Cuban government authorizes MSMEs but excludes them from strategic sectors

RIO DE JANEIRO, BRAZIL – The Cuban government gave the green light on Wednesday, June 2, to create micro, small and medium-sized enterprises (MSMEs) in both the state and private sectors, where they will be limited to non-strategic sectors.

Prime Minister Manuel Marrero said in a meeting of the Council of Ministers that private MSMEs will not be allowed to operate in the health, telecommunications, energy, defense, press, and other areas that were already forbidden to self-employed workers in the country.

These areas are strategic for the Cuban state for economic or political-ideological reasons. According to official data, they are out of the reach of the so-called “cuentapropistas”, who currently represent 13% of the employed population in Cuba.

Micro, small and medium-sized private companies will also not be able to set up to carry out some of the activities that are allowed for self-employed workers, such as computer equipment programmers, bookkeepers, translators and interpreters, and others, according to the Granma newspaper of the Workers’ Party (PCC, the only legal party).

After the approval of the MSMEs, Cuban authorities will start working on the legal regulations necessary for their establishment, said the Prime Minister.

Marrero remarked that the announced changes would not lead to a privatization process “since there are limits that cannot be exceeded”. The decisions will be implemented “gradually to avoid setbacks”, he added.

The Cuban state identifies as economic actors in the country the socialist state enterprise (the main one), non-agricultural cooperatives, self-employment (private), and micro, small and medium enterprises.

The measure comes at a critical time for the economy, which contracted by 11% last year due to the coronavirus pandemic, the reinforcement of US sanctions, and the delay in implementing the reforms approved in 2011 to boost the inefficient centralized model.

This has led to severe shortages, with shortages of almost all products and long lines in front of stores throughout the country.

Cuban economists and the sector have demanded the elimination of permitted activities, considering them a burden for the economy and progressive liberalization of business activity.