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By Tim Johnson, tjohnson@herald.com. Posted on Thu, Nov.
21, 2002 in
The
Miami Herald.
WASHINGTON - A common view among Cuba-watchers is that the thousands of
micro-enterprises that Fidel Castro has allowed to operate on the island in the
past decade comprise "islands of capitalism in a sea of socialism.''
They include small bed-and-breakfasts, 12-seat restaurants and other tiny
businesses.
But scholars at a conference on Cuba's economy said Wednesday that the
Castro regime has never allowed the private sector to flourish. It has choked
businesses with red tape, forced them into illegal survival strategies and
condemned them to a provisional and tenuous existence.
''These enterprises face a very insecure future,'' said Ted A. Henken, a
professor at Tulane University who wrote a doctoral thesis on Cuba's experiments
with self-employment.
Fighting off economic collapse after the fall of the Berlin Wall, the Castro
regime in mid-1993 permitted some Cubans to create their own jobs. It said
Cubans could seek licenses to work in any of 117 occupations, including bicycle
taxi operators, street vendors, artisans and other categories. With time, the
list of occupations grew to about 160 categories of self-employment.
By 1996, some 209,000 Cubans were self-employed. The number has since
shrunken to about 150,000 people, a sign of the mistrust the Castro government
feels toward the sector, the scholars said.
Still, the micro-businesses absorb the unemployed. For every licensed
self-employed worker, there may be as many as three other people who are
unlicensed, creating a ripple employment effect, the experts said.
''Even though it's just 2 percent of the labor force, it's an important
factor because of the multiplier'' effect in the economy, said Joseph L.
Scarpaci, professor of urban planning at Virginia Tech and a frequent visitor to
Havana.
The experts said they think the Castro government will continue to tolerate
the micro-businesses -- even as they deeply restrict them.
''I think they are here to stay,'' said Philip Peters, vice president of the
Lexington Institute, an Arlington, Va., think tank that organized the
conference. 'Government officials say, 'Look, they provide an array of services
that the government can't provide.' ''
Henken, focusing on the small private restaurants -- or paladares -- that
popped up around the island, said the government has imposed a thicket of legal
restrictions on them.
The facilities can't have more than 12 seats and all workers must be either
family members or live in the same household, he said. They cannot have
television sets, live music or bar areas.
The number of private paladares has fallen from a high of 1,562 in 1996 to
as few as 200 today, partly because of legal restrictions and high taxes.
Red tape means that owners of the micro-restaurants have to adopt
often-illegal survival strategies, resorting to hustlers to bring in tourists
because advertising is banned, and offering hidden rooms, illegal foods and
other inventive strategies, Henken said.
''It's still very mysterious and complex how [the self-employed businesses]
function and where the inputs come from,'' he said.
Ironically, the entrepreneurs are not necessarily keen on a dramatic further
opening of the economy, in part because their success is based on whom they know
and how they can get by in a restrictive socialist system, he added.
But many of the self-employed are risk-takers, and while their links to
official sources for supplies are deep, they still live partially outside the
government's control.
''The real heroes on the island are the self-employed,'' Scarpaci said. "They
are the future. I see people looking up to them.''
Thousands of bed-and-breakfasts now exist on the island, 40 percent of them
licensed to cater to foreign tourists, Henken said.
The Castro regime has slowly de-emphasized the nation's reliance on sugar
production in favor of tourism, bringing 1.7 million foreign tourists to the
island last year to occupy some of the 36,000 hotel rooms now on the island,
Peters said.
As more Cubans look for jobs in self-employment or related to tourism,
''you've got a demonstration effect that market mechanics work,'' he said.
''Everybody knows'' that capitalist techniques "pulled Cuba out of the
ditch.''
Scarpaci said, though, that the Castro government cadres ''are not filling
up the beds the way they thought.'' Service remains bad, efficiency is poor and
the numbers of tourists who come back to Cuba a second and third time are not
high, he said.
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