From our Bureau of Socialist Free Enterprise with some assistance from our Bureau of Extremely Lousy Transparent Camouflage
The new rules are very complicated, but their intent can be summarized very simply: Castro, Inc. is determined to crush all entrepreneurs who might be foolish enough to think that they can establish their own business enterprises. No doubt about it, Castro, Inc. is no longer willing to camouflage its total control of the Cuban economy.
Up until now the world’s news outlets have been publishing stories about entrepreneurs, “private” businesses, and self-employed Cubans, all of which have ignored the fact that Castro, Inc. was merely camouflaging its total control of the Cuban economy. Well . . . some camouflage is still in place, but most of it has been stripped away.
Abridged and loosely translated from Marti Noticias
The Cuban government has announced that Micro, Small, and Medium-sized Enterprises (MSMEs) in the country can now be state-owned, privately owned, mixed, or owned by political and mass organizations, including the Committees for the Defense of the Revolution.
While the government claims that the new regulations for the private sector aim to ensure a more orderly and harmonious management of MSMEs, economists are warning of increased state interference in this economic activity.
Ángel Marcelo Rodríguez Pita, an economist and entrepreneurship advisor based in Havana, suggests that allowing new MSMEs to be funded by “political and mass organizations” points to potential state intervention in the private sector.
The new decree, published on Monday in the Official Gazette, allows MSMEs to be “state-owned, privately owned, mixed, or owned by political, mass, and social organizations.”
These organizations, which the Cuban authorities identify as non-governmental, include the Committees for the Defense of the Revolution and the Federation of Cuban Women. They are sponsored and controlled by the Communist Party of Cuba and are sustained by the state budget.
The new regulations also require that MSMEs, both new and existing, create a “voluntary reserve” to support vulnerable sectors in their surroundings. According to González Pita, this could become an additional burden for these businesses.
For example, authorities have indicated that, in the medium term, a significant reduction in the ration book and the regulated family basket is expected, with part of that responsibility being shifted to MSMEs through these “voluntary reserves,” the expert emphasized.
Among other obligations, the decree mandates that MSMEs must trade their goods and services in the national currency, with limited exceptions according to current legislation. Another measure is that self-employed workers currently engaged in wholesale activities will have their operations restricted to the retail sector only.
The list of prohibited activities for MSMEs has also been updated, excluding more than 100 types of businesses.
They might as well be more open about what they are and do. It’s not as if the usual suspects give a damn.