Two compatriots, one adventure

Two Cubans, one of whom lives in the United States and the other in Cuba, wanted to pool their moderate capital to set up a small or medium business on the island. They cannot do it: one is barred by the U.S. blockade, the other by the recently approved Investment Law.

To solve the problem, the one who lives in the U.S. decided to return to Cuba, regain his status and become what the other is — a Cuban living on the island, with all his rights and duties — in order to found the small business. They still cannot do that, because Cuba does not promote small or medium private businesses.

It is true that in Cuba there are businesses that are de-facto small or medium enterprises, for example, restaurants with 20 employees, each one of whom must obtain a license as a “self-employed” worker. But that does not reflect the truth. The truth is that they are one entrepreneur and 19 employed workers.

Because these businesses are still not recognized as entrepreneurial activities, they have no labor union chapters or other organizations. There is no legislation establishing a minimum wage, and the workers are not protected against dismissal or harassment, although they do have social security and other benefits guaranteed by the state.

The Investment Law could have resolved these and other wrongs, propitiated an integral and coherent legislation for the small and medium businesses, promoted their development and created the conditions to exert some pressure regarding the elimination of the U.S. blockade and, until that happens, struggle to break that blockade.

On the margin of all those considerations, it is difficult to understand the line of reasoning that led the law’s drafters and the National Assembly deputies to ignore the small and medium entrepreneurs, foreign and native, in favor of the great capital and alleged million-dollar investments, when both are compatible.

In reality, because of the scale of Cuba’s economy, what seems most viable and sustainable is a modest beginning that proceeds from small to large and from simple enterprises to others of greater technological complexity.

Big businesses require a considerable volume of capital, which leads to lengthy amortization. Big businesses take years to build and mature, and frequently run into political complications because they require the involvement of international banks and the use of technologies or licenses that often have some United States component.

The insistence on prioritizing exports is not clear, when one of the urgencies is to do right by the undersupplied national market and reduce imports. Cuba imports soda crackers from Nicaragua and Mexico, pancakes from Vietnam, garments from Central America, yoghurt from Spain and Germany, detergent from Iran, candy and sweets from several other countries, not to mention China.

In any case, the law won’t take effect for 90 days, when it will be signed and promulgated by the president. He might find some valid arguments to propose another reading. We’ll see.

(The photo shows the restaurant Bistro Habana Kohly.)