Cuba Fosters Micro, Small, and Medium Enterprises

President Miguel Diaz-Canel's administration on Wednesday authorized the creation of private micro, small, and medium-sized enterprises (MSMEs) in Cuba's non-strategic sectors.

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Prime Minister Manuel Marrero explained that private MSMEs will not be able to carry out activities in health, telecommunications, energy, defense, press, and other strategic sectors that were already vetoed for self-employed workers or "cuentapropistas",  who represent 13 percent of the economically active population.

Once the creation of MSMEs has been approved, Cuban authorities will start working on the legal regulations necessary for their establishment.

Marrero remarked that the announced changes will not lead to a privatization process, "since there are limits that cannot be exceeded". The decisions will be implemented "gradually to avoid setbacks", he added.

Currently, Cuban legislation defines as economic actors the socialist state enterprise, non-agricultural cooperatives, private self-employment, and micro, small and medium-sized enterprises.

The decision to expand the options for MSMEs comes at a critical time for the Cuban economy whose gross domestic product experienced an 11 percent reduction in 2020 as a result of the U.S. blockade and the pandemic.

Omar Everleny, former director of the Center for the Study of the Cuban Economy at the University of Havana, described the changes as positive. However, he explained that the State must now concentrate on eliminating obstacles to the operation of the non-state sector so as to solve problems related to the supply of products and their impact on inflation.