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August 17, 2022
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The misleading government policy towards MSMEs

actores económicos MIPYMES CNA

HAVANA, Cuba.- During the last session of the National Assembly of People’s Power, it was announced, in a victory tone by the Minister of Economy and Planning, Alejandro Gil, that there were a total of 4,042 micro , small and medium enterprises (Mipymes) -3991 private and 51 state-, and 55 non-agricultural cooperatives (CNA).

More recently it transpired that since last August 8 the call for the creation of Mipymes and CNA was opened in economic activities that until now had not been processed.

Clearly, Castroism intends to show, through this strategy of increasing the number of non-state economic actors, especially MSMEs, that there is a willingness on the part of the machinery of power to promote these new forms of management. The quantitative element is enhanced, but as we will see below, the same does not happen with the qualitative factor.

In a recent Plenary of Economy of the provincial government of Havana, the governor of that territory, Reinaldo García Zapata, reported that the Electric Company and the Provincial Directorate of Labor will inspect the Mipymes of the province that present high consumption of electrical energy, to which will be reduced by 20% average monthly consumption.

In other words, to the general blackouts that all neighborhoods in Cuba are currently suffering, selective blackouts will be added to limit the electricity consumption of MSMEs. Obviously, such a measure constitutes a brake on the development of these new forms of production.

Another aspect in which the government’s double standards with respect to MSMEs can be seen is in relation to the granting of bank loans, an attitude that extends to self-employed workers and CNAs.

According to information in the newspaper Granmathe Central Bank of Cuba pointed out that entrepreneurs can access these loans with relatively small amounts of money, and that they imply a quick return to banking institutions.

These are credits that can even be granted in freely convertible currency (MLC), which are, of course, the most demanded by entrepreneurs due to the prominence that these currencies achieve in the national economy.

However, access to credits in MLC is reserved only for those entrepreneurs who meet any of the following requirements: make sales to the chain of stores in MLC; market in the Mariel Special Development Zone; or export part of its productions or services.

We are in the presence of another important obstacle for entrepreneurs who start their work, and who need these credits in MLC, among other things to import supplies and raw materials, and who cannot access them because they have not complied with the requirements demanded by The authorities.

It should be noted that in the immediate future there will be an avalanche of new MSMEs. They will be the current self-employed businesses with more than three contracted workers, which in September must be transformed into Mipyme or CNA. If the current trend continues, almost all of them will become MSMEs, apparently preferring to retain private ownership of the business, before becoming a CNA, which could become group property over time.

In any case, this avalanche of non-state MSMEs could explain the resentment of Castroism towards this new form of management.

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