Private Enterprise in Cuba: Two Stories and Why They Matter

https://www.attorneycuba.com/files/2017/08/cuba-professionals_f2c47df30835a792b5d71fbab64cc18e.nbcnews-ux-600-480-300x197.jpgProfessionals in Cuba are in limbo as the Castro government decides how much to loosen its firm grip on private enterprise. The private sector has seen tremendous growth over the past decade, with private employment rising from 140,000 in 2009 to 535,000 in 2016.

At the same time, Cubans working for the state at a rate of $25 or less per month have been flocking to slightly more lucrative private sector jobs, such as waiting tables and driving taxis. Those are not exactly the types of jobs that young, ambitious Cubans are thrilled to take, but unskilled jobs aren’t the only ones opening up. As Cuba finds its way, opportunities for professionals come and go.

Take Agora, a design firm owned by three young to middle-aged Cuban architects who graduated from Jose Antonio Echeverria University in Havana. All three men once worked in low-paying state jobs upon graduation, which is a trend with graduates. Since state jobs pay so little, many flock to higher-paying unskilled jobs in the private sector. But the founders of Agora took a risk in founding their firm and made a winning bid for a coveted government contract to renovate the median strip of Calle Marti. As government workers put the finishing touches on the project, the founders of Agora look forward to future possibilities.

Agora is far from alone in seizing the opportunity to shift to the private sector,  but the degree to which Cuba’s government is willing to allow the private sector to grow is still a toss-up. Scenius, a cooperative of accountants, was shut down earlier this month due to accusations of “serious and repeated violations.” The Ministry of Finance and Prices claiming that the cooperative was carrying out work that didn’t appear in their company mission.

Scenius denies the accusations as they await an uncertain future. The cooperative was created in 2015 with just 3 people and $300, and has grown to a size of over 200 associates with a worth of over $2 million USD. As it stood before the shutdown, Scenius was among the largest and most successful cooperatives in Cuban history. This seems to draw a line in the sand for the amount of success that the Cuban government is comfortable allowing for a cooperative.

Alfonso Larrea, the commercial director as Scenius, remains optimistic about the future. The cooperative is challenging the government’s decision, claiming that “there are legal provisions that back our work.” Larrea doesn’t believe that this action is a curb on the reforms process, but rather a “restructuring,” and that the government is grappling with business regulation in Cuba and how to accommodate different needs for different businesses.  After all, non-agricultural cooperatives such as Scenius were only legalized a short 5 years ago.

Agora and Scenius both provide their own glimpses into the future of Cuban private enterprise. The potential for Cuba to grow into a more modern economy, with opportunities for young professionals, is most certainly there. But for now, we’ll just have to wait and see.

Sources:

Cuba’s Castro faces tough choices on the island’s fledgling economy –  The Hill

Cuba Grapples With Professionals and Their Economic Future – NBC News

Cuba Gov. Shuts Down Accounting Cooperative – Havana Times