New MSMEs in Cuba: The rebirth Of An Economic Management

The Ministry of Economy and Planning of Cuba (MEP) approved this Thursday 192 new applications to create micro, small and medium-sized businesses (MSMEs), bringing the total to 8,951 authorized since this economic actor was allowed again in September 2021.

Of the new group, 186 are private MSMEs, five correspond to state management and one is a non-agricultural cooperative, the MEP specified on its Telegram channel.

The majority of MSMEs will operate in activities related to gastronomic services, passenger transportation and the production of construction materials, as has been customary in the latest authorizations.

The recent history of MSMEs in Cuba

This form of economic management, prohibited in Cuba since 1968, returned to the national scene in September 2021 as part of government reforms aimed at revitalizing the economy.

The sector employs more than 15% of the country's workers and contributes just under 14% of GDP , according to official figures.

In addition, they have introduced products that were scarce or did not exist on the island, which has suffered a serious shortage of basic goods (food, medicine, fuel) for three years.

MSMEs are also a controversial figure on the island, where they have been accused, on the one hand, of fueling inflation and, on the other, of being mostly in the hands of people linked to the Government or the Communist Party of Cuba (PCC, only legal).

MSMEs can be established as state, private or mixed and are recognized as an economic unit with legal personality with its own characteristics.

However, they are prohibited from accessing spheres such as health, telecommunications, energy, defense and the media, areas considered "strategic" by the State.

They share the centralized Cuban economic scenario with the socialist state company – the main one for the State -, non-agricultural cooperatives and self-employment (autonomous).