Communist Cuba Recently Legalized Small Businesses, And They're Already 'Dominating' the Country's Economy
Editor’s Note: Our readers responded strongly to this story when it originally ran; we’re reposting it here in case you missed it.
It truly is amazing what a little personal ambition can do for one’s position in life.
Cuba is just learning that lesson after 70 years of strict communist rule: In only two years, the country’s move to legalize small businesses has become a major boon to the island nation’s economy.
Despite its many decades of antagonism against capitalism, and with glorious leader Fidel Castro now moldering in his grave, the communist regime in Havana softened its rules on small businesses in 2021. Though they are still restricted, personally owned businesses are allowed.
And lo and behold, these newly approved small businesses have become a “lifeline” for Cuba’s forever-struggling economy, The Wall Street Journal reported Oct. 4.
The country passed laws allowing Cubans to create small businesses with fewer than 100 employees, the report said. Since then, more than 8,000 small businesses have emerged covering all sorts of fields, including tourism, construction, computer programming and grocers.
The change has been amazing. Cuba — a nation always suffering from shortages — is still struggling, but these small businesses are so successful that they already account for about half the nation’s much-needed food imports, according to the Journal.
And it isn’t just food imports.
“These businesses are now leading importers in a country that relies on imports of everything from fuel to most of its food. Cuba’s economy minister, Alejandro Gil Fernández, said in a report to Cuba’s Congress on the state of the economy that imports by private companies could top $1 billion this year,” the Journal reported.
“They are on track to provide more than half of Cuba’s food imports,” it said.
Aldo Álvarez, a Cuban lawyer turned importer based in Havana, told the Journal, “In the last two years, the private sector has been dominating commerce in Cuba to an unprecedented level. We not only have businesses, but we have the capacity to import.”
These small businesses also are beginning to reach out to counterparts in the U.S. to import much-needed supplies and products into Cuba.
Still, government officials say they won’t allow the country’s citizens to get too wealthy or become big landowners, and the nation’s single-party rule won’t change or be reformed.
Regardless, the lesson is profound. The businesses are making the lives of about one-third of Cubans better, the Journal reported.
“Privately owned restaurants, bakeries, beauty salons and even gyms dot streets where before there were none,” it said.
Former Democratic Rep. Joe Garcia of Florida told the Journal, “Now there are little grocery stores every other block selling inexpensive things, food products. People complain that they’re expensive, but before there was nothing.”
The U.S. still has most of its sanctions in place against Cuba, but the country’s new tolerance for small businesses has made life better for many Cubans.
The communist country’s history of loosening its grip on the public only to start it back up all over again is not good. But right now the policy is working.
“We live with high levels of uncertainty,” Álvarez told the Journal. “It’s not the first time the Cuban state goes in one direction, only to reverse course and go in another one.”
When the policy was implemented, many Cubans assumed that only those with government ties would prosper. So far, however, that has not been fully the case. Many more have benefited than first imagined.
The effect has been wonderful for many. Capitalism has improved the lives of tens of thousands of Cubans.
Unfortunately, that might be reason enough for the communist government to end the experiment. After all, it fully proves that their trust in communism is disastrously misguided.
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