Cuba moves to safeguard monopoly on imported goods

Cuba moves to safeguard monopoly on imported goods

By Marc Frank

HAVANA | Thu Sep 26, 2013 4:10pm EDT



(Reuters) - Three years after opening up retail services, Cuba tightened

the reins on Thursday with new regulations aimed at stopping the sale of

imported goods at lower prices than those offered by the state.



In 2010, communist-run Cuba allowed retail services in the form of 200

individual activities from clowns, seamstresses, food vendors, taxis and

the building trades, to small businesses such as restaurants,

cafeterias, bed and breakfasts and home-based movie theaters.



Enterprising residents have taken advantage of some of the categories,

for example seamstress and household supplies salesman, to offer

imported clothing and supplies in greater variety and at lower cost than

the state.



Others buy out available supplies at state stores and resell them at

higher prices, which is also banned by the new regulations.



Cubans appeared to oppose restricting the sale of imported goods, but

support putting an end to reselling local products.



"I am against the import ban. I can't tolerate the shoddy clothing the

state stores sell, they are very expensive and of poor quality," said

Xiomara, a Havana nurse who like others did not provide her last name.



"At the same time, things like plumbing and electric supplies, that they

buy in the stores to resell at twice the price, that's unbridled

robbery," she said.



The opening to small business, along with loosened travel restrictions

between the United States and Cuba, has led to a flood of items being

brought into the island by travelers. These items, from spices, sauces

and beauty products to clothing, hardware and household goods, often are

not available locally or are sold by the state at a minimum 240 percent

markup.



Thousands of people currently sell the imported goods from their front

yards, porches and living rooms in competition with state-run outlets,

and many more go door to door without a license and avoid paying taxes.



A year ago, the state dramatically increased customs duties on travelers

with the apparent aim of protecting state-run stores from the growing

flow of merchandise imported informally.



KEEPING STATE MONOPOLY



Thursday's measures were first announced at a July parliament meeting by

the head of the Communist Party's economic reform commission, Marino

Murillo, who estimated some 20,000 mom-and-pop businesses, out of more

than 300,000, would be affected.



The measures appeared aimed at protecting the state's monopoly on the

wholesale and retail sale of goods.



The new regulations, which were published in the official Gazette on

Thursday and become law in 30 days, are aimed at "a better regulation of

this form of non-state management" opined the Communist Party daily,

Granma. It said there were now 436,000 self-employed people, of which

around 100,000 work at small businesses, according to the government.



The regulations include a new list of authorized types of

self-employment and their descriptions, with the addition of phrases to

stop the resale and importation of goods.



For example, the description of a seamstress now has added, "does not

include the sale of manufactured or imported clothing," and the

description of household goods salesman states, "does not include

articles obtained from retail stores or imported (electric appliances,

furniture, clothing and shoes, among others)."



Jose, a 45-year-old who sells household supplies from his porch in

Havana, said the measure might lead him to close down.



"I sell a lot of locally crafted things, but also stuff from abroad.

There is no doubt they have closed the door on me, and if I can't

balance the books I'll hand in my license," he said.



Since taking over for his ailing brother, Fidel, in 2008, Raul Castro

has pushed for the "modernization" of the state-monopolized economy,

promoted some types of small business and farming, including

cooperatives, and lifted some onerous restrictions on daily life in the

Caribbean nation, such as travel restrictions.



Currently, 78 percent of a labor force of 5 million works for the state

and the remainder in the non-state sector mainly work in retail services

and farming.



(Editing by Jane Sutton and Doina Chiacu)



Source: "Cuba moves to safeguard monopoly on imported goods | Reuters" -

http://www.reuters.com/article/2013/09/26/us-cuba-reform-idUSBRE98P0WD20130926