Cuba’s new entrepreneurs are longing for level playing field

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Cuba’s new entrepreneurs are longing for level playing field

HAVANA, March 31, 2018 (AFP) – Without raw material for her fashion
designs, Idania del Rio had to find a creative solution, resorting to using
hand-me-down shirts, cutting them up and re-styling them to create her own
clothing outlet.

She is part of Cuba’s new generation of entrepreneurs, who have to use
ingenuity to get to the marketplace, and are counting on the imminent changes
at the top of the communist-ruled island’s hierarchy to bring about a
business boom.

Raul Castro started reforms to modernize an economy still modeled on the
Soviet Union after he succeeded his brother Fidel as president in 2008, and
entrepreneurs known as “Cuentapropistas” (literally, the self-employed) have
emerged.

Restaurants, barbershops and workshops of all kinds have flourished, and a
decade on, small private businesses account for 12 percent of the country’s
workforce, or 580,000 people.

“We wanted to achieve something different in terms of design because it did
not exist in Cuba,” said del Rio, 36, who started her Clandestina clothing
outlet with her Spanish partner Leire Fernandez three years ago.

Their “Vintrash” remodeled and printed T-shirts go for $20 each in their
store in Old Havana’s Villegas Street.

“We have this passion for recycled things. But the main reason is because
there was no alternative,” she said. “When we were looking for what we could
work on, we found little in the local market. But there was plenty to find
second-hand.”

Cuba imports the majority of what it consumes and remains heavily affected
by the Cold War-era US trade embargo.

Del Rio was able to circumvent the embargo by launching an online store and
having her creations produced and sold in the United States, benefiting from
a scheme introduced by the administration of Barack Obama to allow the export
of Cuban creative products.

Obama personally praised her undertaking during his historic visit in 2016,
when he said Cuba’s economic future depended on government action to spur
growth in the private sector.
– Young and old –
In Cienfuegos, 230 kilometers (145 miles) southeast of Havana, Asley
Alfonso Gil gives a second or third life to bicycle wheels in his small
workshop in the city center.
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“A lot of bicycle parts break and we have no way to find new ones, so we
have to repair them,” said the 29-year-old.

Castro is due to step down as president on April 19. His most likely
replacement is First Vice President Miguel Diaz-Canel, 57.

The looming change has given rise to fresh hope among small business
owners.

“The role of the young people who start a business is important — what
should happen is that the Cuban state improves something and gives us the
possibility of buying spare parts, because at the moment we are fixing and
mending,” Gil said.

“We are hoping for openings in every sense of the term,” del Rio added.

Armando Reyes, who at 73 props up his pension by selling produce from a
cart in the streets of Havana, believes the new self-employed have been a
force for good.

“There are coffee shops and bars that did not exist before, and good
quality restaurants,” Reyes says.

– Uncertainty and optimism –

Last August, however, the government abruptly put the squeeze on the sector
and suspended the granting of new licenses for dozens of cash-generating
businesses, particularly restaurants.

The goal was to fight fraud and tighten loopholes for a sector that some of
the country’s leaders see as an affront to communism.

In a country where the average monthly state salary is $30, a waiter in a
private restaurant can earn as much as $200.

At its most recent meeting in March, however, the Central Committee of the
Communist Party recognized the important role played by entrepreneurs and the
need to “continue updating the economic model.”

For Cuban economist Pavel Vidal, from Colombia’s Javeriana University, the
new rules should bring a greater level of control over taxation and a greater
degree of interaction with banks.

“It is very important that the private sector contributes to the treasury
in proportion to its profits, something that cannot be guaranteed if its
operations are not registered in the banks,” he said.

“A progressive and effective tax system is a net dividend for all.”

Bicycle repair man Gil hopes that everything will run as smoothly as a
newly renovated bike — despite the demise of old certainties.

“Sometimes I’m a little bit afraid, because with Fidel and Raul, we felt
more secure,” he said.

“We need a change for the benefit of the people, that they continue to
award licenses, that businesses continue to open, so that the economy of the
country keeps flowing.”

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