Entrepreneurship, microenterprise, and public policy in Cuba: Promotion, containment, or asphyxiation?

The objective of this essay has been to explore the nature and operation of entrepreneurship in the market-oriented areas of the Cuban economy in the 1990s. It was argued that market-oriented entrepreneurship is actually a valuable and abundant resource in Cuba. Indeed, its emergence over the last 39 yr has been, paradoxically, the unexpected by-product of the planning system itself. When entrepreneurship was legalized in September 1993, it sprang to prominence rapidly, manifesting iteself through microenterprises and markets of various sorts (coming up from underground, or reinventing itself in new activities). Already the emergence of this market-oriented entrepreneurship has produced major benefits for Cuba, albeit also some costs. Unfortunately, by late 1996, the potential contributions of the microenterprise sector were being deformed and stunted through negative public policy. Hostile treatment by the political leadership and the press, an onerous and regressive tax regime, a plethora of restrictions and regulations, and some predatory competition from state enterprises have reduced the number of enterprises or forced them into the underground economy, with resultant losses for the Cuban economy and people.