Private Industry Grows in Cuba

07/01/2022
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    Even Cuban eateries have been state owned and government subsidized. Now many will operate legally as small, private businesses. (AP/Ismael Francisco)
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    Raul Castro (left) and Fidel Castro in 1964 (AP)
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    This photo shows a 2019 trade fair in Havana, Cuba. A new trade policy in 2021 has opened up more opportunities for private business. (AP/Ismael Francisco)
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    A woman sells handmade goods in Havana, Cuba. (AP/Ismael Francisco)
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    Yurena Manfugas Terry works in her clothing store in Havana, Cuba. ( AP/Ismael Francisco)
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After more than 50 years of banning nearly all private enterprise in Cuba, businesses there have reached a milestone. Individuals can now legally own companies and exhibit their wares—some for the first time ever.

In 1968, the Soviet-style socialist Cuban government took over all private businesses. Many were closed down completely.

Since the 1991 collapse of the Soviet Union, Cuba’s political system and economy have struggled. Cuba has tried to attract foreign investors and expand tourism, despite strict U.S. trade and travel bans. But the country’s government-regulated production remained dismal. Store shelves are sparsely stocked. Even basic supplies are meager.

In the early years after the collapse, dictator Fidel Castro’s government grudgingly began allowing small-scale individual private businesses. But it quickly quashed the surge amid complaints about relatively rich people. A socialist system prizes equality over wealth for all but a ruling few.

With the country’s economy still struggling, Castro’s brother and successor, Raúl Castro, once again opened the door to private businesses in 2010.

More change followed. A new policy took effect in September 2021. The economy was slammed by shortages, pandemic restrictions, and a re-tightened U.S. embargo. The change allows companies to employ up to 100 people. Before, businesses could hire only family members or a few outsiders. The new policy also allows for formal financing and doing business with state organizations.

Within six months, 2,614 of these new “limited responsibility societies” registered in Cuba. Of those, 2,523 are private companies.

This spring, visitors strolled among booths at a Havana convention center. Businesses displayed products ranging from furniture and clothing to glassware and chocolates.

“We’re experiencing something without precedent, at least for our generation,” says César Santos. His company offers electrical installations. “We are seeing other businesses that we didn’t even know existed.”

Restrictions continue, however. The government insists the state will remain the dominant force in the economy. Occupations like journalism are out. Business cannot offer services such as architecture, medicine, or law. And banking, import, and export red tape are still complicated.

Officials hope conventions like the one in Havana help entrepreneurs make contacts to improve company success. For example, a woodworking company found a nail manufacturer.

Many convention participants were young. That’s noteworthy. The island nation has lost many young people through emigration. “The migratory crisis we’re experiencing currently is really sad,” Santos says. He has no plans for leaving. “We are seeing opportunities arising through this private enterprise [policy]. . . . I prefer to bet on building my business in the country where I am.”

Why? The Bible says that working is good. All good earthly work has an eternal purpose. “For what does it profit a man to gain the whole world and forfeit his soul?” (Mark 8:36)