Good News for Cuban Entrepreneurs, But When Exactly…?

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Cuba has seen many changes in the last few years.  With the slow and steady influx of tourism from the US and a regime change, Cuba is gaining momentum as it turns toward more laissez-faire policies.  On a day-to-day level, these changes in policies have manifested themselves as a healthy crop of privately owned establishments–bars, hotels, and nightclubs are booming as Cuba’s private sector grows.

However, last week saw a brief halt in operations when the government instituted a temporary freeze on new licenses for a few of the more prominent private sector enterprises–room rentals, cafés, and restaurants, to name a few.

All hope is not lost.  On Tuesday, the Cuban government announced that the recent suspension will be lifted after “not a very long time,” according to local media sources.  Exactly how long is a “not very long” amount of time? That remains to be seen.  

The Cuban government’s communist past has earned it something of a reputation for working at a very relaxed pace.  The layers upon layers of bureaucracy in the Cuban system have made something as simple as applying for a restaurant license into a process that can take months or even years.

However, as Cuba pushes forward into its future as a hotspot for tourism and an attractive option for other new economic connections with the US, the Cuban government has grown aware that the world’s eyes are on them. Their internal processes must hasten to “keep up” with the rising demands that come with an elevated position in the world economy.

This announcement comes with the intention to reassure independent contractors and self-employed persons that everything will be right as rain in a more “normal” period of time, according to Marta Elena Feito, Deputy Minister of Labor and Social Security.  To be more specific, “We are not talking about a very long period of time, we are not talking about years, we are talking about a normal work process for the approval of these rules,” said Feito.

According to Feito, the ban came as a response to suspicious activities regarding “raw materials.”  Essentially, the government was responding to evidence that a large number of these new private sector businesses are supplied by “black market” farmers and other kinds of agricultural producers. No one is paying taxes on any of these transactions.

Although the ban was (and is, ostensibly) intended as a temporary measure for most, it does not come completely without consequence.  According to the Havana Times, “Numerous people, including residents, emigrants, and potential returnees, found overnight that their plans to invest in a small business on the island had disappeared.” Additionally, the Cuban government will no longer be issuing licenses to “wholesale sellers of agricultural products,” though entities who held such licenses before the ban will be able to continue their operations.

It is only natural that Cuba’s transition toward a more capitalistic economy with more connections to the world at large will have a few hiccups and bumps along the way. The world, and Cuba, can only hope that this one will pass quickly.

Source: Cuba Says New Business Licenses Will Be Issued – Havana Times