Cuba is taking a new step toward bringing down the taboo of private property. In fact, the government intends to legalize small- and medium-sized enterprises to give a push to the weak economy and to favor more foreign investments.
The proposed law came this week in a 32-page document that illustrates a series of initiatives approved by the 7th Congress of the Cuban Communist Party in April. Particularly, the new opening to private enterprise comes from the committee tasked with “conceptualizing Cuban socialism”: to be transformed into law, it must be approved by the Assembly of People’s Power, the Cuban Parliament, scheduled to meet in July.
In a few months we’ll know the details and the times for implementing such an opening on the market, although all observers agree that it’s an important sign of change. It’s a strengthening in the pragmatic line implemented by Raul Castro which, ever since having been nominated as president in 2008, has aimed toward a drastic reduction of the inflated and non-productive public sector in favor of “new forms of economic management,” both cooperatives as well as private. According to the document, the Cuban government will allow “small stores created by the worker and by his family” and “private enterprises on a small, medium and micro scale.”
The measure originates from the “need to mobilize non-state owned resources … in order to increase the production of goods and service and to modernize the infrastructure and the productive system necessary for development.” Given these premises, “the acknowledgment of non-state-owned forms of property and of management contributes to freeing the productive forces.” But the youngest of the Castro brothers has made it clear that these are economic reforms, and they do not imply substantial political reforms, considering that socialism remains Cuba’s political base and that state-owned property will remain the island’s economic backbone.
Actually, on the island, there are a little more than 500,000 cuentapropistas, a euphemism created to avoid the words “private business owners,” abhorred by the Communist party’s current dogma. Together with almost 800,000 small private farmers and the little more than 100,000 workers in the rising non-agricultural cooperative sector, it means about a third of the country’s workforce (5 million workers) are involved in the private sector.
The legalization of the small and medium enterprises will grant equal rights to the businesses, in addition to those already tolerated for the individuals. The half a million cuentapropistas are already entrepreneurs running small businesses — bars, cabarets, restaurants, guest houses, transportation. But their activities are not legally recognized as enterprises. Therefore, the small-time Cuban entrepreneurs don’t have permits to import the products they need and have to purchase from state-owned sellers or the black market.
Allowing private property should facilitate the development of a private sector, mired by bureaucracy and by the lack of a wholesale market to guarantee its profitability, a step which to many observers was unthinkable before the relations with the United States started to warm up in December 2015. During his visit to Havana in March, President Obama made it clear that the measures taken by his administration to weaken the embargo were aimed, most of all, at strengthening Cuban society.
The strongest objections to the normalization come from Republican politicians connected to the exile community in Florida. They say Obama’s policy rewards the state and, therefore, “the Cuban regime,” given that more than 70 percent of the island’s economy is state-owned. The new Cuban bill, therefore, contributes to strengthening Obama’s position, which, according to recent polls, enjoys of the favor of the majority of the U.S. population and is also gaining popularity in Congress.
On Thursday, the American coalition against the embargo, Engage Cuba, has predicted that the “Law for the freedom to travel to Cuba” jointly submitted in January 2015 “might be approved within the next two months” and already has the support of 51 out of 100 U.S. senators.
