More Details on New Cuban Regulations on Private Business

A prior post discussed Cuba’s new regulations for the self-employed sector (the private sector) of the economy. More details on these new regulations are provided by Nora Gámez Torres in the Miami Herald.[1]

She says that he new regulations limit a Cuban to owning only one private enterprise and impose higher taxes and more restrictions on many self-employment endeavors, including the arts. All of these measures are designed “to limit the accumulation of wealth by Cubans.”

As a result, a Cuban who runs a private restaurant (a paladar) will not be able to rent a room in his or her home. The Cuban Vice Minister for Labor and Social Security, Marta Elena Feitó Cabrera, explained that owning more than one business “is not the essence and the spirit of the TCP [self-employment], which consists of workers exercising their daily activities.”

The government also stated it would eliminate the tax exemption for businesses that have up to five employees and would instead impose a tax on a sliding scale that increases with each worker hired. It also ordered an increase in the required minimum monthly taxes of businesses in various categories. Economists, however,  have warned that more taxes on hiring employees could dramatically hamper the development of the private sector at a critical moment.

To increase state controls, each authorized activity will be under the supervision of a state ministry, in addition to the municipal and provincial government entities, which can intervene to set prices. The level of control reaches such extremes that the Official Gazette published a table with classifications on the quality of public restrooms and the leasing rates that would have to be paid by “public bathroom attendants,” one of the authorized self-employment categories. Some public bathrooms are leased by the state to individuals who then are responsible for upkeep and make their money by charging users a fee.

The new regulations also could have a significant impact on the cultural sector with the Ministry of Culture empowered to increase control over artists and musicians and impose more censorship in the country.

For example, there now are fines and forfeitures, as well as the possible loss of the self-employment license, to those who hire musicians to perform concerts in private bars and clubs as well as in state-owned venues without the authorization of the Ministry of Culture or the state agencies that provide legal representation to artists and musicians. Many artists in urban genres such as reggaeton and hip-hop, who have been critical of the Cuban government, do not hold state permits to perform in public. However, many usually perform in private businesses or in other venues. Painters or artists who sell their works without state authorization also could be penalized.

Even books are the target of new censorship: private persons, businesses and state enterprises may not sell books that have “contents that are harmful to ethical and cultural values.”

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[1]  Gámez, Cuba imposes more taxes and controls on private sector and increases censorship of the arts, Miami Herald (July 10, 2018).

Recent U.S.-Cuba Developments 

Here are updates on several U.S.-Cuba issues.

U.S.-Cuba Bilateral Commission Meeting[1]

On June 14 in Washington, D.C., the U.S. and Cuba held their seventh meeting of the  Bilateral Commission that was started by the Obama Administration and Cuba.

Afterwards the State Department said the two parties “reviewed . . . areas for engagement that advance the interests of the [U.S.] and the Cuban people including combatting trafficking in persons; facilitating safe civil aviation; law enforcement cooperation; agricultural cooperation; maritime safety and search and rescue cooperation; resolution of certified claims;[2] advancing understanding of environmental challenges; and protecting the national security and public health and safety of the [U.S.]”

The State Department also said, “The [U.S.] reiterated the urgent need to identify the source of the attacks on U.S. diplomats and to ensure they cease. We also reiterated that until it is sufficiently safe to fully staff our Embassy, we will not be able to provide regular visa services in Havana. We expressed our continued concerns about the arbitrary detention of independent journalists and human rights defenders. The [U.S.] acknowledged progress in repatriating Cubans with final orders of removal from the [U.S.], but emphasized Cuba needs to accept greater numbers of returnees.” The U.S. also voiced concern about the “arbitrary detention of independent journalists and human rights defenders” in Cuba.

“Carlos Fernandez de Cossio, the top Cuban official at [this meeting], told The Associated Press that his delegation had “challenged the U.S. on the use of the word ‘attack.’ “There is no evidence of a weapon, there is no evidence of a source, nobody can point to motivation and yet they continue to use the word ‘attack.’ We see it as politically motivated.’” He also noted that neither American nor Cuban experts had been able to determine what caused the symptoms. He renewed concerns that the Trump administration is using the incidents as an excuse to roll back U.S.-Cuba rapprochement started under the Obama administration.

This objection to the U.S. verbiage for this problem was reiterated in a statement by the Cuba Foreign Ministry. “The Cuban delegation urged the government of the [U.S.] to desist from the continued political manipulation of the alleged health cases, which became the pretext to adopt new unilateral measures that affect the performance of the respective embassies, in particular, the rendering of consular services depended upon by hundreds of thousands of persons.” Cuba also raised its objection to the U.S. “travel warning” for Cuba, saying it “hinders the scientific, academic, cultural, religious and entrepreneurial exchanges, as well as the visits by Americans to a country that is internationally recognized as safe and healthy.”

The Cuba Foreign Ministry statement added, “The Cuban delegation rebuffed the regress in the bilateral relationship imposed by the government of the [U.S.] and called attention on the negative consequences thereof for both peoples, the Cuban emigration and the international and regional environment. The Cuban delegation reiterated that the economic, commercial and financial blockade continues to be the main obstacle to any perspective of improvement in the bilateral relationship and denounced its intensification with the adoption, in particular, of additional financial measures of aggressive extraterritorial nature.” Another Cuban objection was registered to what it said were U.S. actions, which were “intended interference in the internal affairs of Cuba, with the open manipulation of the human rights issue, which is flagrantly, massively and systematically violated with the implementation of the blockade.”

The Cuban Foreign Ministry, on the other hand, acknowledged “that it has been demonstrated that it is possible to cooperate and live in a civilized manner, by respecting differences and promoting that which benefits both countries and peoples. It expressed Cuba’s willingness to continue the bilateral dialogue and to work on issues of common interest through the active implementation, based on concrete proposals, of the bilateral agreements subscribed as those on environmental protection, law enforcement, health, agriculture, hydrography and geodesy, among others.”

Finally the State Department announced that the parties had “agreed to hold the next rounds of the biannual Migration Talks and the Law Enforcement Dialogue this summer.”

Another source mentioned that since Trump took office, the two countries have met around two dozen times on topics such as migration, public health, combating illicit drugs, environmental protection, law enforcement, agriculture, people smuggling and migration fraud, fugitives from justice, cyber-security, anti-money laundering, human trafficking, maritime safety, civil aviation and human rights.

Overall Evaluation of U.S.-Cuba Relations Under Trump[3]

Mimi Whitefield, who closely follows Cuban developments for the Miami Herald, notes that U.S.-Cuba relations appear to be stalled since President Trump gave his speech in Miami announcing retreats on U.S. engagement with Cuba.

However, she points out, the Havana-based “Cuban Commission for Human Rights and National Reconciliation documented 5,155 such cases last year, compared to 8,616 and 9,940 during the last two years of the Obama administration.” And in May 2018 they fell to 128, the lowest monthly total in three years, which may have been affected by “factors that affected Cubans’ activism: Poor weather conditions kept many people indoors, Cubans were preoccupied and took more time trying to find food and other staples, transportation was difficult, and the deaths of 112 people in a May 18 airline crash left the nation shell-shocked.”

Whitefield also states that the U.S. List of Restricted Entities and Subentities Associated With Cuba as of November 9, 2017, with which U.S. persons are not to have any dealings, has not been updated and does not even include all the hotels run by Cuba’s military conglomerate, and Americans still have the option of staying at hotel chains operated by the Cuban Ministry of Tourism.

U.S. visitors to the island declined 56.6% in the first quarter of 2018 versus the prior year, with enormous adverse impact on Cuba’s emerging private sector. “Cuban entrepreneurs complain that the confusing U.S. travel policy has hurt them disproportionally because individual travelers tend to stay with them rather than at state-owned hotels. Business, some say, is down 30 to 40 percent because U.S. travel in general is down.”

On the other hand, says John McAuliffe, executive director of the Fund for Reconciliation and Development, which promotes engagement between Cuba and the U.S., “there is one form of travel to Cuba that is booming and that is cruises, and most of the revenue from the cruise industry goes to the state. With cruise terminal fees, buses, tours, and cruise passengers eating at mostly state restaurants, it’s channeling more money to official circles.”

Expansion of Bipartisan State Councils Supporting  Engagement with Cuba[4]

 On June 12, Engage Cuba, a bipartisan coalition promoting U.S. engagement with Cuba, announced that there are now 18 states with bipartisan state councils supporting these efforts. The latest is Pennsylvania, which like the others will seek to build statewide support for pro-engagement policies and ending U.S. trade and travel restrictions on Cuba.

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[1] U.S. State Dep’t, United States and Cuba Hold Seventh Bilateral Commission Meeting (June 14, 2018); Cuba Foreign Ministry, Seventh Meeting of the Cuba-United States Bilateral Commission held in Washington, D.C, (June 14, 2018); Assoc. Press, US Renews Call for Cuba to Probe Cause of Health ‘Attack,’ N.Y.Times (June 14, 2018); The US urges the Government of Cuba to identify the origin of attacks on diplomats, Diario de Cuba (June 14, 2018).

[2] The “certified claims” probably refers to claims against Cuba by U.S. nationals for their claims for compensation for Cuba’s expropriation of their property on the island in 1959-1960 that were certified by the U.S. Department of Justice. See these posts to dwkcommentaries.com: Resolution of U.S. and Cuba’s Damage Claims (April 6, 2015); Resolving U.S. and Cuba Damage Claims (Dec. 13, 2015).

[3]  Whitefield, Has President Trump’s year-old Cuba policy helped the Cuban people? Miami Herald (June 14, 2018).

[4]   Engage Cuba, Pennsylvania Leaders Launch Engage Cuba State Council (June 12, 2018).

 

Cuba’s Many Problems Prompt Speculation Galore  

Cuba’s facing many problems: the collapse of its ally and benefactor, Venezuela; recovering from the damage caused by Hurricane Irma; increased hostility from the Trump Administration; Cuba’s government’s fear of an expanding private sector of the economy; declining visitors from the U.S.; a declining national economy; the imminent political transition next February and the regime’s blocking 175 independent candidates from the upcoming election of municipal councils.

A Miami Herald article gathers experts’ speculation over whether Raúl Castro will in fact relinquish the presidency next February; whether the presumed new president, Miguel Diaz-Canel, will be capable of handling all of these problems; whether hardliners in the regime have been or will be empowered. Read it to get the full flavor of these and other speculations.[1]

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[1] Whitefield & Gámez, Raúl Castro: Will he stay in power in Cuba or retire? Miami Herald (Nov. 21, 2017).

Additional Reactions to New U.S. Regulations Regarding  Cuba         

As noted in a prior post, on November 8, new U.S. regulations on travel to Cuba and business with Cubans were issued while another post discussed initial reactions thereto.  Already additional reactions have surfaced: impact on what Americans drink in Cuba and the adverse impact on U.S. interests.

Americans Drinks in Cuba[1]

The new Cuba Restricted List bans U.S. businesses and individuals from doing business with the Cuba companies that produce two rum brands—Ron Varadero and Ron Caney—and three soft drinks—Tropicola Cachito, Jupiña and Nahita. That has raised concern that Americans in Cuba would have to be careful about what they drink.

Two days after the issuance of the new regulations, the U.S. Treasury issued a clarification. The List only bans direct financial transactions with the entities on the List. Therefore, says the Treasury, “Americans may still consume those soft drinks and rums” — as long as they don’t buy them directly from the companies on the List. They can buy a Tropicola from a street vendor, for example, and they won’t have to tell a bartender: ‘No Varadero or Caney rum, please.’”

But the Americans may not buy “a rum and coke at . . . one of the 83 hotels that are run by Gaviota or Habaguanex, two tourism brands controlled by the military [and, therefore, on the List]. It’s off limits for not only drinks but also lodging.”

Adverse Impact on U.S. Interests[2]

A Miami Herald journalist, Fabiola Santiago, has identified at least five ways the new regulations harm U.S. interests.

“First, by doing away with the independent people-to-people travel by Americans, . . . [the regulations] are actually helping the Cuban government control what travelers do, whom they meet, and how their perceptions of the country are shaped, thus becoming enablers of the dictatorship. Yet, tours are the mode of travel endorsed by Trump’s policy — and propagandistic historical tours are one of the activities that prove to the Treasury Department that your travel to Cuba is ‘educational.’”

Second, the new regulations put “the trips back in the hands of babysitters . . . [i.e.,] loyal government employees who shuttle around visitors. . . . Trump just expanded their ranks. Jobs!”

Third, the new regulations thereby harm “Cuba’s fledgling entrepreneurial class,” who will lose customers to the state-owned businesses.

Fourth, the new regulations do not adversely affect U.S. cruise ship operators even though their “passengers are a captive audience of government stores filled with Che Guevara paraphernalia and peddlers who offer government services to people disembarking.”

Fifth, the regulations and the Trumpian rhetoric about Cuba are helping the Russians enhance their relationship with Cuba, which includes “aggressively pursuing establishing a military base in Cuba, 90 miles from the USA.”

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[1] Whitefield, Do new rules on Cuba travel mean no rum in cocktails for American travelers? Miami Herald (Nov. 10, 2017). (I was unable to find the Treasury Department clarification on its website.)

[2] Santiago, It’s your Cuba policy, Miami republicans. You can’t blame Obama now, Miami Herald (Nov. 10, 2017)

Continued Official Uncertainty Over Cause of Medical Problems of U.S. Diplomats in Cuba     

There has been lots of news over the U.S. diplomats with medical problems from serving in Cuba. But there is still official uncertainty over the cause of those problems and resulting cooler Cuba relations with the U.S. and warmer relations with Russia.

U.S. Trying To Hide the Attacks?[1]

CBS News on October 10 reported that one of the 22 U.S. diplomats who has suffered from purported “sonic attacks” in Cuba had asserted that the U.S. was trying to hide the attacks.

In addition, this individual reportedly told CBS that the attacks had happened at the Embassy itself, their Havana quarters and hotels, that the State Department “pressured” some U.S. embassy officials who had been injured to remain on the island and “waited too long” to withdraw personnel and that the initial treatment by doctors in Havana and at the University of Miami Hospital in the U.S. was “superficial and incomplete.”

The State Department denied these allegations later the same day.[2] Its Spokesperson, Heather Nauert, at a press briefing, said, “We have an ongoing investigation that’s being spearheaded out of the [U.S.] with our best investigators on that, so they continue to move ahead with that investigation. We still don’t know who is responsible and we still don’t know what is responsible for the injuries of our American staff.” (Emphasis added.)

Pressed by other reporters about the above comments by one of the victims and by the Department’s recent identification of only two Havana hotels where some of the attacks occurred, Nauert said the following:

  • “I was just speaking with one of our colleagues who served down there in Cuba and is recently back here in the [U.S.]. And I asked this person that very question: ‘How do you feel that we responded?’ And I’ve asked numerous of my colleagues that very question. . . . [W]e all care deeply about how our folks are doing down there. And I asked the question, ‘Do you feel supported by us? Do you feel that we were quick enough to respond?’ And the answer I got back was ‘yes.’ . . . it took a while to put this together, because the symptoms were so different.”
  • “But this person said to me once we figured out a pattern, . . . the State Department was extremely responsive. This person said to me that they . . . never felt the pressure to stay in Cuba, although they wanted to make it clear that they wanted to serve down there. These folks love what they’re doing, they feel a real dedication to . . .our mission down there in Cuba, the activities that they were involved with on behalf of the U.S. Government with local Cubans, and they were encouraged by the State Department to come forward, please get tested if you feel like you’ve had some sort of symptoms or something.”
  • “I don’t have the actual timeline in front of me that lays out when attacks took place at different locations, and I’m not even sure that that is something that we’re making public. But once we started to figure out what this was all about and started to investigate and realized that we were not able to protect our people, that’s when the Secretary made [the decision to reduce U.S. personnel at the Embassy in Havana].”

U.S. Government Statements About the Attacks and Relations with Cuba

On October 12 White House Chief of Staff, John Kelly, provided a very unusual press briefing. Unusual because the chief of staff rarely, if ever, provides such a briefing. The apparent major reason for the briefing was to provide a platform for him to deny that he was quitting or being fired as chief of staff. In addition, in response to a reporter’s question, Kelly stated, “We believe that the Cuban government could stop the attacks on our diplomats.”  But he provided no bases for that belief and was not challenged with additional questions by the journalists.[3] (Emphases added.)

Later that same day Kelly’s comment was interpreted (or qualified) by the State Department spokeswoman, Heather Nauert, who said, “General Kelly, when he said we believe that they can stop the attacks, I think what he was referring to was, one, we have the Vienna Convention [on Diplomatic Relations]. And under the Vienna Convention, . . . the Government of Cuba, has a responsibility to ensure the safety of our diplomatic staff. That didn’t happen. But there’s also another well-known fact, and that is that in a small country like Cuba, where the government is going to know a lot of things that take place within its borders, they may have more information than we are aware of right now.”[4] (Emphases added.)

The next day, October 13, President Trump addressed the 2017 Values Voter Summit.  It included the following comment: “We’re confronting rogue regimes from Iran to North Korea and we are challenging the communist dictatorship of Cuba and the socialist oppression of Venezuela. And we will not lift the sanctions on these repressive regimes until they restore political and religious freedom for their people.”[5] (Emphases added.)

Two days earlier (October 11) Vice President Mike Pence delivered a speech at a National Hispanic Heritage Month celebration at the Naval Observatory in Washington, D.C. in which he referred to meeting people from the Cuban communities here in the U.S., and had seen “the spirit of the Cuban exile community in this country firsthand.” On that same day, the Vice President continued. “President Trump announced a new policy to ensure that U.S. dollars will no longer prop up a military monopoly that exploits and abuses the Cuban people. Under this administration, it will always be “Que viva Cuba libre![6] (Emphases added.)

Sound Recording[7]

The Associated Press obtained an audio recording of what some of the U.S. personnel in Cuba heard.  Says the AP, it “sounds sort of like a mass of crickets. A high-pitched whine, but from what? It seems to undulate, even writhe. Listen closely: There are multiple, distinct tones that sound to some like they’re colliding in a nails-on-the-chalkboard effect.”  The AP adds that it has “reviewed several recordings from Havana taken under different circumstances, and all have variations of the same high-pitched sound.”

Similar Problems at U.S. Embassy in Moscow, 1953-1976[8]

The BBC reports that in May 1953 U.S. officials at the Moscow embassy detected a microwave frequency that oscillated above the upper floors at certain times, sometimes up to eight hours a day, and that autumn some embassy workers felt inexplicably ill. At first it was dizziness, palpitations, headaches, blood pressure too high or too low. But no one understood what was happening.

In 1962, those who were still there or even those who had already left had more severe symptoms: sudden cataracts, alterations in blood tests or chromosomes. In 1965 the U.S. began what was known as the “Moscow Viral Study,” a multimillion-dollar operation in which scientists apparently looked for the potential exposure of workers to an unknown strain of a mysterious and potent virus. The eventual conclusion was the Soviets were “bombing” the U.S. embassy with very low-level microwaves, which the U.S. called the “S ENAL Moscow.” This persisted until April 1976.

Cubans Doubt[9]

From Cuba, the Associated Press reports that “the common reaction in Havana is mocking disbelief” about the attacks.

The same tone was struck by Miguel Diaz-Canel, the first vice president who is widely expected to succeed Raul Castro when he steps down as president in February. He said, “A few spokespeople and media outlets have lent themselves to divulging bizarre nonsense without the slightest evidence, with the perverse intention of discrediting Cuba’s impeccable behavior.”

Mass Hysteria?[10]

Journalists from the Guardian newspaper in London reported that “senior neurologists” say that ”no proper diagnosis is possible without more information and access to the 22 US victims,” but speculate that the diplomats’ ailments could have been caused by “mass hysteria.”

Cuba-Russia Relations[11]

According to the Miami Herald, “after the election of President Donald Trump, the pace of [Cuba’s] bilateral contact with Russia has been frantic,” even more so after the eruption of U.S.-Cuba relations associated with the medical problems of U.S. diplomats. Here are such examples:

  • Just days before Foreign Minister Rodriguez’ September 26 meeting with Secretary of State Tillerson at the State Department, the Minister met with his Russian counterpart Sergei Lavrov on the sidelines of the U.N. General Assembly gathering. The conversation was “confidential,” according to a press release issued by the Russian Foreign Ministry.
  • On July 26 Cuban diplomat Josefina Vidal, the main negotiator with the U.S., went to Moscow and met with Deputy Foreign Minister Sergei Ryabkov.
  • Cuba’s ambassador to Russia has met with Ryabkov at least five times so far, this year.
  • Last December, just after the election of Mr. Trump, Russia and Cuba signed an agreement to modernize the Cuban army, and this year Russian officials — including military personnel — have made frequent visits to Havana.
  • In March, the Russian company Rosneft signed an agreement to ship 250,000 tons of crude oil and diesel to offset the decline in Venezuelan oil shipments to Cuba.
  • Rosneft also has discussed other joint projects with Cuba for oil extraction and the possibility of modernizing the Cienfuegos refinery, operated jointly by Cuba’s CUPET and Venezuela’s PDVSA.
  • In April, Russia offered to fund $1.5 million in U.N. projects in Cuba for hurricane recovery and later pledged to support recovery efforts following damage caused by Irma.
  • In September, Cuban Vice President and Minister of Economy Ricardo Cabrisas signed a package of agreements with Russia in the energy, rail transport and elevator-supply sectors.
  • Recently, Cuban news agency Prensa Latina, which has an office in Washington, and the Russian news agency Sputnik signed an official cooperation agreement.

These developments are no surprise to Richard Feinberg, an expert at Brookings Institution and a former U.S. policymaker for Latin America during Bill Clinton’s administration. He says, “[Vladimir] Putin’s message is not difficult to understand. [He] longs to regain the past imperial glory and relations with Cuba follow that same pattern.” Feinberg added, “From the point of view of the Cubans, they are looking to diversify their relationships. As closer economic relations with the U.S. do not seem likely for at least the next few years, they are looking for alternative allies, especially from countries with strong states like Russia and China that can offer favorable payment terms, something very welcome in an economy with poor international credit standards.”

Conclusion

In the above and the many other reports about the medical problems affecting some U.S. personnel serving in Cuba, I find it astounding that there still is official uncertainty about the cause or causes of the medical problems.

It also is astounding that no journalist or other commentator has publicly asked whether the U.S. has investigated whether the problems were caused by a secret and perhaps malfunctioning U.S. program or device and if so, to provide details. Such a possibility would help explain the delay in the U.S. public announcement of this set of medical problems and the apparent U.S. reluctance to share details of its investigation with Cuban investigators, all as discussed in previous posts to this blog. Moreover, this possibility would render various U.S. reactions—reducing the U.S. personnel at the U.S. Embassy in Havana, expulsion of 15 Cuban diplomats and the latest U.S. travel warning—as cover ups and as excuses for additional tightening of U.S. screws on Cuba.

Moreover, Trump’s hostile rhetoric and actions regarding Cuba, which are unjustified in and of themselves, have adverse effects on other important U.S. interests, including the prevention of increasing Russian influence in Latin America.

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[1] Cuba victim tells CBS News “complaints were ignored,” CBS News (Oct. 10, 2017); ‘Washington was trying to hide the acoustic attacks,’ says one of the victims, Diario de Cuba (Oct. 10, 2017).

[2] U.S. State Dep’t, Department Press Briefing—October 10, 2017.

[3]  White House, Press Briefing by Press Secretary Sarah Sanders and Chief of Staff General John Kelly   (Oct. 12, 2017); Assoc. Press, White House Says Cuba Could Stop Attacks on Americans, N.Y. Times (Oct. 12, 2017).

[4] U.S. State Dep’t, Department Press Briefing-October 12, 2017.

[5] White House, Remarks by President Trump at the 2017 Values Voter Summit (Oct. 13, 2017); Reuters, U.S. to Maintain Cuba, Venezuela Sanctions Until Freedoms Restored: Trump, N.Y. Times (Oct. 13, 2017).

[6] White House, Remarks by Vice President Mike Pence at National Hispanic Heritage Month Reception (Oct. 11, 2017)

[7] Assoc. Press, Dangerous Sound? What Americans Heard in Cuba Attacks, N.Y. Times (Oct. 13, 2017).

[8] Lima, The “Moscow Sign”, the mysterious Soviet Union bombardment of the US embassy, which lasted more than two decades during the Cold War, BBC News (Oct. 14, 2017).

[9] Assoc. Press, ‘Star Wars’ Fantasy? Cubans Doubt US Sonic Attacks Claims, N.Y. Times (Oct. 13, 2017).

[10] Borger & Jaekl, Mass hysteria may explain ‘sonic attacks’ in Cuba, say top neurologists, Guardian (Oct. 12, 2017).

[11] Gámez, Amidst growing tensions with U.S., Cuba gets cozier with Russia, Miami Herald (Oct. 13, 2017).

Why is the Cuban Government Trying To Slow Down the Private Sector? 

                                                                                                              Yesterday’s post described the Cuban Government’s suspension of the issuance of new permits for certain self-employment categories and closing down some paladares (private restaurants).

Why is this happening and what is its impact on Cubans?

Nora Gámez Torres of the Miami Herald reports that certain experts say the suspension is the government’s fear of the emergence of a truly successful entrepreneurial class on the island as a future political opponent of the government. As Ted Henken, a U.S. sociologist and expert on Cuba’s private sector, put it this way: “hardliners in the Cuban government are afraid of the private sector, not only because it competes with state monopolies but because economic autonomy ‘can lead to more political freedom and independence, and create a powerful lobby with a different agenda than those in power currently.’”[1]

This move by the Cuban government is seen as against its economic interest as the private sector generates more than $2.5 billion and up to 18% of the economy’s revenues while the implosion of Cuba’s ally, Venezuela, has a major negative impact on Cuba’s economy.

Meanwhile Cubans planning to open new businesses are upset.  Here are some of their reactions.[2]

  • Sara in anticipation of renting a house in Vedado said, “I have spent months and money invested in arranging the house to rent it to foreign tourists, I already had contacts and I was planning to apply for my license in September.”
  • Sergio, a taxi driver who was planning to move to a home buying and selling office, said he lost more than 1,000 CUCs between chairs and other items he bought to set up an office. The government’s suspension of new licenses “demonstrates that no one can make more than four pesos.”
  • Brian, who already had bought equipment to open an appliance repair shop in Havana, has seen his aspirations frustrated, as he had not yet submitted his license application. “Right now I do not know what to do because I owe money to several people for the purchase of equipment.”
  • The owner of a cafeteria in Havana said that in just two months she planned to open a restaurant in the same place. “Now what do I do with all the cutlery, glasses and even an electric coffee maker I bought? I have to sell them or keep them until they reopen the licensing, but no one knows when that will be. The government wants us to be starving all our lives.”
  • Marta, a bookkeeper who looks for accountants to manage her payments at the bank, said that these closures “affects her a lot. As new entrepreneurs do not emerge, it makes it more difficult for me to get new clients. I have been put into China by these bastards since I only had a few months in this activity.”
  • Lázaro, “They do not want a middle class to emerge and they say they take these measures because there are many raw materials and equipment of illicit origin, and where do these illicit products come from? That comes from the lack of control and disaster of state companies,” he said. “They really screwed us up.”

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[1] Torres, Fear is driving Raúl Castro to punish Cuba’s new entrepreneurial class, experts say, Miami Herald (Aug. 2, 2017).

[2] Fernandez, ‘There is no one here to raise their heads,’ they complain affected by the brake on private work, Diario de Cuba (Aug. 2, 2017).

Cuban Entrepreneurs Fear Implementation of Trump’s Ban on Individual Person-to-Person Travel to the Island

Meg Whitefield of the Washington Post reports that members of Cuba’s emerging entrepreneurial sector are fearful of the negative impact on their business of the future implementation of President Trump’s announced ban on individual person-to-person travel to the island.[1]

Here are examples:

  • The manager of a Cuban “loose association of vintage car owners who have banded together to offer transportation for visiting dignitaries and other groups” already has received cancellations of reservations and fears for the 20 drivers who depend on these bookings for their livelihood as well as a group of mechanics that refurbish classic cars.
  • The husband and wife owners of a Cuban “bed and breakfast for the past two decades have gradually renovated an old mansion that was in ruins when they began, adding guest rooms and struggling to find parts to get the swimming pool filter running again.” They are fearful of having fewer American visitors. The couple also fears the negative impact on “their 17 employees and the private sub-contractors they use to do everything from carpentry work to washing and pressing clothes for guests.” The couple said, “Cuentapropistas (the self-employed) have created a network. We regularly seek out each other’s services to solve our problems.”

Phil Peters, a consultant and president of the U.S. non-profit Cuba Research Center, said most casa particulares are small and won’t be able to handle group travel. “It’s harder if you have 20 people and need to run a scheduled program. You can’t have a tour bus stop at 10 different locations to pick up group members. It’s a little impractical.”

The exceptions, said Peters, “are tourist towns like Trinidad or Viñales where it seems like almost every other house is a casa particular. The three state-run hotels in Viñales, a small rural town near dramatic rock formations and caves, have a combined total of 193 rooms, while there are 1,107 private bed-and-breakfasts, many that have two or three rooms.”

The adverse effects of the future ban on individual person-to-person travel will also be felt in the U.S., according to Sandra Levinson, executive director of The Center for Cuba Studies, which is based in New York and has sponsored educational travel to Cuba since 1973. She said, “Millions are being spent by Cuban Americans who are helping their families in Cuba start their businesses by providing them with the necessary equipment for their startups — everything from bought-in-the-U.S. blenders, ice cream makers, coffee pots, dinnerware, air conditioners, TV sets, leather upholstery for cars, computers, cell phones, sound systems, bedding, shower curtains and more.”

These are important reminders to those of us in the U.S. who oppose this change in U.S. policy. Write your Senators and Representatives to pass the pending bills granting Americans freedom to travel to Cuba.

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[1] Whitefield, Cuban entrepreneurs brace for President Trump’s new Cuba policy, Miami Herald (July 3, 2017)  This blog previously has commented on the upcoming negative impact of the ban on individual person-to-person travel on Cuba’s private sector: President Trump Announces Reversal of Some U.S.-Cuba Normalization Policies (June 19, 2017); Cuban Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 22, 2017); This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 23, 2017); Reducing Adverse Impact on Cuban Entrepreneurs of Trump’s Partial Ban on U.S. Person-to-Person Travel to Cuba (June 28, 2017).