Cuba’s Private Sector Has Become an Example of Resistance

The preparation and sale of food remains one of the most attractive choices in the private sector according to the OCDH. (14ymedio)

14ymedio bigger14ymedio, Madrid, March 12, 2021 — Cuba’s private sector, whose workers are referred to as cuentapropistas, suffered a 25% decline in 2020 compared to the previous year. This was mainly due to impact of the Covid-19 pandemic but also partly because of the crisis caused by the country’s economic system.

The island’s calamitous situation is analyzed in depth in an article, “Environment, Private Enterprises and Economic Rights,” published on Thursday by the Cuban Observatory for Human Rights (OCDH).

For starters, it confirms the official data: private businesses employ around 30% of the country’s active labor force and contribute 13% to state coffers in the form of taxes.

From 2010, when the regime legalized self-employment, until January of 2020, the private sector grew 59%, with 459,234 legally registered cuentapropistas throughout the country. However, 158,000 of them have since gone out of business. The causes, according to Rosello Consultores and confirmed by the OCDH, are “losses resulting from Covid-19 [65%], the country’s economic crisis [30%] and other factors [5%]”

“The failures of the Cuban economic system are becoming increasingly obvious,” says the OCDH in its report. “The various issues and ongoing crises have only aggravated and simultaneously made more explicit the shortcomings of the Cuban economy, which is still tied to the primacy and monopoly of the state, its commitment to centralized planning and the rejection of prosperity, which the Communist Party calls ’accumulation of wealth.’”

Against this backdrop, the report continues, self-employment has been one of the few “ruptures” with the “Stalinist economic model,” becoming not only “an example of efficiency” but also “an example of resistance” in the current “adverse” environment.

According to the report, the most attractive activities in the private sector continue to be the preparation and sale of food, transportation of cargo and passengers, leasing rooms in private homes and telecommunication services, which represented 22% of operating licenses in 2020 and 78% of the 127 approved self-employment categories.

The organization states that last year saw “increased economic rights violations, persecution and surveillance of the self-employment sector.” Authorities also carried out 1,400,000 “control actions” while fines amounted to 32 million pesos, 44% more than in 2019.

“Given its entrepreneurial nature, the private sector expresses a repressed pluralism and constitutes a countercultural platform for civic reflection,” says the OCDH, which counted forty-seven public protests and demands for economic rights by Cuban cuentapropistas. “Despite their legitimacy, they were ignored by the media and the seventeen official national unions,” it adds.

The Madrid-based organization highlights that Cuba has been in a “a deep economic and financial crisis” since 2019. Among the causes it cites are a drop in oil prices and “breach of supply contracts” by the Venezuelan national oil company PDVSA, the three billion dollars set aside to pay the foreign debt, and sanctions imposed by the United States under the Trump administration. Contributing factors include a decline in foreign tourism as well as purchases of agricultural products from the United States.

In addition, “certain elements of Cuba’s legal and economic system itself, which, although they are not temporary, are seen as partof the permanent crisis,” for example the high taxes,” which, according to the OCDH, in 2018, were above the average for Latin America and the Caribbean and above the average for the OECD countries themselves,” notes the Observatory.

The report concludes, “Self-employment generates half a million jobs, and makes significant contributions to the state budget and to GDP. Given how important it is today, it even more crucial to create conditions to encourage its development. A strong and healthy business network would create a multiplier effect which would benefit everyone, especially the people.”


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