New Cuban restrictions on private business ownership worry entrepreneurs

World Today

A member of the National Assembly studies the proposed update to the Constitution, in Havana, Cuba, Saturday, July 21, 2018. Cuban lawmakers approved the Cabinet named by new President Miguel Diaz-Canel, keeping most of the ministers from Raul Castro’s government in place. (Abel Padron, Agencia Cubana de Noticias via AP)

While Cuba’s parliament is discussing a new constitution which will recognize private property for the first time, at the same time, the Cuban government has announced a new set of regulations restricting ownership of private businesses.

CGTN’s Michael Voss reports.

Camilo Condis is a Cuban entrepreneur who runs two separate businesses. He owns an apartment which he rents to tourists and also provides IT support and online marketing for a private restaurant. Now under the new private sector regulations, Condis will only be allowed to keep one of them.

He said his apartment rental business is not too time-consuming, which is why he is able run another business, that generates a second income as well.

The number of Cubans licensed to work in the private sector has jumped fourfold since 2010, according to official figures. Today, almost 600-thousand people, around 13 percent of the workforce, own or are employed in small private businesses

The government stopped issuing new licenses last year saying it needed time to reassess its market reforms. There were concerns about tax avoidance, the black market and growing wealth inequality, in a country where state employees earn roughly 30 dollars a month.

This new set of regulations on private sector ownership is the first major policy announcement since Miguel Diaz-Canel took over the presidency from Raul Castro. There are greater controls mixed with some sweeteners.

Private fixed route taxi drivers will now have access to subsidized fuel at state gas stations in a bid to stop them from buying cheap stolen fuel on the black market.

And where currently there are separate licenses for barbers, hairdressers, manicurists and beauticians, they will now be rolled into one beauty services sector.

For others though like Camilo Condis, who work in different sectors, they will have to give one up and lose part of their income. Condis said giving up one his businesses will not be straightforward either, “It’s going to be a problem because there are also no laws or regulations that will allow people to sell a business. That’s not a legal thing that you can do in Cuba.”

The government believes the new regulations will help legitimize the private sector and make it more sustainable. Critics fear the increased controls and regulations could put new people off from entering the market.