Tue | Sep 29, 2020

Economy tanking, Cuba launches some long-delayed reforms

Published:Thursday | August 6, 2020 | 11:37 AM
Customers enter through the back of Mercabal wholesale market, to load their merchandise in Havana, Cuba, Thursday, July 30, 2020. The government is letting private businesses buy wholesale for the first time. (AP Photo/Ismael Francisco)

HAVANA (AP) — With its airports closed to commercial flights and its economy tanking, Cuba has launched the first in a series of long-promised reforms meant to bolster the country’s struggling private sector.

The island’s thousands of restaurants, bed-and-breakfasts, auto mechanics and dozens of other types of private businesses have operated for years without the ability to import, export or buy supplies in wholesale markets.

While the communist government began allowing widespread private enterprise a decade ago, it maintained a state monopoly on imports, exports and wholesale transactions.

As a result, the country’s roughly 613,000 private business owners have been forced to compete for scarce goods in Cuba’s understocked retail outlets or buy on the black market.

That has limited the private sector’s growth and made entrepreneurs a constant target of criminal investigation.

With the essential tourism business cut off by the novel coronavirus and the government running desperately low on hard currency, the government last month announced that it would allow private restaurants to buy wholesale for the first time.

Ministers also announced that private businesspeople could sign contracts to import and export goods through dozens of state-run companies with import/export licenses.

Within four days of its opening to private business, 213 restaurant owners signed up to buy beer, flour, yeast, shrimp, sugar, rum and cooking oil at a 20 percent discount off retail at the Mercabal wholesale market in Havana, state media reported. A similar market has been opened to entrepreneurs in the eastern city of Holguin, according to state media.

Government officials have not said how many import/export contracts have been signed.

Private business owners said they welcomed their new wholesale access, although some said they were sceptical given Cuba’s long history of failing to follow through on economic reforms, or of periodically launching crackdowns on what it considers illicit or excessive private sector wealth.

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