Emigrants and Private Businesses in Cuba

By Jesus Arboleya (Progreso Weekly)

HAVANA TIMES – The Cuban law that allows the establishment of micro, small and medium-sized private companies (MSMEs) was approved recently. One of the elements that received the most publicity was the possibility for emigrants to invest in them. Economists and lawyers will study the law in order to establish the legal framework in which this can be done and its eventual economic consequences. I will focus on their impact based on current political conditions, as well as their possible impact on Cuba’s relationship with its emigration.

The first thing that jumps out is that it is not a law designed for the country’s emigrants so it does not establish anything new regarding its treatment. For years, emigrants who do not have resident status in Cuba are able to invest in the country through the mechanisms for foreign investment that have been adopted. The fact that practically none have done so responds to the difficulties and dangers imposed by the U.S. blockade, the lack of correspondence between the supply and the scale of most of these capitals, as well as the restrictive criteria that have prevailed in Cuban policy making it difficult to apply the law that establishes this possibility.

Emigrants who retain their residency in Cuba, no matter the average length of time they stay in the country, have never been able to avail themselves of the law for foreign investment because they are not considered the same as the former, and as such the rules apply to them as to any other Cuban.

This is a fairly arbitrary difference, since, for the purposes of other laws and the Constitution itself, both categories are considered Cuban, no matter what their recognized residency is. It is something that was established for other purposes from Decree-Law 302 of 2012, amending the immigration law, which stipulates that any Cuban who emigrates from that date retains all rights of residency as long as he/she updates this condition every two years. The fact that they can now invest in MSMEs is because that possibility has been opened to all Cubans residing in the country, not because an exception has been made for them.

In summary, the new law for MSMEs does not change anything with respect to emigrants. Those who do not retain their residency can invest as foreign entrepreneurs, but not in MSMEs, designed for residents of the country. On the contrary, those who maintain their residency can do so in the MSMEs, but like the rest of the Cubans residing in the country they cannot take advantage of the law for foreign investment. Truly gibberish, which reflects a contradiction that encompasses all Cubans, not just emigrants, and that cries out for a law for the investment of nationals, which does not exclude them from any alternative.

The Cuban government has insisted it is interested in strengthening ties with its emigration and taking advantage of its contribution to the development of the country. This being the case, an important step would be to review the policy that encourages and regulates possible investments in Cuba.

It is difficult to identify the advantages that promote investments in Cuba while maintaining the difference between residents and non-resident emigrants, especially when it comes to MSMEs, since the majority of emigrants are excluded from this process. In particular descendants born in other countries, who are already close to constituting half of the population, and who constitute the sector best situated economically and the most dynamic of its components.

To promote Cuban emigrant investments a specific policy is required that overcomes legalistic barriers and established prejudices, often unjustified. A policy is needed that establishes special advantages, due to the condition of being Cuban, and focuses on the objective of integrating them organically to the life of the nation. Herein lies the political value of this matter.

Read more from Cuba here on Havana Times.