Friday, January 27, 2017

Cuban entrepreneurs dream big but the government is in their way

Cuban entrepreneurs dream big but the government is in their way

Like entrepreneurs in any country, Cuban entrepreneurs want more access
to resources and fewer bureaucratic obstacles to expand and reinvest in
their businesses, according to a new study based on interviews conducted
on the island.

"I would like those who govern to begin to think more about how to make
life simpler for citizens and less how to preserve the [government]
precepts that have been proven to offer only hardship," says a private
real estate agent, who was among the 80 Cubans interviewed for Voces del
cambio en el sector no estatal cubano (Voices of Change in the Cuban
Non-State Sector).

The study, spearheaded by Cuban-born economist Carmelo Mesa Lago,
includes interviews from Havana and surrounding provinces that were done
without government approval. It is focused on four segments that are
part of the so-called "non-state sector" of the Cuban economy, still
highly centralized and controlled by the state: the self-employed;
farmers who use state-owned parcels; corredores (brokers) of home sales;
buyers and sellers of private homes; as well as workers of non-farm
production and service cooperatives.

Among those interviewed are coffee shop owners and hairdressers; sellers
of religious products for Santería; a chauffeur for rental cars used for
weddings; massage therapists; photographers; and homeowners who rent to
tourists. Absent from the study, however, are the owners of private
restaurants known as paladares, which Mesa Lago attributed to the
difficulty of accessing these entrepreneurs who, in many cases, function
on the edge of legal bounds and do not want to attract attention to
their business.

Among the great surprises of the interviews, he said, "was discovering
the very high level of reinvestment that the self-employed engage in.
Most, including those renting apartments and houses, reinvest."

Another interesting section of the study, published in bookform by the
Ibero-American publishing house and which is expected to have an edition
available in Cuba, summarizes the main problems and aspirations of those
interviewed: "One of the main barriers that they mention, and there was
an impressive unanimity in this, is the level of state interference,"
Mesa Lago said.

The prospects for a booming private sector have not changed much since a
similar study, conducted by professors Ted Henken and Archibald Ritter,
found that high prices for supplies, the absence of a wholesale market,
high taxes, and over-regulation hindered the development of Cuban

The overwhelming majority of respondents in the Voces study also
expressed their frustration with obstacles to move their business or
work forward — from high prices of raw materials and supplies, low wages
and bureaucracy, to poor access to the internet.

The so-called cuentapropistas were at the center of policy changes
toward Cuba by former President Barack Obama. He met with them in Havana
during an unprecedented visit to the island last year and issued
executive orders to promote the export of their products to the United
States and for them to import products from the U.S. But the Cuban
government put up roadblocks, Mesa Lago opined, because it sees the
development of cuentapropistas with "reluctance," which is why the
private sector is becoming "stagnant." The absence of further reforms
during the Communist Party Congress in April filled the self-employed
with disappointment.

"The way of thinking has to change, not just our own, but of the people
who govern us," said a cooperative partner interviewed in the study.
"They have to give us more freedom to grow, to continue to cooperate."

Another unexpected result of the study was the high degree of
satisfaction expressed by those who have decided to start a private
business in Cuba, which has allowed them to gain autonomy and live
better than those who depend on state wages.

Mesa Lago warned that the study has limitations and is not intended to
be scientific. The sample, the economist said, is small and not fully
representative of a private sector comprised of the self-employed and
other workers. By including both entrepreneurs and other workers in the
non-state sector and even home buyers, the survey could not be
homogeneous and not all respondents answered the same questions. So any
quantification or statistical analysis should not be taken as conclusive
but as a starting point to gather more information on the subject.

The Cuban government has drawn up surveys for the self-employed but
their results have not been published, Mesa Lago said, so the book
"fills gaps in information about issues we did not know about, such as
the characteristics of race and gender" in these sectors. Of those
interviewed, 76 percent were state workers before launching their own
business, 80 percent of all respondents were white, and 74 percent were men.

Although the sample is predominantly white, the quantitative analysis in
the study found no significant relationship between skin color and other
variables. Other scholars such as Alejandro de la Fuente have pointed
out that the Afro-Cuban population is at a disadvantage in the emerging
private sector compared with whites — who receive more remittances and
support from abroad.

However, the same characteristics of the Voces survey, the
under-representation of blacks and mulattoes in the official Census and
the absence of official data on race in relation to the labor market,
make it difficult to draw definitive conclusions on the subject.

Still, Mesa Lago emphasized the informative value of the study in a
context where gathering this information independently of the State is
extremely difficult and people are reluctant to provide personal

"We tried to see if we could do a survey with 200 people and it was
impossible," he said. "Even among the cooperatives we could not do the
25 interviews we planned. Nobody wanted to talk because the cooperatives
depend on the state.

"The state decides that they will become cooperatives and workers have
no choice, he added. "f they do not agree they are fired, then they do
not dare to speak."

Source: Cuban cuentapropistas want government obstacles removed | Miami
Herald -

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