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Entrepreneurial
spirit alive for small minority in Cuba
By Mike Williams. Palm
Beach Post-Cox News Service. Tuesday,
May 29, 2007.
HAVANA - It's nothing but a simple shed
with a counter stuck in the front yard under
a shade tree. The menu, a tiny chalkboard
hung from a rusty nail on the wall, offers
only two items: pizza and ice cream.
But the small food stand Esperanza Perez
has owned and operated in Communist Cuba
for the past 13 years has been life changing
for her.
What are these?
"Before this, my life was very difficult,"
she said. "My husband died and I had
to face life. I had my disabled mother and
my daughter to support. This business is
not making us rich, but we are surviving."
Perez was part of a new wave of Cubans
allowed to open private businesses in the
1990s, when Cuba's economy was devastated
by the collapse of the Soviet Union and
the loss of about $6 billion a year in subsidies.
The decision to allow privately owned enterprises
was a dramatic departure from Cuba's long
commitment to socialism, a doctrine adopted
by Fidel Castro after his 1959 revolution.
But as Cuba's post-Soviet crisis eased
in the late 1990s, Castro became uncomfortable
with the threat posed by private profit
in a state where riches are considered a
sin.
Cuban officials in recent years have clamped
down on the tiny private sector, raising
fees, cutting back the number of licenses
issued and increasing inspections.
The number of private entrepreneurs - called
"cuenta propistas," or "people
working on their own account" - dropped
from around 200,000 in 1996 to about 150,000
today, according to news reports.
The question on many minds is whether Cuba
will continue to rein in private opportunity
or open its economy further.
Although Castro remains firmly committed
to socialism, the 80-year-old leader has
been sidelined the past nine months by a
serious illness. He officially turned over
power to his 75-year-old brother, Raul,
in July.
Raul, head of Cuba's military, is said
to be a pragmatist open to the idea of limited
private enterprise. Cuban officials also
are candid about the need to improve the
living conditions of the Cuban people, most
of whom earn only $12 to $15 a month.
The cuenta propistas will be a part of
Cuba's future, Economics Minister Jose Luis
Rodriquez insisted insisted during a recent
press briefing.
"There is not a policy to destroy
private businesses," he said. "Legally,
people are allowed to do this. The state
never thought of private business as a menace."
That is good news to the business owners,
many of whom say they enjoy the challenge
of running their own enterprise.
"It's a good business that enables
me to maintain my house, to sometimes drink
a beer and to maintain my cars," said
Miguel Gonzales-Carbajal, a Cuban physician
who has run a "casa particular,"
renting rooms to tourists, for seven years.
"With just my salary, it was hard
to make ends meet," he said.
He charges $25 for a small room and $35
for a larger room that are clean, air-conditioned
and have private bathrooms. For this privilege,
he pays the state the equivalent of about
$325 a month.
"There is risk because if I have no
customers, I still have to pay the license
fee," he said. "But if we have
a month we believe will be slow, we don't
have to pay the fee but then we cannot rent
the rooms."
The concept of risk is new to many Cubans,
but some of the business owners seem to
thrive on it. "I really enjoy it,"
said Lazaro Ordonez, 44, who with his mother
Elisa, 62, has run Los Amigos, a tiny paladar
or private restaurant, out of their home
for 12 years. "You have to work more,
but in the end, you have a compensation,
a better life."
Cuban law allows the businesses to hire
only family members. The cost of the licenses
varies. Perez, who charges the equivalent
of about 30 cents for a small pizza and
13 cents for an ice cream cone, pays the
equivalent of about $116 each month for
her license and two family workers.
Entrepreneurs also pay 10 percent of their
profits in yearly income tax.
Cubans are loath to speak of how much they
earn, but a Cuban professional who researched
the private sector with thoughts of opening
a business estimated that a stand such as
Perez's might earn $200 a month in profit.
Also thriving are private markets, where
farm cooperatives and individuals pay fees
to sell goods and produce. The private markets
often have higher-quality produce than state-run
markets, although prices are also higher.
"The vendors pay 5 percent of sales
in taxes and 5 percent to rent their stalls,"
said Orlando Valdez, manager of a market
in Havana's Vedado neighborhood. "The
prices are set by supply and demand, but
if a vendor is charging very high prices,
we try to convince them to lower them."
Prices seem cheap by American standards,
with a pound of tomatoes costing the equivalent
of about 20 cents, while chicken and pork
sold for about $1 a pound in Cuban pesos.
Other vendors sell at a street fair that
takes place once a month in Vedado.
"I buy this stuff from the state and
pay 10 percent of each sale in taxes,"
said Roberto Garcia, 28, who sold mops,
brooms and detergent at the fair. "I
do OK because my prices are cheaper than
in the state stores. I sell soap for 5 pesos
(about 20 cents), while in the state stores,
it's 15. I'm not getting rich, but I'm surviving."
Most of the Cuban entrepreneurs say the
same thing. But most also say they would
never go back to their state jobs because
they would miss the pride of running their
own affairs.
At the Ordonez family's paladar, there
is almost always a long line outside waiting
for a chance to eat a typical Cuban meal
of pork or chicken, rice and beans. With
a beer or two, the meal costs the equivalent
of about $7, or roughly half the average
Cuban's monthly wage.
But the place is wildly popular and filled
mostly with Cubans, not tourists.
"This is good for us and good for
the country," said Lazaro Ordonez.
"We support our economic system, but
we hope they will allow more of these private
businesses."
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