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2011-10-04 / Jorge Olivera Castillo
Private Business and Emerging Chaos
Will Cuban Socialism terminate in chaos?
Private Business and Emerging Chaos
Jorge Olivera Castillo
The working style known in Cuba as running own business, should be closed between two interrogation marks and an early applause to it should be kept off. The possibility to earn for living this way is quite far away from a relatively less hazardous way.
To have a clear definition of what has happened and what will be happening in relation to this modest relaxation of rigid economic and work schemes, it is necessary to interpret all the elements which appear in the scenario and not only the convenient parts with objective to create theories with doubtful connection with the reality.
Is it an attempt to save the regime or the country? In reality, it does not appear that there exists a genuine will to remodel the system for the benefit of more than 11 million residents of the island.
The changes, in this case to liberate one part of the productive forces permitting them to run certain types of work outside of the state sector, are not sufficient to think about a plan, setting a series of measures leading to total elimination of the inefficiency, and to give the employees all the rights inseparable from their human and labor conditions.
A view on the fiscal politics dedicated to this sector evidently includes the intention to threaten the actual and potential license solicitors to establish their own enterprise dedicating to one of 178 work categories.
For example, the rent tax oscillates between 25 % and 50 %; tax imposed on sales or services is 10 %, tax on labor forces contracting is 25 %, and there is also an obligatory contribution to the social security, another 25 %.
Other irregularities which maintain the level of skepticism without any movement, has its roots in the absence of whole sale market where goods and necessary sources for the respective services could be purchased.
Such demands have to be satisfied at the Foreign Exchange Shop (TRD) for astronomic prices, or have to be obtained at black market. Of course, the latter option is preferred, turning the rings of corruption, a phenomenon which exceeds the expert prognostics.
The testimony of a private trader who recently opened a coffee shop at his house´s portal located in a populated zone of the capital, reflexes the impossibility to reach an efficient control in the state businesses, enterprises, and factories, where the reduction of resources is in process, maybe now in a augmented form, due to the increase to up to 169 000 of private entrepreneurs (about 4 % of the productively active population), as the official media informed.
“I get the products at the black market and I pay the invoices using a contact at a Shop (which operates with foreign exchange) for one or two pesos convertibles” (1 dollar = 0.87 pesos convertibles).
“If the inspectors discover the cheat, I give them an offer and everything is alright. No one resists money. Till now I never had a problem and I hope the things will go well, ” assured my interviewee.
Anyway, not everybody is involved in these activities, some of them are really surrealistic, like a bathroom guide, button service, or lighter serviceman, who are disposed to suffer the high taxes as well as other associated risks in a context where illegal deeds are obligatory to reach at least a minimum profit.
Though the official numbers show an increase of license solicitors, nobody talks about hundreds of returned licenses.
At an informal level there was discussed a help to the entrepreneurs in form of micro credits, but this is not to be profiled as a massive politics and a quick application. There have been only rumors dissolved in speeches calling for sacrifice for the country and recessive laments situating the United States to the number one on a list of guilt for all internal failures.
There is not any or at least a little evidence that would represent the government´s intention to be at full disposal to extend the licenses for private entrepreneurs up to 460 000 in the remaining days of 2011.
If this initiative does not come together with real re-adjustments in legal and conceptual planning, new ways of increasing corruption will be created with other defects deeply rooted in all socio-economical structures of the country.
Some analysts insist that a model similar to the Vietnamese or Chinese is sought, but these two countries, apart from the cultural peculiarities very different to the Caribbean, needed two decades to see some fruit of their experiments.
It is foreseen, according to the conception of the private entrepreneurs in Cuba, that this will never be a solution for the existing grave problems.
This all seems to be more like an emergency plan to prolong the life of the sclerotic regime, than a source to take the nation from the deep crisis.
A fear to an integral opening which would finish the irrational absolute power is obvious. The ambivalence will continue as a tactics to get time.
Will the Cuban socialism terminate in a chaos?