Cuba's shrinking state makes way for eager entrepreneurs
Posted on September 27, 2011 by Ben Osborn
Topics: Economic Development
As the Cuban economy is liberalized, budding entrepreneurs are competing
with more than just each other. Their biggest competitor may be the
Last year the Cuban government announced it would gradually lay off over
one million of its employees as part of a move to wean the population
from the services and payrolls of cash-strapped socialist government.
The government hopes to reduce costs and increase revenue by taxing the
newly privatized businesses formed after it flooded the private sector
As reported by NPR, new business are springing up across the country.
Most are competing with each other. Many are competing with the state.
Until recently, most services were offered by state-run agencies that
faced little competition and thus little incentive to evolve and improve.
Cuban entrepreneurs are taking advantage of this stagnation by offering
goods and services at lower prices than do traditional government
agencies. If the entrepreneurs are successful, Cuba will come to rely
more on its markets and less on its government.
Now that Cuba's free market is rolling, it may prove harder for the
government to slow the free market's momentum than it was for
entrepreneurs to start it.