Private and Cooperative Enterprise in Cuba's Economic Future

Abstract

In 2011, some 50 years after the abolition and subsequent containment (with some vacillation) of micro and small enterprise outside the agricultural sector, Raul Castro's government embarked on a major process of policy liberalization that resulted in an impressive expansion of the sector by 2017. Legislation opening the way for nonagricultural cooperative enterprises was also passed and cautiously implemented beginning in 2013. While the policy liberalization toward micro and small enterprise has been very significant, leading to employment levels of around 500,000 in that sector, there are still a variety of regulatory blockages and taxation burdens that continue to smother the entrepreneurial creativity, resourcefulness, and energies of Cuban citizens, who have demonstrated strong motivation and aptitude for self-activated economic activity. A variety of further policy changes could lead to further expansion of indigenous Cuban entrepreneurship, generating important benefits for Cuba. In the longer term, Cuban policymakers will have an opportunity and obligation to shape the future structure of Cuba's economic institutions. Some sort of hybrid or mixed economy approach, with particular emphasis on an indigenous private entrepreneurial sector, a strong cooperative sector, and a significant joint venture sector, as well as an effective public sector, would provide an optimal future institutional structure for Cuba.