Iván García, 3 December 2018 — A 1950s General Motors truck with an American body and a powerful Italian Iveco six-cylinder inline engine parks in front of a house in a neighborhood west of Havana. Several men begin unloading sheets of drywall, bags of joint compound and galvanized steel beams.
Twice a week Jesús orders a large quantity of supplies for his business erecting lightweight structures, which are currently all the rage in Cuba. He directs three work crews that install shelves, closets and ceilings in restaurants and privately owned tourist lodgings. His clients include hundreds of people who build or renovate their own homes by themselves.
Although a large closet with several sections can cost the equivalent of $900 — fifteen times the monthly salary of a typical medical specialist — Jesús reports that the demand far exceeds the supply. And he adds that he has plans to expand his business.
“Raw materials are the main problem,” he says. “Since they aren’t sold in hard currency stores, you have to buy them under the table. Supplies come from state construction projects, like luxury hotels and hospital renovations. The government wants us to do things legally, and most self-employed people like me want to do that also, but it doesn’t want to set up wholesale markets where we can buy what we need at reasonable prices, without having to import everything. We could get everything we need from Miami, which is closer to Havana than Santa Clara. It would make more sense for the state to license ferry boats instead of cruise ships. Can you imagine how many things the average person needs that those boats could bring in?”
In the opinion of Nicolás, an economist, when Raúl Castro began his timid economic reforms, “he did it keeping in mind the million and a half people projected to be unemployed after cuts to the public sector, which were necessary to reduce the bloated bureaucracy. But the wave of dismissals was suspended due to political considerations and only half a million workers lost their jobs. Private sector workers have always been problematic for the government. It accepts them but it doesn’t like them.”
He adds, “From the beginning self-employed workers have been burdened with roadblocks and impediments, such as prohibitions on business expansion and capital accumulation. They also could not access wholesale markets or rely on an independent, transparent legal system. Self-employment is recognized in the new constitution but the rules of the game are capricious and subject to the whims of authorities.
“These vague policies have created distorted business practices, from having to keep two sets of books and tax evasion to purchasing of raw materials on the black market. If the state wants an orderly system, it should expand the private sector, create wholesale markets and allow supplies to be imported. If there is one thing the government should be aware of it is that private entrepreneurs are not going to give up their businesses despite the constant obstacles. If they are not allowed to do it legally, they will do it — as always happens in Cuba — under the table.”
Alberto, the owner of a café that specializes in Creole food, says, “Coming up with a daily menu is a headache because everything basically revolves around pork or chicken. But since the state can’t satisfy the demand, prices for meat, poultry, vegetables and fruit periodically go up. Boneless pork costs between 55 and 60 [Cuban] pesos per pound. Managers of cafés and state-run restaurants sell us beer for 27 to 28 convertible pesos [CUCs] a box and pocket three or four CUCS from each box. As a result there are no domestically produced beers or malt beverages available anywhere in Havana.”
On December 7 new measures governing the private sector were announced. “When the local office of ONAT [the internal revenue agency which oversees private employment] met with business owners, it was all lies and deceit. If they want self-employment to function properly and legally, they have to lay the foundations,” says Alberto.
Ask any Cuban entrepreneur his or her opinion about the new guidelines the regime will soon adopt and the response will likely be highly critical, both of those rules and of President Miguel-Díaz Canel in particular.
I spoke to sixteen owners of food service, hospitality, construction and transport businesses. Twelve of them believe the new regulations are a smokescreen to mask the government’s true intentions: to strangle the private sector economically with a series of restrictions.
Four of the owners said that if the government makes things difficult for them, they will surrender their business licenses. “Then I will have to figure out how to support myself,” says Joan, a café owner. “The government likes to hamstring the average Cuban. If things get hard, I will emigrate or start a clandestine business. But I’m not going to die of hunger.”
“They’re scared of us. They think we set a bad example for society because we’re able to make money and prosper in spite of the American blockade and the shortages. The money we make allows us to be independent. We don’t rely on the state to improve the quality of life for ourselves, our families and others,” says Luisa, a self-employed hair stylist.
Camila rents out bedrooms in her home and has “given up trying to understand the government’s stupidities. Díaz-Canel is a puppet. In all the time he has been in office, he has never once met with self-employed workers. He is all about the State, about government control. It’s a policy that hasn’t worked for sixty years and is never going to work. Sometimes I think there are CIA agents working inside the government. Why are they so scared we might make money?”
If any group of people is especially unhappy it is independent taxi drivers. As of October 8 private transport workers in Havana are subject to a new set of rules, but almost all of them reject these provisions and vehemently criticize them.
Edel, a taxi driver in his forties, is convinced the state wants to control people’s money. “We have to open an account and declare eighty percent of the money we invest and earn,” he says. “The only thing they have achieved is that, out of the 14,000 freelance taxi drivers in Havana, only five or six thousand are working. A lot of drivers have told me they won’t go to work on December 7. They’ll go on strike.”
In an effort to assert their rights, a group of private sector workers has created an association, PEMEMCUB (Spanish initials for Small and Medium Size Businesspeople of Cuba), which they hope will offer them protection from the whims of the state. “PEMEMCUB was founded with the goal of gaining national and international recognition as an organization which defends the rights of Cuban entrepreneurs,” says board member Antonio Font Carreño in a recently published interview with CubaNet.
There has not yet been a response from the Ministry of Justice to their efforts and PEMEMCUB has so far not been able to register as a legally recognized organization. Nevertheless, Jesús, the owner of a lightweight assembly business, is convinced of the need to “unite to confront unfair attacks and government regulations. We are not a small group. All together there are more than a million co-operative and individual workers among us. That is 25% of the Cuban of the labor force.”
Their strategy is to scream as loud as possible until the regime listens. They have no other option.