Cuba’s Small Entrepreneurs: Down But Not Out

School’s out in Havana, and Ricardo, a mechanic who quit his government job, gets busy in his driveway making milkshakes and money. Students in uniform line up as he spoons mango slices, powdered milk, ice, water, and sugar into his blender, then serves the shakes and an occasional pizza. He hustles, knowing that for all the decisions Cuba’s government makes about the economy, his earnings depend on him alone.

Ricardo engages in trabajo por cuenta propia (self-employment), the Cuban version of small enterprise that was legalized in 1993. Then, the advent of legal entrepreneurship seemed to point to policies that would add more market mechanisms to the economy’s socialist structure.

This was not to be. Self-employment was one of several measures that helped Cuba end the economic emergency brought on by the loss of Soviet bloc support in the early 1990’s. It was deemed to be less necessary when Cuba’s economy recovered, and was scaled back along with some of the other market-based reforms adopted during the height of the emergency.

While these entrepreneurs, called cuentapropistas, are reduced in number, they remain visible in towns and cities from one tip of the island to the other; a distinct, private sector of the economy that occupies about three percent of the Cuban labor force.

These entrepreneurs are not a major factor in Cuba’s economic output. But their sector is significant as an alternative to state employment where Cubans exercise initiative and considerable ingenuity to provide goods and services to Cubans and tourists alike. Even as they operate under policies that reflect the state’s discomfort with the concept of private enterprise, they pay taxes and earn higher-than-average incomes in an economy that has rebounded but not yet restored standards of living that Cubans knew in the 1980’s. For Cuba’s future, this entrepreneurial sector is significant as a potential starting point for new policies, if Cuba’s government were to decide once again to use market mechanisms to generate jobs and growth.

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