|Photo by Jeison Higuita |
15th February 2021
Cuba’s Council of Ministers has approved and published a list of more than 2,000 forms of employment that in future can be undertaken by the country’s embryonic private sector.
The announcement, which had been expected, confirms that Cuba’s non-state sector is likely to grow and will be given new freedoms, albeit within government guidelines and regulations. The intention is to encourage non-state economic actors to create new forms of employment, raise the country’s tax base and compliment and integrate their business activities, where possible, with those of state enterprises.
Speaking on the radio and television programme Mesa Redonda, Vice Prime Minister, Alejandro Gil, the Minister of the Economy and Planning, said that there was “nothing improvised” about the decision. In his remarks Gil stressed that widening of private commercial activity was not in response to the difficult economic situation Cuba presently finds itself. “On the contrary”, he said, “self- employment is incorporated into our economic model, in the Party’s guidelines and is part of the economic and social strategy”. “We start from a base: the economy is only one. We don’t have a state and a non-state one. We are taking steps so that the Economic Plan recognises all economic actors. There is no they and no us. We are all one and, in that sense, everything we do to improve self-employment is on the positive path of incorporating new potential to solve the problems of the economy”, the Minister told viewers. Noting that Cuba’s economic scenario was radically changing because of the economic ‘reordering’ now underway, he said that unification of the exchange rate had created “more favourable conditions to promote larger transformations, both in the state and non-state sectors” including in relation to selfemployment. In his remarks he stressed that the transformation in self-employment would see the issue of approvals made more flexible, offer greater opportunity for the delivery of projects, and that such activities would be spoken about “with positive language”.
The list opens new opportunities in manufacturing and services and will make legal many activities already undertaken informally by Cuban businesses including for example software development and clothes design. It is also expected to enable non state cooperatives and entrepreneurial individuals to establish manufacturing operations for food processing, become suppliers to state industries, and provide items for the domestic market such as toys and clothing. Less clear is whether there will be an upward limit on the long-term growth of such companies in terms of numbers employed, capitalisation or market share.
Previous announcements by the Minister of Investment and Foreign Trade, Rodrigo Malmierca and senior officials have made clear that foreign investment is likely to be encouraged in some private ventures if they enhance import substitution and exports. The terms and possible restrictions are not yet known (Cuba Briefing 14 December 2020). It is expected also that a law to give legal status to small and medium sized enterprises will be introduced in 2022.
Under the new regulations Cubans will also be able to operate more than one type of business within their enterprise. This will, for example, allow those renting rooms to also provide meals. In addition, all self-employed workers, according to Minster of Labour and Social Security Marta Elena Feito, will have to re-register and those seeking to open new businesses will have to submit their projects for authorisation.
At present some 0.6m Cubans work in the non-state sector although many who do are also employed in the state sector. The new measure in part responds to the up to 0.3m state workers that Government estimates will become unemployed because of the removal of subsidies as a part of the process of reordering the economy. At present some 0.25m workers have temporarily deregistered as selfemployed because of the economic downturn due to the pandemic and the absence of tourists.
The published list of prohibited activities can be found in Spanish at http://media.cubadebate.cu/wpcontent/uploads/2021/02/Anexo-No-1.pdf
It is divided by sectors of the economy covering for example agriculture, energy, and manufacturing. Described as ‘provisional’ it expressly excludes activities that the state will retain including sugar, tobacco production, the media, and the work of professionals including architects, engineers, doctors, and scientists. In addition, more obvious areas of state activity relating to healthcare, education, communications, and defence are excluded.
In his concluding remarks, Gil told television viewers, “it seems to us that we found the right path, but it has not been an easy task”.
Observing that “there is a lot of talent in Cuba and many people with the capacity to contribute”, he said that the intention is to “unite all of the economic forces in the country” to “achieve productive chains between the different economic actors”. “We know that the non-state sector is in a position to make a favourable contribution to this strategy ”, Gil said.
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