The micro, small and medium-sized enterprises (MIPYMEs) do not represent free enterprise in Cuba. Without the rule of law, investors and entrepreneurs are subject to the arbitrary diktats of regime officials who remain antagonistic to free markets and regard Cubans who become successful through their own private ventures with suspicion. Analysts in Spain described reforms around MIPYMEs in Cuba as "one step forward, two steps back."
What the Cuban military dictatorship calls economic reforms have resulted in hyperinflation on the island, and the claim that they lack the ability to print the national currency. This is the most common pretext given for the recent restrictions on cash transactions and ATM access. However, there is a reason that Havana is turning to digital banking: more centralized control over the economy, and less hard currency to circulate in the black market.
Cuban economist Elías Amor Bravo in his article ‘Bankification’ is Economic Repression in Cuba published in 14ymedio on August 4, 2023 reveals some difficult truths for those seeking to portray the ongoing process in Cuba in a positive light.
"And the truth is that, although the leaders declare that Cuba is governed in its banking practices by international standards and participates in all agreements and conventions, the reality is that there is a long way from saying it to the facts. For example, banking is all state-owned, and the banks are at the service of the Regime, in compliance with an alleged principle of legality, which tends to be blurred in certain contexts and operations. There is no competition between the banks, and they all follow similar procedures. Customer service leaves a lot to be desired. For example, the reading of the ruling of the London court denounced the strange Cuban banking operation. The judge’s ruling made it known that Cuba’s responsibility in the efforts made in the investment of international debt leaves much to be desired."
Havana's priorities can best be seen with regards to the regime's internal blockade and messaging on fishing.
Vice Minister of Cuba's Food Industry, Mydalis Naranjo Blanco
The Vice Minister of Cuba's Food Industry, Mydalis Naranjo Blanco, said on the radio and television Mesa Redonda program that the seas that surround the island do not have enough fish for Cubans to consume. "In terms of fishing, it is appropriate to say that although we are a country that is surrounded by the sea, our waters do not have the levels of fish that we need to cover the demand of the population," Naranjo Blanco responded to Randy Alonso's question about the fishing situation in Cuba, reported Diario de Cuba on June 22, 2023.
Deputy Prime Minister Jorge Luis Tapia: Let them farm their own fish.
Deputy Prime Minister Jorge Luis Tapia, during a speech before the National Assembly of People's Power on July 21, 2023, assured that "family aquaculture" was successful during the Special Period, the acute economic crisis of the 1990s.
"In the years of the Special Period there was a movement at the level of the popular council that many families made the tank and that exists in the world. But here in Cuba it was made. A pond, four meters around and they raised fish there after they had it. they caught", he emphasized hitting the podium, according to images transmitted by the official Canal Caribe.
Message to Cubans: no fish in the surrounding ocean waters, and if you want to get your own fish you will need to cultivate it in improvised man-made fresh water ponds. Yoani Sanchez wrote a column that exposes Tapia's failed scheme within the existing Cuban reality.
Tapia, who has left the worst of reputations – for being inefficient, corrupt and oppressive – wherever they have placed him as leader of the PCC, has not the slightest idea of what he is ordering us to do. According to his explanation, in a few square meters we could create the pond that will take us out of the crisis and make our kitchens overflow with fish and our plates with fins. In a country with a serious problem of housing overcrowding, thinking that families can have space for something like this exceeds naivety to become evil. To this we must add the issue of water. In a nation where thousands of homes only receive their water through tanker trucks and the pipes of so many homes have not seen a single drop for months, it would be worth asking Tapia how we are going to fill the pond. If they have made life difficult for those who built a little pool in their patio to cool off in summer, then what will they do to someone who dares to create a lagoon with tilapia and clarias. But the main difficulty lies in the food. Tapia, from his bureaucratic ignorance, must think that fish live off the air. If families do not have enough to give their children a snack, what food will they have to satisfy the hunger of the small fry that will not grow without nourishment, will not mature, and will not be ready to – in turn – be devoured by us. All his words are complete and utter nonsense or, worse still, a villainy launched by a man who obviously does not have to dedicate himself to fishing on his terrace to be able to eat snapper whenever he wants.
These are not the messages sent to visiting international tourists.
Make memories and get that rare catch when you deep-sea fish in Cuba! Ecocubapro.com
Ecocubapro.com has a section on deep sea fishing in tropical Cuba that includes several photos of top quality fish caught in Cuban waters by visiting tourists.
"The Old Bahama Channel, where you’ll be deep-sea fishing, is located between Cuba and the Bahamas, one of the world’s most beautiful and unique straits. With the fresh sea breeze blowing in your hair, your minibus will be waiting to take you to an all-inclusive hotel, so that after you’re finishing your fishing day, you can come back and relax in the pool, get a drink or two, and have the concierges bring you snacks as you relax under the setting sun."
What kind of fish can you expect to cash according to the Ecocubapro.com website?
"It really depends on the time of year you’re planning to come. Check out the options below:
Barracuda (Picúa): All year longWahoo (Peto): October- DecemberDorado or Mahi Mahi (Dorado): January-May / October-DecemberMarlin (Aguja): October- DecemberBlue Marlin (Castero): March- May/ October-NovemberTuna (Atún): June-September
So whatever the time of year you plan to visit Cuba, you’ll be sure to get the type of fish that can only be bought in stores outside of the Caribbean! With specialized crews and fishing gear, you’ll be fully outfitted to make that big catch."
“Make memories and get that rare catch when you deep-sea fish in Cuba!” Ecocubapro.com
VisitCuba.com offers a similar message to tourists that contradicts what is being told to the Cuban people.
"Largely unspoiled and mega-diverse, Cuba is one of the most fascinating destinations for fishing in the Caribbean. Although located in the heart of the Caribbean, Cuba is also right next to deep oceanic trenches, which hide hundreds of different species. No wonder the legendary writer Ernest Hemingway ended up staying here for over 20 years: fishing in Cuba is something else! During this time, not only did he write some of his masterpieces, but he also explored the coast aboard the Pilar, his very own custom-built fishing boat. Cuba’s waters, rivers, and lakes are full of Atlantic tarpons, bonefish, pomfrets, Atlantic bass, and trout. However, if you want to find the biggest banks and the rarest species, make sure you check out the places on the list below."
Saltwater Sportsman in their 2016 article described permits and mutton snappers that were found in good numbers in an area called Cuba's Zapata Peninsula, and provided some photographic evidence of their catch.
Mutton snapper often leave the reefs to forage in the bocas and nearby flats. Mary Raulerson
Cubans who want to have the same experience as tourists, or regime elites, risk fines and prison. They are prohibited from fishing on boats. In the video below foreign tourists go deep sea fishing on a yacht, and in the video one can see the ticket for the trip marked "Gaviota". Gaviota is a business run by the Cuban military, and a subsidiary of its conglomerate GAESA.
Mary Anastasia O'Grady in her September 7, 2021 column in The Wall Street Journal titled "A Sanction Worth Lifting in Cuba" highlighted the obstacles placed by Cuba's military dictatorship on Cubans in the island. In it she mentioned the Center for a Free Cuba's July 29, 2021 CubaBrief that made the request to “Let Cubans Fish” and outlined the existing reality.
"This is no joke. A Caribbean sea teeming with marine life contains abundant protein. Yet it’s nearly impossible for Cubans legally to reel in dinner to feed their families. This is more proof, as if we needed it, that socialism is for morons."
Compare and contrast the fishing experience of the foreigners above, and the Cubans in the video below.
Imagine being a second class citizen in your own country. Cubans have been living that experience in Cuba for six decades.
France24, August 9, 2023
Cubans wary of banks as government cracks down on cash
Havana (AFP) – Accustomed to lugging around thick wads of cash, Cubans are skeptical of government efforts to force them to deposit their money into a crumbling banking system, in an effort to curb runaway inflation and boost liquidity.
The communist country is experiencing its worst economic crisis in decades, with double-digit inflation and rampant money printing in recent years boosting the amount of cash on the street.
Long wary of the country's poorly functioning banks, Cubans have in recent months embraced cash even more, to avoid long lines and withdrawal limits at ATMs.
The government, seeking liquidity, transparency, and greater control over monetary flow, last week announced restrictions on cash payments to force businesses and citizens to use electronic payments.
Cash transactions will be limited to 5,000 pesos (about $20 on the black market), under the reform which is to be gradually implemented over the next six months.
"In the times we are living in, 5,000 pesos is nothing," said mechanical engineer Lisandra Pupo, 30, who like most Cubans, prefers to have her cash safely in hand.
Soaring prices and the loss of value of banknotes mean people on the island have to cram cash into a bag or backpack to pay even minor purchases.
"If I had a lot of money, I would not put it in the bank, because if I need it tomorrow and I go to the bank, they will not be able to give it to me, so I will have to wait three days, or until the bank has enough money," said Pupo.
Independent economist Omar Everleny Perez said that "with such high prices and the inexistence of high denomination banknotes" the push toward banking is essential.
Outdated banking tech
However, Cuba's outdated banking system risks leaving users with no way of accessing their money at all.
Internet is unreliable, many people don't have smartphones for contactless payments, and Central Bank president Joaquin Alonso on Monday admitted there were few terminals for card payments.
"To install point-of-sale terminals, a communication line is required ... now imagine how much investment we would need to put terminals in all points of sale," said Alonso.
"This demands a lot of us, but we are not saying we won't move forward.
"Today there is a significant level of cash that is outside the banking system. That money does not circulate through the logical paths of the economy and is only traded between people," said Alonso.
He said the mass of freely circulating cash was "incentivizing the inflationary spiral."
Complex economic crisis
The island nation's current economic crisis is multi-pronged, and comes with a backdrop of decades of US sanctions, inefficiency, lack of foreign investment, and a heavy reliance on imports.
Former US President Donald Trump toughened sanctions against Cuba, and then the Covid pandemic battered the tourism industry -- the government's main source of foreign exchange -- which has battled to recover.
In 2021, a monetary reform phasing out a convertible peso pegged to the dollar, led the regular peso's value to plummet.
There are endless queues for food, fuel, and medicine, prompting an exodus of Cubans seeking to flee the island.
Year-on-year inflation reached 45.8 percent in May, while in 2022 it was 39 percent, according to official figures, but analysts believe it has already reached triple digits.
Small businesses in Cuba, given legal status for the first time in 2021 in a country where state-run stores were long the only option, also dread the switch to electronic transactions.
Private business consultant Oniel Diaz wrote on his Facebook account that these businesses will lose their ability to import "in an environment of scarcity and inflation."
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© 2023 AFP
Havana Times, August 9, 2023
Cuba: One Economic Slip-up after Another
By Javier Herrera
HAVANA TIMES – Hellbent on modernizing the Cuban economy, the Cuban Government is committing one monumental mistake after another. It would seem they didn’t have economists serving as advisors to their insane ideas and that they make decisions without consulting or learning the reality or economic framework they’re working with.
It’s worth pointing out that economic reforms that have been implemented in Cuba aren’t the result of a decision made overnight, analyses have been made and plans have been written up over more than ten years, according to their own words. Nor have they been implemented taking into account citizens’ or ordinary families’ income, these reforms have rather been pushed by their mere survival instinct as the ruling class.
After the “Currency Reform” they bragged about so much, which was implemented in January 2021 to eliminate the dual currency system and thereby the difference between those who had and didn’t have access to foreign currency, the country has been sunken into the harshest crisis it’s ever known in its revolutionary (post 1959) history. In addition to not eliminating the dual currency system, we now have multiple currencies circulating such as the Euro, USD, MLC, CUP and whichever foreign currency the Cuban National Bank happens to accept, while the State is selling basic essentials pretty much only in these currencies.
Unaware or ignoring the way the market economy works that they’ve tried to kick start, the Government is poking around in the dark and slipping up time and time again, trying to fix the mistakes it makes with new, even more catastrophic measures than the last. The extent of this chaos is so great that we have even heard the Cuban President talk about “reorganizing the Organizing process”, referring to the Currency and Economic reforms.
So many economic faux-pas and poor production by state-led industries – which is pretty much all of national industry -, has led to inflation rates never seen before here, not even during the notoriously known “Special Period” (of the post-Soviet 1990s). Today, the dollar is being sold on the illegal or underground market for over 225 Cuban pesos (CUP), the currency Cuban workers earn in with an average wage of 4000 pesos per month. Most pensions are under 2,000 pesos.
The absence of basic goods and services in national currency has meant that money leaving the Banks’ coffers as wages, never returns as it ends up in the hands of private business owners who are selling food or other products at exorbitant prices. Then, this money is reinvested in buying strong foreign currencies as a self-defense mechanism given the ups and downs in currency rates, or is spent abroad on new merchandise, which is sold for a high price, yet again. A lot of this strong foreign currency is also used by Cubans who emigrate for good and must pay all of their expenses in dollars or euros.
The situation foretold leads to hyperinflation where demand for goods goes above and beyond supply and, as a result, the trend is that prices increase, like they do in any free market. This abnormal currency circulation goes hand-in-hand with a lack of liquid funds in banks and the recipe for an even greater economic collapse is sealed.
Now, it’s normal to find companies with significant wage defaults to workers. ATMs without cash have also become commonplace recently, with long lines at those that do have cash and even lines in the early morning to see if the ATM is restocked. Often there isn’t any cash in the bank, and withdrawing cash for any urgent need is impossible.
Faced with the dilemma of printing more bills that will only increase the amount of money in circulation and thereby inflation, the State is now limiting the sum of money people can withdraw on their bank cards or from their bank accounts, restricting citizens’ ownership of cash and making the general population more unhappy as their access to their own economic resources is now restricted.
As a last resort, administrators of the Cuban economy have now decided that privately-owned businesses that don’t implement electronic payment methods, within a six-month timeframe, will have their work licenses revoked. This measure was announced in the extraordinary issue of the Cuban Republic’s Official Gazette, with Resolution 111/2023.
This measure might seem harmless anywhere else in the world, but it’s a clear alarm bell here in Cuba. First of all, we have to bear in mind the fact that Cuba’s I.T. network is awful and it’s quite common for the largest state-owned markets – selling in foreign currency – not to make a sale because “There isn’t any connection”. In addition to technical hiccups, we can add the fact that the Cuban Government has a long history of interfering in citizens’ private affairs, including their economy, without the presumption of guilt or any other legal reason to interfere in a Cuban’s personal finances.
This attempt to try and implement a bank freeze just leads to greater distrust towards the Cuban banking system and state institutions. Distrust also leads to further discontent and despair, which will give a further boost to the unstoppable exodus on the island in recent years for sure, with over a third of a million inhabitants of a working age having left Cuba.
The worst thing about all of this is that it confirms the Regime’s stubbornness in failing to recognize its failures and being able to reverse all of the crazy things that have crossed their minds. Instead, they just take pleasure in blaming the US Government and the economic embargo it’s imposed for all of this chaos, while the people suffering abandonment, shortages, malnutrition and a lack of basic essentials such as medicines and food are ordinary Cubans.
It’s time the Regime understands that the crisis here in Cuba isn’t economic or temporary, it’s systematic. The Cuban crisis is innate to the chosen economic system, and this is tied to the political regime in power. Since the early years of the Revolution, their inability to create goods and services was clear and they only managed to afford the first 30 years of government thanks to aid – which wasn’t selfless – from the Soviet Bloc that existed at the time, especially the Soviet Union.
After the Socialist Bloc collapsed, economic distortions became clear, and the crisis has just been getting worse ever since. One day, it was the Special Period, then it was a “temporary” fuel crisis, then it was the 240 measures announced by Trump, then it was COVID-19, then the Biden Administration… the reality is that they always blame an external actor, and they don’t take a serious look at the real shortcomings in the economic model the ruling elite have chosen and imposed.
They won’t solve the economic, and political, crisis the Cuban people are suffering with bank freezes, or resolutions pulled out of their sleeve, or financial restrictions. Sticking their nose in private, individual or company finances won’t help the Cuban State manage to reduce inflation and recover liquidity either.
It’s time Cuban leaders wake up and take effective measures to alleviate the crisis of the Cuban people… I don’t think they’d be very happy if the Cuban people woke up instead.
https://havanatimes.org/opinion/cuba-one-economic-slip-up-after-another/
Havana Times, 08 Aug 23
Provinces Compete for Economic Results, Upbeat Data in Hand
The tip of the dying Cuban economy
Havana photo by Juan Suarez
By Elias Amor Bravo (14ymedio)
HAVANA TIMES – A kind reader of the blog asks me why the Cuban economy is having so much difficulty getting ahead and improving the living conditions of the population.
And my first warning is the mention of the embargo/blockade of the United States as a limiting factor to the country’s economic possibilities. My answer is clear: if in Cuba there is no process of economic recovery as in other countries of the world and in Latin America, it is because there are internal factors that prevent it.
One doesn’t have to look for those responsible outside, because there isn’t anyone. The seed of economic failure was planted by Fidel Castro 64 years ago when he decided to transform the structural base of the nation’s economy, betting on an adventure that at that time was fashionable in the countries dominated by the Soviet empire or China, but that over the years was seen to be unsustainable.
And while other countries were leaving behind that useless and inefficient economic model, Castroite leaders clung to it, as if it were a DNA trait impossible to replace. And so we come to the present day, when the communist regime continues to believe that the key to the nation’s economic prosperity is based on the “control and efficiency” of the economy by the regime. As if it were a military barracks. That’s how it goes.
The economic history of the nation is sad and offers a balance for future generations that only serves one thing: to understand that you can’t live in Cuba and that the solution is to go abroad. The same thing that has happened on the Island since the flights of Camarioca (1965) were inaugurated, after the massive departure of the Mariel Boatlift (1980) and Rafter Crisis from Guantánamo (1994)
Every fifteen years, Cuban communism is forced to open the doors of the prison so that people who hate the system flee and the regime thereby strengthens itself and gains time. The operation has gone well for the Castro leaders, but not for the Cubans. The Island decreases in all its indicators. It ages, is depopulated, lacks international solvency, is technologically lacking and continues to lose the talent and energy of its young people.
And in a scenario like this, it now turns out that the regime wants the provincial councils, protected by the communist territorial power, to assume the planning and management of the economy as part of the competition that has been ceded to them from the central regime.
And that is where the local communist bureaucrats have found some meaning in their lives, elaborating statistics of dubious quality confirming that on the one hand there is economic recovery, but on the other, the opposite happens. And with these data they launch themselves into a competition with the other territories to impress the hierarchical leaders of the party and the regime, installed in their comfortable offices in Havana, who have done their homework well and deserve a little applause, in the form of a visit or some institutional act.
Then, the controlled and submissive state press is in charge of covering this activity as if it were something transcendental, but the reality is that people are still standing in lines, suffering from a shortage of all kinds of goods and services. Private enterprises are blocked, and with optimism at rock bottom, Cubans can’t wake up from the terrible nightmare in which they live.
This analysis of the territorial economies that has just begun will give surprising results, which will soon be put on the table.
The communist regime has led to a very unequal distribution of state income and wealth in the different parts of the territory, which is reflected in numerous aggregated indicators. No one is surprised that the highest wage levels in Cuba are paid in the western provinces, while the lowest are obtained in the eastern ones.
This depends, and a great deal, on the territorial specialization, the density of companies and the number of jobs that are assigned in each area of the country. And for this reason, territorial governments will begin to acknowledge the effects of these inequalities very soon, especially when they have access to the business activity and the results of the management.
That will be the moment when it will be possible to verify that the permanent shortage of food and products, such as bananas and sweet potatoes, rice, vegetables, fluid milk and beef, has little to do with acceptable business results, duly made up by the managers.
Even when the analysis of compliance or non-compliance with the plan arrives, an approach to management can be contemplated, which does not imply a clear improvement in people’s living conditions.
The instruments that support the economic model of central planning will not serve to determine the conditions in which people live. The data will give satisfactory information on one hand, but the reality of the people on the street, of the average Cuban, will be very different. The communist Tovarich — the comrades — of the Iron Curtain already faced this problem in the 80s of the last century, and perestroika and glasnost emerged as recipes to solve it.
The governments of these communist countries realized that while they spent their time measuring, for example, the indecipherable indicators of overcompliance with retail commercial circulation, the people turned their backs on them and took to the streets in a demand for freedom and a different and more prosperous model for the economy. And what no one thought would happen happened. The Berlin Wall came down, and the communist empire of the USSR disappeared from the history of humanity. Then China and Vietnam did their own homework and ended up being part of the global economy.
The world changed but Cuba didn’t. Fidel Castro was a decisive block on the arrival of those winds of change and took advantage of the last years of his life to reinforce the old Cuban communist economic model that became the disaster that currently presides over the situation of the Island.
It is a scenario in which there is a shortage of food, state companies with losses, international insolvency, absence of foreign investments, collapse of tourism, territorial decentralization, galloping inflation, destruction of the value of the national currency and an obsession of the regime to control the money in circulation.
And the leaders of 2023 are reluctant to implement changes in the economic model to get Cuba out of this disaster and want the measures that are applied to be based on central planning and not on the market. For example, when they threw themselves into the Ordering Task* because it was going to be the solution to all the problems, they were already warned of the consequences. Now they’re here, and let’s see how they turn out.
And with this balance of widespread poverty, local leaders, who lack a global vision of the economy and only attend to their territorial objectives, say they want to export to other countries, without previously covering the internal needs of the population, as is the case with fresh fruit. The objective of achieving foreign exchange is only achieved with the entry of remittances that bets on the informal market and moves away from the economic controls of the regime.
However, the export categories do not work and the non-compliances are significant. And what is worse, the party’s local leaders refuse to allow exports from each area to leave the country through airports located in other provinces, since this goes against the presentation of results to the higher authorities. Unfortunately, the market unity in Cuba has been broken. This is the situation now.
*Translators Note: The Ordering Task is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.
https://havanatimes.org/opinion/provinces-compete-for-economic-results-upbeat-data-in-hand/
14ymedio, August 4, 2023
‘Bankification’ is Economic Repression in Cuba
By Elías Amor Bravo
Elías Amor Bravo, Economist, August 4, 2023 — Who benefits from the ’bankification’ of the Cuban economy? This question has been going around since the Regime, using an entity at its service, the Central Bank of Cuba, has announced measures that aim to reduce the circulation of cash and get economic actors to use electronic banking services more.
To do this, published in the Official Gazette No. 55 Extraordinary of August 2, 2023, is a resolution that establishes the banking rules relating to limits for collections and cash payments in national currency, their deposit, extraction and possession, and other issues that should not go unnoticed. One of them is the possible threat of confiscation to those who do not comply with the provisions of the rule. The other is the authorization to withdraw cash from ATMs, but only for certain very specific needs, such as salaries, savings accounts, pensions and other personal expenses.
The rest of the resolution is pure heavy artillery from the Central Bank of Cuba, it says, to favor the process of bankification in the country. And even though it is emphasized that the objective is, in principle, to “maintain equality for all the actors of the national economy,” the truth is that the measures adopted have clear asymmetric effects depending on the size or sector of specialization of the economic actors, among others. So it can be expected that problems will appear in applying the new rules, and that the eventual rearrangement of banking flows will not be achieved either.
The Regime points out in the preamble to the resolution that the increase in the use of cash in economic and financial transactions since 2021 has caused a decline in the levels of banking and financial inclusion in the country. Some reflection should lead to an initial conclusion: the entity responsible for that monetary expansion is the Regime itself, with its unbridled public spending, and not the economic actors to whom it is unfairly going to apply the adjustment.
Therefore, it should be the Regime that sets an example and acts to correct the high costs associated with the issuance, transport, processing and storage of money. In fact, the growing demand for money in a number of ATMs for cash extraction is the direct result of the rampant inflation that exists in the economy and that forces those multiple cash withdrawals in order to face spiraling prices.
The communist Regime creates the problems but applies the adjustment measures to others. Just like that. The increase in the bankification of financial operations, through electronic payment channels, is not intended to improve the service for economic actors nor to meet their growing cash needs. It only makes the adjustment of monetary control fall on the weakest part and conveys a message: here you obey, always, and at any price.
The resolution puts pressure on all economic actors, from State enterprises; senior business management organizations; budgeted units; non-agricultural cooperatives; agricultural cooperatives; agricultural producers; individual small farmers; commercial fishermen; micro, small and medium-sized enterprises [MSMEs]; local development projects; self-employed workers; artists and creators; the modalities of foreign investment and the associative forms created under the protection of the Law of Associations. No one escapes.
Likewise, it is applicable to natural or legal persons not covered by the above, if they carry out legally authorized commercial and service activities. That is, MSMEs are also a target of the measures, in case anyone had any doubts about the coercive action.
The Regime has been in a rush to boost electronic banking operations. Despite the low or no degree of development of these, because Cubans use cash for most transactions in the formal and informal economy, the Central Bank wants this process to be based, as soon as possible, on the digitization of the operations of the banking system within its process of technological modernization.
The communist leaders are convinced that the provision published in the Gazette will accelerate the process of bankification of operations, among them, all the collection and payment relationships of the economic actors that are based on the bank’s payment methods and should be the basis of electronic transactions. They are wrong. It is the eternal obsessive mania of Castroism that an economy can function through the publication of rules in an official gazette. A misconception. The normal thing is to observe what happens in reality, and if it has to be regulated, do it by interfering in the least possible way in those processes. Just the opposite of Castroism, which has been believing for 64 years that an economy can be controlled and directed.
In the face of the disaster of the country’s ATM network, a service that the leaders recognize is not efficient, it is established that the teams will only dispense cash for the debit cards of natural persons associated with salary, savings accounts, pensions and other personal assets. That is, the same exceptional assumptions. The control will be maximum. They warn that if a card of another type is detected, it will be returned and the customer must go to a bank branch.
Shops that offer the sale of goods and services must incorporate the possibility of electronic payment channels, either through the Transfermóvil, EnZona gateways or the Sales Terminal Points. Let’s see how many warehouses in the standard basket incorporate these digital processes for payment. In the face of the growing alarm of the population, the authorities have been forced to declare that cash will not cease to exist, but that the use of electronic payment is promoted, and the “revolutionary principle” insists that no one will be left helpless in the knowledge that not everyone can access these mechanisms.
In the market economy, this type of initiative is usually accompanied by incentives or gifts to users to mobilize and reward their behavior change. Not in Castroism. It insists only that, since they are safer and faster operations, “they must also be a benefit for the population, so they are being studied to continue advancing in the levels of profits, which are issued by banks, a work that is also in conjunction with businesses.” Profits for whom and for what?
In fact, plastic money in Cuba is far behind other countries. The average is 1.4 cards per inhabitant, and in other countries, such as the Dominican Republic, the average is 4.5. This indicates that operations with electronic means do not exceed 200 million per year, a level that is considered low for the level of transactions of the economy as a whole. Behind this deficient result is the low confidence of Cubans in the banking system, where they have had terrible experiences, and its limited attractiveness for the promotion of savings and the sale of investment services, such as mortgages or pension plans, which are prohibited by the communist Regime.
And the truth is that, although the leaders declare that Cuba is governed in its banking practices by international standards and participates in all agreements and conventions, the reality is that there is a long way from saying it to the facts. For example, banking is all state-owned, and the banks are at the service of the Regime, in compliance with an alleged principle of legality, which tends to be blurred in certain contexts and operations. There is no competition between the banks, and they all follow similar procedures. Customer service leaves a lot to be desired. For example, the reading of the ruling of the London court denounced the strange Cuban banking operation. The judge’s ruling made it known that Cuba’s responsibility in the efforts made in the investment of international debt leaves much to be desired.
On the other hand, it is surprising that the deadlines for applying the rule are unnecessarily shortened. It is true that when the conditions are not created, the rule recognizes a period of up to 6 months for cash withdrawals to continue to be made in Cuban pesos to make payments to workers for salaries, premiums, gratuities and other remunerations, as long as you do not have a resident employee payroll. This very short period will lead some actors to prefer other informal channels. The same goes for the maximum limit of 5,000 Cuban pesos per operation for cash collections and payments, a figure that seems to be pulled out of a hat without too much analysis. In fact, it is pointed out that if these operations exceed the figure of 5,000 Cuban pesos, they must be carried out through payment instruments and credit securities other than cash, especially through electronic payment channels.
In addition, the cash income in Cuban pesos received by the subjects of the resolution, as a rule, is deposited in their current accounts no later than the next bank business day from the date of receipt. In the case of non-State forms of management, the deposit made in the account is recognized for tax purposes, while cash withdrawals for the payment of salaries, subsidies and other social security benefits and student loans are made, at the most, three working days before the date established for payment. These deadlines are not understood and do nothing but increase the logical distrust of Cubans in the banks.
Some economic actors have felt trapped in a crude financial “corral” at the wrong time. The financial situation of the Regime must be bad, very bad so that, overnight, under darkness and with treachery, the authorities gave an unexpected turn to their banking system, and the consequences can be dire for the economy.
And to make it clear that this issue is being taken seriously, the communist rule warns the presidents of banks, or the persons to whom they delegate authority in writing, not to suspend banking services or close customers’ accounts, “and to comply with the provisions of the Third and Fourth sections of this Resolution.” These exceptional measures go too far and create a logical alarm, concern and uncertainty among economic actors. Once again, arbitrariness is at the center of decisions in Castroism: the concept of “a repeated rule,” which is not adequately defined and raises many doubts about what it means, how many times and in what way.
Which means it’s not a joke. The resolution launches a full-blown threat. You must necessarily comply with what it establishes, no matter how irrational and inefficient it may be. Otherwise, be willing to lose all the money you have in the bank. It should be noted here that this is a case of confiscation of property outside the provisions of the 2019 communist constitution and the 2022 expropriations law. Where is the public utility or the social interest in these maneuvers of suspension or closure of banking services by the authorities? Castroism is showing its worst face once again. Bankification ends up being economic repression.
Translated by Regina Anavy
https://translatingcuba.com/bankification-is-economic-repression-in-cuba/
14ymedio, July 23, 2023
Raising Fish at Home, the Latest Silliness for Cubans
the malevolent brainchild of a Cuban minister to solve the food shortage
Cuban Vice Prime Minister Jorge Luis Tapia. (@AsambleaCuba/Twitter)
HAVANA TIMES – A few days after standing in a very long line, I had to walk through the streets of the San Leopoldo neighborhood in Havana, avoiding the bodies of dead chicks, thrown from the balconies, with their necks outstretched and their feathers still a tender yellow color. I had spent a whole morning in line to buy those tiny beings who, according to the official discourse, were going to save us from famine.
Only one of those chicks survived two weeks in our house. He died malnourished and sick, due to our inexperience as poultry farmers and the lack of food to give him. We couldn’t take a bite of that starving, gray creature, perhaps because it had ended up looking too much like us. Three decades later, the nightmare repeats itself, but this time with the breeding of fish.
Cuba’s unpopular Vice Prime Minister Jorge Luis Tapia has summoned us, speaking before the National Assembly of People’s Power, to create ponds in our backyards and dedicate ourselves to aquaculture. I am not going to dwell on the authoritarian and despotic tone with which he has launched his demand, because it is the typical way in which the bureaucrats of the Cuban Communist Party (PCC) speak to us, as if they were addressing soldiers and not citizens, as if the country were an immense barracks and we were Compulsory Military Service recruits.
Tapia, who has left the worst of reputations – for being inefficient, corrupt and oppressive – wherever they have placed him as leader of the PCC, has not the slightest idea of what he is ordering us to do. According to his explanation, in a few square meters we could create the pond that will take us out of the crisis and make our kitchens overflow with fish and our plates with fins. In a country with a serious problem of housing overcrowding, thinking that families can have space for something like this exceeds naivety to become evil.
To this we must add the issue of water. In a nation where thousands of homes only receive their water through tanker trucks and the pipes of so many homes have not seen a single drop for months, it would be worth asking Tapia how we are going to fill the pond. If they have made life difficult for those who built a little pool in their patio to cool off in summer, then what will they do to someone who dares to create a lagoon with tilapia and clarias.
But the main difficulty lies in the food. Tapia, from his bureaucratic ignorance, must think that fish live off the air. If families do not have enough to give their children a snack, what food will they have to satisfy the hunger of the small fry that will not grow without nourishment, will not mature, and will not be ready to – in turn – be devoured by us. All his words are complete and utter nonsense or, worse still, a villainy launched by a man who obviously does not have to dedicate himself to fishing on his terrace to be able to eat snapper whenever he wants.
I have no doubt that there are already neighbors in my building who are calculating the quantity of tench that could fit in the huge water tank that supplies our 144 apartments. Perhaps some seasoned cederista* will take the initiative to turn the deposit into a spawning, rearing, and fattening industry. Voluntarism can lead to these extremes, but decades of failure have already proven that animal food does not spring from will.
Like those chicks from my adolescence, in the Special Period, it will begin to rain scrawny fish from the balconies and rooftops. They will fall to the street, without anyone daring to pick them up, too similar to ourselves to touch them.
—–
*Translator’s note: The term ‘cederista‘ derives from the initials C-D-R for Committees for the Defense of the Revolution, and is used to designate a member of that organization
Translated by Translating Cuba.
https://havanatimes.org/opinion/raising-fish-at-home-the-latest-silliness-for-cubans/
In case you missed it
Gowper, September 7, 2021
Do MIPYMEs open the Cuban economy to private investment?
One step forward, two steps back
A necessary step, but in itself insufficient
On August 19, 2021, the Official Gazette of the Republic of Cuba published a series of decrees issued by the Government headed by Miguel Díaz-Canel Bermúdez, which aim to regulate the opening of the Cuban economy to private management, specifically with regard to micro, small and medium-sized enterprises or " SMEs". In short, these are measures that modify the regulations on self-employment and implement, for the first time in the economic history of the regime, the possibility of setting up 100% private companies.
The main rule of the package is Decree Law 46/2021, on micro, small and medium-sized enterprises. This decree introduces in the Cuban non-state sector the new figure of Limited Liability Companies or "SRL", to provide legal personality to those private business projects based in Cuba, which are classified as " MIPYMEs".
How does the decree law legally regulate MIPYMEs?
First, MIPYMEs are defined as companies whose maximum number of employees reaches 100 workers. It is noteworthy that despite using a universal terminology such as Small and Medium Enterprises ("PYME" in Spanish, or "SME" in English), the requirements to be met in order to be considered as such are significantly different from the usual ones in the rest of the legal systems.
Requirements and legal form
For the purposes of the Decree Law, micro-enterprises will be those with between 1 and 10 employees, small enterprises will be those with between 11 and 35 employees, and medium-sized enterprises with between 36 and 100 employees. However, no economic criteria are established, as is customary in other legal systems, to determine the size of the company, and the maximum number of workers is half of the number usually contemplated.
As regards the legal structure, it is decided to provide MSMEs with their own legal personality in the form of a Limited Liability Company or LLC. The regulation of these SRLs, however, is similar to the way they are regulated in other countries.
Limited Liability Companies (SRL) or Limited Liability Companies (SL) in Spanish law, and their variants Società di Responsabilità Limitata (S.r.l. ) in Italy, Société à responsabilité limitée (SARL) in France, or the German Gesellschaft mit beschränkter Haftung (GmBh), are all figures of the continental commercial and corporate law system, but are also reflected in Anglo-Saxon law, with the Private Limited Company (Pvt Ltd) in the United Kingdom or the Limited Liability Company (LLC) in the United States.
This is a legal concept that has become a classic (due to its uniformity and expansion), although it is relatively recent (1892). Thus, it is not surprising to observe common features between Cuban and foreign regulations, the former including many of the characteristics of the latter.
Share capital
Cuban LLCs do not have a minimum capital stock, according to Article 23.2 of Decree Law 46/2021, which leads to the inevitable conclusion that it is possible to incorporate a company with a capital of 1 peso. In this, it is similar to the French SARL, which does not impose a minimum capital, and to the Italian subtype "S.r.l. de capital mínimo o simplificada", which can be incorporated with a minimum share capital of 1 euro. In Spain, however, a significantly higher minimum capital of at least €3,000.00 is still maintained, although not exorbitant, since it represents 3.2 times the minimum interprofessional wage (SMI). In Spain, moreover, the SRL can be incorporated without the obligation of actually depositing the said amount, the mere declaration of the partners being sufficient.
However, the choice of a small or low amount of capital stock can give rise to a number of problems[1].
The capital stock of the Cuban LLC will be divided into shares, the transfer of which is subject to the preemptive right of the other partners, if any.
Although the capital stock can be formed by monetary or non-monetary contributions (susceptible of economic valuation), its disbursement, in any case, is obligatory at the moment of incorporation.
The increase and reduction of capital stock is regulated, as in Spanish law, by linking it to resolutions of the General Shareholders' Meeting, although the lack of regulation regarding the Issue Premiums (a financial element that is so important in the entrepreneurial sector or Startups), or even regarding the cases of mandatory reduction of the Capital Stock (a legal assumption so relevant in the assessment of the liability of the administrator), is noteworthy.
The Articles of Incorporation
The Articles of Incorporation must have the usual content: corporate name of the MIPYME, domicile, corporate purpose, capital, shareholdings, administrative body, etc. It should be noted that Article 31.g) of Decree Law 46/2021 introduces a completely new body in the usual regulation of companies in other jurisdictions, the control and supervision body. This body is regulated in Section Four of the regulations, Articles 82 and following, and is a kind of auditing body that supervises and controls the activity of the administrator. This is not an insignificant measure, since it actually doubles the company's management tasks and considerably dilutes the liability in the event of negligent management of the company.
Life cycle of the company
On this point we find an almost perfect parallelism with Spanish legislation.
The situation of the company in formation and the irregular company is precisely regulated, generating the usual joint and several liabilities among partners. The causes of extinction or dissolution of the LLC are the usual ones in the rest of the legal systems, as well as those related to the distribution of dividends, etc.
The rights and obligations of the partners are also the usual ones, as well as the adoption of resolutions in the General Meeting by means of a system of majorities, normally simple and that sometimes will have to be reinforced.
Is it possible to incorporate a single-member MIPYME?
Yes, the law allows the incorporation of a Sole Proprietorship Limited Liability Company, whose sole shareholder may be either a natural person or a legal entity, although it is linked to whether the company is state-owned, mixed or private.
As in Spain, for example, the sole proprietorship of the company may be original or supervening, but in any case, the circumstance of sole proprietorship must be stated from the moment it occurs.
Then, can any person be a partner of an MIPYME?
No. The regulation takes necessary steps in the economic opening of the island, but it does not abandon the state control of the economy and its development.
According to Article 48 of Decree Law 46/2021, natural persons residing in Cuba, over 18 years of age, may be partners of an LLC in the case of private MSMEs. Only in state-owned or mixed MIPYMEs may there be partners who are legal persons, and therefore, subject to the scrutiny and authorization of ministerial and governmental bodies.
In addition, Article 49, which regulates incompatibilities, clearly states that one cannot be a partner in several companies if one is a natural person.
In short, genuine private initiative is limited to (1) Cubans who are (2) natural persons (3) residents in Cuba, and (4) may be partners in only one company.
None of these limits is present in the regulations on SMEs in any of the countries mentioned above, nor in the rest of the states of the European Union, or in the countries of the Organization for Economic Cooperation and Development (OECD), which brings together the most developed countries and currently has 38 member countries (there are also Latin American countries, such as Mexico, Chile, Colombia or Costa Rica).
The state or mixed initiative, as has been traditional in Cuba, is broader, admitting legal entities and non-residents, but remains under the absolute control of the government.
Does this regulation open the Cuban economy to foreign investment?
No. But it does intend to encourage indirect investment, since most Cubans living on the island do not have sufficient economic resources or means of their own to undertake, nor can they turn to entities in search of financing, since they do not offer it. The solution within their reach will be, as always, to turn to relatives, friends or partners abroad.
Let us remember that the state or mixed initiative does not have these limitations. In fact, one of the problems in foreign investments in Cuba is the high amount that must be disbursed to invest in a mixed company. The possibility of creating mixed MIPYMEs could be an attempt by the regime to attract foreign investment in more moderate amounts, while maintaining control, since it is the Ministry of Foreign Trade and Investment (MINCEX) who must approve joint venture projects. We will have to observe the plans of MINCEX in view of this new possibility to discover the real intentions of the regime.
Well, once again it will be the Cubans living abroad who will have to put up the money for the private initiative of the MIPYMEs, either directly if they have a residence in Cuba, or indirectly through their relatives living on the island.
Does the incorporation of the MIPYMEs go through any filter of the State?
Of course it does. The incorporation is registered in the Companies House, but it is not registered with said public registry, but with the Ministry of Economy and Planning.
The partners or a representative of the partners must submit the request for the creation of a MIPYME to the aforementioned Ministry. At this point the regulation becomes vague and diffuse, because although it seems to be understood that the Ministry will know the activity to be developed by the company, at no time does it indicate the documentation that must be submitted to this Ministry in order to obtain the approval.
It will certainly be necessary to submit the Articles of Incorporation, identification documents of the partners, etc.
What criteria are followed to approve or deny the incorporation?
Decree Law 46/2021 does not regulate when the Ministry of Economy and Planning must approve or deny the request for the creation of a MIPYME. It is understood that the requirements of the law regarding partners, administrators, capital stock, etc. must be complied with. What generates more doubts is the viability or legality of the intended corporate purpose.
In the same regulatory package for MIPYMEs, Decree 49 was published, which regulates the activities that may be developed in the private sector. Again, it is understood that if the activity intended for the corporate purpose of the MSME is not included among those "prohibited" in Decree 49, the ministry should allow it to be carried out. But this list is limited to the most traditional activities of the economy, which are already carried out by the self-employed, and which by themselves cannot generate the wealth that the State does not achieve even if it has a State monopoly over the rest of the economic activities.
The vague and non-transparent regulations, as well as the same criteria for the approval of MIPYMEs, will allow the government to enter into an unimaginable casuistry of denials, and what is more worrisome, it will be impossible to appeal.
Apart from possible arbitrary denials, what are the risks that entrepreneurs take when setting up a MIPYME?
Overall, the risks are extraordinary and very diversified. They range from the absence of a body of ordinary and specialized laws on corporate and commercial matters, to the lack of experience and business customs settled in time, since in the last 60 years there has been no private activity of any commercial nature by Cuban citizens, since the regime completely ostracized the previous entrepreneurial culture that gave so many examples of the know-how of Cubans, with Cuban-born companies that currently dominate or compete for the dominance of entire market sectors, such as Bacardi in spirits and distilled beverages.
Likewise, the complete dysfunction of the Cuban judicial system, which lacks independent and impartial judges who apply the law exclusively, does not have judges specialized in commercial matters, does not allow the use of alternative, reliable and effective methods of dispute resolution, nor does it have the indispensable assistance of independent legal operators, since lawyers are forced to practice law collectively, to the detriment of their clients and the entire system of rights. The legal uncertainty is therefore complete.
With respect, specifically, to MIPYMEs, there are serious problems of omission in Cuban regulations.
What would happen, for example, in the event of insolvency[2] of the MIPYME? The only thing that the law regulates is that partners of MIPYMEs may not distribute dividends, and if they had done so, they must return them.
When the insolvency is temporary or temporary, it is possible that the business project is still viable, being then essential to reorganize costs, to redirect the activity, to look for financing and to restructure the debts of the company. For the latter, the company can file for insolvency proceedings, which is a legal procedure that exists in most countries for legal entities (and even individuals) to resolve an extraordinary debt situation.
When the insolvency is permanent, it is known as bankruptcy, and implies the definitive impossibility for a company, be it small or large, to meet its debts.
The fact that nothing similar is regulated for MIPYMEs in the decree law is worrisome, because the consequences of bankruptcy or bankruptcy are the liquidation of the company to execute all its assets in favor of all its creditors, which may imply the extinction of the company. And, in case the assets of the company are not sufficient, if it is considered that the insolvency has been culpable and that the administrator or the partners have had some responsibility, they will have to respond with their personal assets.
The creditor of a MIPYME could be not only another natural person (a relative of the partner who has lent money, a friend, a "partner" or investor, Cuban or not), but also a legal person, such as a State enterprise, a bank (State-owned or controlled by the State, since they all are), or, in the end, the State itself for non-payment of taxes and social contributions, etc. In these cases, it is necessary to provide legal protection not only for the creditor who has made an investment with its capital, but also for the very survival of the MIPYME, providing all the possibilities of enforced collection against the debtor's assets (not against the debtor's person) through the courts.
And it is essential, especially in the case of debts owed to the State, that the State does not end up imposing a "debt prison", or that the State aggressively pursues, automatically and without any judicial procedure, all the present and future assets of the manager and partners of the MYPIME, until it is compensated.
Although it may seem redundant, it goes without saying that Article 11 of the UN International Covenant on Civil and Political Rights states that "no one shall be imprisoned merely on the ground of inability to fulfill a contractual obligation".
It is not only a silence of Decree Law 46/2021, but also a silence of the Cuban Legal System in general. The Commercial Code of the Republic of Cubais limited to classifying the types of bankruptcy, without regulating a bankruptcy procedure for the case in which it occurs. There is also no bankruptcy law. In short, the situation of insolvency is not regulated, neither in the MYPIME nor in supplementary rules.
Another very worrisome omission is the liability of partners and those who hold positions of managerial responsibility in MIPYMEs. Joint and several liability is regulated in cases of irregular MIPYME or MIPYME in formation, but what happens when the MIPYME commits a crime? There is absolute silence as to what may be unfair administration. The Cuban Code of Commerce, which speaks in terms of a joint stock company, because of the date in which it was enacted (1885), if it applies at all, is completely and absolutely out of date.
Furthermore, there is an important conflict of responsibilities between the management body and the control and supervision body. Are both bodies jointly and severally liable for negligence?
The Cuban corporate and commercial legal system is a house that starts with the roof, it lacks sufficient foundations to dispense with a sufficiently detailed regulation. This is a situation of deep legal insecurity, especially for investors, businessmen and even young entrepreneurs, who have more knowledge, are used to or aspire to develop their activity in predictable and safe legal systems.
Is there a tax regime for MIPYMEs?
Yes, it is something that the Cuban State could never forget. The regulatory package includes Decree Law 49/2021, which amends Law 113 on the Tax System. And Decree Law 48/2021 establishes a special Social Security regime for self-employed workers, MIPYMEs and non-agricultural cooperatives.
This is a rather curious tax system, as it introduces a specific variation for MIPYME partners in the Personal Income Tax (IIP). This is due to the fact that, unlike in the rest of the systems, in Cuba individuals do not make an annual declaration of their income or personal income; it is the payer itself (the State) who settles the taxes when the monthly salary payment is made. When the partners of a MIPYME are not paid by the State, an ad hoc system must be established for the liquidation of their taxes.
In addition to this variation of the IIP, there is Sales Tax, Service Tax, Labor Force Tax, Document Tax, and a whole tax system that requires a detailed analysis.
What conclusions can we draw from this new economic measure?
In the absence its implementation and testing, the creation of the figure of the MIPYME is a small step forward, at least legally, as opposed to the absolute stateization of the economy, with previous exclusive participation of (large) foreign investors through joint ventures.
However, two steps backward are taken. The creation of MIPYMEs does not completely and sufficiently free private entrepreneurial initiative in Cuba. Only resident Cubans can undertake entrepreneurship, their entrepreneurship is necessarily limited in size, entrepreneurship is ambiguously subject to the unregulated approval of state bodies and entities, the ability to undertake is restricted to a single project or enterprise, the permitted economic activities are regulated, legal instruments are not provided to resolve a situation of insolvency, which is extremely frequent, even more so in novice environments, etc.
MIPYMEs are like an exclusive party to which you receive an invitation: you want to go, you prepare yourself according to the etiquette indicated to you, you arrive on time and show up with your ticket, but... you are not entirely sure if they are going to let you in, you do not know the host (you have only heard that he is the owner of everything there), nor the rest of the guests, you do not know all the rules of the party, nor how to leave if you do not feel comfortable, or what could happen to you if you run out of money.
In short, the MIPYMEs regulations do not provide the necessary legal certainty for Cuban entrepreneurs to join (nor their relatives, friends, Cuban or foreign investors), it is not enough to build an inclusive entrepreneurial ecosystem, in which all Cubans participate, nor does it provide a protective legal environment, which truly favors entrepreneurship and the prosperity of Cubans and the country.
How can Gowper help?
At Gowper we have an international business law practice area, staffed by lawyers with proven experience in the European Union and internationally. Our firm is committed to corporate social responsibility policies, corporate and business ethics, prevention of money laundering and terrorist financing, and the promotion of democratic values and the rule of law enshrined in the Universal Declaration of Human Rights (UDHR) and all international human rights instruments.
So, for Cuba, we wish what a universal Cuban, José Martí, asked for, that "the first law of the republic be the cult of the Cubans to the full dignity of the human being". And for that dignity to be full, it is necessary, among many freedoms and rights, the authentic economic freedom and the freedom to do business.
For this reason, at Gowper, we are committed to empower Cuban entrepreneurs, providing them with legal knowledge and legal tools that will be useful to create an inclusive, transparent, ethical, and free entrepreneurial ecosystem. And also, to inform entrepreneurs and investors who are interested in doing business in Cuba about the legal actuality, the legal challenges, the uncertainty and the great legal and ethical risks of doing business with the regime, and that only in a pluralistic, multi-party Cuba, subject to the rule of democratic law, will they be able to prosper and genuinely serve the progress of Cubans.
At Gowper we do not and will not support business with the dictatorial regime in Cuba. Our support will focus exclusively on 100% private entrepreneurship, with the goal of helping economic empowerment to precipitate democratic change on the island.
Authors:
Reimel Ariosa Méndez
Julio Rodríguez Pellitero
©2021 Gowper® All rights reserved.
[1] From the loss of financing capacity: a company with a low share capital is the object of distrust on the part of the banks in the event of a loan during the life of the company, which is why they usually require the partners to provide a guarantee or personal surety; to the neutralization of the principle of limitation of the partners' liability: the creation of a company with insufficient funds could be considered a mismanagement on the part of the partners, if the funds did not allow the operation of the company, and may cause the creditors to attack the personal assets of the partners, rather than those of the company.
[2] Insolvency is a legal condition in which a company finds itself when it is temporarily or permanently unable to pay its debts. This situation occurs when current assets are less than current liabilities.
https://gowper.com/en/blog/mipymes-cuba-inversion-privada-riesgos/
The Wall Street Journal, September 6, 2021
A Sanction Worth Lifting in Cuba
Under the island’s military dictatorship, it’s illegal to fish for dinner.
By Mary Anastasis O'Grady
Sept. 6, 2021 11:41 am ET
Reprisals carried out by storm troopers and secret police against participants in Cuba’s July 11 uprising have been widely condemned, including by President Biden.
But the international left is trying to help Cuba’s military dictatorship recover from this public-relations disaster by blaming the U.S. for the island’s misery.
A petition circulating among supporters of the regime calls on Mr. Biden to lift sanctions imposed by President Trump. The petition alleges that shortages of food and medicine are the fault of the sanctions, which have restricted the flow of dollars to Cuba. But the real reason for Cuban privation is totalitarianism.
The petition, titled “Let Cuba Live,” is aimed at recovering dollar flows to the regime. But it’s not a solution aimed at helping the Cuban people. “Let Cubans Fish”—as recommended by the Center for a Free Cuba in a July 29 brief—would be infinitely more beneficial.
This is no joke. A Caribbean sea teeming with marine life contains abundant protein. Yet it’s nearly impossible for Cubans legally to reel in dinner to feed their families. This is more proof, as if we needed it, that socialism is for morons.