Caveats to Cuba’s Communist Party’s Decision To Legalize Small and Medium-Sized Businesses 

Based upon secondary sources, a prior post asserted that the Communist Party of Cuba at its recent Seventh Congress had decided to have small and medium-sized businesses legalized. Now, another secondary source suggests that there are significant qualifications to that Party decision.[1]

First, this new source says “the legalization of the so-called PYMES (Spanish acronym for small and medium enterprises) is part of a . . . Party . . . project to ‘conceptualize’ the ‘theoretical basis … for the economic and social model that we aspire to as part of the process of actualizing’ the island’s system.” This project is “part of another document on a ‘Projected National Economic and Social Development Plan until 2030’ … whose fulfillment will contribute to reaching that model, in the long run.’” (Emphasis added.)

The “strategic sectors singled out for development in the 2030 Plan” include “construction, electricity, telecommunications, internet connectivity, transportation and warehousing for commercial activities, hydraulic installations and networks; tourism and related activities such as marinas, golf and real estate; professional services, especially medical personnel; non-sugar agriculture and the food industry; production of pharmaceuticals and biotechnology; the sugar industry and light industry for the domestic market.”

The Party documents also note that “’in the future society to which we aspire’ the socialist economy and central planning will occupy ‘a primordial place’” and that “the ‘existence of non-state forms (of economic activity) will depend on the goals of socialist development.’” In addition, the government will “recognize private property that fulfills a public function in specific activities and whose owners are people or companies — Cuban as well as foreign.” Moreover, “Cubans will be able to establish ‘small businesses carried on basically by the worker and his family’” as well as “’private companies of medium, small and micro sizes, according to the volume of the activity and the number of workers, (to be) legally recognized as companies.’”

As a result, this secondary source predicts a slow pace in adopting these reforms.

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[1] Torres, Cuba’s Communist Party lays out a vague future for private enterprise, InCuba Today (May 31, 2016).