Private imports in Cuba: a problem or the solution?

By Osmel Ramirez Alvarez

Photo: miamiactualidad.com

HAVANA TIMES — According to an article by Fernando Ravsberg’s recently published on this website, “The Millions that Fly Out of Cuba“, a multimillion dollar business which individual people in the private sector engage in could be moving approximately 500 million USD per year. This is an extremely important economic activity in our sunken economy, there’s no doubt about it, yet the National Assembly is still not talking about it.

Just as we’ve come to expect with Ravsberg’s work, the article touches upon an important point in our national life today and he does this by adhering brilliantly to the principles of good investigative journalism, a great challenge in today’s Cuba. He gives us important facts, he cites his sources, he gives his opinion about the root of the problem and even gives us hints at possible solutions. Of course, from his own viewpoint, which has really created an interesting debate. My respects to the journalist.

I just didn’t like the pro-government approach to this issue. The author invites us to lament the fact that this large sum of hard-currency is leaving the country to be invested in merchandise that has a demand on our national market, just because this money travels in private entrepreneurs’ pockets and not in a bank transfer to the Armed Forces GAESA import company.

If these are products that are still not produced in Cuba, that need to be bought abroad and their shortages in state-owned retail markets that sell in CUC is linked to the chronic problem of centralization and excessive planning of our economy, what does it matter that it’s thousands of people doing this instead of one company? It seems to be a better way to distribute wealth really; and the dollars or euros spent on purchases end up escaping anyway.

We rather need to advocate for legalizing imports for individuals and businesses with private capital, an activity which has been exclusive to the State up until now. We need to criticize and apply pressure until this draconian Customs law is eliminated, which only hinders our travelers greatly yet doesn’t stop this trade at all, as Customs officials just become the middlemen in corruption, charging expensive bribes.

Hard currency isn’t going to stay in Cuba by maintaining the State’s inefficient companies with privileges; it will only stay if imports are competitively replaced and by encouraging national industry. And we are talking about hard currency which, by the way, easily enters Cuba in the form of remittances, top-ups and packages that the now famous “mules” bring. Net profit! When a ton of clothes from the US come into Cuba, it’s as if they were magically produced here: zero investment.

It would be more productive to take advantage of and develop these spontaneous and efficient forces that many entrepreneurs have, who have managed to fill the gaps in our national market in spite of working under adverse, risky conditions and out of tenacity.

Every modern country is somewhat open to the market, which means exporting and importing. Large sums of money being used to purchase goods can’t be considered a crime, even when it doesn’t create profits and imply expenditure. Which is not to say that it isn’t necessary. We need to be looking for a way for the commercial scales to tip in favor towards exports or at least for it to be balanced. This is what our Government should be focusing on, on creating profits, not on limiting or trying to replace private businesspeople and much less in sectors where the state-owned equivalent has proven itself to be highly incompetent.

This matter has other interesting aspects. For example, the opportunity some Cubans have to travel and the restrictions that exist for everyone else. No visa is required in the case of Guyana and Russia, but Panama, Mexico, the Dominican Republic and other countries in the region, whose Duty-Free zones or markets generally offer affordable prices for Cuban businesses, do ask for a visa. The thing is, we are clearly an emigration country thanks to the Revolution’s conquests and visa requirements prevent a mass exodus. Not all of the Revolution’s conquests were positive, they just aren’t spoken about very much.

This is where Cuban-Spaniards come into the picture. These are the descendants of citizens from the Motherland who took advantage of Spain’s Historic Memory Law. Many are a kind of “modern-day pirate” because they are just as Cuban as anyone else but they can travel to any country in the world without a visa, like privileged Europeans. They have a kind of “letter of marque” in this business, which puts them at an advantage over 100% Cuban entrepreneurs.

An official law for this trade would be extremely good, which would give people the opportunity to create import cooperatives or businesses, small in the beginning but with the chance to grow, in order to make wholesale trade deals and send merchandise back to the island in containers. Prices would fall, competition would increase and so will prices for a people who continue to be the most underpaid for their work in the world, but paying the most for their consumer products.



2 thoughts on “Private imports in Cuba: a problem or the solution?

  • Osmel is right on point. I have been on a Cuban shopping trip to Russia, seen the purchasing opportunities there, reentered Cuba with duffle bags full of products for resale, then observed the semi clandestine retail sales marketplace.

    This seems to be another one of those many officially illegal opportunities driven by economic demand that the Cuban government simply cannot control. Eventually the government will be forced to legalize this in some form or another just to maintain credibility and appear to enforce some appearance of control.

    Reply
  • If there is a demand for particular goods…there will be people stepping up to supply them. That’s commerce. May it continue unabated and may it flourish.

    Reply

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