Cornered by the Crisis, the Cuban Government Eliminates the List Limiting Self-Employment Activities

According to the Minister of Labor, the closed list of activities prevents Cubans from developing their native creativity. (14ymedio)

14ymedio bigger

14ymedio, Havana, 7 August 2020 – Cuba’s rigid control on permissible self-employment activities has been eased with the elimination of the list of 123 activities permitted to the private sector, a measure announced Thursday by the Minister of Labor and Social Security, Marta Elena Feitó, who affirmed that the current situation prevents Cubans from developing their native creativity. Economists, who have been demanding the end of this list for years, have expressed satisfaction, but also caution.

“Finally! The list of activities allowed for self-employment in Cuba will be eliminated!!! We had to insist on it ad nauseam so that they would adopt it!!!! Better late than never! But it would be worthwhile to continue digging deeper!” exclaimed Mauricio De Miranda Parrondo who, in any case, considers that the Government has not taken the step due to the demands of the economists “but because the gravity of circumstances imposes it. That is why it is necessary to show a true political will for change,” he added.

Marta Elena Feitó, who was speaking on the Roundtable program on National Television, did not provide a date for the implementation of this measure but said that the Government will allow private companies to launch “businesses along a much broader profile.” Currently, the bulk of self-employment activities focus on hospitality, transportation, and rental housing. Now one can present the projects they want, although the specifics of the standard remain to be seen, as does how far its discretion can go.

However, the minister did make it clear that “the limitations will be that they are legal activities with resources and raw materials of legal origin,” so it is hoped that the Government will allow the importation of raw materials by individuals to carry out activities until now reserved for the State. On the other hand, there is no sign that the authorities are willing to open their hands in the sectors considered strategic, including education, health, the press or telecommunications.

Thursday’s Roundtable was dedicated to explaining the new actions in the areas of Energy and Mines and Labor and Social Security. Thus, the most relevant news, the opening of the private sector, was diluted and the official media have not given the expected prominence to such a significant change, perhaps, precisely, because it implies a resignation – of a still unspecified scope – of the more orthodox lines of communism.

Cuban economist Pedro Monreal praised the news, but also pointed out the scope for improvement. “The Roundtable did not address concrete measures to solve three crucial problems: the huge number of people of working age who do not work or study, the low productivity of agriculture, and the establishment of SMEs (small and medium size enterprises) that provide quality employment,” he lamented.

The expert believes that small and medium-sized companies are essential to in order to raise the productivity ceiling in the short term. “The data is clear: the function of creating net employment in the Cuban economy is increasingly held by the non-state sector, mainly the private sector. The primitive institutional framework of TCP (trabajo cuenta propia, i.e. self-employment), with the absence of a private business format, is a huge obstacle,” he says.

The minister’s statement included another important piece of information: the government’s intention to link state wages to productivity.

“Life has shown that setting performance indicators associated with the fulfillment of plans does not work. You have to pay the workers for the concrete results of the wealth they generate. The indicator has to be set by efficiency.”

The Government, according to Feitó, intends that the salary “constitutes the main source of satisfaction for the worker and their family” and announced that it will seek to associate payment with performance, eliminate restrictions on compensation and streamline procedures.

Currently the average salary in the state sector barely reaches $45 a month.

The private sector, which brings together more than half a million self-employed workers who generate approximately a third of the jobs in the country, has been particularly hard hit by the pandemic, as tourism disappeared and the number of customers for tourist related Businesses drastically decreased.


COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.