Self-employed Cubans real entrepreneurs?
Entrepreneurship has many faces in Cuba today, from street vendors who
sell skimpy tube tops purchased at Miami discount stores to the
chauffeur of an improvised bicycle taxi to the operator of a
white-tablecloth private restaurant with the tips already included in
But while the government initially declared that it wanted to move
500,000 Cubans off state payrolls by April 2011 and another 800,000 by
the beginning of 2012, it has fallen far short of those targets.
And there is a vast grey area in this world of so-called
cuentapropistas, where the self-employed function on the fringes of
legality, key elements that would lead to successful small businesses
are missing and broad questions remain about how the program should go
forward in a communist country.
There’s also disagreement about whether Cuba’s flirtation with private
business represents a path toward true entrepreneurship or has simply
resulted in reinforcement of a shadowy informal economy where
cuentapropistas bend the rules in order to survive.
At the end of May, nearly 430,000 Cubans in a workforce of five million
were self-employed, according to a report from the Cuban Ministry of
Labour and Social Security. But not all of them are furloughed
Some 14 per cent were retired, meaning they didn’t switch from current
state employment to working on their own, and analysts say a significant
number are probably former black marketeers, who are used to operating
outside the bounds of state control, or workers who have held on to
their state jobs but want to earn extra money on the side.
“So far, it’s been more of a legalisation of the illegal economy than
creation of a small business class,” said Ted Henken, a Baruch College
professor and president of the Association for the Study of the Cuban
Self-employment is permitted in 181 economic activities, and 18 per cent
of cuentapropistas are employed by small private business owners. In
other fledgling attempts at private business, scores of nonfarm
co-operatives – most of them former state companies – have been
launched, and private farmers are now cultivating once-idle public land.
The budding private sector is mainly a service economy. The most popular
activities are selling and preparing food, transportation of cargo and
passengers, renting homes and selling agricultural products on the
street, according to the Ministry of Labour and Social Security.
Karina Galvez, an economist from Pinar del Rio, agrees that the recent
changes aren’t necessarily things the government wanted to do, but says
the economic situation as well as pressures from Cuba’s nascent civil
society obligated the reforms.
Speaking at the recent meeting of the Association for the Study of the
Cuban Economy in Miami, Galvez said that many of the self-employed have
to “break the law” to make a living because taxes are so high and many
self-employment activities still aren’t allowed, including freelance
work by lawyers, accountants, architects and other professionals.
Some of the new entrepreneurs have resorted to bribing inspectors to
avoid high fines for violations, said Galvez, who is also one of the
founders of Convivencia, a digital magazine.
“In Cuba, everyone commits illegalities in their business,” said Antonio
Rodiles, a Cuban political activist who has created a forum for public
debate through his Estado de SATS movement.
One of the most common infractions, he said, is stealing electricity
because utility bills are so high.
“At this point, self-employment is failing,” he said.
Many of the cuentapropistas are dependent on the black market to supply
them, and instead of the emergence of a small entrepreneurial class, he
said, what is happening is the encouragement of an informal or
But Galvez said she believes the self-employed prefer to operate legally.
“This gives me hope,” she said. “I believe in the force of la pequena
Jose Luis Leyva Cruz, a professor at the University of Camaguey, also
has embraced entrepreneurship with a project he calls “DLideres,” whose
goal is to develop entrepreneurial leaders in Cuba. Lacking another
space, the organisation held its first meeting in front of his home in
He outlined DLideres’ goals during the ASCE meeting: Develop networks of
entrepreneurs and intellectuals, provide training in leadership and
technology, develop a digital magazine called @emprenda, and connect
international patrons with Cuban entrepreneurs.
“In Havana, you see a lot of successful entrepreneurs who are creating
jobs or innovating,” said Henken.
For example, some of the more sophisticated paladares (private
restaurants) have live music, well stocked bars and gourmet fare.
“There is a new class of high-quality gourmet restaurants mainly
surviving on their owners’ ingenuity,” he said.
But, Henken added, some of the more established enterprises “may have
some form of protection” and are run by former military or government
Many self-employed people are “still trapped in survival mode with very
low productivity,” Henken said.
“And a lot of corruption is caused by unworkable, antagonistic rules the
government has put in place.”
Source: “Self-employed Cubans real entrepreneurs? – Yahoo!7 Finance