Self-employed Cubans real entrepreneurs?

Self-employed Cubans real entrepreneurs?

AAP



Entrepreneurship has many faces in Cuba today, from street vendors who

sell skimpy tube tops purchased at Miami discount stores to the

chauffeur of an improvised bicycle taxi to the operator of a

white-tablecloth private restaurant with the tips already included in

the bill.

But while the government initially declared that it wanted to move

500,000 Cubans off state payrolls by April 2011 and another 800,000 by

the beginning of 2012, it has fallen far short of those targets.

And there is a vast grey area in this world of so-called

cuentapropistas, where the self-employed function on the fringes of

legality, key elements that would lead to successful small businesses

are missing and broad questions remain about how the program should go

forward in a communist country.

There's also disagreement about whether Cuba's flirtation with private

business represents a path toward true entrepreneurship or has simply

resulted in reinforcement of a shadowy informal economy where

cuentapropistas bend the rules in order to survive.

At the end of May, nearly 430,000 Cubans in a workforce of five million

were self-employed, according to a report from the Cuban Ministry of

Labour and Social Security. But not all of them are furloughed

government employees.

Some 14 per cent were retired, meaning they didn't switch from current

state employment to working on their own, and analysts say a significant

number are probably former black marketeers, who are used to operating

outside the bounds of state control, or workers who have held on to

their state jobs but want to earn extra money on the side.

"So far, it's been more of a legalisation of the illegal economy than

creation of a small business class," said Ted Henken, a Baruch College

professor and president of the Association for the Study of the Cuban

Economy.

Self-employment is permitted in 181 economic activities, and 18 per cent

of cuentapropistas are employed by small private business owners. In

other fledgling attempts at private business, scores of nonfarm

co-operatives - most of them former state companies - have been

launched, and private farmers are now cultivating once-idle public land.

The budding private sector is mainly a service economy. The most popular

activities are selling and preparing food, transportation of cargo and

passengers, renting homes and selling agricultural products on the

street, according to the Ministry of Labour and Social Security.

Karina Galvez, an economist from Pinar del Rio, agrees that the recent

changes aren't necessarily things the government wanted to do, but says

the economic situation as well as pressures from Cuba's nascent civil

society obligated the reforms.

Speaking at the recent meeting of the Association for the Study of the

Cuban Economy in Miami, Galvez said that many of the self-employed have

to "break the law" to make a living because taxes are so high and many

self-employment activities still aren't allowed, including freelance

work by lawyers, accountants, architects and other professionals.

Some of the new entrepreneurs have resorted to bribing inspectors to

avoid high fines for violations, said Galvez, who is also one of the

founders of Convivencia, a digital magazine.

"In Cuba, everyone commits illegalities in their business," said Antonio

Rodiles, a Cuban political activist who has created a forum for public

debate through his Estado de SATS movement.

One of the most common infractions, he said, is stealing electricity

because utility bills are so high.

"At this point, self-employment is failing," he said.

Many of the cuentapropistas are dependent on the black market to supply

them, and instead of the emergence of a small entrepreneurial class, he

said, what is happening is the encouragement of an informal or

underground economy.

But Galvez said she believes the self-employed prefer to operate legally.

"This gives me hope," she said. "I believe in the force of la pequena

(small)."

Jose Luis Leyva Cruz, a professor at the University of Camaguey, also

has embraced entrepreneurship with a project he calls "DLideres," whose

goal is to develop entrepreneurial leaders in Cuba. Lacking another

space, the organisation held its first meeting in front of his home in

Camaguey.

He outlined DLideres' goals during the ASCE meeting: Develop networks of

entrepreneurs and intellectuals, provide training in leadership and

technology, develop a digital magazine called @emprenda, and connect

international patrons with Cuban entrepreneurs.

"In Havana, you see a lot of successful entrepreneurs who are creating

jobs or innovating," said Henken.

For example, some of the more sophisticated paladares (private

restaurants) have live music, well stocked bars and gourmet fare.

"There is a new class of high-quality gourmet restaurants mainly

surviving on their owners' ingenuity," he said.

But, Henken added, some of the more established enterprises "may have

some form of protection" and are run by former military or government

officials.

Many self-employed people are "still trapped in survival mode with very

low productivity," Henken said.

"And a lot of corruption is caused by unworkable, antagonistic rules the

government has put in place."



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