Sales by Cuba’s Private Businesses Tripled in the First Half of the Year

Small private Cuban companies specializing in the sale of imported food items have made their presence felt in recent months. (14ymedio)

14ymedio biggerEFE (via 14ymedio), Havana, August 25, 2023 — Sales of goods and services by Cuba’s micro, small and medium-sized private businesses (MSMEs) tripled in the first half of 2023 compared to the same period last year according to a report issued by Cuba’s National Statistics and Information Office (ONEI) on Friday.

However, the total sales volume of these businesses, which have only been in operation for two years, accounted for only slightly more than 4% of the total sales of goods and services in the first six months of the year. The rest were sales by state-owned companies.

According to the ONEI report, “Sale of Retail Goods and Services, January-June 2023,” the figure came in at 132.6 billion Cuban pesos (or 5.5 billion dollars at the official exchange rate), 26% more than in the same period last year.

Of this, the state sector had sales totalling slightly over 127 billion pesos (95.90%) with the private sector coming in at just under 5.5 billion pesos (4.10%).

Sales of goods climbed to 57.6 billion pesos, a 14.4% increase, while services rose 23.7% to 45.7 billion pesos. The food service sector rebounded 63.5% to 29.3 billion pesos.

State-owned companies, the Cuban government’s top priority, sold 22.9% more than in the comparable period. Meanwhile, MSMEs increased their sales volume 206.8% in part due to the approval in recent months of hundreds of new private business licenses.

What stood out in the ONEI report was the performance by the food service sector, which increased sales substantially in the year-on-year comparison. Figures for state-owned businesses increased 51.6% while privately owned ones grew in 615.8%.

Food services accounted for  49.69% of all MSMEs’ sales volume in that period compared to 20.90% in the public sector. Combined, the sector is responsible for 22.08% of total sales.

In the state-run sector, retail businesses had the largest share of sales volume (43.45%), followed by service-oriented businesses (34.47%), with restaurants and food services making up the rest.

In the private sector, by contrast, food services made up 49.69% of sales volume, compared to 45.06% for retail and 5.25% for service-related businesses such as basic supplies, communications and transportation, in which by law the state has a near total monopoly.

The surge in the number of MSMEs, which were banned for fifty-five years, began in the fall of 2021 after reform measures were adopted to deal with a severe economic crisis. Though there are currently about 8,000 of them in Cuba, they remain a subject of controversy.

Some applaud their role in helping to alleviate the severe shortage of basic consumer goods that the country has experienced for more than two years and believe they represent the beginning of greater economic opportunity in Cuba.

Among their chief critics are pro-government factions who blame them for fueling high inflation. There are government critics, however, who claim these new businesses are controlled by the country’s political and military elite and do not represent real change.


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