{"id":264297,"date":"2023-01-29T15:23:08","date_gmt":"2023-01-29T20:23:08","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=264297"},"modified":"2023-01-29T15:23:08","modified_gmt":"2023-01-29T20:23:08","slug":"how-the-u-s-can-support-cubas-emerging-private-sector","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/cuba-usa\/how-the-u-s-can-support-cubas-emerging-private-sector\/","title":{"rendered":"How the U.S. Can Support Cuba\u2019s Emerging Private Sector"},"content":{"rendered":"

There is one aspect of U.S. policy toward Cuba\u2014and only one\u2014that Presidents Barack Obama, Donald Trump and Joe Biden all agreed on: supporting Cuba\u2019s private business sector. Ever since the Cuban government legalized small businesses in the 1990s, Washington has seen the private sector as an actor that could move Cuba toward a more open economy and, as it gains economic power, toward more democratic politics. Last May, President\u00a0Biden promised<\/a><\/strong>\u00a0to increase U.S. support for independent Cuban entrepreneurs, but he has not actually done much so far.<\/p>\n

The Cuban government\u2019s attitude toward the private sector (or \u201cnon-state\u201d sector, including cooperatives as well as private businesses) has been ambivalent. In 1968, seeking a shortcut to communism, Fidel Castro ordered the seizure of more than 55,000 small private shops and banned all private businesses except family farms. For the next two decades, the only private entrepreneurs in Cuba were black marketeers.<\/p>\n

In the 1990s, after the collapse of the Soviet Union threw Cuba into deep depression, Castro grudgingly legalized some forms of self-employment (cuentapropismo<\/em>) because the state could no longer provide jobs for all. But Castro saw the re-emergence of private business as a concession to capitalism and tied the sector up with so much regulatory red tape that it remained economically marginal.<\/p>\n

Ra\u00fal Castro, by contrast, saw the private sector as a dynamic element in his broader economic reform plan to shift the Cuban economy from Soviet-style central planning to a socialist market economy. He widened the scope of businesses allowed, relaxed some regulations, and\u2014perhaps most important\u2014acknowledged the legitimacy of the private sector as a permanent and important part of the economy.<\/p>\n

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Wearing a mask amid the pandemic of the new coronavirus, Cristobal Marquez, owner of “Cristobal’s”, the restaurant where Michelle and Barack Obama had lunch during their visit to Cuba in 2016, shows the book made by White House photographer Pete Souza, in Havana, Cuba, Thursday, Oct. 22, 2020. Photo: AP\/Ram\u00f3n Espinosa.<\/figcaption><\/figure>\n

In 2019, Cuba\u2019s new constitution explicitly recognized<\/a><\/strong> the right of private property and in 2021, the government\u00a0passed a law\u00a0giving private businesses clear legal standing. As a result of this liberalization, the number of private businesses in Cuba has increased dramatically,\u00a0today employing\u00a0a third of the labor force<\/a><\/strong>.<\/p>\n

The impact of U.S. policy on Cuba\u2019s private sector has had its ups and downs as well. When President Obama announced his intent to normalize relations, his first\u00a0regulatory changes<\/a>\u00a0<\/strong>relaxing the embargo focused on helping the private sector. The changes allowed for U.S. micro-finance and business training programs for Cuban entrepreneurs and legalized the import of privately produced goods.<\/p>\n

When Obama visited Cuba in 2016, he met with a group of Cuban entrepreneurs,\u00a0praising<\/a><\/strong>\u00a0their ingenuity and declaring, \u201cAmerica wants to be your partner\u2026 America wants to help you take off.\u201d<\/p>\n

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Barack Obama on official visit to Cuba, March 2016. Photo: Alejandro Ernesto.<\/figcaption><\/figure>\n

But the re-imposition of economic sanctions by President Trump took a heavy toll on Cuba\u2019s private businesses, despite the fact that his\u00a0stated policy<\/a><\/strong>\u00a0was to \u201cencourage the growth of a Cuban private sector independent of government control.\u201d Restrictions on travel and remittances\u00a0deprived Cuban businesses<\/a><\/strong>\u00a0of customers and capital. In a 2019 survey of 126 private businesses in Havana, only about a quarter of which were directly connected to tourism, 80% said their businesses had been negatively impacted by Trump\u2019s sanctions.<\/p>\n

Biden\u2019s Cuba policy<\/strong><\/p>\n

Cuban entrepreneurs celebrated Biden\u2019s election because he promised to return to Obama\u2019s engagement policy. \u201cIt\u2019s really good news for the entrepreneur community in Cuba,\u201d said business consultant\u00a0Oniel D\u00edaz<\/a><\/strong>, \u201cThe private sector was one of the hardest hit by the Trump administration\u2019s Cuban policy.\u201d But when Biden did nothing to change Trump\u2019s policy during his first year in office, some 250 Cuban businesses and entrepreneurs wrote an\u00a0open letter<\/a><\/strong>\u00a0urging him to \u201cresume the path of engagement and normalization.\u201d<\/p>\n

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Photo: Desmond Boylan \/ AP<\/figcaption><\/figure>\n

Biden finally announced a\u00a0Cuba policy<\/a>\u00a0in May 2022, including a pledge to \u201cincrease support for independent Cuban entrepreneurs.\u201d But he has yet to take the practical steps necessary to make that pledge a reality. Here\u2019s what needs to be done:<\/p>\n