Private Businesses in Cuba Sound the Alarm / Iván García


Iván García, 18 August 2017 — While slicing pork and a half-dozen chicken breasts into cutlets, which he then weighs on a digital scale, the owner of a cafe in Havana’s south side that serves light meals and sandwiches gets a call on his cell phone.

“Hey. Listen, partner, have you got any beef? Or fish?” he asks as sits down, nodding his head as he listens to the answer on the other end of the line.

Two hours later, a driver in a truck with government license plates drops off, without undue discretion, several boxes of frozen chickens and smoked pork loin. The merchandise is carried to a freezer in the kitchen of house where the cafe is located.

Let’s call the owner Antonio, a man with a strong build and decades of experience in the precarious world of private sector employment. “In the 1970s,” he explains, “I was a manager at a state-owned restaurant. Later, I was in the handicraft ’business,’ selling leather sandals in Cathedral Square. After that, I was had a stall in a privately-run farmer’s market. Then, when self-employment became legal in 1993, I opened a cafe. I have lived long enough to know how the state works. They give you rope but, just at the right time, they grab the other end of it and you get screwed.”

For Antonio, Cuba is not a normal country. “Ideally, there would be a well-supplied wholesale market and taxes would be reasonable. But that’s not the case. ONAT (the National Office of Tax Administration) lets you sell beef, fish and shellfish. But where are people supposed to get it? The retail price of a kilogram of beef is 12 CUC and getting shrimp or lobster from a state-run establishment is impossible. A big portion of a private food service’s inventory is purchased under the table, usually from state-owned companies or tourist resorts. I don’t see anything wrong with them trying to get their house in order. But in order to set everything straight, the government first has to accept that, by not creating wholesale markets, it hasn’t met its obligations,” he says.

He pauses to give instructions to his employees: “Hey, this juice is watery. When you season the meat, don’t be stingy. Why is the rice and beans dish taking so long?” Drinking coffee from an aluminum mug, he continues:

“The problem is that these people (the regime) have lied so many times that when they presumably do tell the truth, they lack credibility. I don’t believe that this restructuring of self-employment is being done in good faith. As long as taxes are high, people who make more than 20,000 (Cuban) pesos a month (about $750 USD) will be subject to a 50% tax rate, businesses will keep two sets of books and income will be underreported. As as long as there is scarcity and food is hard to get, there will be schemes to get it. That’s not going to stop anybody. The government has never wanted people to make money. That’s why there are so many controls and restrictions,” he says.

The new measures, which temporarily put a halt to licenses for the most profitable private businesses, has set off alarm bells among the island’s private sector businesspeople. The decree was published in the Official Gazette on August 5 but passed on July 18 at the closing session of the National Assembly.

José, an architect who offers interior design services to owners of private businesses, believes, “The government has always treated private business owners as though they were criminal suspects. The Cuban state is programmed to direct and control its citizens’ lives, all the way from their salaries, recreation and housing to what they eat. Don’t forget that many of the bigwigs who launched the Revolutionary Offensive of 1968, closed private-sector farmers’ markets in the 1980s and decelerated self-employment in the 1990s, still govern the country. A guy with money is more likely to have his own opinions and not rely on the state to feed his family. In the end it boils down to an ideological conflict, especially when they hear American presidents expressing support for private business. They see us as Trojan horses who will strangle the socialist system.”

The economist Omar Everleny believes that the government should come up with a list of unauthorized jobs and should favor professionals who could also open businesses, which would add value to the private sector.

Diana, a former ONAT official, says, “It’s the government, with its inconsistent policies, that is encouraging rule bending and illegality. Their only concern is how to collect the most money while punishing those they think violate their precepts. They forget that in any social contract there are rights and responsibilities. They demand their rights but ignore their responsibilities.”

Carlos, a sociologist, believes, “Almost 60 years of revolutionary government have shown that, the more things are prohibited, the more the door opens to clandestine businesses. In 2011, they ordered the closure of 3D cinemas and private clothing stores. These businesses continue to operate but do so illegally. In fact, by the time the regime decided to legalize self-employment, some businesses had been operating illegally for years.”

Yosvany, a professor of political science, believes, “Cuba’s aging leaders carry intransigence in their DNA. If one segment of the population starts to make money, no matter how small that segment is, they see it as a threat to the power they’ve held since 1959. In China and Vietnam the communist party shrewdly allied themselves with entrepreneurs and the new rich. But in Cuba they view them as public enemies.”

Oscar, the owner of a rental property, says, “The government has exaggerated the success of private businesses. Of the 201 authorized jobs, they stopped issuing licenses to about twenty. But if these business are up and running, and their owners know how to manage well, they can make a profit. That’s not the case with button stampers, palm tree trimmers and other jobs where they make just enough to survive.”

The widespread perception among several private sector workers interviewed by Martí Noticias is that the new rules of the game as drafted by the government will halt the advancement of private initiative on the island.

The military dictatorship has never hidden its disdain for so-called cuentapropismo.* That is why it prohibits the accumulation of capital and resorts to decrees to hinder private enterprises from prospering.

If anyone did not understand this, it was because they refused to do so.


*Translator’s note: A term unique to Cuba that was coined by the government to avoid using a more generic and politically fraught term like self-employment