The need for a common platform of action for all economic actors.
Despite so much talk about the necessary productive linking between state enterprises and the private sector, there are underlying distortions that make it advisable to define the rules of the game clearly, that is, through contractual relations that define the role of each one...
Fidel Benito Rendón Matienzo, August, 2025
CUBA AHORA Revista Digital de Cuba
From the top to the left: Socialist Estate Enterprise, Non-Agricultural Coops, Agricultural Coops, Micro, Small and Medium size Enterprises, Self-Employed Workers.
In August 2024 or a year ago, during a new Roundtable transmitted by Cuban radio and television, Joaquín Alonso Vázquez, Cuban Minister of Economy and Planification (MEP), explained that Cuban economy private actors were still not effectively inserted in the Cuban economy. That productive linkages between state enterprises and the private sector are still pending. The Minister shared that the Cuban state monopoly of commerce had moved but often out of state control, and not always legally, by the commercial-import dynamic of non-governmental entities. Moreover, provincial governments have not always applied their authority and autonomy to manage economic and social development in their territories.
He recognized the efforts Cuba made in overcoming the mentioned challenges. He pointed out that despite such efforts distortions still persist and this is the reason behind government projects applying the needed transformations during the second semester of 2025. The goal is improving state enterprises systems and applying methodological guides that regulate contractual relations among economic actors. Private sector participation increases, particularly around the provision of services and demands as Prime Minister Manuel Marrero Cruz highlighted last July in Parliament, and so does the impact of its management formats. In Cuba, 496.535 people are self-employed today; we have approved 11.745 cooperatives and “Mipymes” or micro, small and medium size enterprises -these last with the main goal of increasing production. Of these 878 private Mipymes of which 43 have reported losses for a second year in a row.
According to the Minister a methodological guide has been completed with the goal of facilitating relations among different economic actors -private and non-private. Cuba has moved forward in reorganizing the social objectives of private Mipymes and cooperatives, as well as in ensuring much needed coherence between main and secondary activities.
Administrative restrictions still persist.
Within the governmental program focused on the correction of distortions and the reanimation of our economy, objective 4 has a specific focus on the need to resize and develop socialist governmental enterprises, together with other economic actors. Enterprises have gained institutionality in term of increased faculties. During the 9th Congress of the National Association of Economist and Accountants of Cuba (ANEC), however, it pointed out that administrative restrictions persist in regards to their autonomy, selection of providers, price determination and other indicators. Given the need for transformation, ANEC proposed to simplify the mechanism to create enterprises, regulate and promote competitiveness among offering enterprises as a form of self-regulation and stimulus to enterprise competition, and the revision of activities currently prohibited to the private sector. ANEC suggested also, to establish a clear distinction between different types of enterprises according to their peculiarities and their role in our economy.
Opportunities in the formation of alliances with the state.
Oniel Diaz, General Manager of Auge, has, like many entrepreneurs, his own perspective. Auge provides corporate services, it organizes an event in Havana every year, Quorum. February 2025 Quorum 4th edition brought together 150 business leaders to discuss challenges the private sector will face in 2025 and the eventual application of new regulatory rules in Cuba.
In the current context most private sector incentives have disappeared, Diaz explained, for example in 2024 Mipymes’ partners were exempted from paying anything for the revenues obtained during their first year in operations. It is also difficult for new businesses to access bank credits because they cannot comply with the rigorous warranties expected from the bank.
“This does not mean that we are expecting private enterprises to go back or disappear in 2025. Simply we are facing a new scenario confronting private enterprises and we will have to deal with it”, said Díaz to the local media. He believes that “private initiatives that are already working are here to stay: they provide services to government enterprises and count with thousands of workers (they employ approximately 35 % of the Cuban labor force) and contribute to the Cuban economy a 15% of its GDP (Gross Domestic Product).”
Daniel Torralbas, economist and analyst of AUGE, one of Quorum's opponents, explains that the main challenges the private sector faces this year is to resist. “First, the economic situation of our country is still complicated, and then there are macroeconomic distortions. On the other hand, there are new opportunities thanks to new formats of alliances with our state.”
As experts say, a model based on markets and price regulation planned strategically and directed with policies of incentives, would allow for a functioning platform common to all the economic actors involved.
Translation NSCUBA (Nova Scotia)
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