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‘Roberto’ and other tales of the Cuban economy

'Roberto' and other tales of the Cuban

Ask any self-employed Cuban how she came to possess the goods she's

selling, and she might tell you they came from 'Roberto,' a euphemism

indicating the goods are stolen, writes a guest .

By Melissa Lockhart Fortner, Guest blogger / July 20, 2012

Ask a self-employed Cuban how she came to possess the goods she is

selling, and she might tell you that they came from "Roberto."

The euphemism indicates that the goods are stolen, and given the

scarcity of many products and the unreliability of state retail stores

in Cuba, many new entrepreneurs in Cuba are struggling to cobble

together their businesses and turning to alternative – and

under-the-table – economic strategies. In fact, the channel of goods

coming into the country from family, friends, and mules is estimated to

have ballooned recently to more than $1 billion per year. This should be

no surprise to the state, since Cubans lack access to a wholesale market

by design. But these informal imports, currently running under the

radar, are about to face a 100 percent tax that will go into effect in

September.

In the course of the ongoing economic overhaul by the Cuban state, new

challenges are indeed arising every step of the way. The path in this

case is easy to trace.

The Cuban government lays off workers from the public sector in

order to eliminate its inefficiencies and encourage a private sector to

develop.

The country does not have the mechanisms to support a new private

sector, however, so those new entrepreneurs are forced to get creative.

They start acquiring more goods through informal channels in order to

maintain their supply.

In this (true) scenario, the Cuban state misses out on any kind of

revenue from those "imports". So the government slaps a 100 percent tax

on this kind of trade, which looks more like an effort to stifle the

informal trade altogether than an attempt to get in on the spoils.

The problem is that Cuban small business owners will be left in a lurch

if this is not coupled with the natural counterweight policy – that is,

creating a clear way for entrepreneurs to get the goods they need

through official channels – which would allow the Cuban state to earn

some revenue from the private sector trade while still generating viable

conditions for small businesses in the private sector to operate.

I suspect that sounds too much like capitalism.

But with 387,000 Cubans now self-employed (out of a total island

population of 11 million) and a state goal to add another 240,000

private-sector jobs this year, policies that make the lives of private

sector entrepreneurs and employees more difficult seem counterintuitive.

The Cuban National Assembly is set to meet on Monday. Here's hoping we

see a good plan.

IN PICTURES: Cuba economy

– Melissa Lockhart Fortner is Senior External Affairs Officer at the

Pacific Council on International Policy and Cuba blogger at the Foreign

Policy Association. Read her , and follow her on Twitter

@LockhartFortner.

http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2012/0720/Roberto-and-other-tales-of-the-Cuban-economy

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