Tighter rules threaten Cuba's independent clothes sellers

13 October 2013 Last updated at 01:34 GMT

Tighter rules threaten Cuba's independent clothes sellers
By Sarah Rainsford
BBC News, Havana

Cuba's privately run clothes stores range from folding tables piled with
accessories on a front porch to glass-fronted, air-conditioned shops
full of the latest Latino fashions.

In the three years since the island's communist government expanded the
opportunities for private business, the clothes stores have sprung up
across Cuba, usually offering a wider choice and cheaper price tag than
state-run alternatives.

But now the government has announced it is tightening the trading rules,
leaving thousands of retailers facing the loss of their licenses and
their livelihood.

"We're waiting for the inspectors to show at any moment," says Victor,
in the porch of his central Havana home where he set up shop three years
ago.

Ban on imports

The amended rules were published in the government's official gazette
and specify that the clothes sellers, whose licenses define them as
tailors and dressmakers, are banned from selling imported fashions.

"We're supposed to sell things we make ourselves, but people started
bringing clothes into the country and we started selling them - and they
let us do it," Victor explains, as customers browse rows of brightly
coloured shorts, shoes and baseball caps.

Officially, individuals are not allowed to import items for sale.

But Cuba has no wholesale provision for its nascent private sector, so
unlicensed suppliers run networks of "mules", people who hand-carry
everything from clothing to computer parts into the country.

"We invested and invested in our businesses and they didn't stop us,"
says Victor, whose stock is mostly from Panama and the US. "Now Havana's
full of imported clothes stalls."

But now the Communist Party newspaper Granma has informed
license-holders that by selling imported clothes they are breaking the
law, meaning that as many as 20,000 stores will have to close.

Slump in sales
"We pay taxes, we pay salaries and taxes for our employees. I'm sure the
state benefits from us," points out Victor, bemused - like many - at the
sudden change.

It comes despite a government target of moving 1.5 million employees off
the bloated state payroll and into the newly extended private sector.

And it is a target they are far off from reaching, having issued just
436,342 private licenses so far - 18% of which are for workers who have
kept their state-sector jobs.

Many shopkeepers say there is an easy answer to the problem. They
suggest the government simply alters the licences from "seamstress" to
"clothes-seller" and charge higher taxes, benefitting the government,
and allowing them to stay in business.

But officials insist the new measure will "bring order" to the non-state
sector and put an end to illegal practices.

They point to the approval of ten additional business activities,
including allowing people to set up as estate agents, as proof of the
state's continued commitment to expanding "non-state" employment.

But Cuba's new breed of retailers detect an ulterior motive. Anecdotal
evidence suggests sales in often drab and poorly stocked state stores
have slumped.

"It's always the same stuff in the state clothes shops, like they're
incapable of buying any nice things!" housewife-turned-shop-owner Sandra
says.

"So people come to us for what they like, for what's modern."

Young and trendy
"We buy everything in the markets. The clothes are really dear in state
shops, and uglier," a young bicycle taxi driver agrees. "You can pay $60
(£38) for a pair of shoes in the state stores. Do you know how far I
have to pedal, to make that much?!"

He is sporting a bag decorated with the UK's Union flag, a relic from
last year's big major trend. Then, it was exclusively the private
vendors who fed demand, sourcing and supplying the fashion-conscious
with customised T-shirts, shoes and belts.

"This business certainly offers serious competition to the state shops,"
agrees Omar Everleny, of the state-run Centre for the Study of the Cuban
Economy. He calls the decision to revoke the licenses "an error".

"The state should be competitive, not use these mechanisms," he
believes, echoing the widely held view that the clampdown will drive
goods back onto the black market, precisely the reverse of the reforms'
supposed aim.

"For 54 years we thought the private sector was bad. Still the word
'private' is not even used here," the economist points out, probing the
logic of the move.

"It's very difficult. There is still a lot of resistance to change."

Uncertain future
So as shopkeepers pondered their future, a state TV programme extolled
the virtues of home-made clothing, decrying the dictates of an
"exploitative" global fashion industry. Commentators talked of a
potential revival of home-grown designers.

The newly market-savvy traders are highly sceptical.

"No-one will buy handmade stuff now they're used to coming to us and
buying imports," Sandra scoffs.

"But we don't know what we're going to do now," she says, surrounded by
racks of clothes.

A Labour Ministry official informed state media that license-holders
would get a personal explanation of the new measures, but stressed that
"the law is already in force and should be complied with".

So Cuba's clothes sellers are waiting - still working - unsure and
anxious about what comes next.

"This business isn't going to make me rich," one woman says, folding her
stock after a tough day without a single sale.

"But I've invested a lot of money here," she points out. "Now what will
I do?"

Source: "BBC News - Tighter rules threaten Cuba's independent clothes
sellers" - http://www.bbc.co.uk/news/world-latin-america-24474318