Cuba’s new private companies display products at the fair

HAVANA (AP) — The event, held at a convention center in Cuba’s capital, looks like many trade shows: music blares as visitors stroll between colorful booths displaying a wild variety of products: furniture or clothing, glassware or recycled paper, chocolate or cleaning supplies.

But it’s a commercial milestone for Cuba: the companies showcasing their wares are mostly formal, private companies that were only legalized about six months ago – more than half a century after the communist government banned almost all private companies.

“We are witnessing something unprecedented, at least for our generation,” said César Santos, a 36-year-old engineer who is a partner in Lucendi SRL, a company that provides electrical installations for both residential and government customers. “We see other companies that we didn’t even know existed.”

Born 18 years after the government closed or took over private companies in 1968, Santos consolidated a Soviet-style socialist system forged after the 1959 revolution led by Fidel Castro.

Cuba’s one-party political system survived the collapse of the Soviet Union in 1991, but its socialist economy has struggled to find a foothold in the decades since it lost heavy Soviet subsidies. It has long tried to attract foreign investment and expanded tourism, despite US embargo measures hampering both. But government sector productivity remains dismal.

Fidel Castro’s government reluctantly began allowing small-scale private enterprise in the early 1990s, then cracked down amid complaints that it was creating a relatively wealthy class under a system that favored equality over wealth.

In 2010, with the inefficient economy still struggling, the government led by his brother and heir, Raul, once again opened the door to individual companies. On the eve of the pandemic, about 600,000 people worked in this sector on the island of 11.3 million people.

They run small restaurants, rent rooms, offer repair services, even have at least one fancy clothing boutique — though they can reportedly only employ family members or a handful of outsiders.

But the new policy, which went into effect in September – while the economy has been battered by shortages, pandemic restrictions and a tightening US embargo – potentially goes well beyond that: it allows actual businesses, which can employ up to 100 people, to do one obtain formal funding and do business with state-owned companies.

In six months, 2,614 new “limited liability companies” – or SRLs in Spanish – have registered. Of these, 2,523 are private companies, the rest are either state or cooperative companies. Most are in the Havana area.

So far, they employ around 42,000 people.

However, limitations remain. The government says the state will remain the dominant force in the economy and the new companies will not be able to engage in journalism or provide essential professional services such as architecture, medicine or law.

And the businessmen at the fair said they still face bureaucratic hurdles that need to be cleared if the system is to work better: For example, the banking, import and export bureaucracy is complicated, they said.

On the last Sunday of the fair in the Expocuba center on the southern outskirts of Havana, 720 companies and cooperatives will present everything from yoghurt to building materials.

Officials hoped the meeting would help entrepreneurs network with each other, said Suleidis Álvarez, an official with the capital’s Plaza of the Revolution municipality. For example, she said, a woodworking company found a manufacturer of nails it needed.

The youth of the participants was remarkable on an island that has lost many young people to emigration.

“The migration crisis we are going through is really sad,” said Santos. “Nevertheless, we see opportunities arising from this private venture (politics). … I’d rather bet on building my business in the country I’m in.”

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