May 6, 1997

THE GOOD NEWS AND BAD NEWS OF SELF-EMPLOYMENT UNDER CASTRO

Cuba, with a population of 11 million, in 1996 allowed 200,000 to be self employed. These licenses are for very few professions, are tightly controlled by Castro's regime and are specifically designed to prevent individual prosperity.

Among the self-employed professions allowed in this "workers' paradise" are: refilling disposable cigarette lighters, sharpening knives and scissors, fixing bicycles, rewiring and repairing old electrical appliances, making slippers from the inner tubes of tires and shoes from other discarded materials, selling old shoes and clothing, the making of soup, pizza, coffee, pastries, fruit flavored ice cubes, milk shakes or ice cream to sell from the home and opening the popular "paladares" (home restaurants) that by decree can not seat more than 12 people and restrict the hiring to family members.

Castro's regime is based on a selective distribution of goods and privileges in order to buy a loyal and powerful ruling elite. This is the scheme: Maintain the general population at survival level to keep them occupied in that basic endeavor, deprived of the energy to organize and revolt. Therefore, individual initiative and prosperity are a threat. Entrepreneurial success is a constant reminder of the failure of the communist system and is thus subjected to strict control to make sure the independent little guy doesn't get ahead.

In January 1959, the same month Castro took power in Cuba, he took over the Confederation of Cuban Workers. This union (known as the CTC) was at the forefront of labor conquests. Cuban workers before Castro had the most advanced social and labor laws in the Americas. In terms of purchasing power, they were among the best paid in the world. (The average daily wage of the US worker was US$4.06; Cuba's US$3.00 and West Germany's US$2.27.) In those times the exchange rate for the Cuban peso was: One peso = one dollar. Today's exchange rate is: one dollar = 20-25 pesos. According to Vladimiro Roca reporting from Cuba, the average daily wage of today's Cuban worker is US 40c. Can a Cuban honestly say that he or she is better off now than 38 years ago?

On May 27, 1996, in the weekly Trabajadores from Castro's workers union (formally the free and independent CTC) there was an editorial against the "new rich" resulting from these new self-employed, demanding that "we can not allow them to succeed." The "union" proposes (as a punishment) the imposition of taxes. They accuse the self-employed seeking profit of being "mortal enemies of the social and economic order." What a "union!"

Swiftly, a new regulation was enacted in June 1996 against the "paladares" imposing a monthly fee of US$750 plus 1,000 Cuban pesos and a 60% tax on their profits. Soon after, 26 "paladares" in the Vedado area of Havana closed. For the rest of the self employed, Castro imposed a US$250 monthly fee plus a 60% tax on profits.

Discouraged by the regime's bureaucracy truncating all prospects of success for their individual efforts and sickened by the multiple inspectors' demand of a payola, the victimized self-employed started closing their businesses. From 200,000 in January 1996 to 85,000 in October. The survivors keep struggling until more regulations drive them out of business.

As recently reported by Juan Sanchez from Cuba, Castro's regime is now confiscating the ice cream machines that individuals had bought for 40,000 Cuban pesos each (US$1,600) from the Cuban government. These machines, originally owned by the government, had been discarded as "broken." The government then began to sell the broken machines knowing that they would later confiscate them. Thus the government would make money while "teaching a lesson" to many prospective entrepreneurs. Besides, the regime noticed the quality and variety of flavors that the entrepreneurs' ingenuity were able to produce in opposition to State ice cream. They noticed that people were favoring them in spite of their higher price, and that was the end of it. The rumor in Cuba is that pizza vendors will be next. The so-called "economic opening" is just a cosmetic arrangement. For as long as Castro is in power, the individual will not be permitted to prosper.

Businesses and partnerships with foreign investors are through phony Cuban companies, whose strings are being pulled in the background by Castro, the one making the profits. In these partnerships, Cuban workers are being exploited. They are deprived of unions, rights and social laws to protect them and are paid in worthless Cuban pesos. To add insult to injury, independent Cuban entrepreneurs are forbidden to participate in these partnerships. So, this "engagement to encourage reform in Cuba" instead helps maintain the painful status quo thanks to Castro's immoral foreign business partners.

Distributed by Cubanet