The Cuba Study Group published on Tuesday the report ‘Private Sector in Cuba: Exhaust valve or development engine?’
Miami, United States. – The Cuban government considers the independent business a “necessary evil” and imposes a “crystal ceiling” that restricts its expansion in the midst of a “deep economic crisis”, He affirmed to Efe The researcher Ricardo Torres Pérez, author of the study Private sector in Cuba: Exhaust valve or development engine?released Tuesday by the Cuba Study Group.
The analysis, cited by EFE, argues that the private sector already has a relevant weight: in two years more than 10,000 have been recorded Micro, small and medium enterprises (MSMEs)responsible for about 30% of employment. However, its ability to grow is still slowed down by the lack of State’s commitment to the free company, Torres said.
“Cuba is going through a deep economic crisis,” said the attached professor at the Center for Latin American and Latin Studies of American University in Washington. As he explained, the context reduces business opportunities and contracts demand for income inequality: “A good part of citizens, consumers, tend to concentrate on essential products, and there is no longer much more left to buy other things.”
For Torres, the business climate is marked by uncertainty and state control: “Right now there is a lot of uncertainty in the private sector, because the economy is drowned. It depends on regulations of a government that is not committed to the free company.” He added that “there is no commitment, because the ideology that still prevails in the government understands the private sector as a threat.”
The author described an unpredictable action scheme by the authorities, with raids, inspections, regulatory changes, price stops and tax adjustments. “There is always a new regulation that can be done to bother the private company in one way or another,” something possible “at any time, as they have demonstrated in these recent months,” because the State reaches “as far as it wants to go,” he said.
Although the private sector has occupied spaces left by the State – in retail trade, transport and household services – remains treated as an exhaust valve and not as a development engine: “It is not a priority to grow the economy,” said Torres.
The researcher rejected the idea that the private boom depends on links with the ruling party: “I do not see anywhere convincing that the majority of the private sector are people who came from the government or that the company has because they have connections with the government. That is not so.” In his opinion, “the reality of the majority of the private sector” is that “the Cuban government does not want it ultimately, because it knows that the day you give them free rein, the state economy disappears practically.”
However, Cubanet and other independent media They have investigated Private companies with close links with the ruling party or that are properly of regime members or their relatives. For example, Lisa Titoloone of Raúl Castro’s granddaughters, who is presented as a private businesswoman, has among other “ventures” an online store, a meat factory and another of construction materials.
While there are no evidence or it is reasonable to think that of the tens of thousands of MSMEs that are today in Cuba, they are all connected to the State, there are proven connections between the most profitable and prosperous businesses and the dome. Crescent, The first mipyme approved in Ciego de Ávila It was in the recent past was a state food company that was later transformed into a “local development project” (a public-private company) and that, finally, evolved to MiPyme.
This peculiar “non -state” business shares frequently in its publications in social networks Speeches of Fidel Castro; He sadly recalls his death and celebrates episodes of the revolution as the anniversary of the assault on the Moncada barracks. And it was a protected business and privileged by Alejandro Gil, former Minister of Economy.
The report in question, omits that unlike what happens in most countries, in which the registration of a company consists of a simple administrative procedure in which the State only watches because some legal requirements are met, in Cuba, the process is aimed at serving as a filter. Different State institutions can veto or give a green light to a business, regardless of whether or not it complies with the conditions established in the law. And there the political filters enter.
Torres also warned about external factors, in particular the policies of the United States, which hinder financing and international payments for financial restrictions and the absence of normal banking relations. Recent changes in visa policies also limit the trips of Cuban businessmen to explore commercial opportunities: “If they could make an export at a given time, they would duplicate, they would triple the sales they have,” he said.
The study, according to EFE, documents that the elimination of tax benefits, price stops and limits to the profitability of contracts with state companies have further strengthened the operational margin. In particular, the suppression in 2023 of tax exemptions, which reduced the margins and raised the risk of closing for dozens of business.
Despite the resilience shown by the ventures, the report concludes – according to Efe – that this capacity does not translate into sustained prosperity. Although the sector generates employment and covers unattended niches, its contribution to GDP is below its potential due to internal and external restrictions. The combination of economic crisis, limits imposed by the State and the US financial blockade keeps Cuban business in a vulnerable position, Torres lamented.
