Since 2021, with Cuban government approval, “roughly 10,200 new Cuban private businesses have opened, creating a dynamic, if fledgling, alternative economy. . . . About 1.5 million people work for private businesses, a 30 percent jump since 2021, and they now represent almost half of the total work force on the Caribbean island” and about 15% of gross domestic production. While “Cubans working for the state, including white-collar professionals, doctors and teachers, make the equivalent of roughly $15 a month in Cuban pesos, . . . employees in the private sector can make five to 10 times that amount.”[1]
Last year, this sector imported roughly $1 billion of goods, mostly from the U.S. and mostly financed by cash remittances sent by Cubans in the U.S. to their relatives back home. “Across Havana, new delis and cafes are appearing, while entire office floors are leasing space to young entrepreneurs bursting with business plans and products, from construction and software to clothes and furniture.”
An example of such businesses is two Home Deli markets in Havana, which offers a mix of locally made items like pasta and ice cream and imported goods like beer and cereals. They are owned by Diana Sainz, who had lived and worked in Europe, but who returned home to Cuba to open and operate these stores.
Another example is a Havana restaurant, La Carreta, that was reopened by a local restaurant owner and Obel Martinez, a Cuban-Amereican interior decorator based in Miami.
The Cuban government, however, could do more to build this sector. Such businesses are limited to 100 employees. Cuba’s state-owned banks do not allow account holders to access deposits in dollars to pay importers because of the government’s lack of foreign currency to pay its own bills. U.S. sanctions also prohibit direct banking between the United States and Cuba. And the Cuban government has kept major industries off limits to private ownership, including mining and tourism.
Benjamin Ziff, the chargé d’affaires who heads the U.S. Embassy in Cuba, observes, “Cuba is falling apart faster than it is being rebuilt. There is no turning back.’’ He wonders “whether the [Cuban] government will allow the private sector “to expand fast enough and freely enough to meet the challenges.”
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[1] Adams, In a Communist Stronghold, Capitalists Become an Economic Lifeline, N.Y. Times (April 29, 3024).