{"id":298085,"date":"2024-03-13T10:40:05","date_gmt":"2024-03-13T14:40:05","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=298085"},"modified":"2024-03-15T14:58:11","modified_gmt":"2024-03-15T18:58:11","slug":"msmes-and-state-enterprises-a-combination-to-achieve-success","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/opinion\/msmes-and-state-enterprises-a-combination-to-achieve-success\/","title":{"rendered":"MSMEs and state enterprises: a combination to achieve success?"},"content":{"rendered":"

A few months ago it was announced that there would be modifications to <\/span>Decree-Law 46\/2021<\/b><\/a> \u201cOn micro, small and medium-sized enterprises.\u201d The objective of the changes is to regulate distortions and adapt the operation of this economic actor, according to the deficiencies detected since the entry into force of the document on August 19, 2021.<\/span><\/p>\n

The new regulations have not yet been promulgated, but in the National Assembly of December 2023, reported by Cubadebate, Prime Minister Manuel Marrero advanced concepts to be taken into account in future regulations.<\/span><\/p>\n

First, the need to \u201cpromote the constitution of joint ventures between state entities and private MSMEs\u201d <\/span>was mentioned<\/span><\/a>. The aforementioned decree did not include the possibility of establishing joint ventures between private MSMEs and foreign companies, as stated in the current Decree-Law, whose complementary regulations have not been approved. This aspect, highly demanded by national MSMEs and foreign businesspeople, for some reason, could completely change the state of foreign investment in the country.<\/span><\/p>\n

Next, the need to \u201capprove the legal regulation that establishes the principles for relations between state and non-state actors\u201d was noted, outlining some aspects of the future regulation, when the following comments from the premier were added:<\/span><\/p>\n

\u201cHow is it possible for a state enterprise to rent its workshops, instead of chaining itself? That is giving up your productive capacity. What future do these workers have?\u201d<\/span><\/p>\n

\u201cWe propose chaining, but true productive chaining. \u2018I have the workshop, the mechanics, but not the parts. And you, from the MSME, have financing to fix machinery and get things going as a whole, distribute benefits, rescue underutilized capacities,\u201d Marrero said at the aforementioned meeting.<\/span><\/p>\n

It seems naive to me to think that private MSMEs will be eager to provide their financing and resources so that the state enterprise produces and manages and the profits are shared between the two. Neither has foreign capital.<\/span><\/p>\n

This idea is based on the erroneous concept that state enterprises only need financing.<\/span><\/p>\n

In the business world, it is often said that entrepreneurs face many problems, including financing; but of those problems, money is usually the least.<\/span><\/p>\n

After establishing an enterprise and providing initial capital, if an entrepreneur has a stable and promising business, a demanded product, a market, income generation, and good profits, financing usually appears abroad without major difficulties.<\/span><\/p>\n

But financing <\/span>an activity in Cuba in which workers are not properly stimulated, in which there are multiple regulations to set capped prices, to obtain profits, difficulties of all kinds to continue paying suppliers and have the financial resources of the enterprise, and many other obstacles…who will want to continue investing resources in business plans that are not very easy to fulfill?<\/p>\n

The existence of factories, workshops, and mechanics does not guarantee the success of a venture, just because someone provides the parts and financing.<\/span><\/p>\n

The MSME \u201cmyth\u201d and bread with croquettes<\/a><\/p><\/blockquote>\n