Cuban Government Wants to Fix and Manage ‘Distortions’ in Small and Medium-Sized Businesses

After meeting with Cuban jurists, Marrero spoke with a delegation of administrative managers from Spain. (X/Manuel Marrero)

14ymedio bigger 14ymedio, Havana, 7 October 2023 — Cuban Prime Minister Manuel Marrero confirmed on Friday that a government commission is working on new legislation for small and medium-sized businesses (MSMEs). In a meeting with 470 attorneys, consultants and legal advisors, he said that the goal of the regulation is to fix and manage “distortions” that have arisen as new economic players have gained prominence in the economy.

A possible change in the rules of the game would affect not only Cuban businesspeople but also Cuban-Americans interested in opening businesses on the island. Diplomatic sources have been anticipating changes since President Miguel Diaz-Canel’s recent visit to New York. The Nuevo Herald reports that officials are “contemplating and working on” legislation that would facilitate investments by Cuban-Americans and allow them to own MSMEs registered in Cuba.

Marrero was not alluding to the transformations that Diaz-Canel promised would provide new business opportunities during his New York visit. Instead, he used the meeting to warn that the government’s decision to promote MSMEs did not represent a step backwards. There would, however, be limits. He indicated that, although there was consensus among officials on new business development, the priority would continue to be “the socialist, state-run company.”

The prime minister indicated that one issue left to be decided was the level of approval the new companies would need and the time required to get it

He added that part of the legislation would deal with “updating the list of prohibited activities,” which at the moment includes work as dissimilar as creating labor unions, manufacturing sugar and tobacco products, and practicing independent journalism. The prime minister also indicated that one issue left to be decided was the level of approval the new companies would need and the time required to get it.

Marrero addressed the jurists during the Third National Symposium on Legal Advice and Business Law, informing them that, as the MSME law is being implemented, they will be responsible for ensuring that it is complied with to the letter. He also announced the creation of two new and as yet unspecified institutions to “serve” the self-employed and various state-run businesses.

Regarding the latter, he again reiterated that the government is obliged to protect the “socialist, state-run enterprise,” as the Cuban constitution “expressly” stipulates.

Marrero later met with a commission from the General Council of Spanish Administrative Management Schools, headed by its president, Jesús Santiago Ollero. State media was tight-lipped about what was discussed at the meeting. Ollero, who said he was in Cuba to meet with the country’s justice minister and the National Organization of Collective Law Firms, praised the digital transformation of the island’s civil registries and other institutions.

Marrero reiterated that the government is obliged to protect the “socialist, state-run enterprise,” as the Cuban constitution expressly stipulates

He added that Spain would support Havana by providing technical cooperation to develop information sofware, though he provided no details. He praised the “political will” of the Cuban government to facilitate legal procedures without mentioning the ongoing obstacles that Cubans face in obtaining any type of official document. The press did not reveal whether Marrero and Ollero discussed the Spanish experience in the management and administration of MSMEs.

The future of small businesses in Cuba is unclear and remains subject to the shifting opinions of the government, which has consistently said they will be subject to oversight by authorities. Despite the obstacles, the rise of MSMEs now seems to have been inevitable. This has led to controversies about whether or not they are a ploy by the regime to place like-minded businesspeople at the head of a sham private sector.

That is the opinion of the Madrid-based organization Cuba Siglo 21 (21st Century Cuba), which has said that Washington should not provide financial support to owners of MSMEs on the island, arguing this would “only prolong the agony of the Cuban people.” For its part, the Christian Democratic Party views Havana’s new economic flexibility with suspicion. It warns, “Both the credits themselves and the potential opportunities [for Cuban businesspeople] to open bank accounts in the United States are limited and will only benefit a select group of people near the pinnacles of power.”


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