Government Unveils New Measures to Control Cuba’s Private Sector

According to the State newspaper “Granma,” these regulations were negotiated at the end of 2018 with the entrepreneurs.

14ymedio bigger14ymedio, Elías Amor, Valencia | 6 November 2019 — Cuban entrepreneurs cannot catch a break. The regime does not want the independent economy to flourish in Cuba, not even during critical times like right now, when the productivity of the private sector has clearly demonstrated to be superior to the economy under communist control. Gaceta Oficial just published a new series of regulations that limit, control and stifle even more the individual entrepreneurial activities in Cuba.

Granma says in this regard that the implementation of these rules was negotiated at the end of 2018 with self-employed workers. The opinions and suggestions of the population were also received and the newspaper also refers to letters received in the Ministry of Labor and Social Security. Caution. We already know how these things work in Cuba; it is believed, for example, that an “assembly of several neighbors of a certain block” can serve to form an organ of democratic representation. The field of public opinion in Cuba is far from what we know in the rest of the world.

Granma says that these measures aim to “incorporate new activities, compact and refine the reach of some and simplify procedures.”  And this at a particularly difficult time in which the economy is heading towards a deep recession as a result of the reduction in low-priced oil supplies from Venezuela and the impact of lower worldwide growth on internal activity, a time of special difficulty that does not lend itself to policies of this type.

Specifically, six new activities have been added to the list of allowable work for the self-employed, namely: operator and/or lessor of equipment for artistic production, casting agent, and artistic production assistant. Nobody knows  what sense it makes to approve occupations in dribs and drabs, particularly where these occupations are already being carried out in the field of the informal economy or independently, and why this anachronistic and interventional procedure is not liberalized once and for all, in determining what private activities Cubans can engage in. Specifically, these occupations belonging to the cultural field represent a small fraction of all employment associated with this sector, which has important potentials in Cuba.

Similarly, the activity of certified translator and interpreter is approved. Interesting. An activity that is questioned in many countries by modern information technologies (electronic devices integrated in the external ear) that can lead to the destruction of employment in this sector, which has to be adapted more to cultural mediation than to administrative work. Once again, and as has been the case in the last 60 years, the communist regime of Cuba, every time it moves, places itself to the rear of world economic activity.

Finally, the activity of commercial fisherman and producer-seller of food products has been approved, which includes the production and sale of sausages, smoked foods, preserves and the like. Apparently they had been forgotten in some previous approval. They love to grab the bull by the horns.

While these activities are approved, the Ministry of Labor and Social Security announced a “new regulation aimed at unifying activities and modifying the scope of those that are related” which, they say, increases “the range of services, which can to be provided under the same authorization.”

Several examples. Starting now, “the activities of craftsman, saddle-maker, producer, footwear seller are integrated, and the seller of artificial flowers is also incorporated, a practice currently integrated to that of florist. Similarly, the locksmith activity can exercise the electronic locksmith activity, and in the case of the water carrier, the sale of ice is allowed.

Once again, it is necessary to insist on the same, why not leave the freelance workers to establish the associations and collaborations that are more interesting and profitable for their businesses? Why does the communist state intervene and authorize processes such as those described, and many others, that are included in the norm published in the official Gazette?

What the Cuban leaders do not understand is that as soon as these “authorizations” are approved, demands for others are already appearing. The reason is very simple: the market, independent free enterprise goes much faster than the bureaucratic dinosaur state created in Cuba by Fidel Castro and now managed by his heirs.

Economic freedom does not require the State to say whether auto bodyworkers can be independent or not of the carriers, or if the repairers of mechanical equipment have to be electricians at the same time, and if the decorators can organize birthday parties.

Reaching these levels in the control of economic activity is nothing more than showing the communist regime’s distrust of free enterprise and the independent work of Cubans. In short, the fear that the economy will acquire sufficient dimensions to stand up to communist political power and demand concessions, as in democratic and free countries.

Keeping self-employment under control, the latest official data is 617,974 people, just over 12% of the country’s employed population, which ensures the regime a dominant role in the economy and society, which is the dominant note of Castroism.

The published rules also incorporate references to vacations that the self-employed person can offer the hired worker and set deadlines for exits abroad (applicable only when the would-be traveler is not “regulated,” and the exercise of said right contained in the Castro constitution is prohibited), limiting the hiring of a spouse, or relatives of first and second degree of consanguinity (children, parents, brothers, grandchildren and grandparents), or relatives of the first degree of affinity (son-in-law, daughter-in-law, in-laws, in-laws). And most surprisingly, an authorization for independent workers to commercialize the result of their work. Amazing.

Regulations have been established for contractual relations between self-employed workers and non-agricultural cooperatives with legal entities, which may be financed in the two currencies in circulation. Measures designed to promote the productive chain of the different economic actors. If this is so, it would not be necessary to regulate anything, and an in-depth liberalization of these agreements would allow private agents to develop the most appropriate formulas for their interests and needs.

Finally, certain tax and fiscal aspects were approved that logically try to obtain more income from the exercise of independent private activity, which limits its growth and consolidation.

Nothing new under the sun. Since the initial launch in 2007 of self-employment, Government action on its subsequent dynamic has been reluctant and hesitant. These measures confirm it. Instead of liberalizing the sector, respecting the economic human rights of Cubans, and supporting independent work and entrepreneurs with a modern and efficient structure, similar to that of other countries in the world, the regime is determined to maintain control with the “carrot and the stick.” Then they say that the problem is the blockade, as they call the American embargo, but even they don’t believe that.

Editorial Note: This text was originally published on the Cubaeconomics blog  and is reproduced here with the author’s permission.


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