More on Cuba’s Private Businesses

By Francisco Acevedo

HAVANA TIMES – The issue of micro, small and medium private businesses (MSMEs) in Cuba has become every day in recent times. This week, an intervention on the subject by an official from the Ministry of Economy and Planning to a group of foreign businesspeople was leaked on social networks. The official said that his office accompanies those interested in “simple” methods to assist successful personal projects.

The first thing the young man said caught my attention, and that is that whoever is in these types of businesses it is to make money. It is a truth like a temple, but here they are afraid to openly say it. Every time we listen to one of these state “businesspersons” they start with the slogan that it is to “help the people”, “produce for the people”. All of that is very good, and in some way occurs, but from behind, because such officials clearly work for the government, not a Non-Governmental Organization.

This procedure is understandable, because in the precepts of communism the capitalist businessperson is the bad guy, the ruthless one who only seeks capital gain, etc. So, all these people, young people in general, try to give the image of the good capitalist, when there is no good or bad, only the one who operates efficiently, fulfills their contracts and pays their debts, everything else comes later.

To begin with, in Cuba you do not carry out a private activity without first having government authorization, which from the outset is discretionary, that is, there are no legally established requirements. If it seems good to them, they give you permission, and if they deny it, you go home quietly. Since the rules are not properly regulated, access to a private activity is not a question of rights, which by the Constitution all citizens should have.

Of course, this leaves the possibility that one’s politics is on the table, because if you do not support the Communist Party of Cuba it will be difficult to get a permit. And, even after they give it to you, because they do not know you well, if you express any position contrary to the Government they can take it away from you, that’s how arbitrary the process is. That is why all these Mypime owners are very careful not to cross the line, and try to focus everything on the economic part, which is as it should be in terms of priorities, but without putting a straitjacket on for everything else.

The Ministry of Economy and Planning official said it is a process that is very similar to the rest of the world, except for the initial step of the application, which is actually the most important. If you do not have authorization, nothing else exists. In good Cuban, that is the chicken of the arroz con pollo.  

It is true that within the chaos of the last 60 years, it is a legal milestone that since September 2021, Cubans have the possibility to legally establish a private business, different from the cooperatives that existed, which separated state and private assets.

It is certainly a step forward, but it still does not respond to the needs of businesspeople in Cuba because for that the rules must be very clear, and with politics a thousand light years away.

Transportation is the best example, because the State continues to want to control what is most important. For example, the newly inaugurated ferry to travel from Batabanó to Isla de la Juventud had to stop operating due to lack of fuel. The expense is too much, said the minister of the sector. I don’t know if he didn’t do the math before grandly announcing its inauguration a month ago.

Not to mention the planes, the official acknowledged that he has had to enter into collaboration with other airlines because the national fleet, basically Russian planes that are too old, are unsustainable.

If that business is taken over by a private businessperson, they’ll fill Batabano Bay with ferries, just to mention that route. Everywhere the private entrepreneur is the one who pays for public policies, such as the fuel that the Government currently subsidizes.

To explain the current public transportation situation, the official noted that in the 1980s, when there were 2,500 buses working, 600 four years ago and less than 300 today in Havana.  However, he failed to mention that at that time we were subsidized as a country by the extinct Socialist Camp, it was not that we could sustain it with our own efforts.

The explanation, you know, is the US blockade, but they don’t mention that if that bus belongs to an individual, like some that almost do in this same country, the parts are invented, and that must be done on the slide. If you had real autonomy over your vehicle, you are one click away from ordering any spare part.

Because of these things, the noble idea of empowering Cuban businesspeople who intend to partner with friends and family to produce something or provide a service becomes entangled.

As I said in another column, there is no real private sector in Cuba, because that is what the laws dictate, and these MSMEs are another way to entertain the self-employed with the dream of having their own business, a kind of desperate solution, another one.

A business in which the State is clearly behind it, but in the shadows, as a supporter of those intermediaries, who buy precisely from the companies that trade with the Government.

In reality, the only thing “typical” about it, the word most used by the employee of the Ministry of Economy and Planning, is that a contract is signed, and taxes are paid, but be careful, always after official approval.

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