Cuba’s Self-Employed Enter the Tourism Industry
Private Restaurants Authorized to Sell Rum and Cocktails
HAVANA TIMES — Last week, the Cuban government formally announced that tourism companies and agencies will now be authorized to enter into contracts directly with private businesses licensed to operate accommodations, restaurants and other establishments.
The measure, which had been advanced by the Ministry of Tourism last April, became legally effective through Resolution 145/2013, published in Cuba’s Official Gazette on September 24.
The announcement is being made on the eve of Cuba’s high tourism season, as part of an initiative aimed at increasing the number of visitors to the island beyond the figure of three million. In this connection, the private sector is being called on to complement State activities aimed at attracting tourism to the country.
Payments in Cuban Convertible Pesos
The new legislation makes it possible for those who rent out their homes and rooms, the owners of cafeterias and restaurants, the self-employed who offer tours on horse-driven coaches and vintage automobiles and those who organize excursions around the country to enter into contracts with State travel agencies and to thus offer their services directly to tourists.
Payments shall be made in hard currency (Cuban Convertible Pesos, CUCs) or their equivalent in regular Cuban pesos (CUP). The CUC is worth just over a US dollar. These payments shall always be effected through the established financial mechanisms, chiefly bank transfers, excluding cash. According to the resolution, the self-employed must have a bank account in CUCs to enter into these contracts.
The contracts must be approved by the Ministry of Tourism at the pertinent level, in consideration of the amount being negotiated. Contracts for services of up to 1,000 CUC will be approved by local company branches and those for more than 1,000 CUC at the national level. Those contracts whose value exceeds that of 4,000 CUC shall require the approval of the central branch and government budgetary entities.
According to official statistics, Cuba currently has over 1,700 privately-run restaurants, some 4,280 rooms for rent and over 700 homes licensed to lodge tourists.
Bricklayers and Carpenters Needed
Over 436,342 licenses for private businesses have been issued around the country, chiefly in the food preparation and transportation sectors.
The new legislation will allow entities attached to the Ministry of Tourism to hire the self-employed (and to pay these workers in CUC) in 28 different service sectors approved by the government, including bricklayers, carpenters, locksmiths, glaziers, electricians, plumbers, kitchen and mattress repair people, upholsterers and furniture painters, pitmen, roofers and maintenance personnel.
In connection with the hiring of these services, State companies offering camping locations and services for the population shall be entitled to pay only in Cuban pesos.
Entities in the tourism sector that continue to offer lunch services to their employees at State cafeterias will be authorized to hire private caterers and to pay for these services in CUC, provided such expenses have been approved in the company budget.
The legislation establishes that travel agency officials must visit private restaurants and cafeterias in order to inspect them and determine whether their food services meets quality standards before entering into the said contracts.
Rum, Cigarettes and Cigars
Cuba’s Official Gazette also published another legislative reform authorizing broader private services, the Ministry of Trade’s Resolution 305/2013, authorizing the sale of alcoholic beverages, cigarettes and cigars at private restaurants and cafeterias.
The legislation was signed this past October 1 and took immediate effect.
The published document acknowledges that “the quality of the services offered by cafeterias authorized to sell rum had been undermined by excluding other alcoholic beverages from the list of permitted drinks.”
“The norms currently governing the management of self-employed businesses that rent out locales for food and related services must be brought up to date,” the new regulations state, which seeks to adjust the existing legislation to the country’s current economic conditions.
In addition to beer, private restaurants and cafeterias will now be authorized to offer other alcoholic beverages, such as cocktails, rum, wine and liquor.
Cuba’s reforms just touch the fringes of the economy. 2 to 4% of the economy is in private hands. That is not enough.
Cuba needs more reforms to thrive.
As second problem is that in the part of the private economy that can get in touch with tourists lots of places – restaurants and bars – are owned by members of the Cuban elite. As such they again profit and not the people.
The elite has privileged access to both locations and supplies through their contacts and it makes extensive use of these advantages.