World Economy

Cuba Creating Space for Private Enterprise

Cuba Creating Space for Private Enterprise Cuba Creating Space for Private Enterprise

Cuba says it will legalize small and medium-sized private businesses, a move that could significantly expand the space allowed for private enterprise in one of the world’s last communist countries. Communist Party documents published Tuesday say a category of small, mid-sized and “micro” private business is being added to the party’s master plan for social and economic development, Reuters reported.

Until now, the government has allowed private enterprise only by “self-employed” workers in several hundred established categories. In reality, many of those workers have become small business owners employing other Cubans. But many complain about the difficulties of running a business in a system that does not officially recognize them, and that often engages in crackdowns on successful businesses for supposed violations of the arcane rules on self-employment.

US President Barack Obama’s visit to Havana in March shined a spotlight on Cuba—a country that is regarded warmly by people around the world. Over the last two years, a new foreign investment law has sparked the interest of many companies (especially European ones) and the re-establishment of diplomatic relations with the United States has also made the possibility of trade and investment deals with US companies seem closer.

In this context, a number of corporate leaders are wondering how they should view the Cuban opportunity while avenues to move beyond the embargo are pursued in Washington. The country clearly has great economic potential and there were high hopes that the recently concluded VII Congress of the Communist Party of Cuba would take further steps to create a more hospitable environment in which private enterprise can make greater contributions to accelerated economic growth and job creation.