Importing and exporting in the private sector, produce that leaves, profits that return?

Those who have already taken part in foreign trade services now have a new experience to boost their business and “influence” the national economy.

Since July 2020, when the Non-State Forms of Management (FGNEs) gained access to foreign trade services, this is what has happened. According to figures provided by the Ministry of Foreign Trade and Investment (MINCEX), at the beginning of April 2021, import and export contracts signed by FGNEs amounted to 1,669 and 87, respectively. The ministry also specified a month before that the amount collected with the contracts in the export area reached 5 million dollars.

Unlike the forecasts of October 2020, where several territories with high export potentialities were identified, the panorama has changed. In March of this year, ministerial authorities reported that the provinces with the best results in obtaining foreign trade service contracts were Camagüey, Havana, Ciego de Ávila and Matanzas.

Previously, at the end of January, Vivian Herrera Cid, MINCEX director of Foreign Trade, reported that in four months (probably between September and December 2020), 22 million dollars had been moved through these import and export contracts. “It is an encouraging figure and it shows us that it is possible to insert these forms as clients in the economic fabric of our country,” she stated.

And what a possibility this is! In fact, good examples have been circulating for months. That of farmer Lázaro Fundora and his export of a ton of Persian lime to Spain and another of Catalina avocados to Italy, was echoed in the state media as a resounding success of a cautious experiment.

The speed of his sales was due to the fact that Fundora had already worked on the certification of his lands in order to sell his produce to the Mariel Special Development Zone and to the tourism sector. He already has export contracts for this year, which reflects not only the prestige of his produce, but also the constant demand for it in distant markets from the tropics, and the acquisition of supplies and equipment to improve the yield of his farm.   

According to Orelvis Bormey, a self-employed worker from Villa Clara, the satisfaction of sending 5,000 peanut brittle nougat to Italy, thanks to the guidance provided by CubaExport and its relations with the foreign entity, opened the path to both new income and technological improvements. With the resulting acquisition of freely convertible currency (MLC), Bormey will be able to “make imports that will guarantee the incorporation of technology, which results in the efficiency of the processes and production costs, which then define the sales prices.”   

However, there are many who consider there is a need to review the rules governing the export process, to specify and analyze which services can be managed differently according to their nature. Among them is Bernardo Romero, a self-employed worker and founder of the micro-enterprise Ingenius Cuba, for whom such a definition is essential since at present “services such as software and IT solutions have to go through a very long process, when foreign clients requesting this type of service are looking for operability, speed and efficiency.”    

Given these and other experiences, the debate on whether there is a real need to rely on intermediary enterprises has opened up. So far we know that natural persons can only import objects using luggage corresponding to a traveler, whether accompanied or unaccompanied, or through one of the 41 authorized state entities. However, this brokerage is not always required by the non-state sector and can make invoices more expensive. 

According to economist Oscar Fernández, in this context a third option should be authorized and consists of allowing “the non-state sector to contract directly with the external supplier, at its own risk, without the obligation to submit to the brokerage of the designated importers”; since the participation of state entities that provide foreign trade services “may be essential for the success of the process in many undertakings, but it may also imply an unjustified cost for others that do not need it.” 

Furthermore, and as I mentioned in a previous article, private enterprises can count on more than their ingenuity and individual importing capacity.  Circumventing the economic barrier represented by the blockade and, in that way, boosting areas of the national economy that the State cannot due to the aforementioned obstacle, can become a palpable reality rather than a theory.

Cuban economist, Pedro Monreal, took a close look at this matter a short time ago, and after his observation of the relationship between foreign trade and the private sector, he put forward three considerations in a tweet: a) it is positive, but it would be better without mandatory state intermediation, b) the term self-employed is an outdated euphemism, and c) to think that 87 export contracts “consolidate” something is problematic.

In response to this analysis, self-employed worker, Camilo Condis, affirms that point a): “has serious consequences for imports. We pay the importer in advance, but the importer pays the foreign company that sells me the product when they feel like it, so many companies now do not want to sell anything to the self-employed sector.”

The truth is that, if so few actors have obtained such figures in such a short time, as I explained at the beginning of this piece, much more could be done with full freedoms, without bureaucratic intermediaries, formal recognition and more comprehensive laws.

Apart from these considerations, MINCEX official sources recently announced that ten intermediary enterprises already use the revenue collected through their foreign trade operations with FGNEs through the Transfermovil platform, and that a Resolution related to the general methodology for carrying out foreign trade goods operations is expected to be issued, after which virtual training will be provided to all Cuban enterprise owners. 

The good intentions exist and the dialogue with non-state initiatives seems to be taking a positive direction. Perhaps what still needs to be done lies in the application of common sense, of the understanding of the economic functioning of the market and of the joint progress between the State and the private sector. A path that, far from a setback to the model, will strengthen it and make it more sustainable.



Adriana Heredia (Beyond Roots)

For me the experience was not very positive. Inefficiency, lack of clarity in the mechanisms to follow and little effectiveness in the search for suppliers. I started the process in October and just finished two weeks ago. I went through several importing enterprises such as the Fondo de Bienes Culturales and Consumimport, and it was not until I arrived at ENCOMIL that I felt really supported during the process and I was able to finish my operation in less than a month. 

Sandra Aldama (D´Brujas Jabones Artesanales)

The possibility of accessing foreign trade services is essentially positive, if we look at it from the point of view of the fact that it is the only way that has been established for the non-state sector to acquire raw materials and inputs necessary for our operations.

The experience, at least in my case, has been a test of patience. We started the process for importing raw materials with an enterprise in October 2020, and it is assumed that by mid-June this shipment will arrive. It will be beneficial for us to have that raw material.

The search for suppliers was crazy and the response times or procedures could be more streamlined. Let’s hope that the process improves, since the interests and energies of the parties in this equation are not advancing at the same pace.



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