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News / Nation & World

Cuba pushes back against claims in Congress that its private sector is a ‘myth’

By Nora Gámez Torres, Miami Herald
Published: January 28, 2024, 6:00am

After a congressional hearing last week questioned the existence of a legitimate private sector in Cuba, Cuban officials have pushed back strongly, placing the island’s communist government in the unusual position of defending its fledgling experiment with capitalism.

In a hearing last Thursday entitled “The Myth of the New Cuban Entrepreneurs: An Analysis of the Biden Administration’s Cuba Policy,” U.S. Rep. María Elvira Salazar, a Miami Republican who chairs the House Foreign Affairs Subcommittee on Western Hemisphere Affairs, said that claims that a private sector exists on the island were likely “a new scheme from the regime which is desperate for millions of dollars to violate the American market.”

The congresswoman aired concerns shared by some Cuban-American activists and other Republicans: that the realtively new small and medium enterprises are not independent of the state and that only those who have connections to elites in power can operate a private business on an island where everything is under government control.

Shortly after the hearing, Cuba’s vice minister for the economy, Johana Odriozola, offered a rare interview to CNN en Español, the Spanish-language television news channel, to push back against those assertions.

“Nobody in their right mind can talk about something that really exists being a myth,” Odriozola said in an interview broadcast late Friday. “We are not talking about something small; we are talking about more than 10,000 micro, small, and medium-sized companies.”

“They are real people; you can talk to them,” she added. “We have many ways to prove the real existence with the investments they have made, with the employment they generate.”

The interview was remarkable because typically only diplomats are authorized to engage with foreign media, and Cuba’s bureaucracy does not produce timely reactions to news events.

A second Cuban official, Johana Tablada, currently number two at the foreign ministry’s department handling U.S. affairs, also questioned the premise of the congressional hearing in a lengthy tirade against U.S. policies toward the island and personal attacks against Salazar.

In a story published on the Cuban official news site Cubadebate, Tablada said the Cuban government would not allow the U.S. government to use the private sector to meddle in Cuba’s internal affairs but said the government is “serious when it says it supports this sector’s development”

The officials’ public defense of these enterprises also comes despite recently announced additional restrictions and tax hikes on these businesses and their employees, a signal that the government is nervous about the market opening spinning out of control.

Since the small and medium-sized private enterprises were first authorized in 2021, the Cuban government has been clear it considers these businesses to be an integral part of the island’s centralized socialist economy. It has imposed several restrictions on their operations, including a hiring cap of 100 employees, a prohibition against owning more than one company, and restrictions on cash operations that Cuban entrepreneurs have said could ultimately force many business owners to close their companies.

Even so, the private sector, which also comprises self-employed workers and some cooperatives, now employs 35% of all Cuban workers — more than those employed in state-owned companies, according to data published by Cuban economist Juan Triana in a piece trying to provide evidence that the enterprises have a real impact on the island’s economy.

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Biden administration officials said during the congressional hearing last week that the administration sees the emergence of the private sector, even under the government’s strict rules, as an opportunity to exert influence and help Cubans get independence from the state.

Cuban Prime Minister Manuel Marrero recently announced plans to allow private companies to partner with the state to scale up their operations, which would make it more difficult to assess their independence from the state.

Odriozola defended the government policies in her television interview, saying that businesses on the island must comply with the country’s legislation and that the Ministry of Economy has not denied applications to register these enterprises.

Despite the title of the congressional hearing and an email blasted shortly after by Salazar’s office with the title “Salazar Exposes the Cuban Regime’s ‘Growing Private Sector’ Propaganda,” Salazar seemed to have softened her position by the end of that session, asking State Department officials how members of Congress could work together with the administration to help Cubans not linked to the government to set up private businesses on the island.

Former U.S. Rep. Joe García, who approached Salazar later that day on Capitol Hill, told the Herald she had agreed to meet with Cuban entrepreneurs and that he was working to make that possible. Last September, García helped bring a large group of Cuban private business owners to Miami.

But Salazar’s communications director, Mariza Smajlaj, told the Herald on Wednesday the congresswoman has “no plans to meet with Joe García or any so-called ‘entrepreneurs.’”

“The Biden administration failed to prove that there are small businesses that are truly independent from the regime,” Salazar said in a statement. “Until Cuba allows for business owners to sue the government for expropriation and other government abuses like rule abiding democratic countries do, it’s hard to believe that there is a free and fair business sector on the island.”

She added: “I plan to continue exposing the links between the regime and the private sector in Cuba.”