Is Cuba putting the brakes on private business?

by on August 7, 2017 at 2:59 pm in Current Affairs, Law | Permalink

On Tuesday, Cuba’s government said it would suspend the issuance of permits for a range of occupations and ventures, including restaurants and renting out rooms in private homes.

The suspension included the growing field of private teachers, as well as street vendors of agricultural products, dressmakers and the relatively recent profession of real-estate broker.

The announcement did not say when the issuing of permits would resume and said that enterprises already in operation could continue.

Cuban President Raul Castro expanded an opening of the economy to private-sector employment in 200 categories of business in 2010. It later also legalized nonagricultural cooperatives.

The government has said nearly 570,000 people are employed in the enterprises, which include hundreds of restaurants and guest houses.

The latest moves have created fears that Cuba is putting the brakes on plans to reform its centrally planned economy, though officials said the country is not going back on its economic opening.

Here is more, via the excellent Mark Thorson.  Here are related stories, and here is my earlier bearish Bloomberg column on Cuba.

1 derek August 7, 2017 at 3:05 pm

How much of this stuff is going on without permission?

2 rayward August 7, 2017 at 8:23 pm

Here is all I know about Hindi culture. Today is raksha bandon, when railroad ties are given to men by a tie tied around their wrist, and a sweet is given to the female cousin. 8/7/2017, and so Krishna’s Birthday, Jan Mashtami, is 8/27/2017, which is the same thing as 8/27/86, which holds the pie to gravity ratio at 3.12 if you do the math and think about it, it makes no sense.

3 Rich Berger August 7, 2017 at 3:24 pm

From Bloomberg, a somewhat related story:

https://www.bloomberg.com/view/articles/2017-08-06/china-s-ascent-isn-t-looking-so-inevitable-anymore

The ChiComs can go only so far while retaining the control they crave. The free pass they have gotten from their neighbors seems to be ending. Trump has signaled that China can be opposed and illuminated its unwillingness to rein in the Works.

4 Thiago Ribeiro August 7, 2017 at 4:04 pm

Yet, Red China’s regime is prevailing, it has made a nuclear power out of their rogue neighbour, has made no real concessions in trade, won’t return even a measle job they took, have Finlandized South Korea and keep graduating more engineers and building more infrastructure than America. Maybe, it is because Xi does not spend much time at Twitter. America is retreating, bowling alone, it is not trusted by its allies anymore. When the fat finally his the pan, everyone knows Americans won’t fight.They will sell Taipei as they sold Saigon.

5 Doug August 7, 2017 at 4:24 pm

> The ChiComs can go only so far while retaining the control they crave.

Not that I disagree with this… But what about the counterexample of Singapore? (Which is the often stated model of the post-Deng CCP). It’s one of the wealthiest and most free market world economies, but the ruling party still maintains unchallenged secure authoritarian power.

6 dan1111 August 8, 2017 at 2:07 am

I would respond:

1) Singapore is the one example of such success out of hundreds of authoritarian regimes. The preponderance of evidence suggests that rising above middle income status is very unlikely for autocratic regimes.

2) Singapore’s success path of getting rich from trade and being a financial center (and attracting a lot of the top talent from the region) is only viable for a small country.

3) Singapore is less authoritarian than China, with some important democratic reforms made over time. They aren’t fully free, but still this may be a difference maker in terms of governance quality.

7 Adrian Ratnapala August 8, 2017 at 10:09 am

This is Western narcism at its finest.

Sure, by western standards, Singapore’s political system resemble that of China — astounding in an east asian city ruled by Chinese people. But by from the point of view of China, it looks awfully a lot like a western system.

8 jorod August 7, 2017 at 3:41 pm

Are they getting rid of drug running into the US? Are they releasing political prisoners? Should we be concerned about anything else?

9 Thiago Ribeiro August 7, 2017 at 3:58 pm

Well, America assure us it is very worried about freedom in Cuba. Not Saudi Arabia and, in the 1980s, not Argentina or Chile, but always in Cuba.

10 rayward August 7, 2017 at 3:57 pm

The alternative explanation is that American Mafia is ready to return to Cuba, in particular in the hotel and gambling industries that were dominated by the American Mafia. Maybe the former Mafia gambling colony isn’t willing to give up so easily.

11 Yobo August 7, 2017 at 4:06 pm

Kinda hard for the mafia to create a gambling haven anymore.

12 Hyman Roth August 7, 2017 at 4:29 pm

This is the business we’ve chosen!

13 Doug August 7, 2017 at 4:26 pm

Cuba should be so lucky. During the height of their tenure as a “gambling colony”, Cuba’s standard of living exceeded Italy and Spain.

14 Art Deco August 7, 2017 at 4:46 pm

Per Angus Maddison, the per capita incomes of the following countries in 1955 as a % of that of the US were as follows:

1. 80% Venezuela (petrostate)
2. 49% Uruguay
3. 48% Argentina
4. 36% Chile
5. 25% Mexico
6. 25% Peru
7. 22% Costa Rica
8. 21% Colombia
9. 18% Cuba

Japan’s was 22%. Central and northern Italy was 37%.

15 rayward August 7, 2017 at 5:47 pm

Maybe I wasn’t clear. It could be that the Cuban government is signaling to the American Mafia that the Cuban government will protect the Mafia against interlopers like airbnb and online betting web sites, while signaling to Mr. Trump that Cuba is open for business for his brand.

16 Art Deco August 7, 2017 at 6:56 pm

Why would the Cuban government give a rip bout the remnants of the Sicilianate mob? They’re all done.

17 Art Deco August 7, 2017 at 4:33 pm

The median age of the Cuban cabinet and politburo is around about 74 That suggests a life expectancy of about 12 years. Raul Castro’s life expectancy is about 5 years.

18 msgkings August 7, 2017 at 4:34 pm

Yeah, I guess Cuba has a rule that once a leader or politburo member dies they don’t replace him.

19 Thiago Ribeiro August 7, 2017 at 4:45 pm

It means their leaders can’t survive another half century of sanctions. Changing subject, how old is Kim Jong-un?

20 JWatts August 7, 2017 at 5:10 pm

He’s only 33, so he’s got decades in front of him.

Speaking of which, when is Brazil going to do something on the international stage. To stop North Korea or even slow down China. Or is Brazil just going to kowtow to the Chinese and complain a lot about America not doing anything?

21 Cptain Obvious August 7, 2017 at 5:31 pm

They will send Thiago Ribeiro to stop them. That’s more than enough.

22 Thor August 8, 2017 at 3:07 am

Oh yeah, bub? Thiago Ribeiro and what army?

23 Thiago Ribeiro August 7, 2017 at 6:38 pm

Brazil will act IN its own good time. During WWII, Brazil pretended to be allied with Hitler, then when he was lured into a false sense of security, we declared war and sent our troops so fast, a captured German general said he was not even aware Brazil was at war. We leave Twitters and saber-rattling to insecure men. We are subtle.

24 JWatts August 8, 2017 at 8:34 am

“During WWII, Brazil pretended to be allied with Hitler,….”

Translation: Brazil allied with the Nazi’s and then the US told them they better rethink their alliance or the US Military would rethink it for them.

“Prior to the official declaration, Brazil was cooperating with both the Axis and the Allies, though more economically than militarily. The United States had begun building air bases in Brazil in early 1942, but Brazil was still also working and trading with Germany and Italy. Shortly after agreeing to allow US air bases to be built, and while technically still neutral, Brazil had announced it would no longer deal diplomatically with Germany, Italy, or Japan in late January 1942. Six months later, however, Brazil officially sided with the Allies when it declared war.”

http://classroom.synonym.com/brazilian-involvement-wwii-12185.html

25 JCC August 8, 2017 at 4:38 am

He’s pretty young but I guess his chances of ending up sitting on the iron throne are very slim.

26 Thiago Ribeiro August 8, 2017 at 7:37 am

Probably.

27 Bill August 7, 2017 at 5:31 pm

We visited Cuba last year, and I agree with Tyler’s assessment, based on changes that have occurred since then. The Cuban military is increasing becoming a partner in commercial enterprises, thwarting the development of private enterprises and supporting an even greater role for the military in their society. I think the Trump administration was correct in limiting persons from dealing with military owned enterprises. The most stable dictatorships are those in which the military is part owner of the private economy. Witness Egypt. And, soon Venezuela, which receives internal security assistance from Cuba. Feel sorry for both the Cuban and Venezuelan people. They will have to learn from hardship as their economies are so f..cked up.

28 wait August 7, 2017 at 6:39 pm

No thoughts on the TPP article from Politico suggesting that President Deal Maker completely screwed us?

29 Mateo Raft August 8, 2017 at 1:53 pm

Like Bill, I recently visited Cuba and realized the government sees private businesses as competition for much-needed foreign currency reserves. More here: https://willworkforjustice.blogspot.com/2017/08/cuba.html

The above link takes you to the third part of a three-part series on Cuba. I’ve traveled to 35+ countries. Havana and Rio are at the bottom of my recommendation list.

30 James Anderson August 10, 2017 at 7:50 am

We need to do business that we are at ease with and where there is enough potential in it. I do Forex trading which is the BEST business online and one is able to gain massively through it. However, we need to have skills for it and due to broker like OctaFX, it’s a lot easier with having lowest possible spreads at 0.1 pips for all major pairs, high leverage up to 1.500, zero balance protection, swap free account and much more, it’s all superb.

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