Cuba continues betting on non-state sector

The number of self-employed has grown to 400,000, in a process of integration to the Cuban economy not exempt from conflicts.

Jorge Luis Baños/IPS

Private workers have become a part of the urban image in the principal Cuban cities.

The self-employment option continues attracting more persons, at a slightly higher pace this year, though they continue viewing with apathy the offer of bank credits. According to the most recent report by the Labour and Social Security Ministry (MTSS), at the close of last July there were 436,342 self-employed persons.

That figure – which includes the owners of private microenterprises and persons hired in those businesses – represents a 9.5 percent increase as compared to the report previously presented by the MTSS: 398,447 self-employed at the close of last November. In eight months the registered amount has grown in a proportion similar to all of 2012 and at a slightly higher absolute magnitude: a bit over 37,800 as compared to some 35,000 in the year of reference.

This form of employment had slowed down a bit in 2012, after the growth boom in 2010 when the government re-launched the alternative. Now, with the start of this year, it is showing signs of stabilisation, though the government’s forecast of half a million can still take longer.

Some of the activities that continue having a greater expansion are the elaboration and sale of food (13% of the total of registered persons), freight and passenger transport (10%), home rentals (6%), agricultural products’ peddlers (5%), manufacturers and sellers of household products (5%) and messengers (3%).

Some areas of the capital and of other cities stand out for the high amount of private workers. This is the case of important avenues or parks in the provinces of Havana, Matanzas (to the west), Villa Clara (centre), Camagüey, Holguín and Santiago de Cuba (east), which have the highest amount of granted licenses.

The concentration has lent weight to commercial competition among cafeterias or among vendors of various products, just to cite two classic examples.

Neither has the strong representation of persons without other labour links varied: 68 percent of the total. Only 18 percent work in other entities – including the state sector -, while 14 percent are pensioners who have resorted to that labour modality to make up for their low pensions.

Despite the sustained expansion, the private sector has not been tempted by the new Cuban banking credit policy for natural persons.

Until the close of July, the national banks had approved 271,152 loans worth a total of 1.5 billion pesos ever since the coming into force in December 2011 of Decree Law 289, which regulates the granting of credits to private individuals to finance agricultural productions, self-employment and the construction and repair of homes. This information was announced to the press at the beginning of this month by Francisco Mayobre, vice president of the Central Bank of Cuba (BCC).

The cooperatives have appeared in transport and other non-agricultural sectors, with greater disposition than the self-employed to negotiate national bank credits.However, the great majority of the financing was for the purchase of materials and payment for labour force to build or repair homes. As a tendency, private workers have kept their distance from the banks. When it comes to seeking capital to undertake or maintain their businesses they have preferred to resort to their savings or that of the family, among other sources.

“We haven’t received a greater demand for the new form of banking procedure as we would have wanted,” a director of the Credit and Commerce Bank (BANDEC), Vivian Sorolla, admitted. Despite the dissatisfaction, Mayobre appreciates a certain increase in the demand for and granting of credits to the self-employed, after the BCC made flexible the regulations to grant them and the incorporation of new facilities to the commercial banks.

The other form of non-state activity underway, the non-agricultural cooperatives, have shown a greater disposition to negotiate with the banks. They have received 91 loans, mainly as initial work capital.

The inflexibility of one party and the hesitation of the other are decreasing little by little, in an economic race in which the non-state forms are playing a greater role. (2013)

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