Since Obama Deal, Number of Self-Employed Licensees in Cuba Drops

Wednesday, January 20, 2016
Fact: There are less "self-employed" licensees in Cuba today than when President Obama announced his one-sided deal with Cuban dictator Raul Castro on December 17, 2014.

Over the last year, the number of "self-employed" licensees has dropped by nearly 10,000.

Add this to every other metric that proves Obama's policy has been counter-productive: repression has intensified; Cubans fleeing the island has doubled; U.S. agricultural exports have plummeted; religious freedom violations have increased tenfold; and Cuba's Internet access ranking has fallen.

However, the decrease in the number of "self-employed" licensees is perhaps the most symbolic, as Obama's entire policy has been focused on "empowering" this small sector -- even at the cost of Cuba's courageous democracy leaders.

All of the changes in Commerce and Treasury Department regulations have been geared at specifically helping the "self-employment" sector grow.

Yet, the opposite has been taken place -- which was entirely predictable.

Back in April 2014, we warned about this wrong-headed theory:

"Can lifting U.S. trade and investment sanctions benefit Cuba's 'self-employment' (cuentapropistas) sector?

The short answer is: Not really.

Cuba's military and intelligence services control and run the conglomerates of Cuba. The 'self-employment' sector represents a very small part of the island's economy and it is important, in the debate over sanctions, to understand its nature and limits. During economic crises, the Castro regime typically authorizes a host of services that Cubans can be licensed to provide, keeping at least a portion of what they may be paid. The world's news media refers to these jobs as 'private enterprise,' which implies 'private ownership.' Yet Cuba's 'self-employed' licensees have no ownership rights whatsoever - be it to their artistic or 'intellectual' outputs, commodity they produce, or personal service they offer. Licensees have no legal entity (hence business) to transfer, sell or leverage. They don't even own the equipment essential to their self-employment. More to the point, licensees have no right to engage in foreign trade, seek or receive foreign investments. Effectually licensees continue to work for the state -- and when the state decides such jobs are no longer needed, licensees are shut down without recourse [...]

Based on the lessons of history, those who still believe 'self-employment' licenses are 'a step in the right direction' toward capitalism, actually have all the more reason to support U.S. sanctions. Self-employment was a temporary reaction to loss of Soviet subsidies, and with the remnants of the Chavez regime in Venezuela now imploding, Cuba will likely continue allowing it. Yet the historic lesson is clear: The Castro regime only responds when it is economically pressed. Once the Cuban economy stabilizes or begins to 'bounce back,' the Castro government reverses itself to freeze or revoke self-employment licenses. Lift U.S. sanctions and Cuba's government will solely focus on strengthening its state conglomerates and the repression required to suppress change. Thus, U.S. sanctions are the best friends that 'cuentapropistas' now have."

The fact remains that the Castro regime has never made any changes out of good-will, but only when forced out of necessity.

Nothing has changed.

Thus, rather than empowering Cuba's "self-employed" sector, the opposite has been the case. The Castro regime's military conglomerates, led by GAESA, have been at the center of all trade delegations. Even the limited spaces in which "cuentapropistas" previously operated are being constricted so that GAESA can further centralize its control of the island's travel, retail and financial sector. This has led to the widespread expulsion, arrest and confiscation of "cuentapropistas" from designated tourist zones.

Meanwhile, a follow-up theory of the Obama Administration was that U.S. businesses would pressure Castro into allowing greater space for the "self-employment" sector to operate.

Again, the exact opposite is happening.

Just this week, Cuba's Minister of Tourism, Col. Manuel Marrero Cruz, stated about U.S. business interests, "the Americans will come, but they'll enter dancing to our tune."

They already are.

Rather than pressuring the Castro regime, the business community is instead lobbying the Obama Administration to circumvent U.S. law and allow it to cut deals with Cuba's military monopolies.

The biggest losers -- the Cuban people.