The conclusion of the recent report by the opposition platform Cuba Siglo 21 on the emergence of micro, small and medium enterprises (MSMEs) in the island’s economic panorama is clear: they have failed. Originally intended to provide oxygen to the island’s weak market – and replenish national coffers in the process – they never succeeded in attracting capital from exile, nor did they demand the economic freedom essential to the fulfillment of their mission.
According to Cuban analyst Emilio Morales, editor of the report, “the ‘openness’ movement that the Cuban regime launched through the MSME law was overwhelmingly rejected, not only by Cubans living on the island, but… also from the exiles.”
The proof lies in the number of private companies registered since 2021 – when the government promoted the law that allowed the creation of private companies – and the number of Cubans who decided to leave the country by paying thousands of dollars or demonstrated their solvency to support their emigrated relatives, a budget that in another reality could have been the initial capital of any self-employed person.
In the last three years, half a million Cubans have arrived at the Mexican border with the aim of entering the United States. Added to this are another one and a half million who have entered this country through the parole program or hope to do so. Morales estimates that together they make up about 20% of the Cuban population.
“In terms of money, we can say that this operation (parole), if it materializes, represents an investment of around $30 billion by the Cuban diaspora and could be carried out in a period of three to six months.” An operation that represents more of a ‘rescue’ than immigration and dwarfs all others,” he says. “Given the dilemma that Cubans find themselves in today – emigrate or start a business under the new MSME law – as an opportunity for a fresh start, the decision to emigrate has overwhelmingly prevailed.”
According to the analyst, the mass demonstrations of July 11, 2021 represented a turning point in the government’s policy
According to the analyst, the mass demonstrations of July 11, 2021 represented a turning point in the government’s policy, which was divided into two fronts. On the one hand, the increase in repression was evident and resulted in hundreds of political prisoners being imprisoned. On the other hand, the state quickly looked for a way to calm the mood among the population. Both the apparent opening to private individuals and the free visa to Nicaragua – which gave Cubans a new migration route – were part of the measures taken.
However, according to Morales, MSMEs are just a facade to fake economic freedoms that don’t really exist on the island. “To be approved (MSMEs, these) have to go through several filters, from local and regional governments to the Ministry of Economy and Planning, as well as the hidden filters of counterintelligence and the PCC. A selection method that provides fertile ground for exclusion based on ideological discrimination and corruption,” he says. A law that the Cuban regime refused to implement when there was a thaw with Obama, and this was the right time to do it. Instead, he chose to halt reforms and destroy the largest entrepreneurial movement the island had seen in six decades of communism.
An example of this is the catastrophic difference between the number of private establishments that exist on the island – about 8,938 according to official figures – and the rest of Latin American countries, which range from more than four million in Mexico to between 147,000 and 880,000 in the smallest Crowd. “It’s the dynamics of the market. Each of these countries has its own rules to encourage the development of entrepreneurship, unlike Cuba, where the constitution prohibits the concentration of wealth, the state limits prices and the banks keep the dollars that the companies they own in theirs Businesses win, retained.” Management”.
Furthermore, he continues, Cuban statistics do not reflect the number of these ventures that do not survive the first few months of operation or even flourish. “If we take as a reference the statistics of MSMEs in Latin America – where only 45% of them survive in the first two years in conditions of complete business freedom, price freedom and a completely open market economy that allows access to finance from banks and private companies etc. – this number of MSMEs created in Cuba in the first two years is really disappointing and not flattering at all.”
Morales also noted recent attempts to establish closer ties between Cuban-American businessmen and the island’s government, which included a meeting between the US side and several Cuban MSMEs in Miami. On other occasions, several owners of these companies have sent letters to US President Joe Biden demanding an end to the embargo affecting their companies and the removal of Cuba from the list of countries that support terrorism.
“It is understandable that the Biden administration, in its effort to stem the wave of migration, is seeking to find formulas that provide incentives to Cubans.”
“It is understandable that the Biden administration, in its effort to stem the wave of migration, is trying to find formulas that will incentivize Cubans to stay on the island and not leave the risky country to emigrate to the United States . “What prevents this empowerment, however, is the Cuban regime itself with its gagging laws, with its relentless repression and with its constant obstruction and persecution of wealth creation,” says the analyst.
The Cuban regime, in turn, has used the strong migration waves of recent years to “blackmail” the North American country. “The United States has a large arsenal of effective and dissuasive tools within international law to put an end to this immigration extortion,” he added. But “engaging in political marketing operations to try to promote a private sector that does not exist, that is artificial, and that has been constructed at the whim of the regime is a regrettable and useless exercise.”
Last August, Cuba Siglo 21 presented a series of demands to the United Nations Human Rights Commission aimed at establishing a truly functioning private sector on the island. The demands included freedom of registration and management of companies by their owners, as well as openness to a free market and non-discrimination on political grounds. The aim of the measures is to get the country’s economy back on track, as supporting a private sector under the current conditions is “absurd”, the platform said.
“The main obstacle to prosperity in Cuba is not the exogenous sanctions, but the internal blockade that the regime has imposed on its citizens. It is the mental block of the oligarchs who control the country and do not fully understand that their time has passed.” . . “That democracy is necessary for the country to function, for capital to flow and for the economy and population to stay afloat,” he concludes.
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