October 22, 2021

Beyond Going Long

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Half a century later, it will be possible to do business in Cuba again.  Dozens of private companies are set up on the island

Half a century later, it will be possible to do business in Cuba again. Dozens of private companies are set up on the island

This week, the Cuban Ministry of Economy approved 32 small and medium-sized companies, which became the first private company on the Caribbean island in more than half a century.

The scope of activities in which a private company in Cuba can do business is limited and can only trade abroad through a state-owned company. El Pais daily reported about it.

So far, only self-employed individuals have been able to do business independently in Cuba, and they also have limited bases in addition to the vastness of the industry. They work mainly in the hospitality industry or as repairmen. Twenty of the newly allowed businesses were founded by these self-employed people, thus changing the form of business.

Changes after half a century

Private companies, which can have up to a hundred employees, are a novelty. The last of these companies were in Cuba in the 1960s, until then-communist leader Fidel Castro nationalized private companies as “a relic of capitalism”.

Experts quoted by El País agree that this is a historic move, although business sectors are limited. Private companies may work not only in healthcare, telecommunications, energy or media, but also, for example, in advocacy or accounting.

About a third of newly certified companies are licensed to produce food. Corporations take the form of limited liability companies and can have any number of partners.

However, one Cuban may not be a partner in more than one such enterprise. A foreign investor may not be a partner either. However, mixed companies can be created with foreign participation, but they must go through a special approval process in the ministry.

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In recent years, the Cuban economy has been in deep crisis, exacerbated by the resumption of sanctions by his successor, Donald Trump, after the warming of Cuban-US relations under US President Barack Obama.

Releases to pets

Later, the island’s crisis, dependent on tourism, was exacerbated by travel restrictions during the COVID-19 pandemic. Many Cubans blame the communist government for shortages of basic goods and blackouts, which are justified by the US economic embargo imposed since the 1960s and new US sanctions imposed by Trump.

According to El País, small and medium-sized private enterprises were allowed in 2011 through the Sixth Congress of the Cuban Communist Party, which remains the only political party permitted in Cuba.

However, the relevant laws were not approved by the government until this year. This summer, for example, Cubans were also allowed, until the end of the year, to bring in an unlimited amount of medicine, food and hygiene supplies from abroad for their own use.

According to some analysts, the government is trying to stave off more mass protests. It erupted in July of this year, and in addition to the miserable long-term standard of living for a large part of Cubans, the much worse epidemiological situation with COVID-19 contributed to it as well.

Another major protest is scheduled in Cuba on Monday 11 October – a national strike to release political prisoners and end repression against critics of the regime.