The State of Cuba’s Urban Cooperatives

Daisy Valera

The Fausto Theater in Havana.

HAVANA TIMES — The bar and cafeteria located at the intersection of Soledad and Concordia streets in Havana’s neighborhood of Centro Habana, an establishment that used to sell cheap tap beer and bother the neighbors with blaring reggaeton music in the early hours of the morning, looks rather different today.

Most of its old wooden tables, blackened by filth, have been replaced with gleaming, white plastic furniture. Now, you don’t run into any drunkards hunched over the bar in the morning, and the place sells milkshakes, coffee and sandwiches – a menu that would have been unthinkable a few short months ago.

The Fausto cafeteria on Prado Street, Old Havana, has undergone a similar mutation. It boasts newly-painted walls and a clean counter. Sweets and soft drinks have come to swell the familiar offer of rum, cigarettes and cigars.

These two examples are a fairly good illustration of what has happened with the eating establishments once administered by the State, establishments which, today, fall under the category of “urban cooperatives.” The changes we’re seeing attest to the efforts being made by many workers in the times of cutbacks and layoffs.

In June 2012, the National Assembly of the People’s Power (Parliament) authorized the creation of 222 non-agricultural cooperatives, in conformity with the Guidelines (25 to 29) established by the Cuban Communist Party.

A year later, we got wind that the first 124 (99 retailers, 11 construction companies and 2 in the industrial sector). This past month of September, the establishment of a new group of cooperatives (73 in total) was approved in the abovementioned sectors. The last group of 13, founded in September, produce clothing, furniture and footwear.

Today, there are over 200 such cooperatives in operation, but the benefits do not appear to go beyond the slight improvements we’re seeing at eating establishments. In fact, most of the population disapproves of how these new cooperatives are operating.

People complain about the rise in the prices of food at agricultural and livestock markets, today agricultural sales cooperatives, or about the carwash services being offered at gas stations, to mention only two examples.

We could venture to call the process we’re witnessing a kind of forced cooperativization. Of the 124 first cooperatives approved by Parliament, 112 were formerly State property and, of the more recent 73, 41. This means that approximately 78% of today’s cooperatives were previously State-run enterprises.

The State has ditched its ill-managed establishments and has gained in “cooperativists”, who must pay for water, electricity and other utilities and, in addition, rent the equipment and locales they use. Coupled with the absence of a wholesale market, this results in the rice in prices today being endured by Cubans.

Another regrettable fact is the lack of any experience in the running of cooperatives. The only reference Cubans have are the country’s agricultural cooperatives, experiments which were genuine disasters.

Equal rights, collective decision-making processes and a fair distribution of incomes are far from being implemented in Cuba’s urban “cooperatives.”

The fact of the matter is that former State managers are today behaving like private business owners and employers (benefitting from the subsidies that the Ministry of Finance and Prices has approved for cooperatives).

If new cooperatives continue to be designated from above and those that emerge as the initiative of certain sectors of the population aren’t prioritized and incentivized with credit facilities, then these new private businesses (comprised of the self-employed or “cooperatives”) will become the only viable option within Cuba’s economic “reform” process.

Daisy Valera

Daisy Valera:Soil scientist and blogger. I write from Mexico City, where Havana sometimes becomes so small that it disappears. However in others, the Cuban capital is a city so past and present that it steals your breath.

3 thoughts on “The State of Cuba’s Urban Cooperatives

  • Hello Daisy, Thank you for the article on urban cooperatives. I have been traveling to Cuba since 2001 (my last trip was last July) and hope to return with university students next year. I am very impressed with the energy, innovation, and desire of Cuban entreprenuers to develop or improve their establishments. Cooperatives are a wonderful alternative to state run businesses. The new economic policies implemented by the government are good policies that should help the economy produce more and better goods and services. There is certainly a new Cuba in the making and I hope to continue witnessing its growth.

  • Daisy Valera, what about the possibility of some of these cooperatives learning what others have tried and learned in other countries. For example, the fairly successful efforts in Spain? In the capitalist countries such as mine, they used to teach in economics classes that most (90+ out of a 100) small businesses failed in the first year or so. They didn’t even bother to teach about cooperatives. But we do have some history of successes and so do many other countries and those lessons might apply. Clearly it is easy to do it badly, but from the successes I’ve seen over the years, a rationally run cooperative is a good place to shop and an excellent place to work. I’d say, reach out to those who want it to succeed and stay away from the more negative nay-sayers.

  • From what you descibe, the new “coopratives,” (whether managed from above, by their former managers, or below, and run by those workers themselves formerly employed by the state enterprises) are doing better in offering services than when they were state enterprises. Those who are complaining because of the increased prices can always take their business elsewhere (i.e. to those dirty places with disinterested staff). If the workforce is truly alienated, as was the case with the former state enterprises, then the service and atmosphere of these new coopertives will soon degenerate to the shoddy places of yore.

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