Cuba is opening up to the private sector. What used to be a four-letter word in the socialist island has now become a necessity. Strangled by the American embargo and a catastrophic administration, barely kept alive by the cheap Venezuelan oil provided courtesy of fellow revolutionary Hugo Chavez, Raul Castro has decided at the end of 2010 to launch a series of long-delayed reforms of which the most important one is arguably the legalization of the Cuenta Propistas. Literally “those who work for them selves” Cuenta Propitiates are the new licensed entrepreneurs in a country where 86% of the population works for the state. More then 400,000 have already obtained their license for one of the 178 authorized professions. The government hopes that by 2015 at least 40% of the working population will be in the private sector, which would mean massive savings for the state and fresh income from taxes.
The reform is indeed injecting some new enthusiasm into a very sleepy economy and an often disgruntled youth. The results vary. In the provincial town of Cienfuegos, Raidel Peñate is making as much as 2,000 USD a month by organizing parties and has eight people working for him, while Eneida Lameiro makes almost 30 times less with her horse-powered taxi and never manages to put money aside. But they are both examples of budding Cuban capitalism.
Problems still need to be resolved. The list for the authorized professions seems penned by the worst Soviet bureaucrat, where the state tries to confine within almost comically narrow limits the possible area of enterprise. So the dawn of capitalism in Cuba includes such codified professions as “used-button sewer”, “fruit peeler”, “seller of animals for religious sacrifices”, “renter of animals for children’s locomotion” and “filler of empty lighters”. So if you have a license as a “gardener for private houses”, this will not allow you to take care of the trees unless you have a specific “dead palm leaf cutter” permit. Furthermore, taxes are not applied as a percentage of revenue but as a fixed amount whether the business is working or not. Supplies in all areas are very difficult to get, since the state is the only authorized importer and prices for goods are the same for wholesale or retail. So, for example, private restaurants, known as Paladars, have very high operating costs.
Economist Omar Everleny Perez Villanieva, director of the Ceec (Centro de Estudios de la Economia Cubana), affirms that Cuba is going from Communism to Gradualism, the doctrine where things get changed gradually.
What is clear is that the license for “Cuenta Propista” is gradually replacing the “Carte del Parito”, the membership card of the party. The same initials, but with very different meanings.