Supporting private enterprise to thrive in Cuba

Supporting private enterprise to thrive in Cuba
By Charles Shapiro5 P.M.AUG. 7, 2014

In May, together with a long list of American business, academic and NGO
leaders, I signed a letter to President Obama urging changes in the Cuba
embargo regulations. The major change can be summed up very simply:
remove the embargo from the Cuban private sector.

What could make more sense than to encourage private Cuban citizens — or
the citizens of any country — to open businesses, to compete in the
marketplace and to succeed? Those for and against the embargo can argue
the utility of an embargo against the government of Cuba, but
independent business people make the decisions that affect their lives,
and that's exactly what we ought to encourage.

Keeping in mind that at the end of the day it is the government of Cuba
that sets the conditions for the business environment, let's remove the
obstacles the United States has placed in the way of these entrepreneurs.

The Institute of the Americas has now organized two educational trips to
Cuba. We met with as broad a range of people as possible: the Catholic
Church, the Patronato synagogue, musicians, writers, U.S. and
third-country diplomats, the Cuban Foreign Ministry and above all
private entrepreneurs.

Cuban entrepreneurs run restaurants, bars and B&Bs. They are professors
who moonlight by giving lectures to groups like ours. They are DJs and
hip-hop artists, hairstylists, dressmakers, photographers and event
planners.

The people we spoke with don't think of themselves as entrepreneurs, but
as cuentapropistas, a Cubanism meaning people who are working on their
"own account." Somehow, entrepreneur sounds too grand in that Communist
nation.

Some businesses are tiny. Others, like restaurants, employ significant
numbers of people. But they all face daunting obstacles: no wholesale
suppliers; little or no financing; convoluted supply chains; and limited
Internet access. There are few building contractors and the ones there
are have no building supplies.

Above all, government regulations shift inexplicably. Licensed tailors
and dressmakers could for a time import clothes and sell them at retail
prices, until the government changed its mind. Private movie theaters
were allowed and then disallowed. A taxi driver can now buy a used car
but it will cost more than $50,000 — a millennium worth of wages when
the average state paycheck is $20 a month.

Nevertheless, the opening of the Cuban economy to "self-employed" has
been dramatic within the Cuban context. UCSD's Dr. Richard Feinberg
estimates close to 1 million self-employed.

More people are earning more money than they did as state employees.
Others have become cuentapropistas because they have no choice.

The government has reduced the number of state employees because it
cannot afford to keep them on the payroll.

Relative to what Cuba needs to do to catch up to China or Vietnam, the
changes are slow and tentative.

The United States should support small but concrete actions that will
help Cubans while we wrangle over policy toward the government of Cuba.
Normally, bilateral relations are the purview of the executive branch.
But American policy toward Cuba was enshrined in law in 1996 and cannot
be changed without modifying that legislation. That is not going to
happen anytime soon.

Source: Supporting private enterprise to thrive in Cuba Page 1 of 2 |
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