Cuba opens to small business

By Saul Landau

Carlos III market
HAVANA – The Cuban government has recently announced new government rules that make private business easier just as lots of mostly Canadian and European tourists (more than 2.1 million in 2012), and hundreds of thousands of Cuban Americans carrying cash and commodities visiting family arrived on the island. These factors have helped sustain Cuba’s economy and transformed the street atmosphere in Centro Havana, for example, where neighbors sell to other neighbors and talk or dream about setting up their own establishments. They can do that legally now in sharp contrast to the past when laws made [I]cuenta propismo[/I] (private entrepreneurship) illegal.

In the late 1980s, Cuba opened to large-scale foreign tourism, an industry that grew rapidly, and the State soon recognized the paucity of decent restaurants available to foreign visitors or the few Cubans with convertible currency who could choose to eat out. Then, poof – the government allowed “los paladares,” private, small eateries to emerge. Rules initially limited the size of the restaurant, covered labor relations, and placed sizable tax burdens on the owners. Nevertheless, some “paladares” offered enough succulence on their menus to make names for themselves among tourists and those Cubans with spending money. Now, eateries of quality compete in several Havana neighborhoods. In 2012, [I]pregoneros[/I] (commercial town criers) selling food from hand-pushed wagons announce their wares on the street. These new entrepreneurs buy directly from farmers, with whom restaurants also contract as they do with fishermen and other suppliers.

Small business, not yet really easy to do because of still existing rules and laws in Cuba, has, nevertheless, become an established form of earning a living. One can own an establishment or work for an owner. For the State, this means a way to unload idle workers from its payroll.

Shoemakers, tailors, barbers and hair dressers have retaken possession of their professions from the state, and small stores abound, supplied by relatives (partners) from Miami or from suppliers who have found ways to bring in material from Panama and other foreign sources. Some material for sale has been stolen from the State. But some former state enterprises have become cooperatives that compete on the market for business.

As a result of this spawning, cockroach capitalism, Cuban consumers find easier access to services and goods the State had previously monopolized under its label of socialism or state scarcity as contrarian wits labeled it.

When Centro Havana residents go to the immense Carlos III market to buy groceries, they pass dozens of fruit and vegetable venders with street carts, little shops with small appliance and items like auto parts, plumbing supplies and new tires previously scarce or unavailable on the island.

Some neighbors crowed proudly about these “reforms,” while insisting that socialism had to stay (free education and medical care as well as rights to housing, cheap food, and other state subsidized benefits), and these new steps had made socialism better, more consumer-friendly. We have now, said one male resident, “a more sensitive socialism.”

Cubans cannot claim the material privileges of Americans, but they’re on their way. Cell phones abound as do laptops in Havana, and of course, email has followed as a major form of communication. But access to the internet remains limited and slow (dialup in most cases). The Cuban government appears to be in no hurry to provide rapid web access to its citizens because of its own security concerns. And the U.S. policy of “spreading democracy” to Cuba heightens the threat from outside. The State Department has pursued the policy of finding and servicing dissidents, some of whom are creations of U.S. policy, as part of its long-time desire to overthrow the Cuban government, and re-establish “civil society,” meaning a return to total private ownership and lessening of substantive rights.

The Washington policy elite don’t remember or care that Cuba had a U.S.-backed civil society, under Batista. Most Cubans did not like to see the Mafia running gambling and other rackets in league with their government. They also opposed Batista’s dictatorial methods and his brutal and torture-minded police. On January 1, 1959, they opted for the revolution led by Fidel Castro, which emphasized substantive rights (education, food, housing and medical care) over rights to own property and exploit labor.

Cubans, like Americans who follow Cuba and US-Cuba policy, ask: when will the U.S. lift its punishment policy, a 52-year plus embargo, and restore relations with the island? Hard liners insist: “The embargo is only 52 years old. Give it time to work. Fidel and Raul will soon die and without them the revolution will evaporate.”

Realists who have studied Cuba see a well-organized government and society with no serious succession problems or internal threats.

U.S. pessimists see no clear and immediate benefits to the Obama administration for taking steps to improve relations. Indeed, in Washington, no signs of policy change appear on the Obama agenda. The “what’s in it for us” attitude of the White House does not offer much positive perspective on the President changing course in the next four years. He has shown little interest in Cuba, or the rest of Latin America, after appearing in 2009 in Trinidad and raising hopes in the region, and then squashing them. Optimists now predict that by 2050, the embargo might self erode.

On the other hand, some large business interests may soon see Cuba as a market of 11 million people, and as a potentially lucrative source for investment. Their pressure could change the political climate. And those on the left who have always thought the U.S. had done wrong to Cuba could better organize for their position. How weird that some people still think that “doing the right thing” should prevail in the White House, rather than the “how I can benefit” approach. It was not the Obama I voted for, but the one I got.

Maybe he’ll think of his legacy?

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