"Self-Employment" in Cuba is Not Private Business

Tuesday, June 16, 2015
By Cuban lawyer Nelson Rodríguez Chartrand in The PanAm Post:

Self-Employed in Cuba? Good Luck with That

Economic "Liberalization" Only Heaps More Indignities on Cuban People

When one lives under a totalitarian, dictatorial society — just like the Cuban system — you can’t expect anything good from your rulers, nor from the laws or decisions adopted by them. For no matter how benevolent and well intentioned they may seem, they always implicitly bear the perverse objective of satiating their uncontrollable hunger for power and riches, to the detriment of freedom and the well-being of their citizens.

Private property has always been one of the fiercest enemies of the Cuban dictatorship. Thus, from an early age, they instil in our consciences the idea that private ownership has been the biggest cause of all humanity’s woes — ironic, given that for the great dictator and his cronies, Cuba and all that lies within it (even her people’s private thoughts) are treated like a personal fiefdom.

However, from 2010, the idea of incentivizing and widening the practice of self-employed work occurred to these monopolists. On the one hand, according to them, the aim was to create another employment alternative which would increase the supply of goods and services, all to benefit the Cuban people — how nice of them, right?

Another perspective is that it was designed to make Cubans and the world believe their intentions of bringing about a revolutionary economic and social opening.

Thus they could kill two birds with one stone: firstly, to revive the people’s hopes and forestall for a few years more the inevitable social uprising, the consequence of the miserable existence that we Cubans live. Secondly, they could achieve a rapprochement in their economic relationship with the West, thus filling their coffers and keeping themselves in power.

Misery Business

But time is the enemy of lies. Now, almost five years after the announcement of this perfidious strategy, the Cuban people continue to be mired in misery, and the implantation of self-employment, far from encouraging their well-being, has only managed to increase corruption, exploitation, and want.

Increasing numbers of self-employed workers have had to hand over their licenses and give up. Below I’ll lay out some of the ordeals that these self-employed Cubans have had to go through in their own words, omitting only their names to protect them from further shame and mistreatment at the hands of the state.

The business isn’t private at all, for the state controls everything. It’s the only provider of raw materials and goods, upon which it imposes abusive prices, forcing us to sell our products on at an expensive price to the population. As you’d expect, this affects our sales and prevents us from changing the prices of our own products, to say nothing of the poor quality of raw materials, which also affects the quality of our stock.

Meanwhile, the almost permanent lack of basic products like eggs, flour, cheese, etc., means that when they appear, well-organized black market traders take everything, only to sell them on later at even more irrational prices.”

“I was declared redundant from the employment center where I’d worked for 10 years, and I saw in self-employed work an attractive proposal, but I was wrong.

Now I have to work 11 hours a day to obtain a miserable salary. Although it’s a little better than the salary I had as a state worker, it’s not enough to definitively escape misery. So you have an idea, I’ll explain the rough outlines to you:

The state rents me my shop for CUC$50 (US$50) daily, from Monday to Saturday. I pay my helper CUC$50 daily, as well as the night watchman another CUC$50.

Now to explain the daily earnings that I make in an average year of work. From daily profits of CUC$319 I deduct the CUC$150 mentioned above, leaving CUC$169, which across a month equals CUC$4,056.

From these gross earnings I have to subtract license fees of CUC$500, CUC$175 social-security payment, and taxes of 10 percent on my profits, representing approximately CUC$405, meaning a total of CUC$1,080. Taken from my monthly earnings, I’m left with a gross total of CUC$2,976.

But it doesn’t end here. It’s almost impossible for self-employed business owners to avoid becoming the victim of an inspection by corrupt state officials during a month of work, who always look for a justification to punish them with fines that can reach up to CUC$1500. As a result, business owners always have between 300 and 500 pesos ready to bribe them and thus avoid the fine.

Taking away a bribe of at least CUC$400, I’m left with gross monthly earnings of around CUC$2,576.

Then from these earnings, we deduct the elevated investment costs in raw materials, meaning that net earnings only reach a pittance, barely enough to live on. In reality, I’ve already thought very seriously of handing in my license and starting to sell on the black market, where at least I wouldn’t have to pay the taxes and would only have to bribe the inspectors. The majority of business in Cuba function in this way, although the statistics never say it.”

This is how things stand: don’t let them fool you. Self-employment in Cuba has nothing to do with private property nor with the well-being of the people, and plenty to do with exploitation, corruption, and misery. Why with misery?

Because the scarce resources that the state offers the population through its degrading “markets,” are mostly hoarded by intermediaries to later sell them on, and by legitimate buyers to use them in their own quasi-businesses. As a consequence, the vast majority of the people don’t have access to them, and thus they have to turn to underground markets and truly abusive prices.

All of this, from the inability and disinterest of the state in satisfying the basic needs of the Cuban people.