Micro, Small and Medium-sized Businesses in Cuba

By Francisco Acevedo

HAVANA TIMES – The noble idea of empowering Cuban entrepreneurs with Small and Medium Sized Businesses (MSMEs) hasn’t bore fruit like it should have.

Tedious paperwork needed to create one of these businesses is just the least of people’s problems when they want to connect with friends and relatives to produce something, because then there are problems getting the materials needed to produce whatever it is they want.

That’s if the MSME produces something, because the vast majority provide services, whether it’s in construction, I.T., transport, etc. Real producers don’t exist, because the majority of people selling products are only really reselling products in Cuba, which they have bought for an affordable price abroad.

When you go to one of these private places, you see cooking oil, coffee, rum, and cold cuts of meat that aren’t sold in Cuban pesos at state-led stores, but they are sold here. As if the State really has washed its hands of this business, because it isn’t them who are selling at a big markup, however your poor ordinary Cubans don’t even bother going up to the freezers on display to stop themselves from dying of a heart attack.

In reality, there is no private sector in Cuba, because that’s what the Law stipulates, and the creation of MSMEs is another way to entertain the self-employed with the dream of having their own business, a kind of desperate solution, another one…

Business that clearly have the State behind pulling the strings, in the dark, as the defender of these intermediaries, who are buying from companies that trade with the Government, not the producer in Kentucky. The Helms-Burton Act makes it perfectly clear that no kind of economic transaction can be undertaken with the State, but this can be made with the private sector, which in this case is the very same State that has created businesses to mock the blockade. Of course, there are lots of Cubans who don’t see themselves as instruments of the State with their MSMEs, but this is the reality, because they all need the State’s blessing.

For example, no US consortium can sell a brick or glass to the state-run company CUBACONS, but they sell it to a family association instead, and the dictatorship manages to make a mockery of the blockade at the end of the day, solves a problem (which might be fixing up the Capitolio), pleases a Cuban with the illusion of being a successful business owner and also benefits from taxes. A done deal.

This is why it’s striking that the United States Interests Section in Havana recently tweeted praising the “independent” management of these entities, when they know full well that nothing here is independent.

Only the naive, to put it the kindest way I can, because I don’t believe officials there have any bad intentions, and they really think that something is truly independent here.

If there are any doubts, you just have to look up statements from influencer Kristoff who recently landed in Miami and spoke about all of the repression he experienced in Cuba while he was trying to create content. He said that when he was at the University, the dean of his Department called him in because he was an “audiovisual celebrity” and when he went, she was accompanied by two State Security agents who asked him about a video he’d made in which he criticized Humberto Lopez, the government’s TV point man for defaming critics. They made him sign a document in which he promised never to make videos about the Government or its leaders again.

This is the reality for anyone who does something “uncomfortable” for Humbertico, the prime minister & vice-president Manuel Marrero or any other figure; they get this and more. They will also try to get hold of them to join their ranks and brainwash them.

Another subject that made headlines was Cuba’s appeal of the financial lawsuit with a British investment fund. The Cuban government media reported that the Cuban Government had won the case, but it turns out they appealed the ruling and this week the London High Court, rejected the appeal. I’m not an expert in the Law, but if you appeal something it’s not because you won the case, you’re appealing because you don’t agree with the verdict that was ruled at the time.

This time, there wasn’t an echo in state-controlled media. It makes sense because the contradiction is clear. Let’s not forget that this is a case to try and determine whether CRF, an investment fund is a legitimate creditor of the Cuban State and the National Bank of Cuba (BNC) for over 72 million euros.

In the beginning, the ruling was that there was legal grounds for this abovementioned fund to file a lawsuit against the BNC for failing to meet debt payments, but not to consider the investment group as a creditor of the Cuban State with loans granted in 1984 by European Banks Crédit Lyonnais, Bank Nederland and Istituto Bancario Italiano, via the BNC.

Furthermore, in a statement released by the investment group, it was also pointed out that the Cuban Government “reimbursed the CRF for legal costs ordered by the Court after CRF’s initial victory in the UK High Court.” So, who won the first hearing?

As a result of this, a Chinese bank also filed a lawsuit for debts Cuba failed to pay. Yep, you read that right, a Chinese bank. The Industrial and Commercial Bank of China sued Cuban financial institutions, via its British subsidiary, for approximately 1.1 billion euros.

This is why I have zero faith, from the very beginning, that Russia will be Cuba’s lifesaver, because just like the Chinese, Russian bankers and business owners are moved by their own interests, and not those of our President Miguel Diaz-Canel.

As soon as they stop paying one debt, all of these contracts will go out the window and we’ll go back to square one, because the Cuban State just doesn’t have anywhere to get the money to pay for everything a country needs, especially now when entire neighborhoods are without water (which has even led to fights with  clashes with bladed weapons), just to give you the latest example of a basic right that should be guaranteed.

They won’t be able to make good on their debts even by selling off the island bit by bit, like it seems they are doing with the Russians or for the Chinese military base.

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