In 2007 the Cuban Government launched its broadest economic reform program to date. These reforms were initially focused on agriculture and rapidly expanded through other areas such as types of property ownership. In 2011 the first official instrument that would serve as guide for all other reforms was adopted: the “Lineamientos” or Guidelines. Other significant documents were approved later in 2016.
The expansion of non-State sector has been particularly interesting during these last few years. Land being granted to farmers and other transformations seeking to develop a new agricultural model; the newly introduced legislation allowing self-employment, as well as the hiring of labor for private enterprises in September 2010; and the introduction of non-agricultural cooperatives have created an adequate environment for the biggest expansion of the private sector since the 70’s.
Regarding the “cuentapropistas”, the current context seems to be different from that of the 90’s in several ways. Now, there are public official documents that state and define the rights and obligations for this sector, even going further by allowing small and medium private enterprises.
Besides the afore mentioned transformations, the reform movement takes place alongside other changes occurring within the Cuban economic model. Such as, those allowing a bigger participation of foreign companies, the creation of a new real estate and automotive market, the elimination of restrictions to move in and out of the country, amongst others.
However, there are still long overdue obstacles to overcome. In August 2017, the license emission for private businesses came to a sudden halt, so far without any information of when it will be resumed. This has created a state of uncertainty and has directly affected those who have invested a significant amount of resources in opening their business in Cuba.
The overall economic situation isn’t that great either. A series of both domestic and external situations have considerably delayed the implementation of policies within the Guidelines, the foundation for the “updating” of the Cuban economic model, and therefore withholding the positive economic effects that were expected.
The Cuban Government has acknowledged that the transformations have practically come to a halt since 2016 due to obstacles from within the bureaucratic State structures and the entering into a more complex stage —considering that the simplest steps have already been taken. The lack of real tangible economic results, along with increasing social inequality (falsely attributed to the private sector) have generated a more difficult environment.
At the same time the external context has changed significantly. If from 2010 up to 2016 Cuba enjoyed a favorable political climate in the Americas, including a series of efforts directed towards repairing Cuba’s political and economic relations with the United States, the situation is very different now.
The return of right wing governments to the region, alongside the change of the American administration, lays out a less friendly scenario. Strong Cuban allies such as Venezuela and Brazil have endured complicated economic crisis thus affecting their cooperation and trade with the Island.
New policies adopted by the American administration in November 2017 , the disastrous consequences of Hurricane Irma along with the Department of State warnings not to travel to Cuba, have created such confusion that the overall number of tourists traveling to Cuba has decreased.
It’s undeniable that the last 10 years have had a positive effect on Cuban entrepreneurship; official numbers speak more than words exemplifying the private sector’s more active role in Cuban economy, while also earning official and social recognition. Additionally, new initiatives are developing displaying the coming of age of the sector, a sector that is ready to face new challenges.
However, certain topics are still pending. First of all, the private sector requires a clearer, broader, and more modern framework to be able to work alongside the country’s institutions. In contemporary Cuba, this translates to: a need for clearer rules and bigger opportunities for local talent.
Communications and information technologies have to be acknowledged as the 21st century’s engine for economic growth and national development. While Cuba has the necessary human resources for this to happen, we lack infrastructure and up-to-date legal frameworks for this to operate efficiently. Demographic dynamics demand a better use of labor force whether it be in the private or the State sector. The greater evil would be continuos youth migration and/or the widening of the informal sector.
It would be naive to think that the new course of action will be free of contradictions but it is possible to come up with a realistic plan that is able to face these contradictions making sure that Cuba and its citizens emerge truly victorious in the endeavor we have embarked upon.
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