The new era of private companies begins in Cuba

RIO DE JANEIRO, BRAZIL  – With the same patience with which she has been weaving vegetable fiber furniture for 25 years, Mirna Rivera studies the requirements that the Cuban government applies since Monday to those seeking to set up private companies, weighing whether it is in her best interest to transform her hitherto prosperous family business.

“We know about small and medium-sized businesses, but we don’t have enough information to get into a company,” Mirna, 49, told AFP.

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After years of waiting that provoked disbelief among citizens, the government finally enacted the laws on the operation of micro, small and medium-sized enterprises (MSMEs), state and private, and those of non-agricultural cooperatives, which were halted four years ago.

On Monday, 75 applications were received. “Perfect start”, commented the Minister of Economy, Alejandro Gil, on Twitter.

Scissors in hand, Elsa – Mirna’s sister – weaves baskets while Angel La Rosa – her nephew – uses his skill and a knife to remove the shell of the guaniquiqui vine and then rub it against the guayo (kitchen grater).

The fiber of this tree and some wood are the basis of the armchairs, tables, baskets, and headboards that they make.

“It’s a family business, we work here with about 20 or 25 people, and each one works individually, each one makes his or her piece of furniture to order,” Mirna explains.

In the absence of private companies in Cuba, each one operates with a self-employed license.

They live in four adjoining houses and come from the eastern provinces of Santiago de Cuba and Holguin, where an uncle learned the art of furniture weaving from a Vietnamese emigrant.

They live and work on a high hillside of the busy Vía Blanca Avenue, which Havana residents call “the Malecón without water”. There, passersby admiringly discover the row of furniture, and some stop to buy.

DEVASTATING

Private MSMEs disappeared in Cuba in 1968 when Fidel Castro began to move into the Soviet state model and nationalized them in the “revolutionary offensive”.

But he had to step back after the disappearance of the communist bloc and, as of 1990, allowed self-employment, foreign investment, and the opening to international tourism.

In an economy that is still 85% state-owned, a large part of the more than 600,000 self-employed – engaged in services: restaurants, transportation, and equipment repair – should be the primary source of private MSMEs.

But the Covid-19 pandemic caused the worst economic crisis in Cuba since 1993 and had “a devastating impact on the private sector”, as more than 250,000 people temporarily suspended their work due to the absence of tourism, explained Oniel Diaz, leader of the Auge consulting firm, to AFP.

Mirna laments: “The pandemic has affected me a lot. The problem is that we have no material”, due to the impossibility of traveling by truck between provinces to look for raw material.

The younger ones go alone to the fields “to see if they can get a little bit of material, a little bag, two little bags, and with that, we are now surviving,” she adds.

According to Díaz, this adversity, however, contributed to “a reconfiguration of the enterprise”, pointing to the production and technology businesses, which “existed hidden in several licenses that were insufficient to cover them” but which now have an opportunity as enterprises.

In a small room of four square meters at the back of his house, Abel Bajuelos, a 42-year-old percussionist turned digital fabrication specialist, engages in what is popularly known as “3d prints”.

He manufactures “everything that fits inside the machine”, which includes various parts and even exact reproductions of damaged human bones, so that doctors can study the solutions before surgery, saving time and increasing effectiveness.

Self-employed, Abel has already submitted his application for a six-person microenterprise.

A 25-day deadline is expected for the response, but many applicants are skeptical due to the usual slowness of Cuban bureaucracy. There is also concern about the lack of credits to support these projects.

The government seeks to prioritize food production enterprises, the export of goods and services, local development projects, the circular or recycling economy, and technology-based businesses.

“The important thing is that it is irreversible, now we have to work,” comments Abel, who a few weeks ago received a visit from the president of Cuba, Miguel Díaz-Canel, whose government advocates the development of science and innovation.

“I think the president is touching with his hand wherever this can flourish,” says the entrepreneur.

Source: AFP