Cuba’s Private Sector Readies for Government Offensive

“And constant faith in victory.” (Raul Castro, July 14th 2017)           

By Vicente Morin Aguado        

A local where self-employed vendora are allowed to sell.

HAVANA TIMES — Raul Castro dedicated the heart of his latest speech – at the National Assemby – to the self-employed sector which is considered to be a motor for the economy, but as fishermen say, there are people who fish and then get scared of fish eyes.

Opening his speech, after the long paragraph before his attack, the leader argued his case. “Divergence from the laws established within this sector and the abuse of legal regulations currently in force, such as using raw materials and equipment from illegal sources has been made evident. Likewise, under declaring income so as to avoid paying tax and shortcomings in state control at every level.”

Tax evasion isn’t anything new in this world, it usually only becomes news when somebody famous does it, like let’s say Al Capone in Chicago in the ‘30s and now, Cristiano Ronaldo. Referring to “illegal” activities, in the case of raw materials and equipment, even though the backdrop to this problem is known, the leader himself offers us a clue when he says:

“There are testimonies of cases where the same person already has two, three, four and even five restaurants. Not in one province, but in several, a person who has traveled over 30 times to different countries around the world. Where do they get their money from?”

The same question would be valid for his nephew Tony Castro who spent a summer in Bodrum, Turkey, but let’s not get off the main subject of our comment.

It’s clear that a thorough reforms process applied to the economy will call for the corresponding legal framework to be reformulated, which has never happened in Cuba because this would mean accepting the end of the Socialist invention which is currently in force. Therefore, running several restaurants, a sign of financial prosperity in any other country, is considered “illegal” here in Cuba. The same can be said of a successful business person who repeatedly travels abroad in search of those items that are inexplicably said to exist outside of the Law.

The Castro idea of self-employment is limited to letting some steam out of the pressure cooker without modifying its content, that is to say, in true Lampedusa style, everything must change so that everything can stay the same.  All we have to do is interpret the question Raul asks himself in this recent speech: What is the State doing, especially a Socialist State, running a barber shop with one, two or three chairs…?

Small businesses will be allowed, but it seems to be an absolute insult to Cuban socialism that self-employed entrepreneurs and cooperatives are able to make a chain of barber shops work financially-speaking, not even a beauty salon whose services exceed the inefficiency accumulated in Cuba over the last half of a century.

There is some logic in the Cuban leader’s understanding of this; it’s the same thing as putting a glass with crystal clear water next to a crude glass vase with cloudy water.

At least Raul Castro has formally assumed the main responsibility of the negative consequences of these faint reforms. Maybe at 86 years old, he isn’t up for daring to be a Deng Xiaoping and that’s why he has gone back on himself and asks: “Whose mistakes are these? – cooperatives, small private businesses, self-employed workers – Us, mainly.”

His repeated confession is a warning that self-employment will continue to exist in formal terms but it’ll be something else in day-to-day living. Non-governmental cooperative and other small businesses outside of the government’s direct control will face a great “legal” attack, stemming from the deliberate, individual interpretation of the legal framework that is called “socialist”, which was created when the self-employed work didn’t exist in Cuba.

A telling example: the state maintains the right to hold a complete monopoly on foreign trade, which openly clashes with the progress of Cuba’s national market for consumer products – clothes, shoes, electrical appliances and other things – as small private businesses have proven themselves to be much more efficient than hard-currency stores.  Communist reasoning, in true Castro fashion, is demanding that this emerging market be nipped in the bud.

If you want more of the same, all you have to do is remember the government’s negative response for any kind of direct funding from abroad for cooperatives and/or small private businsses, an intiative which clashes with the other well-established Cuban State monopoly, the banking system, which is repeatedly incompetent.

Nothing can therefore be expected from this ruling elite who have aged in power.  The historic leadership of Fidel’s Revolution has never assessed their mistakes, which have been many and cost many millions in financial terms, as well as being disastrous for the social strata in a country that is lacking a functional economic system.

We are left with the current leader’s humble confession, faint because he doesn’t go into any details: “Mistakes are mistakes, and they are our own mistakes, and if we are going to measure them against the hierarchy among us, these mistakes are first and foremost mine…”

Run, there’s soup!

If, the all-powerful Head of the Socialist State voices his opinion in such a sincere manner, self-employed workers can expect an offensive of custom officials, inspectors, police visits and other government officials, which arise from laws that not one of the 614 “lawmakers” in the Assembly who listened to Raul, dared to question.

I will write a second article about this reality we live everyday.  For now, we are left with these words lingering on the General-President’s breath “And constant faith in victory.” (Raul Castro, July 14th 2017)

Vicente Morín Aguado: ememultiplicada@nauta.cu
  • Eden Wong

    This is so disheartening to see and experience. The frustration really is beyond description. It’s absolutely killing the spirit of so many smart, hard working, ambitious Cubans who want the very best for their families and instead of running to the US made the tough decision to stay and make it work in their homeland.

    Being granted permission to finally use your skills to the best of your ability… then having everything taken from you as soon as you get successful… it crushes the human spirit in a manner that’s indescribable. I see it ALL the time.

    That said, to hell with the crooks and scammers who are playing the system. May the full force of the law rain down on them.

    Don’t kill the honest, hard working individuals at the same though. That’s monstrous.

  • Edward Kale

    Thank you for your incisive comments, Eden. In your second article, Vincente, please examine the reality of the wonderful “smart, hard-working, ambitious Cubans” and “the [inevitable] crooks and scammers who are playing the system.” Is there a solution to this disparity? Or is human greed simply too pervasive? I think Cuba has a promising future, but this disparity must be worked out. The question is how.

    • Eden Wong

      “… Is there a solution to this disparity? Or is human greed simply too
      pervasive? I think Cuba has a promising future, but this disparity must
      be worked out. The question is how…”

      Cuba isn’t special. People will ALWAYS try to game the system to their own advantage no matter what the country or nationality. It’s just human nature.

  • Ruben Alberto

    The people in Capitalist countries are shown by indoctrination to buy things that do not last anymore, furniture, electronics, and so forth, by way of the television movies in which the public copies that ways of life in CAPITALIST countries, they do the indoctrination of shown the people that are ignorant to destroy things and its okay, so that companies are endorsed by the media could sell more of these product they destroy. Sure buy a new TV and then next month destroy it because they did in a movie, or a friend did and its funny. The Corporations love it, because they keep the factory worker busy, and the indoctrinated individual enslaved into debt. Everyone is an actor, by copying what the movies do.
    The same goes for the Auto Manufacturing Companies, why are they making a “New Model” every year? Well consider this GREAT CAPITAL, commercial laws, the UCC, and by the way, communist countries made cars every five years, and within five years they worked on the upgrade that the cars would need in between that gap.
    American People -Wake Up!
    Pre-Paid is very simple. The entire economy is pre-paid. Look at it this way: We have a car sitting on a dealer’s lot. You walk up to buy the car. Does the dealer ever tell you “I am glad you are going to buy this car because we have to find out how we are going to pay for this car to be built.” No is the answer you would get, but that is exactly what they are doing when you go to the bank to get a loan. When do they ever build something and then talk about how they are to finance it to be built. The product was paid for when the contract was put in place to collect the industrial recourses through the Army Corp of Engineers, EPA, DOT, and OSHA in Flint, Michigan to build it…

    • editorht

      Ruben, how do your comments on the evils of capitalist countries and their corporations relate to the topic of this article?

    • Carlyle MacDuff

      Well Ruben I guess that you would like the capitalist countries to make their furniture out of re-bar like Cuba? Re-bar is also used to construct bibi-taxis. GAESA makes a lot of money by overcharging for imported TVs. A 40″ TV costing over $1,000 when it can be bought in Canada for $399. If you walk up to the State car lot in Havana, you can pay $70,000 for a 5 year old Peugeot when new ones can be bought in the capitalist world for $25,000. So who is smart Ruben?

  • N.J. Marti

    The old guard is terrified of the success of small business in Cuba. Even barbershops present a danger to the state. The socialist experiment has been one humiliating failure after another. The state and the dim bulbs that try to say otherwise have no credibility against the actual historical facts.

  • Raphael Stephen-Pons

    Glad this is happening, it seems capitalism’s re-establishment in Cuba may not happen. Or atleast it is having a set back.

    • Carlyle MacDuff

      Yet with the next breath Stephen-Pons the Castro regime is seeking foreign investment from capitalist countries like your own. Your opinion merits an article in the North Star News by Trizzle.

      • Raphael Stephen-Pons

        How do you know me?