From dried fruit to bike restore, Cuban entrepreneurs put collectively for a more open economic system - Financial Markets Worldwide

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Financial system1 hour previously (Aug 27, 2021 07: 22PM ET)


From dried fruit to bike repair, Cuban entrepreneurs prepare for a more open economy
© Reuters. FILE PHOTO: Of us stroll in a industrial boulevard in Havana, Cuba, June 15, 2021. Image taken on June 15, 2021. REUTERS/Alexandre Meneghini


By Marc Frank and Anett Rios

HAVANA (Reuters) – Cuban entrepreneurs, working companies starting from promoting dried fruit to repairing bikes and setting up utility, are scrambling to treasure the opportunities and challenges ahead after a landmark alternate in the foundations governing the Communist-toddle economic system.

Earlier this month, the authorities launched regulations a pair of reform system-with-legalization-itsy-bitsy-companies-2021-08-13 that would enable itsy-bitsy- and medium-sized ventures to formally incorporate as companies and salvage admission to convey financing, ending a protracted time of classifying them as ‘self-employed’.

The measure is viewed by many analysts as one among important reforms undertaken since all companies – down to shoe-shine boys – were nationalized in 1968 by unprecedented chief Fidel Castro.

Omar Everleny, one among Cuba’s most efficient-identified economists, described the reform as a extraordinarily sure one, lengthy-sought by many Cubans.

It does grasp important limits – as an instance, of us can beget no greater than one commerce and might perhaps perchance now not contract international companions or possess order international commerce.

“Given the economic scenario and final restrictions, this can now not mean a broad economic enchancment in the quick term,” cautioned Everleny.

For Nayvis Diaz, founder of Velo Cuba, a bicycle restore and condominium company with 17 staff in Havana, it marks a most considerable alternate, alternatively.

“What is well-known is we’re genuinely fully fragment of the economic system and now not marginalized,” she acknowledged.

“Many of us with a entire lot of social and commerce responsibilities in the metropolis, and a entire lot of others in the non-public sector, were wanting ahead to this.”

The measure kinds fragment of a package deal of market-oriented reforms undertaken by Cuban President Miguel Diaz-Canel over the closing yr, because the coronavirus pandemic and more sturdy U.S. sanctions tipped the shaky economic system actual into a tailspin and resulted in shortages of meals, treatment and other classic items.

Cuba’s economic system decreased in size by 10.9% in 2020 and shrank one more 2% this yr through June, in contrast with the same interval in 2020. It stays reliant on tourism and imports.

The Fernandez brothers, who beget Deshidratados Habana, Cuba’s handiest company processing and promoting dried fruits, were however alive to.

“A incorrect economic system can unique opportunity,” Oscar Fernandez acknowledged, standing amid makeshift ovens and other gear in his basement. The corporate began when the pandemic compelled their cafeteria to shut, he defined.


Tons of of itsy-bitsy companies grasp found niches in a convey-dominated economic system quick on imagination and initiative: from gourmet eating locations and 3D-substances possess to utility pattern, dwelling provide, landscaping and construction contracting.

The non-public sector, with the exception of farmers, has expanded for the explanation that 1990s to embody greater than 600,000 self-employed license holders. It contains itsy-bitsy-commerce owners, non-agriculture cooperatives, their staff and individuals, tradespeople and taxi drivers.

The Fernandez family commerce sells dried fruit online and has positioned their product at three upscale non-public meals shops in Havana.

“The horizon has opened,” acknowledged Oscar, who holds a doctorate in economics. “As soon as integrated we can do relatives with convey and non-public provide chains and market our product to whomever – from convey-toddle shops to motels, as effectively as export and gaze financing from local banks or in a international nation.”

Diaz, in her workshop crowded with bicycles, used to be also pondering the potentialities for boost, adding that she could be cautious and consult her prison respectable and accountant every step of the diagram.

“Now we need to analyze the economic context closely because we can grasp an rising responsibility with the total of us who we are going to rent in our companies,” she acknowledged.

The Fernandez brothers grasp drawn up plans for a itsy-bitsy manufacturing unit that would course of a ton of fruit day-to-day, alongside side for export. They dream of owning a store that sells their merchandise.

“Now we grasp the land and suppliers lined up. We honest need about $100,000 in financing,” Oscar acknowledged.

Nonetheless one main trouble stays – one shared by many Cubans on social media.

“We calm need to gaze what occurs in apply: how a long way the authorities genuinely lets in us to possess,” Ricardo Fernandez acknowledged.

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