Cuba details new policies on budding entrepreneurs
From The New York Times
MEXICO CITY — Cubans learned on Friday the details of what they would soon be able to do as budding entrepreneurs, including renting spaces for their businesses, hanging out a shingle, and if things go well, hiring a few employees.
The Communist Party newspaper Granma published details of Cuba’s new regulations on self-employment, clearing a thicket of restrictions that had virtually choked off the country’s minuscule private sector.
“It’s going to be a different kind of socialism,” said Ted Henken, an expert on the Cuban private sector at Baruch College of the City University of New York. The new policies could “let out all of these natural impulses to network, to contract out, to be efficient and productive.”
The Granma article was the latest step in a rollout of changes that Cuba plans to shake the nation’s economy out of its torpor.
In recent months, President Raúl Castro has said that Cuba’s bloated state payroll needs to be trimmed by as many as one million people. He warned that Cubans should no longer expect to get paid if they do not work.
Last week, in the clearest sign that the government intended to act, the country’s labor federation announced that a half-million state workers would lose their jobs by next March and should seek work in the private sector.
Friday’s article outlined how many of them could go about doing that, listing 178 activities for which the government will grant licenses starting in October.
Cubans will be allowed to work privately as carpenters or party clowns; they will be allowed to repair computers or give music lessons. They can repair jewelry and carry passengers on their own boats. Under the new rules, they can also begin to set up their own food businesses or workshops to make shoes.
They may even be able to get loans to do it. The article highlighted that the Central Bank of Cuba was studying how to make small-business loans available.
Many of these activities were first allowed during a brief window in the 1990s, but they never flourished. The government stopped issuing licenses years ago, and only 144,000 Cubans are officially self-employed.
Cuba’s government has been “zigging and zagging since 1990,” looking for ways to revamp its economic development strategy, Mr. Henken said, but “they have only been able to put out fires.”
Since taking over the presidency in 2008, Mr. Castro has moved slowly to make changes. “Raúl, in economic terms, is much more of a pragmatist and much less of an ideologue” than his brother and predecessor as Cuba’s president, Fidel Castro, Mr. Henken said.
The Granma article said that the new policy, which also represents a sharp break because it will allow entrepreneurs to hire employees who are not relatives, was intended “to move away from those conceptions which condemned self-employment almost to extinction and stigmatized” those who began working for themselves in the 1990s.
At the same time, new entrepreneurs will have to pay sales, employment and income taxes. In a sign of the problems Cuba faces, Granma quoted Economy Minister Marino Murillo Jorge as saying that it would be several years before the country could create a wholesale market to supply the new businesses.
The government is expected to announce more changes soon, including regulations governing private cooperatives.
“It looks as though Cuba’s days of having a small, stagnant self-employment sector is over,” Philip Peters, who follows Cuba for the Lexington Institute, a research group that promotes free market policies, wrote on his blog about the country.
He added that “if you take entrepreneurs and their employees, and add the yet-to-be-defined new cooperatives,” then “it appears that a small and medium-sized business sector is on the horizon.”
