Self-Employment - A Key to Disaster

Self-Employment: A Key to Disaster / Jeovany J. Vega
Posted on October 6, 2013

Whenever the subject comes up, I remember an anecdote a friend once told
me. One morning in March 1968 he and an uncle, the owner of a small
fruit stand, opened their store early. The story behind this
hard-working man was that he had gotten his start by making the rounds
of the major streets in Artemisa, selling fruit from a pushcart. Little
by little he made improvements to the cart until he was at last able to
rent a storefront and transfer his operation to that location which,
after many years and great sacrifice to his family, was finally his. But
as he was waiting on his customers on that fateful morning in 1968, an
official dressed in olive green and carrying a briefcase appeared at the
doorway.

"Are you the owner?" the official inquired.

"Yes," said the man.

"Could you please step outside?" the official asked from the doorway.

When the owner went out, the official crossed the threshold and once
inside said, "This property has just been expropriated by the Revolution."

And that was that. My friend told me that the former owner could not go
back in even to get a chain that he had left at the cash register along
with his wedding ring a few minutes earlier. Like thousands of other
Cubans he was dispossessed of the small family business in which he had
invested so much over many years. The old folks tell me that after the
so-called "revolutionary offensive" you could not find so much as a
fried croquette for sale on the streets.

A recent State of Sats* panel focused specifically on the current state
of self-employment in Cuba, a sector whose fundamental dynamics vary
depending on what stage of post-revolutionary history we are discussing.
Panel members recalled the various phases of uncertainty this sector has
gone through to get to where it is today. Many of us remember the
circumstances under which this economic alternative was "officially"
introduced. At the peak of the Special Period it served as the
government's exit strategy, an escape valve used to relieve the extreme
pressure that had built up. I myself remember the giant headline printed
at the time in Granma: "Self-Employment Is Not an Economic Solution." In
other words, though they promised to take the policy seriously,
government actions in the early years refuted that pledge, making the
whole thing seem farcical.

We all witnessed how, as soon as it started feeling more confident, the
government began to impede development in this sector by imposing all
sorts of restrictions, designed simply to force the self-employed out of
business. Faced with the inability to pay the excessive taxes demanded
of them and with bankruptcy as their only other option, thousands of
small business owners turned in their commercial licenses. There was, of
course, political motivation involved. It was about needing definitive
proof that private businesses could not compete with the immaculate
efficiency of socialist businesses. In the meantime, the government
maintained a rigid policy of denying all new applications for commercial
licenses for most activities. It was a policy that continued into the
following a decade and one whose results are still felt today. It meant
that only those businesses that were profitable enough to pay sky-high
prices for raw materials on the black market and bribes to inspectors
and police officials survived. It also led to widespread moral decay in
society in general, a condition which still afflicts us today.
The government claims that this time it has the political will to
guarantee a different outcome. But there are indications — some subtle,
some overt — that hint at the real intentions covered over by the tone
of official rhetoric. For example, there is still a body of legislation
on the books giving legal authority to agencies such as the Office of
Public Prosecutor to bring charges against individuals — whether they be
agricultural producers or newly self-employed workers — who only find
out about it after they have lost the shirts off his backs.

Most authorized businesses, which generally are required to show proof
of purchase, still have to cope with the insurmountable obstacle of
sky-high prices for supplies and raw materials, making any attempt to
turn a profit into a joke. The state remains the sole supplier, a
situation directly at odds with changes made early this year to the
emigration policy. It means that a producer is not allowed to directly
import supplies even when it is possible for him to do so. This stands
in stark contrast to the "analogous" examples of China and Viet Nam,
where such transactions are easy.

Entire crops rot in the field because of the inexcusable
irresponsibility of the National Stockpile Corporation — the only body
of its kind authorized by the government — which so fears intermediaries
that it has never indemnified anyone. Real autonomy has never been
granted to these new enterprises, which remain subject to the ludicrous
operational methods of the ineffective state system. This is also the
case with transportation cooperatives, whose members are prohibited by
law from owning their means of production, just one of thousands of
problems too numerous to mention here.

In short, I have the impression that the current situation is
fundamentally not much different that of the past. When a business
fails, it can be attributed to poor management by the owner. But, if we
see a massive trend occurring, then we are talking about ineffective
management affecting an entire country. Surely we Cubans are not that
bad as administrators, especially when it involves risking our meager
savings in a family business.

Those who formulate such policies understand mathematics yet have
nevertheless designed a dysfunctional system. They doggedly insist on
sticking to it because their ultimate goal is not to assure the success
of these "nano-businesses." Rather it is to impede them so that
prosperity might be achieved through a management system that has wasted
decades through inefficiency and administrative indifference, all of
which began on that fateful day in 1968.

I hope I am wrong but, as long as we continue on the current course, I
have a feeling self-employment in Cuba, as represented by the small
family-run business, will be the key element in a future disaster.

*Translator's note: An independent Havana-based organization which
sponsors public discussions on civil society and democratic political
change in Cuba.

25 September 2013

Source: "Self-Employment: A Key to Disaster / Jeovany J. Vega |
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