Cuban Regime Has No Idea What To Do With Private Entrepreneurs

“If my prosperity bothers you, do as I do: Work,” wrote this entrepreneur, known as El Pata, from the town of Alquízar. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 12 June 2022 – Does the Cuban communist regime really know what it wants to do with the new economic actors? There are serious doubts. The best thing the regime can do for them is to forget that they exist, let them function in the most free and autonomous way possible and, above all, provide an adequate legal framework so that they can face their challenges and contribute to the national economy, which is undoubtedly a lot and of high quality. But it doesn’t seem that the regime is going in this direction.

This can be concluded from the exchange held between representatives of private entrepreneurs and authorities of the Ministry of Internal Trade and the Ministry of Tourism last Friday. At that meeting, reports Granma, “several of the main problems that hinder the development of new economic actors, micro, small and medium-sized enterprises (MSMEs); non-agricultural cooperatives (CNAs), and the self-employed, limiting their contribution to the nation” were reviewed. One question: did anyone think of the interventionist communist state as the main and only problem for private actors? No? Well, then, with all due respect, they wasted their time.

To think that right now the global crisis, the increase in the blockade and especially the current situation with certain basic consumer products has some kind of impact on the activity of Cuban entrepreneurs is not true. The proof is that, in the U.S. State Department’s package of measures to soften the dispute, there are some that, without a doubt, are aimed at supporting Cuban private entrepreneurs from the United States. The regime short circuits them, due to its sick obsession against the generation of wealth by private initiative. That is where the problem must be solved, because there is no point in creating more and more MSMEs and CNAs, if the framework in which they must work is full of impediments and obstacles.

Several examples can illustrate the terrible influence that the regime exerts on private activity; for example, forcing informal exchange markets to pay prices for currencies that don’t correspond to the official exchange rate of 1×24. The efficient performance of the new economic actors requires that a formal foreign exchange market be consolidated, especially if the regime continues to sell all kinds of items in the supply markets in MLC (freely convertible currency), which requires the prior holding of foreign currency.

Above all, private actors need to eliminate the suffocating bureaucracy created by the regime to manage business procedures, including registration, as well as review the high taxes they have to pay, which could put the survival of the companies at risk. In that sense, the ONAT [National Tax Administration Office] announcement to start investigating private actors has set off alarms.

The supply of intermediate goods must be solved, not only because of their prices in MLC, but also because many economic actors face problems of scarcity, especially with imports, which prevents them from meeting their commitments to customers. Private actors are asking the state to authorize importation independently of the state, but the regime doesn’t want to lose the business that allows it to withdraw foreign currency for the state coffers.

The Minister of Internal Trade, Betsy Díaz, pledged to eliminate the obstacles that have an impact on the performance of new economic actors and their contribution to the nation’s economy, but she knows that, for ideological reasons, she will not be able to do so. And that is why they use the global crisis as justification and especially the current situation with certain basic consumer products that also affect Cuba. These are false justifications, because the minister knows that Cuban private entrepreneurs, in agreement with their compatriots in the United States, could solve these problems if they could establish agreements and businesses freely, which the regime does not allow.

For the regime, the solution is to invent greater preparation of the municipalities with regards to new economic actors, adequate legal advice, as well as in the knowledge that state companies have the power to carry out certain activities, which could be used to take advantage of eliminating some obstacles. It’s just more of the same, now seasoned with the role of municipalities. They have no remedy. Things will get much worse.

And, in addition, not satisfied with making things increasingly difficult and obstructing any private wealth creation project, now the regime wants Cuban private entrepreneurs to develop policies on social responsibility.

No one is going to question that this is not important, but can anyone in their right mind think that the Cuban private business sector in its current condition of precariousness and weakness can dedicate itself to these policies? In other words, does the communist regime perform any social responsibility with its state enterprises? Let them give just one example.

As if the prohibitions on the exercise of certain activities or the obstacles and complications in developing free foreign trade activities were not enough, it occurred to someone in the regime that it is necessary to create policies related to social responsibility for all economic actors. How can it be understood that there are fundamental sectors and activities in which the regime has not authorized a single MSME or CNA, such as financial and insurance activity? The lack of chains, even innovation, something so hackneyed by Díaz-Canel in his famous doctoral thesis, escape, at least for the time being, from the private projects of MSMEs or CNAs.

They conclude that what needs to be done is to create an “institute of new actors,” envisaged in the law. More bureaucracy.

Translated by Regina Anavy


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