Self-employment or Private Property

Self-employment or Private Property / Osmar Laffita
Posted on September 8, 2013

HAVANA, Cuba, 30 August 2013, www.cubanet.org – Resolution No. 32 of 7
October 2010, issued by the Ministry of Work and Social Security,
relaxed private work with the approval of 181 activities of self-employment.

According to the newspaper Juventud Rebelde, on 17 August of this year,
at the end of July licenses has been issued by the National Tax
Administration Office (ONAT) to 436,342 people.

In a year and a half there was an increase of 110,395 Cubans who
established these private micro-enterprises or contracted as workers of
these small businesses. The government has directed — in the official
press and satellite organizations, like the unions — that what, in
reality, is private activity with owners and employees, is to be called
self-employment.

At the end of July, the private businesses with major expansions were
the snack bars and restaurants, cars and trucks engaged in carrying
passengers and merchandise, and the renting of rooms and houses. These
businesses account for 29% of the total.

Wage earners working for private owners

Cuba already has an incipient sector of private micro-enterprises. Of
the total licenses issued by ONAT, 18% are to contract workers. Of them,
68% did not previously work for the State. Now they work as wage-earners
for owners of private businesses.

The greatest number of people with licenses for self-employment are
concentrated in the provinces of Havana, Matanzas, Villa Clara, Camagüey
and Santiago de Cuba, which account for 65% of the licenses awarded in
the country.

In the capital, at the end of July 110,000 people were engaged in
private activity. In the municipalities within the capital, the greatest
number of licenses were in Central Havana, with 10,479; Playa, with
9,915; Plaza, which registered 9,724; and Rancho Boyeros, which reports
9,514.

Materials on the black market

The government has not guaranteed the opening of wholesale markets so
that the proprietors of these small businesses and micro-enterprises can
acquire inputs to make their activities less onerous. To be able to keep
their businesses open and meet their excessive tax obligations, the
self-employers have not other option than to acquire resources on the
black market. This means that the prices at which they sell their
products and services are not within reach for the majority of Cubans,
whose salaries don't exceed 20 dollars a month.

One element that has contributed to the capitalization, expansion and
sustaining of private activity in Cuba has been the sending of family
remittances from abroad. In the great majority of cases, they have made
it possible for locals to cover the expenses of their businesses, buying
inputs under the table, or on the hard currency stores — called "Stores
for Collection of Hard Currency" (TRD) — at prices with a mark-up of
250% of the actual value.

Though the government doesn't report it, at the end of last year the
remittances from Cubans living abroad, principally in the United States,
totaled 2.605 billion dollars.

If this amount is added to the value of others items sent — food,
medicines, appliances, clothing, shoes and trinkets of all kinds — the
figure would rise to 5.105 billion dollars.

Remittances exceed revenues from tourism

Last year, remittances to Cuba greatly exceeded the revenue from tourism
(2.613 billion dollars), nickel (1.413 billion), and the sale of
medicines (0.5 billion). Indeed, if the costs of each item were known,
the difference might be significantly greater.

The Cuban leaders, although they remain silent, know that relaxing
controls on private activity has exponentially fostered the sending of
remittances. This money contributes to the financing and consolidation
of private micro-enterprise in Cuba, which even with its limitations,
and despite all the obstacles imposed by the State, today constitutes
the only moderately successful element of the reforms.

ABOUT THE AUTHOR

Osmar Laffita, Holguín, 1945. Merchant marine for 20 years. In 1991 he
began working in tourism and did so until 1994. In 1993 he joined the
Democratic Socialist Current, and in 2007 linked to the Democratic
Solidarity Party. Since then he collaborates with Cubanet and Primavera
de Cuba. e-mail: ramsertgandhii@yahoo.com

From Cubanet

29 August 2013

Source: "Self-employment or Private Property / Osmar Laffita |
Translating Cuba" -
http://translatingcuba.com/self-employment-or-private-property-osmar-laffita-2/