{"id":245851,"date":"2021-11-16T10:58:01","date_gmt":"2021-11-16T15:58:01","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=245851"},"modified":"2021-11-16T10:58:01","modified_gmt":"2021-11-16T15:58:01","slug":"msmes-in-cuba-first-month-and-future","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/cuba\/economy\/cuban-economy\/msmes-in-cuba-first-month-and-future\/","title":{"rendered":"MSMEs in Cuba: first month and future"},"content":{"rendered":"

More than a month ago, the Cuban authorities approved the first 35 micro, small and medium-sized enterprises (MSMEs). They did so shortly after <\/span>giving the green light<\/span><\/a> to the emergence \u2014 or, actually, a resurgence, more than 50 years after their elimination by the revolutionary government in the 1960s \u2014 of these economic actors in the country, a measure long claimed by economists, academicians, and representatives of the private sector on the island, who saw their actions and perspectives limited and that, in practice, even exceeded the limits established at that time by the existing regulations.<\/span><\/p>\n

So when the current government finally authorized the creation of <\/span>MSMEs<\/span><\/a>, both private and state, many celebrated the news, although it was done with more caution than desired and in the midst of a critical context for the Cuban economy, strongly impacted by the <\/span>pandemic<\/span><\/a>, internal difficulties and inefficiencies and U.S. sanctions, multiplied by Trump and maintained by Biden after the brief \u201cthaw\u201d in the final years of the Obama administration.<\/span><\/p>\n

However, not a few specialists promptly pointed out the internal and external limitations that could affect the performance of the newly born Cuban <\/span>MSMEs<\/span> and hinder their real development possibilities and their contribution to the island\u2019s economic fabric. Among these they point out, for example, the very effects of the pandemic and the <\/span>U.S. embargo<\/span><\/a> and the difficulties that these and other factors generate in obtaining the supplies and products necessary for their work; the shortage of foreign exchange, the devaluation of the Cuban peso and rising inflation in the context of the <\/span>\u201cmonetary reorganization\u201d<\/span><\/a>; the \u201cclosed mentality\u201d of state administrators, officials and entrepreneurs to negotiate with the new private enterprises and promote productive chains that are beneficial to all, and the limits set by the founding regulations of this reborn economic actor.<\/span><\/p>\n

Among the latter are the obligation to carry out their imports and exports through state-owned enterprises, not being able to have foreign partners \u2014 although MSMEs can, at least in theory, form a joint venture with a foreign company and <\/span>receive credits in foreign currency<\/span><\/a> \u2014 or that one of its partners may be able to do so with more than one MSME, the impossibility of establishing parent enterprises or subsidiaries, some aspects of their tax regulation, and the controversial prohibition of a group of activities considered \u201cstrategic\u201d by the government \u2014 such as those related to health, telecommunications, energy and the press \u2014 and others not so much, such as those carried out by architects, accountants, tourist guides and other professions included in the banned list for self-employment.<\/span><\/p>\n

\u201cWith these signs it is very difficult to foresee, at least immediately, that MSMEs will be another driving force behind the economy, despite their enormous potential,\u201d Cuban economist Omar Everleny <\/span>commented last month<\/span><\/a> to the Spanish agency EFE, when assessing the complex scenario for the resurgence of micro, small and medium-sized enterprises on the island. And shortly after, in a text published by <\/span>OnCuba<\/b>, the specialist himself assured that \u201cthe improvement of economic actors should lead to recognizing the difficulties that the new enterprises that are being created will have to go through.\u201d<\/span><\/p>\n

\u201cIf the State has acted with a certain pragmatism and allowed MSMEs in this adverse situation, the \u2018now yes\u2019 must be accompanied by other decisions that still hinder the optimal use of the potential of this type of business,\u201d Everleny added at the time.<\/span><\/p>\n

Cuba, the embargo and private enterprises legalized in August<\/a><\/p><\/blockquote>\n