Raul Castro’s ‘reforms’ sinks its teeth into Cuba’s small businesses
Sort of like fattening up the calf before the slaughter. Not to say we told you so, but... we told you so.
New import fees to hammer Cuba’s small businesses
Cuban small businesses, most of which work with goods that arrive with travelers or in shipments from the United States, are experiencing higher import fees from the government, which the businesses intend to pass along to customers.
The Havana manicurist gets her nail polish from a sister in Tampa, and a restaurant owner says he gets his Goya seasonings through a Miami mule — someone who flies to Cuba just to deliver packed suitcases.
A Miami woman ships packages averaging 20 pounds of food and clothes for resale to her widowed mother in Cuba, and teacher in Havana says he bought his new jeans from a friend who resells clothes brought in by relatives in Hialeah.
In many different ways, Cubans benefit abundantly from the torrent of U.S. goods flowing in since President Barack Obama lifted virtually all restrictions on Cuban Americans who travel or send packages to the island in 2009.
But now Raúl Castro’s government is hiking the import fees on those goods, apparently trying to force émigrés to send badly needed cash instead, to control the trade in imported items and counter the drop in sales of those types of goods at state-owned stores.
The hikes will fall especially hard on the thousands of mini-businesses, from corner pizza stands to beauty parlors, that blossomed across the island as Castro tries to encourage private enterprise and slash spending by the communist-run government.
“This is going to be a big hit in Cuba. A strong, strong, strong hit,” said Alberto Dieguez, owner of Caribe Express in Miami, who estimated he will have to raise the price of the packages he ships to Cuba to $5.50 per pound, from $3.50 per pound.
The goods flowing to Cuba — from computers to TVs, video games, tools, DVDs and perfume to spare parts for cars and motorcycles — were valued at $2 billion to $2.5 billion in 2011 alone by Emilio Morales, president of the Havana Consulting Group in Miami. About 90 percent of the goods left from the United States, he added.
Dieguez said the new fees — one enacted June 18 and others taking effect Aug. 2 and Sept. 3 — fall hardest on the larger batches of goods arriving because of suspicions that they are destined for commercial use. Residents returning from abroad will more often pay in Cuban pesos, while U.S. visitors will pay in CUCs, worth 26 pesos.
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