In an effort to promote citizens’ initiative the government lifted the restrictions on small private business, giving a much needed boost to entrepreneurship. Cubans all over the country took the opportunity and turned houses, porches, gardens and comfortable relaxing strolls into cafes, restaurants, barber shops, rental properties and markets.
The resurgent private sector expands, and this alternative is expected to absorb the surplus labor force from the state sector, in the midst of a difficult process of employment restructuring.
More than 390,000 people were self-employed by June 2012 and these new figures confirm that these is an economy alternative for a significant number of Cubans.
Among the 181 approved activities for the exercise of self-employment the ones with a larger presence are hired workers, food processors and vendors, freight and passengers, carriers the controversial carter or seller of agricultural products and housing landlord.
Small private business are working under a more flexible regulatory framework that seeks to expand their capabilities, and that among several privileges, allows the marketing of goods and services to state agencies and hiring labor.
No less important is the support in terms of funds they are receiving from the banks in the form of credits, for the first time, and the introduction of new bank instruments which expedite their operations, especially when dealing with state entities.
Today these people can rented premises and assets from the State or from other citizens, and have also the ability to have multiple licenses to practice more than one activity.
All these opportunities, among others, were welcomed by those who decided to manage and increase their income on their own, and thus contribute to the national budget, try to streamline domestic production, and strengthen the domestic market.
But while the growth in the amount of people working on their own now reflects the good reception the modality has met, a set of limitations might undermine the sustained expansion of this new form of employment in our society.
Renown Cuban economists Pavel Vidal Alejandro and Omar Everleny Perez, both with the Center for the Study of the Cuban Economy, highlight the little room that leaves the list of authorized activities to individual initiative, and the fact that activities related to technicians and university graduates are totally excluded, with the consequent waste of a large investment made by the country in the training of professionals.
Moreover, regarding the absence of a wholesale market for the private sector, they noted that currently even the state entities are suffering from supply shortages as a result of the economic and financial difficulties of the country, which makes it very difficult now to foresee the creation by the government of such market.
At the same time, they recognize that the implementation of some relaxations in the tax policy, with emphasis on the appreciation of differences, can encourage the development of these businesses.
In the current context of economic changes that are implemented in the country, although it is essential to stabilize the economy an efficient state management, the encouragement, appreciation and growth of private businesses is necessary, because, as José Barreiro Alfonso, Deputy Ministry of Labour and Social Security, noted, self-employed, from the point of view of employment, has been positive, but the majority of those who exercise this activity didn’t come from the elimination of bloated payrolls in the state enterprises.
Author
Danays Gálvez Salas
