Wednesday, January 19, 2011

Phil Peters: Cuban Entrepreneurs - From Necessary Evil to Strategic Necessity

Late last year, Cuba watcher Phil Peters decided he needed to make a trip down to the island to see for himself how serious economic reforms in self-employment were and to get the pulse of both citizens and officials.

A brief but quite well informed report on his trip just went up this morning at "The American," the journal of the American Enterprise Institute.

You can read it here: Cuban Entrepreneurs - From Necessary Evil to Strategic Necessity.

Here are two key excerpts:

State media that often portrayed entrepreneurs as ingrates or pilferers are now repeatedly explaining how to apply for a license. A December 28 article in Communist Party daily newspaper Granma chided the bureaucracy for blocking the “expeditious issuing of licenses.” And Cuban President Raul Castro told government and party officials in a December 18 speech that it is necessary “to change the negative views that more than a few of us hold toward this form of private work.”

Two critical changes—creating wholesale supply stores and providing bank loans for entrepreneurs—have been promised but not delivered. A new tax system took effect recently; its design is simple for one-person businesses, less so for those with employees, and its real impact on business incentives remains to be seen. In the Catholic Church’s publications and occasionally in the official press, economists have argued that stronger reforms are needed to meet job creation and deficit reduction goals.

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