Business in Cuba.
The Great Communist Island has legalized business. Well, small and medium business, to be precise: Here is a BBC article.
Of course, for those of us who have worked in Cuba, it is evident that private ‘business’ was already alive, if not well.
Here are some previous thoughts on Cuba from several perspectives.
Of course the regime has needed to change and of course it is exciting for tourists (now including Americans) to visit one of the world’s last socialist societies and indeed there is much to be impressed by.
Nevertheless, business has been going on in Cuba for many years. Emigrants pay thousands of dollars to leave – many being trafficked as prostitutes through Trump’s Casino / Hotel in Panama.
In Cuba itself, tour companies send their guides / directors with significant sums of money in order to ‘tip’ just about everyone along the way. Locals pay people off for the right to earn money and the semi-dysfunctional tax system allows for the flow of both ‘Convertible Pesos’ and hard, foreign currencies.
The expanded private-restaurant sector has improved enormously and service is often excellent. Hotels need a lot of work and communications remain poor.
Officially legalizing business is an important step in managing the Island’s economy – and being honest about how it actually works.
Cuba has an opportunity to fend off deep corruption – an illness throughout Latin America, provided it can normalize its economy, let its currency float and pay all sectors of the economy properly. If this does not occur, public entities such as border controls will become increasingly corrupt.
Finally, Cuba will have to learn to understand and manage costs. The country is far more (and far too) expensive for an economy of its size and with the Convertible Peso pegged to the US$, valuations (at least within tourism) are becoming almost entirely disconnected for actual values.
Let’s hope this normalization is another step in securing the good results of the revolution, while now encouraging freedom and ending mass-immigration.