Cuban Government Authorizes “Large Private Companies”
they can have more than 100 employees
Despite the opening toward the private sector, the law continues to affirm that “the socialist state enterprise is the principal actor in the national economy”.
HAVANA TIMES – The Cuban Government continues to amend laws to implement the economic measures announced last June. Thus, this Wednesday, a decree was published in the Official Gazette allowing Cubans residing abroad to become partners in private companies or allowing a single person to be a partner in more than one company, along with other provisions affecting private economic actors.
Among other measures easing restrictions, the same regulation eliminates the 100-worker maximum for private businesses and institutionalizes the “large private company.” In addition, as the country’s leadership had also announced, it decentralizes the approval of private businesses and other economic actors, making municipalities responsible for the process.
The latter, however, is not in itself a sign of greater openness: precisely through this decentralization, provinces have been able to reintroduce price controls, something the measures announced in June were supposedly intended to eliminate.
The new provisions also include a resolution, which opens up the teaching profession, although it remains subject to strict conditions. Teachers are authorized to hold multiple jobs, allowing them, for example, to offer private tutoring, provided that the classes are not held in public schools and that public-school teaching materials are not used.
The resolution also allows for private “childcare homes,” although these require approval from the Municipal Directorate of Education and must meet requirements that include a mandatory training/certification course every two years, as well as strict safety and hygiene standards.
In a second Official Gazette, also published this Wednesday, the Government addresses new laws intended to regulate state-owned companies, but not without first establishing, as usual, that “the socialist state enterprise is the principal actor in the national economy.” Specifically, for example, it decentralizes the operation of the network of public companies, which from now on will fall under the authority of the National Institute of State Business Assets (Inaee), whose creation was formally finalized on June 29.
The transfer of responsibilities from the corresponding ministries to this entity is to take place “gradually over a period of up to 180 days.”
The new decree also divides state-owned companies into four categories. One consists of so-called “competitive” companies, which may be opened to private capital. Defined as “those not classified as strategic that demonstrate the capacity to compete in international or domestic markets,” the decree specifies that they “are preferred candidates for transformation into commercial companies, with the possibility of opening up to domestic and foreign private capital.”
However, “strategic companies” will not be allowed to open up in this way. These are defined as “those operating in sectors reserved for the State for reasons of defense, national security, or overriding economic interest,” in which the Government is required to maintain “a majority stake, directly or indirectly,” and whose “transformation into a commercial company is subject to special conditions.”
Another category is that of “social protection and public service companies,” which “guarantee the population access to essential goods and services, protecting them from market volatility.” The legal text does not name specific companies, but states that their “principal function is to contribute to social stability and food sovereignty, forming part of the State’s strategy to protect the most vulnerable sectors.”
Finally, it establishes the category of “science and technology” companies, based on “research, development and innovation, the generation of intellectual property, the high qualifications of their workforce, and an orientation toward the export of high-value-added goods or services.”
The law also expands the autonomy of state-owned companies to manage annual plans, set prices, hire personnel, approve organizational structures, seek financing, enter into partnerships with other economic actors, and establish operations abroad, provided they generate foreign currency.
First published in Spanish by 14ymedio and translated and posted in English by Havana Times.