Cuba smartly places tighter controls on previously re-authorized private sector

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Cuba re-authorized on Tuesday the issuance of authorizations for private companies after a freeze of one year. Tighter controls have been created for the sector that already employs 13% of the Caribbean island’s labor force.

The official Granma newspaper said stricter measures are needed because of numerous violations by private entrepreneurs, such as tax evasion, underestimation of the number of people employed and non-payment of employer contributions.

The government suspended the issuance of commercial licenses in August 2017 for about 30 of the island’s most profitable commercial activities, particularly the restaurant trade, in order to revise the regulations.

“We will not back down, slow down or allow prejudices against the non-state sector, but it is essential that people respect the law in order to consolidate the gains,” said then-president Raul Castro, who was replaced in April by Miguel Díaz-Canel.

As a result of the new restrictions, the number of commercial categories to be authorized will be reduced from 201 to 123.

“No activity was eliminated, but they were regrouped,” said Labor Deputy Minister Marta Feito, according to Granma newspaper.

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On the other hand, some new categories of private entrepreneur were introduced, including “baker” and “renter transportation.”

The number of small private companies has grown since 2008 in the wake of the reforms launched by Raul Castro – who succeeded his older brother Fidel – in an attempt to modernize the disintegrating Soviet-era economy.

The private sector employs 591,456 people as of May this year, according to official figures, equivalent to 13% of the working population.

Cuba has had its economy under state control and resisted free market capitalism. Through this tight control of the economy, within a generation it was able to bring literacy, health and a higher living standard compared to pre-revolution Cuba that was essentially the party-house and bordello for US tourists controlled by a capitalist class and co-managed the US branches of  Sicilian mafioso families.

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