Cuban government efforts to open its doors to more private enterprise cut state payrolls and lure foreign investors face a string of restrictions and complications, several U.S. academics said during a seminar Saturday in Coral Gables.
The island’s communist government “has a love-hate relationship with the private sector,” said Mario Gonzalez-Corzo, a Cuban-born professor at the City University of New York.
Ruler Raúl Castro has been allowing more private economic activities in hopes of jump-starting a Soviet-style economy since he succeeded brother Fidel Castro, temporarily in 2006 and then officially in 2008.
But while up to 485,000 Cubans are reported to be licensed to work in low value-added jobs such as tailors and seamstresses, there are many constraints, Gonzalez-Corzo told the University of Miami’s Institute for Cuban and Cuban American Studies (ICCAS).
An “onerous tax system” piles “taxes upon taxes upon taxes” that make it difficult for the new micro-enterprises and “confiscate the limited prosperity that people are generating,” he said.
There’s a shortage of appropriate retail space needed for the new businesses, property rights remain largely unclear and government inspectors often look for bribes, the professor added.
The cooperative sector is not doing as well as projected by the government, Gonzalez-Corzo said. And the average bank loan approved under a micro-credit program designed to help the private sector stands at about $55.
State payrolls have been cut by 500,000 — government officials have spoken of a need to lay off at least 1.3 million state employees — but part of the drop was the result of emigration and retirements, the academic said.
Retired World Bank consultant Carlos Quijano said the government’s announced hopes of obtaining $2.5 billion in foreign investments in order to be able to generate moderate economic growth seem far too ambitious.
Cuba now has an estimated total of $500 million in foreign investments, Quijano said, compared to $16 billion for Costa Rica and $17 billion for the Dominican Republic – two other relatively small Latin American nations.
Quijano also said there are three economic tendencies on the island: “statists” who want to largely retain the current model; “economicists” who favor some type of market socialism; and democratic socialists who favor broader use of cooperatives.
Brian Latell, a retired CIA analyst and senior research associate at ICCAS, said the island today appears to have more social stability than at many points in the past. And there seems to be little possibility of a mass exodus such as the Mariel boatlift in 1980.
Cuba’s ruling elites know they have to modernize the Soviet-style economy “but fear a modernization because it might lead to rebellion,” said Juan Antonio Blanco, head of the Center for Latin American and Caribbean Initiatives at Miami Dade College.
The island “is a poor, technologically backward country at the margins of the new digital age of globalization and knowledge economies,” added Blanco, a former analyst with the Central Committee of the Communist Party of Cuba.
Also addressing the seminar were Florida International University professor Marifeli Perez-Stable; Frank Calzon, director of the Center for a Free Cuba in Washington D.C.; and Pedro Roig, senior research associate at ICCAS and former Radio/TV Marti director.