel Díaz-Canel and the Kremlin adviser Boris Titov confirms this trend that has been seen on the street for months. The meeting showed not only that Cuba wants to take its relationship with Russia to “a higher moment,” as the island’s president declared, but this consists of letting Moscow guide in a future opening.

As revealed by the Russian media – in no case by the Cuban officials – both parties agreed to create a center to transform the Cuban economy “from private companies.” This means, for voices in exile such as the Cuba Siglo XXI [21st Century Cuba] think tank, the imminent transition from a “model with a nationalized economy” to the “Russian market mafia scheme,” in which the old Soviet oligarchic elite took control of numerous companies.

In reality, there are rules on the Island that regulate the bidding for the rental of state premises by individuals, but the truth is that the official press, always given to propagating any trifle that suits the regime, has not publicized this.

The Official Gazette of April 21, 2022 specifically establishes the procedure in detail. Among its articles, there is the one that indicates which principles should govern the tender: transparency (“the knowledge of the actions and decisions of the tender that the participants have for an effective social and popular control”), equality (“that the participants have equal rights and opportunities”), publicity (“that the different actions and decisions of the bidding procedure are public”), concurrence (“all those who meet the general conditions that are established have the right to participate in the bidding”), competition (” the possibility is guaranteed to all potential bidders to participate in the process, without being able to introduce limitations that have no technical, legal or economic basis”) and “reasonable efficiency” (“that the selection is most convenient for the public interest”).

The process, in any case, requires the “existence of establishments that it is decided to lease, working or closed” and that “the Council of the Municipal Administration or the Governor, as appropriate, make the call for the start of the bidding process for the lease of the establishment,” according to an official website in May. Everything can take a minimum of 15 business days.

Curiously, the day after the publication of that Gazette, and to date, no public tender or the name of its owner has been known, Fress reopened in the Plaza de Carlos III as a restaurant and store in Cuban pesos.

Three days after the publication in this newspaper of that news and of numerous complaints on-line due to the high prices of the premises, the establishment was closed “due to technical problems,” and the company’s premises in Playa, a restaurant with home delivery, also suspended activities.

“They held an emergency meeting here in Carlos III because of the criticism on social networks, and starting tomorrow they can only sell processed food,” some workers explained to 14ymedio, which collected the testimony of several customers during those days.

The general opinion was summed up in the following: “I have nothing against the privates, but the problem is not that it is private, but that it was impudent. Why some yes and others not?”

The questions remain unanswered. Last August, the newspaper Sierra Maestra published a list of state premises that were going up for tender in Santiago de Cuba, the results of which is unknown. Some of them were Soditos, the state-owned cafeterias spread over various neighborhoods that sold everything from ice cream to condoms, including bread, tea, juices and soft drinks, with great success among the population.

Just a few weeks ago, the Habana Radio website reported the tender for three other properties by Gestión del Patrimonio: Obispo 328, O’Reilly 107 and Obrapía 107. All of them are historic buildings located in Old Havana.

The call for the first, however, expired on November 24, 2022. The second expires on February 5 and corresponds to the establishment where the Sargadelos store was located, a Spanish firm from Galicia that disassociated itself from that project on the Island about five years ago. Finally, the term of the third call ends on February 8.

To find out all these details – property, conditions, dates – it is necessary to opt for the tender, and to follow the intricacies of several clicks, something far from the “transparency” and “publicity” that the law establishes.

Translated by Translating Cuba

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