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Menace and Myth: Cuba's private sector faces regime and exile mistrust

Capitalist Convincer: Former Cuban Olympic track and field gold medalist and now Havana private restaurateur Dayron Robles argues in the video "We're Not a Myth," produced by Belly of the Beast, that the communist island's private sector is real.
Courtesy Belly of the Beast
Capitalist Convincer: Former Cuban Olympic track and field gold medalist and now Havana private restaurateur Dayron Robles argues in the video "We're Not a Myth" that the communist island's private sector is real.

When it comes to Cuba, there are two things people agree on these days.

First, the communist island is experiencing what is arguably its worst economic crisis ever — as bad if not worse than the harrowing "special period" that followed the collapse of Cuba's superpower patron, the Soviet Union, in the 1990s.

Second, the only part of the Cuban economy that is working is its fledgling capitalist sector — the almost 10,000 private businesses known as pymes, a Spanish acronym for the small- and medium-size enterprises (pequeñas y medianas empresas) that were legalized in Cuba only a few years ago.

But that’s where the inevitable disagreements begin. On one side are people like Miami Congresswoman Maria Elvira Salazar, a Cuban-American Republican. At a recent hearing of the House Foreign Affairs subcommittee she chairs, Salazar insisted that a private sector independent of the Cuban regime is largely a “myth” — a regime survival trick.

“This smells like a new scheme from the regime, who is desperate for millions of dollars" to circumvent the U.S. embargo against Cuba, Salazar said after reading off some private entrepreneurs who do, in fact, have a familial or other connection to Cuban officialdom.

"The Cuban regime is a master of disguise.”

Miami Congresswoman Maria Elvira Salazar presiding over a hearing on Cuba's private sector in the House Foreign Affairs subcommittee she chairs on January 18, 2024, in Washington D.C.
U.S. House of Representatives
Miami Congresswoman Maria Elvira Salazar presiding over a hearing on Cuba's private sector in the House Foreign Affairs subcommittee she chairs on January 18, 2024, in Washington D.C.

People like former Miami Congressman Joe Garcia, a Cuban-American Democrat, disagree that pymes are regime shills. Garcia advises Americans on how to help Cuba’s pymes — and he's certain not only that most of those businesses are independent of the regime, but that they represent the best means so far of helping to democratize Cuba.

“If we engage this large section of Cuba that’s moved to the private sector," Garcia tells WLRN, "I think there’s much to be gained to bring change to the situation.”

Both sides now see the pymes debate as central to the Cuba debate.

Those who call the pymes a lie, especially Miami's hardline Cuban exile leadership, insist that investing in them only helps prop up a dictatorship — at a moment when Cuba’s imploding economy could bring down the regime, too.

Those who promote the pymes — including the Biden Administration, which insists it vets pymes seeking investment, import licenses or other U.S. help to make sure they're not enchufadas, or plugged in to the regime — say they don't just represent independence. They point out pymes may also be the only thing keeping regular Cubans from facing starvation right now, since they're able to fill gaping economic shortages and holes like the island's flat-lining agricultural production.

And they say that matters even more now as the Cuban state is poised to impose tough austerity measures on to confront the island's financial disaster.

And the pymes themselves are starting to weigh in.

Cuban Entrepreneurs to Congress: “We’re Not a Myth”

As Salazar was holding her hearing two weeks ago, a Washington D.C.-based media outlet called Belly of the Beast, which promotes U.S. engagement with Cuba, released a video it produced titled “We’re Not a Myth.”

In it, private Cuban entrepreneurs respond to Salazar and insist they’re not linked to the regime.

"I'm the daughter of a doctor and a laborer," says Annia de Armas, who owns a hair-care and cultural promotion company for Afro-Cuban women called Lo Llevamos Rizo.

She and other private entrepreneurs — including former Cuban Olympic track and field gold medalist Dayron Robles, who owns a private restaurant called La Escondida — stress they're not related or otherwise linked to Cuban regime officials or functionaries.

"I have a company. It's mine. I created it," and not the regime, Robles argues in the video.

READ MORE: Cuban capitalism is getting real. Cuban capitalists hope U.S. help will be just as real

A big reason the pymes are speaking out is that they need access to the U.S. banking and financial system to thrive and grow. The Biden Administration is looking for ways to make that happen, in spite of the embargo. But it first has to convince Republicans like Salazar that pymes aren’t fronts for Cuba’s regime.

Pymes advocates say Biden should emphasize that the regime itself fears the private sector’s threat to communism — which is why that regime, pushed by its more ideological older guard, is always reining the pymes in with new and sometimes onerous restrictions, especially on their ability to grow.

Younger Cuban officials like Deputy Economic Planning Minister Johana Odriozola insist the government does support and promote pymes and considers them a vital complement to the country's state sector.

"It's evident the pymes are not a myth," Odriozola told CNN after Salazar's hearing. "They're flesh and blood. They're real."

But “there are certainly many officials in the Cuban government who are suspicious of pymes — what they’re doing and what they’re about,” says Michael Bustamante, a Cuban-American and a Cuban studies professor at the University of Miami, who says he saw the pymes reality on a recent academic visit to Cuba.

The so-called private sector smells like a new scheme from a Cuban regime desperate for millions of dollars to circumvent the U.S. embargo.
Maria Elvira Salazar
If you want to support system change in Cuba — if you want to walk all that talk — then the private sector is the only game in town right now.
Guillermo Grenier

Bustamante says he did see some suspicion about pymes among regular Cubans, too, but in an opposite sense — "as if they're asking, 'How can these [entrepreneurs] be making the money they're making without being related to the government?' But on closer inspection they see that, no, the majority of these entrepreneurs are real people like them.

“And they see another reality: If it weren’t for the private sector, Cubans’ ability to access basic foodstuffs would be even worse," largely because the U.S. now permits pymes to import a broader list of foods and capital goods from the U.S. that the Cuban state cannot under the embargo. Cuba's private sector, in fact, now receives more than half of all the shipping container traffic coming into Cuba from the U.S.

Two options in life

"So," Bustamante asks, pointing to criticism the Biden Administration has gotten for its apparent hesitance to engage the pyme cause more aggressively in the face of GOP resistance, "a lot of people ask: wouldn’t we bend over backwards to try to support" Cuba's private sector?

This Ain't No Pizzeria: Cuban engineer and private entrepreneur Idián Chávez and his wife Ana unpack industrial equipment this summer for their new toilet paper factory in Havana.
Courtesy Idian Chavez
Cuban engineer and private entrepreneur Idián Chávez and his wife Ana unpack industrial equipment last summer for their new toilet paper factory in Havana.

That question divides Cuban-Americans themselves, especially since many of them have friends and family members who own private businesses in Cuba — and many of them are helping finance those businesses.

In his polling of Cuban-Americans in Miami-Dade County on this issue, sociologist Guillermo Grenier of Florida International University finds the community divided.

"They're torn, because enough Cubans here realize the suffering of the Cuban people is a real thing," says Grenier.

"And they’re torn also because [the pymes are] a capitalist movement. I mean, if you want to support system change in Cuba — if you want to walk all that talk — this is the only game in town.”

At the end of day, says Grenier, who also interviews recently arrived Cuban migrants as part of his research, this is also an immigration issue.

"The regular Cuban on the island sees only two options in life right now: leave, or take advantage of the pyme window the regime has opened and start a business. That tells you something here if you're concerned about the immigration crisis."

Richard Feinberg, an international relations professor at the University of California-San Diego and a former National Security Council Latin America advisor, agrees. Feinberg says during his recent visit to Cuba he was struck by "how empty's Havana's streets seemed because of all the massive out-migration — and how understaffed a lot of those private businesses seemed, especially restaurants.

"It seemed to indicate the U.S. should do all it can to make it easier for the pymes to do business, to help slow that level of brain drain."

"The regular Cuban on the island sees only two options in life right now: leave, or take advantage of the pyme window the regime has opened and start a business."
FIU sociologis Guillermo Grenier

All those notions seemed to occur even to Congresswoman Salazar at the end of her recent hearing on Cuba’s private sector — when she suddenly asked a State Department official:

“How can we help this administration to really help those small business owners in Cuba, I repeat, that have no contact or connections with the regime…?”

Salazar appeared to contradict her earlier argument that there can be no such thing as private businesses in Cuba that aren’t linked to the regime. But when WLRN checked with her later, she backtracked and said in a written statement that the Biden Administration has so far “failed to prove that there are small businesses [in Cuba] that are truly independent from the regime.”

Critics say Salazar was simply bowing to conservative exile pressure back in Miami to toe the hardline, especially since they say many exile leaders themselves see Cuba's private entrepreneurs as a threat to their own influence on the island's opposition and dissident stage.

Either way, Cuba’s private enterprises remain trapped between regime hardliners who consider them a menace, and exile hardliners who consider them a myth.

Amid those political stances on Cuba's left and the U.S.'s right, meanwhile, the average Cuban remains ensnared in daily deprivation.

Tim Padgett is the Americas Editor for WLRN, covering Latin America, the Caribbean and their key relationship with South Florida. Contact Tim at tpadgett@wlrnnews.org
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