Cuba bustles with small business year after reform

HAVANA – A year after reforms opened the door to more small business, Cuba has seen a flourishing of new shops and services despite problems of bureaucracy and a difficult transition for many on the communist-ruled island.

The urban landscape is dotted with new independent hairdressers, tailors, watchmakers, cooks, plumbers and other independent professionals in a system where until recently nearly every profession was tightly regulated by the government.Although some still operate clandestinely, many others have taken advantage of a reform enacted in October 2010 that aims to encourage more private enterprise while the regime slashes government jobs and tries to preserve its socialist principles.The number of private business operators has hit more than 333 000, above the expectations of the authorities, from 148 000 in 2010.Last year, President Raul Castro’s government vastly expanded the number of sectors where private enterprises can operate, with 181 professions now open.’I used to sell on the black market but I was always living in fear of the police,’ said Felix Sanchez, who has a small stand selling pirated CDs, which ironically have been legalised in Cuba except where there are Cuban copyright holders.The expansion of the private sector was the main plank in reform plans endorsed at the Sixth Congress of the Communist Party, in an effort to reform a Soviet-style economic model and revive a stagnant economy.The government says there is no turning back, and that this situation is different from the timid reforms applied after the crisis of the 1990s triggered by the collapse of Soviet Union and its socialist bloc.Much of the new private sector activity is fuelled by remittances of hard currency from relatives abroad, notably from the United States.A survey by the Catholic Church showed that 57 per cent of Cuban families receiving aid from the United States and other countries have invested or want to invest in business.Some Cubans say the process is hampered by government inspectors who want to verify the legal origin of goods being sold. Many of these are imitations of major global brand merchandise.Cuban authorities hope the reforms will help a reinvigorated private sector absorb the more than one million public employee jobs that are to be slashed by 2015.But the process is hampered by the lack of a private wholesale market, considerable bureaucratic red tape and high taxes on independent businesses. In Havana, nearly one quarter of the new business owners gave up after struggling with these obstacles.Maira Ibarra, 55, opened her small cafeteria ‘Dona Maira’ at her home in the Vedado section of Havana, but closed up to return to here job at a state-owned company in the tourist sector.’I did not have enough customer and I could not make it,’ she said. ‘I was not able to survive but this opening seems to be a good thing, it gives people opportunities.’In September, the government gave new impetus to the reforms by cutting the tax rate, and expanding the number of places from 20 to 50 in the private restaurants knows as ‘paladares’. Until the reforms, these restaurants had been limited to 12 places, could only employ members of the owner’s family and could not serve beef or seafood.Official figures show there are now 1 438 ‘paladares’ in Cuba including 368 in Havana. But the market remains limited, with few Cubans able to afford US$20-US$30, the equivalent of a month’s salary for many, for a meal. – Nampa-AFP