- Title: Cuban entrepreneurs hope for more space as govt ponders reform
- Date: 22nd August 2022
- Summary: HAVANA, CUBA (AUGUST 4, 2022) (REUTERS) MAN IN DRIED FRUIT SHOP BAG OF DEHYDRATED LEMON SLICES OWNER OF 'DESHIDRATADOS HABANA' (DEHYDRATED HAVANA) RICARDO FERNANDEZ REMOVING DEHYDRATED MANGO SLICES FROM TRAY DEHYDRATED MANGO SLICES BEING REMOVED FROM THE TRAY EMPLOYEE CUTTING COCONUT OWNERS OF 'DESHIDRATADOS HABANA' (DEHYDRATED HAVANA) TALKING WITH EMPLOYEE / EMPLOYEE PLACING TRAY WITH COCONUT CHIPS INTO FRUIT DEHYDRATOR (SOUNDBITE) (Spanish) OWNER OF 'DESHIDRATADOS HABANA' (DEHYDRATED HAVANA), RICARDO FERNANDEZ, SAYING: "A year ago, we produced a small amount. The business has emerged in the pandemic. It is a family business. My brother, my father, and I have seen, with the possibility of foreign investment, to increase what we were already doing, but with a lot of effort and difficulty, during a year and a half of work: the import of our first equipment, the export of the first batch of products. Now with this possibility that can bring us a capital investment, not inconsiderable, we are seeing much greater horizons. With that, we could see an increase in our current production by 10, 15, or even 20 times." FERNANDEZ PLACING A TRAY WITH DEHYDRATED MANGO SLICES ON THE TABLE EMPLOYEE HERMETICALLY SEALING PACKAGE OWNER OF 'DESHIDRATADOS HABANA' (DEHYDRATED HAVANA) OSCAR FERNANDEZ TALKING WITH CUSTOMER DRIED FRUIT PACKETS (SOUNDBITE) (Spanish) OWNER OF 'DESHIDRATADOS HABANA' (DEHYDRATED HAVANA) OSCAR FERNANDEZ, SAYING: "The regulation has been stipulating this for a long time (referring to foreign investment). In the current law, it can be executed. They (the Cuban government) are creating the procedure because the previous procedure only allowed state-owned companies to do so. Now it seems that there is a policy of encouraging this type of association because the private sector is called upon to be very dynamic on a small scale. Still, the sum of these small-scale activities can generate a very positive impact on the economy." HAVANA, CUBA (AUGUST 16, 2022) (REUTERS) VINTAGE VEHICLE ON HAVANA STREET STORE SIGNS IN HAVANA DOWNTOWN INTERIOR OF FURNITURE SHOP 'LEO & MIGUE' EMPLOYEE TALKING WITH CUSTOMER COUCHES HAVANA, CUBA (AUGUST 2, 2022) (REUTERS) (SOUNDBITE) (Spanish) CUBAN ECONOMIST, OMAR EVERLENY, SAYING: "The rules have to change. You cannot give (eds. note: private sector) the same treatment that was given to the state-owned company in the past. The new rules with the private sector are different. They have to be more flexible. They must allow direct foreign trade and any investment amount, in any area." HAVANA, CUBA (AUGUST 3, 2022) (REUTERS) PEOPLE WALKING ON STREET VEHICLE AND PEOPLE ON STREET BLACKBOARD SHOWING RESTAURANT MENU PRICES NEW YORK, UNITED STATES OF AMERICA (AUGUST 3, 2022) (REUTERS) (SOUNDBITE) (English) PRESIDENT OF THE U.S-CUBA TRADE AND ECONOMIC COUNCIL, JOHN KAVULICH, SAYING: "Until there is published a specific set of rules, what do you need to do, we are waiting. So, I'm not clear when they (eds. note: the Cuban government) are evaluating this because if any of them are from the U.S, then they are either evaluating proposals that don't yet have licenses or they are evaluating proposals that perhaps do have licenses and are waiting, but I'm quite concerned that the reporting is that they are evaluating anything because that's the wrong path." HAVANA, CUBA (AUGUST 17, 2022) (REUTERS) EMPLOYEES OF 'CUBELA'S LAUNDRY' CHECKING WASHING MACHINES WASHING MACHINE EMPLOYEE PUTTING CLOTHES INTO WASHING MACHINE EMPLOYEE TIDYING CLOTHES OWNER OF CUBELA'S LAUNDRY' DALIENY ORTEGA CUBELA (LEFT) TALKING WITH EMPLOYEES (SOUNDBITE) (Spanish) OWNER OF CUBELA'S LAUNDRY' DALIENY ORTEGA CUBELA, SAYING: "Our dream, of course, is to have state-of-the-art equipment that allows us to save water, and energy, reuse them for other functions and thus join the circular economy. To be able to use quality Cuban biodegradable products so that we can work with them. What does the legalisation of foreign investment allow us to do today? It allows us the legality to be able to sit down with suppliers or with different companies to be able to sign the necessary contracts before a notary legally and to be able to move forward on this point." HAVANA, CUBA (AUGUST 3, 2022) (REUTERS) PEOPLE WAKING IN STREET VARIOUS OF THE HAVANA COAST
- Embargoed: 5th September 2022 11:57
- Keywords: Cuba United States economy foreign investment
- Location: VARIOUS LOCATIONS
- City: VARIOUS LOCATIONS
- Country: Cuba
- Topics: South America / Central America,Government/Politics,International Trade
- Reuters ID: LVA001958619082022RP1
- Aspect Ratio: 16:9
- Story Text: For those seeking proof that even the most modest foreign investment can help propel Cuba's fledgling entrepreneurs, look no further than Oscar Fernandez' Havana-based dried fruit business.
Thanks to a $40,000 loan from abroad, the family-run company, registered under a reform last year that authorizes small businesses to operate in communist-run Cuba, upgraded antique equipment to state-of-the-art dehydrating ovens, and a packaging machine.
But Fernandez's real dream - to partner with a foreign investor and open a full-fledged factory - is still on hold, like that of many entrepreneurs on the island, as the government ponders further reform amid a grinding economic crisis.
Cuba's economy, hammered by blanket U.S. sanctions, the pandemic, and what President Miguel Diaz-Canel has called “dogmas, obstacles, and self-limitations†-- plunged by nearly 10% during 2020-2021 and has struggled to revive.
Options within the confines of its nearly bankrupt, state-dominated economy are few, according to economists consulted by Reuters, and as unrest grows, the government is running out of room to maneuver.
Last month, Cuba said it was reviewing "seven projects with foreign investment in private businesses," local media reported, but the government has not yet detailed its plans.
Entrepreneurs hoped the nascent private sector would also be given leeway to engage in foreign trade outside state control - an additional perk for would-be foreign investors - but the government last week said it would not relinquish its monopoly on foreign commerce.
Instead, it loosened some restrictions around foreign investment in the wholesale and retail sectors, baby steps that economists critiqued as too little to make a difference.
Cuban economist Omar Everleny said the government has to be more flexible and allow direct foreign trade without limiting the investment amounts in diverse areas.
Dalieny Ortega, the owner of a laundry service that caters to hotels, among other institutions, said she was negotiating for equipment with Domus, a Spanish industrial laundry equipment company.
For Ortega, this measure will allow them to deal and sign contracts with suppliers within a legal framework which will help her business move forward.
Fernandez and Ortega's companies are two of more than 4,500 small and medium-sized enterprises licensed since the government last year reversed a ban in place since the 1960s legalizing private enterprise.
The new sector, with some 70,000 employees, has grown quickly despite U.S. Cold War-era sanctions and domestic rules that prohibit entrepreneurs from independent foreign trade and, until now, from receiving foreign investment in exchange for equity in their business.
Experts are watching to see if the balance will tilt the rules far enough in favor of the private sector to bail out the floundering economy.
John Kavulich, head of the U.S.-Cuba Trade and Economic Council, which favors direct investment in the private sector, said the Cuban government should stay out of the way of foreign investors or risk further stagnation.
Fernandez, of the dried fruit company, said recent talk of encouraging foreign investment was the reason for optimism.
His company still housed in the basement of his family home but now with a storefront, was growing, and now employs 18 people, up from just a handful last year.
(Production: Mario Fuentes, Nelson Gonzalez, Anett Rios, Liamar Ramos) - Copyright Holder: REUTERS
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