New Regulations for Cuba’s Non-Agricultural Private Enterprises as of July 10, 2018
Sarah Marsh FEBRUARY 22, 2018 / 7:08 PM
HAVANA (Reuters) – A draft of new Cuban economic regulations proposes increasing state control over the private sector and curtailing private enterprise, a copy of the document seen by Reuters showed.
The tightening may signal that the ruling Cuban Communist Party fears that free market reforms introduced eight years ago by President Raul Castro may have gone too far, amid a broader debate about rising inequality.
The draft document, circulating among Cuba experts and private entrepreneurs, goes beyond proposed restrictions announced in December. For example, it would allow homes only one license to operate a restaurant, cafeteria or bar. That would limit the number of seats per establishment to 50. Many of Havana’s most successful private restaurants currently hold several licenses enabling them to have a seating capacity of 100 or more.
There is uncertainty over the direction of economic policy generally as Cuba prepares in April to mark the end of six decades of rule by Castro and his older brother Fidel, who stood down formally as a leader in 2008. That has been heightened by U.S. President Donald Trump partially rolling back the Obama-era detente with the United States.
The head of the Communist Party’s reform commission, Marino Murillo, announced restrictions on the private sector in December, some of them included in the new document. But the draft regulations go into greater detail and show how far the push back could go. “The decree strengthens control at a municipal, provincial and national level” over the private sector, according to the 166-page document, dated Aug. 3, 2017 and signed by Marcia Fernández Andreu, deputy chief of the secretariat of Cuba’s Council of Ministers.
The document said resolutions were drafted by the reform commission and were being sent to provincial and national organs of administration for consultation. Reuters could not independently verify its authenticity. Cuban authorities did not immediately respond to a request for comment.
Some analysts said they suspected the draft was leaked to gauge public opinion and could be revised.
The regulations state that measures that will apply to infractions will be more “rigorous.”
The government has increased criticism of wealth accumulation over the past year and gone on the offensive against tax evasion and other malpractices in the private sector.
The number of self-employed Cubans soared to 567,982 as of the middle of last year, versus 157,731 in 2010 at the start of the reform process designed to boost Cuba’s centrally planned economy. Private sector workers now make up roughly 12 percent of the workforce, but the prosperity of some Cuban entrepreneurs, particularly those working in the tourist sector and receiving hard currency, has become a source of tension. The average state monthly wage is $30, the same sum a B&B owner can charge for a night’s stay.
The restrictions unveiled by Murillo in December included limiting business licenses to a single activity per entrepreneur.
Some entrepreneurs had hoped they could get around that by transferring business licenses, for activities as diverse as manicures or bookkeeping, to family members.
It was unclear from the draft document whether the measures would be applied retroactively.
Murillo said in December the number of categories in which self employment would be permitted would be reduced and in some cases consolidated. For example, manicurist, masseuse and hairdresser would fall under an expanded beauty salon license. The draft lists 122 categories, down from approximately 200 previously.
The document calls for a new division under the Ministry of Labour to administer and control self-employed work.
Published 1:15 PM ET Fri, 19 Jan 2018, The Associated Press
Original article: Tourism Booming In Cuba
On a sweltering early summer afternoon in Miami’s Little Havana, President Donald Trump told a cheering Cuban-American crowd that he was rolling back some of Barack Obama‘s opening to Cuba in order to starve the island’s military-run economy of U.S. tourism dollars and ratchet up pressure for regime change.
That doesn’t appear to be happening. Travel to Cuba is booming from dozens of countries, including the U.S. And the tourism dollars from big-spending Americans seem to be heading into Cuba’s state sector and away from private business, according to Cuban state figures, experts and private business people themselves.
The government figures show that 2017 was a record year for tourism, with 4.7 million visitors pumping more than $3 billion into the island’s otherwise struggling economy. The number of American travelers rose to 619,000, more than six times the pre-Obama level. But amid the boom — an 18 percent increase over 2016 — owners of private restaurants and bed-and-breakfasts are reporting a sharp drop-off.
“There was an explosion of tourists in the months after President Obama’s detente announcement. They were everywhere!” said Rodolfo Morales, a retired government worker who rents two rooms in his home for about $30 a night. “Since then, it’s fallen off.”
The ultimate destination of American tourism spending in Cuba seems an obscure data point, but it’s highly relevant to a decades-old goal of American foreign policy — encouraging change in Cuba’s single-party, centrally planned system. For more than 50 years, Washington sought to strangle nearly all trade with the island in hopes of spurring economic collapse. Obama changed that policy to one of promoting engagement as a way of strengthening a Cuban private sector that could grow into a middle class empowered to demand reform.
Cuba’s tourism boom began shortly after Obama and Cuban President Raul Castro announced in December 2014 that their countries would re-establish diplomatic relations and move toward normalization. U.S. cruise ships began docking in the Bay of Havana and U.S. airlines started regular flights to cities across the island. Overall tourism last year was up 56 percent over Cuba’s roughly 3 million visitors in 2014.
While the U.S. prohibits tourism to Cuba, Americans can travel here for specially designated purposes like religious activity or the vaguely defined category of “people-to-people” cultural interaction.
Obama allowed individuals to participate in “people-to-people” activities outside official tour groups. Hundreds of thousands of Americans responded by designing their own Cuban vacations without fear of government penalties. Since Cuba largely steers tour groups to government-run facilities, Americans traveling on their own became a vital market for the island’s private entrepreneurs, hotly desired for their free spending, heavy tipping and a desire to see a “real” Cuba beyond all-inclusive beach resorts and quick stops on tour buses. The surge helped travel-related businesses maintain their role as by far the most successful players in Cuba’s small but growing private sector.
Trump’s new policy re-imposed the required for “people-to-people” travel to take place only in tour groups, which depend largely on Cuban government transportation and guides.
As a result, many private business people are seeing so many fewer Americans that it feels like their numbers are dropping, even though the statistics say otherwise.
“Tourism has grown in Cuba, with the exception of American tourism,” said Nelson Lopez, a private tour guide. “But I’m sure that sometime soon they’ll be back.”
While Trump’s new rules didn’t take effect until November, their announcement in June led to an almost immediate slackening in business from individual Americans, many Cuban entrepreneurs say. The situation was worsened by Hurricane Irma striking Cuba’s northern coast in September and by a Cuban government freeze on new licenses for businesses including restaurants and bed-and-breakfasts. Cuban officials say the freeze was needed to control tax evasion, purchase of stolen state goods and other illegality in the private sector, but it’s had the effect of further restricting private-sector activity in the wake of Trump’s policy change.
Cuban state tourism officials did not respond to requests for comment.
Trump’s policy changes did not touch flights or cruise ships. Jose Luis Perello, a tourism expert at the University of Havana, said more than 541,000 cruise ship passengers visited Cuba in 2017, compared with 184,000 the previous year. Even as entrepreneurs see fewer American clients, many of those cruise passengers are coming from the United States, he said.
Yunaika Estanque, who runs a three-room bed-and-breakfast overlooking the Bay of Havana, says she has been able to weather a sharp drop in American guests because a British tour agency still sends her clients, but things still aren’t good.
“Without a doubt our best year was 2016, before the Trump presidency,” she said. “I’ve been talking with other bed-and-breakfast owners and they’re in bad shape.”
BY NIURIS HIGUERAS, YAMINA VICENTE, JULIA DE LA ROSA QUESADA AND MARLA RECIO
Miami Herald, DECEMBER 11, 2017
Original Article: HURTING CUBA’S ENTREPRENEURS
It is a tough moment in Cuba for hundreds of thousands of entrepreneurs and millions of families with relatives in the United States. President Trump’s new Cuba policy, announced in June and recently written into law, and the partial draw-down of the U.S. Embassy, are hurting the private sector and taking a terrible toll on Cuban families.
As business owners and the heads of our households, we’re saddened by the turn of events that are causing so many of our friends, family and colleagues to suffer. We’re tired of hearing about “support for the Cuban people,” while those very policies take money out of our pockets and food off our tables, and separate us from our families.
The new restrictions on travel are crushing the private sector. Limits on individual travel and calls for stricter enforcement have confused and scared U.S. visitors, many of whom are choosing to go elsewhere or canceling their Cuba travel plans. As a way of kicking us while we’re down, an unjust State Department travel warning and the partial closure of the U.S. Embassy in Havana have further affected U.S. travel and hurt our businesses.
The closure of consular services is dividing families, making reunification and family visits nearly impossible. Hundreds of thousands of Cuban families are suffering, not knowing when they will be reunited with loved ones. It also makes it impossible for entrepreneurs to take part in workshops and training programs, cultural groups to tour the U.S. and Cuban students to get visas to study in the States. The accompanying travel warning, which is completely unjustified, is scaring off American visitors.
Together, the travel warning and new restrictions have had a clear impact: Restaurants are empty, occupancy rates are down, events are canceled and freelance guides and taxi drivers and others roam the streets looking for work. Many of us now must decide which of our workers to lay off.
Unfortunately, despite the rhetoric in U.S. policy about support for the Cuban people and support for the private sector, our reality is not taken into account and our wants and hopes fall on deaf ears. Last year, we went to Washington, D.C., to have lawmakers hear our voices and discuss how a more open policy of trade and travel helps Cuba’s private businesses. The country’s top 100 private businesses sent a letter to President Trump making that case, believing as a business person he would understand.
A group of us, Cuban women entrepreneurs, reached out to Ivanka Trump, assistant to the president, hopeful she would understand the importance of empowering women who are business leaders on the island. Our letters and meeting requests to the administration went unanswered, time and time again.
Sen. Marco Rubio claims to be the leading architect of the administration’s policy toward our country. Facing criticism of how the new travel policy would affect Cuban entrepreneurs, Rubio tweeted: “If Cuban people are hurt it will be because the Castro govt doesn’t allow them to own their own business, not because of the new policy.”
We would like Rubio to know that we do in fact own our own businesses, and we are hurt by the new policy.
We have repeatedly requested meetings with Rubio and his staff to share our knowledge and firsthand experiences as entrepreneurs and community leaders in Cuba. Unfortunately, like administration officials, he has ignored our requests to meet.
Policymakers refusal to meet with us and, more important, take our aspirations and livelihoods into account, is symbolic of decades of U.S. policies that aim to punish the Cuban people because of disapproval of the Cuban government. Not only is this way of thinking and acting ineffective and counterproductive, it is cruel and causes real suffering for the people they’re supposedly trying to help.
We call on Rubio to stop trying to divide and separate our two countries. Stop pushing forward measures that harm families, entrepreneurs and average Cubans. We also call on the State Department to immediately lift the unwarranted and politicized travel warning, fully reopen embassies and make clear that the confusing and convoluted new regulations permit individual travel.
Rhetoric, finger pointing, and restrictions are not the type of “support” the Cuban people want and need. What we want are fully functioning embassies and the freedom of travel for Americans and Cubans alike. We can take care of the rest.