A look at the challenges of small business in Cuba.
Editor's note: As the U.S. begins to look at relations with Cuba, a Cuban American attorney shares his personal perspectives and business insights on small business, human rights and infrastructure. This piece represents another view of small business, one of many perspectives within Latin Business Today.
There has been much discussion about the recent passing of Fidel Castro.
Many claim his impact on the country through his policies improved the nation. Others, however, point to the numerous human rights violations as his indelible mark on Cuba.
Here, we will discuss topics most have not considered likely due to the lack of knowledge. My hope is those reading will leave having a better grasp of the situation and are ultimately well informed on what has gone in Cuba.
As mentioned earlier, Fidel Castro’s death brought about varying opinions depending on one’s frame of reference.
Many have said Castro should be celebrated for bringing equality to Cuba such as in the form of universal healthcare and education for all (it should be noted Cuba’s educational system and literacy rates pre-Castro were on par with current levels).
Now, let’s assume for discussion purposes the “successes” attributed to Castro are indeed valid.
Was it worth the current situation in Cuba?
For those unaware, and contrary to public perception, the situation in Cuba is quite dire. Thus, it is important to state what occurs and has occurred in Cuba.
First, let us state what most people know
First, let us state what most people know,
Cuba is a totalitarian communist regime that rules with an iron fist. There is no freedom of speech, no freedom of press, and no freedom of expression.
Now, let’s get into what many people may not know. There are no free elections. You may have heard Cuba has elections and they have 100% voter turnout.
Unfortunately, those elections only have one party on the ballot, the communist party so there is no choice of individuals.
Second, voters are required to vote.
Second, voters are required to vote.
Not voting is against the law, which is odd considering the positions on the ballot are uncontested.
While some will point to a sole election where there was a contested election (the non-communist candidate lost and many believe Castro’s government forced citizens to vote for the communist candidate), there has been no contested election since.
Committee for the Defense of the Revolution
Another situation most individuals are not aware of is the Committee for the Defense of the Revolution (also known as CDR). CDR’s are, in essence, snitches for the government.
Each block in the country has a member of this CDR. If a CDR member suspects anything that is said or being done is something against the government, individuals singled out by the CDR are immediately taken from their homes and “disappeared” as the saying goes.
It should be noted since former President Obama’s engagement with the island, persecution on any and all dissident action has been on the rise.
A command economy virtually no private sector
Also, there is the economy on the island.
As most know, the staple of a Communist state is its centrally planned command economy. Under a command economy there is no private sector as the government handles all movement of goods.
Such is the case in Cuba, as all the companies are government owned and operated with few exceptions (now some companies in Cuba are joint ventures with foreign partners but the government has majority interest in all joint ventures regardless of the investment by the foreign interests).
You also have the practice treating all jobs performed with the same value and paid the same as a result so, physicians are paid the same as janitors, for instance.
Now, that is not to say the job of a janitor is not important. However, to put it on par with a physician is quite a hyperbole.
Since you have physicians making such paltry salaries, it is no wonder why many physicians have chosen to become taxi drivers instead continuing their profession as they make more money in tips than they do working as physicians.
As a result, the system and the internal mismanagement that goes with such an economic model, is inefficient and has produced a significant amount of waste and a drag on the GDP.
For those who have visited Cuba you may have seen people renting their homes or privately owned restaurants called paladares.
Please keep in mind; this is not what it seems.
Next- 4 Restrictions on restaurants and infrastucture
About the author
Senen Garcia operates SG Law Group LLP a thriving law practice in multiple states assisting clients with their corporate, real estate, estate planning, and property insurance claim needs. Additionally, Mr. Garcia has accounting practice assisting small businesses with tax and accounting needs. Along with his work with SCORE, Mr. Garcia has also provided assistance with the local Small Claims Clinic that provides assistance to individuals filing small claims cases. Mr. Garcia has spoken on a variety of topics such as: How to start a business, Communication within your organization, Importance of Capital Accounts, What’s in Business Name Anyway?, and Stock Purchase Agreements vs. Asset Purchase Agreements.Website