Cuban Entrepreneurs Rolling-up their Sleeves for Opening

A privately owned cafe in Havana.

New regulations will allow small and medium-sized businesses to gain legal status, and form part of a series of economic reforms

By Cubaencuentro

HAVANA TIMES – Cubans who run businesses on the island – which can range from selling dried fruit to fixing bikes and developing software -, are struggling to understand the opportunities and new challenges that lie on the horizon after a historic change to the rules that govern Cuba’s Communist economy, Mark Frank and Anett write for Reuters news agency.

At the beginning of this month, the Cuban government issued new regulations that would allow small and medium-sized enterprises to formally set themselves up as businesses, which will give them access to state funding and put an end to decades of being classified as “self-employed”.

Analysts maintain that this reform is one of the most important in Cuba since 1968, when every business, no matter how small (even shoeshiners), were nationalized by the late Fidel Castro.

Omar Everleny, one of the most renowned economists in Cuba, described the reform as very positive and something that many Cubans have long-awaited.

However, the reform has important restrictions. For example, people can’t own more than one company and they can’t enter into business with foreign partners, or directly sell abroad.

“Given the economic situation and the remaining restrictions, this won’t translate into great economic recovery in the short-term,” Everleny warned.

But according to Nayvis Diaz, founder of Velo Cuba, a bike repair and rental company with 17 employees in Havana, this reform marks significant change.

“The important thing now is that we form an integrated part of the economy and are no longer marginalized,” she said.

“Lots of people with great social and commercial responsibilities in the city, and many others in the private sector, were waiting for this,” she added.

The measure forms part of a series of economic reforms undertaken by Cuban president Miguel Diaz-Canel over the past year in Cuba, where the pandemic and stricter US sanctions forced the unstable economy to plummet and led to shortages of food, medicines and other basic essentials.

The Cuban economy shrunk by 10.9% in 2020 and a further 2% this year up until June, compared with the same period in 2020. It continues to depend on tourism and imports.

The Fernandez brothers, owners of Deshidratados Habana (the only company in Cuba that processes and sells dried fruit), were excited at the news.

“A bad economy can present opportunity,” Oscar Fernandez said, standing amid improvised ovens and other appliances in his basement. The company started up when the pandemic forced him to close down his cafe, he explained.

The horizon has opened up

Hundreds of small businesses have found niches in a State-led economy that lacks imagination and initiative: from gourmet restaurants and manufacturing 3D pieces to developing software, home delivery services, landscaping and contracting in the construction sector.

The private sector, excluding farmers, has grown since the 1990s. It also includes owners of small businesses, non-agricultural cooperatives, their employees and members, shopkeepers and taxi drivers.

The Fernandez family business sells dried fruit online and has placed their products in three private luxury food stores in Havana.

“The horizon has opened up,” Oscar said, who has a doctorate in Economics. “Once incorporated, we can form relationships with state and private supply chains and sell our products to whomever we want, from state-led stores to hotels, as well as exporting them and seeking credit from local or foreign banks,” he added.

In her bike-filled workshop, Diaz is also excited as her prospects for growth, and said that that she will be cautious, speaking to her lawyer and accountant along every step of the way.

“We have to analyze the economic situation closely because we have an even greater responsibility right now to the people who we are going to employ in our businesses,” she said.

The Fernandez brothers have drawn up plans for a small factory that would process a ton of fruit every day, including for export. They dream of having a store that sells their products.

“We have the land and suppliers lined up. We just need about 100,000 USD in credit,” Oscar said.

However, there is still one great concern, one that many Cubans are sharing on social media.

“We would like to see how real implementation of this regulation is in practice: to what extent the government really allows us to develop,” Ricardo Fernandez added.

Read more from Cuba here on Havana Times.

7 thoughts on “Cuban Entrepreneurs Rolling-up their Sleeves for Opening

  • Cuba does not need home Depot work with wholesale like home hardware and co op supply company .

  • Apart from the usual stuff about the US Nick, had you any constructive opinion?

  • If Home Depot could return to CUBA where they owned so much property they could help build and supply all the material needed to build or restore soo much business for the Cuban people to be able to support themselves. With the solar technology and other resources what a great outcome could be!!!

  • I think that the current U.S regime should get rid of its restrictions on its own people. These restrictions, which were strengthened by the previous U.S. regime and continued by the current U.S regime, take away the freedom of U.S. residents to travel where they choose and take away the freedom of U.S. citizens to spend money as they choose and where they choose.
    The current U.S. policy is designed to extinguish the hopes of entrepreneurs in Cuba.
    I know various people in Cuba who’s businesses were starting to thrive prior to the onset of the appalling trump regime. Some Cuban-Americans agree with these efforts to kill off the chances of Cuban entrepreneurs. They are in agreement because they wish to satisfy their own personal lust for revenge.
    I wish all budding Cuban entrepreneurs the very best of luck in their efforts.
    They have to contend with the various arcane restrictions put in place by the Cuban Government.
    And they have to contend with the infinitely more powerful U.S. Government and it’s quite deliberate attempts to destroy their chances of success.

    These absurd restrictions on the freedom of U.S citizens that I describe, practiced by no other ‘western’ country, are a disgrace. They are anti-freedom, anti-free market and anti-democratic.
    These restrictions would have old freedom-loving Benjamin Franklin and his good ‘ol freedom-loving buddies spinning their graves.

  • Economic Capitalism without personal freedom and lack of human rights. Anything to stay in power. I guess this is the Socialism of XXI Century that Castro tried to implement in Latino America .

  • Oh, yeah, really great reforms. Watch what happens later. Let me give you two examples. For many more years than I can remember, private “self-employed” people in Varadero sold articles to tourists in front of their houses, setting up their small stands near the sidewalk, rather than in government owned “artisan” locations. About four years ago, the government shut all that private enterprise down, and making it illegal by another arbitrary reform “decree.” One very popular Cuban fast food place on a side street was also closed down by that same “reform;” this unique “restaurant” was open-air, with stand-up tables. The food was good, fast, and cheap, and even had take-out, with a menu selection of chicken, pork and ham, two choices of rice, and you could get a sufficient portion of meat, vegetable (tomato, yuca, or something else), for as low as $2 US. It was not frequented much by foreign tourists (who didn’t know about it), but by Cubans themselves. At lunchtime especially, it did a lot of business. No matter; it had to be closed down. Here’s the another one. On February 1st, 2020, another country-wide reform decree made it “illegal” for foreign tourists to travel in privately owned taxis, forcing tourists to travel only in government taxis, except for those authorized classic cars owned by guess who. That put even more people out of business. And ask “private” casa particular owners how the government’s unreasonable restrictions, taxes, and licence fees make doing business much more difficult than it ought to be, while the government continues to build more big hotels with their more expensive rooms. Now neither one of those decreed “reforms” that I have mentioned here have benefited the general Cuban population, or private enterprise, even one single peso. No, nor the tourists either, though most of them don’t know the difference because of their short term visits. But government greed is insatiable; they want it all passing through their hands only. And when their state “enterprises” can’t compete, as they never can, this government will “decree” new taxes and even more onerous restrictions to make that private competition and efficiency next to impossible. Of course, those decrees also will be announced as necessary reforms in the public interest, but with far less fanfare and press coverage in the international media.

  • This post reads as if the Castro dictatorship is trying to reinvent the wheel. It’s called capitalism! It’s been implemented all over the world for 400 years. Going tippie-toe into a market driven economy is destined for disaster. As we say in sports…”just do the damn thing!”

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