Cuba’s Limited Privatization

Raul Castro has made a very surprising move. Unlike his brother’s strict communist regime the Cuban government is now allowing limited privatization in an effort to boost their failing economy. The New York Times reports that approximately 85% of those who have jobs are employed by the Cuban government.  As a government worker individuals make only $20 a month in order to have access to free healthcare and education and receive a rationed amount of subsidized goods.  This shift in policy comes as the government faces the need to make sharp employment cuts, and is most likely being made in an effort to stave off any unrest that may follow.  While the move toward privatization is an exciting prospect for many Cuban citizens, the underbelly of this stimulus program is not as clear as one might expect.  There is a list of 178 specific jobs for which licenses will be given, including mending bed frames and fixing parasols.  The jobs appear to be designed to avoid mainstream higher-paying professions, such a lawyers or doctors. Furthermore, although licenses to own businesses will be more forthcoming, the ability to gain access to materials to run a business remains problematic.  Carpenters have no legal route for procuring wood, bakers have no way of receiving necessary flour, and every business will be heavily laden with taxes.  Unfortunately, many Cuban citizens may find themselves unable to successfully conduct businesses but still be responsible for paying the necessary taxes for its operation.   Cuba’s economy will have to open a little more fully for these new businesses to thrive.  Hopefully, as time passes, the original excitement of personal ownership and personal engagement in the economy will linger and the people of Cuba will be able to usher in a period of prosperity unknown to them.  The overall success of this program could aid the diplomatic process between Cuba and many Western governments, namely the United States.  Could this be a step toward fostering new economic relationships?  Perhaps a far stretch, but certainly worth consideration.

Photo:  Flickr, Mike Fleming