Small Cuban businesses now legal - 6th September 2021

Cuba's communist government has legalised small and medium-sized private businesses after numerous anti-government protests across the country in July.

State-run companies are the norm on the island, but President Miguel Díaz-Canel said Cuba was taking positive steps to modernise its economic system. Independent companies, with up to 100 employees, can now be set up under Cuban law. This marks a major shift in government policy.

The government's plans may have been accelerated because of July's protests, when thousands turned out to complain about the economic crisis. Demonstrators criticized the management of the coronavirus pandemic and demanded political change. At least one man died in the unrest and several were arrested nationwide.

In an attempt to improve the situation, the authorities recently said they would allow travellers arriving in Cuba to bring in food, medicine and other necessary items tax-free. This strategy had been suggested by some Cubans, as a way to ease the shortages of essential items.

Tourism, one of Cuba's most important sectors, has been devastated by global limitations on travel during the pandemic. And healthcare providers have been unable to cope with the recent increase in Covid-19 cases. To make matters worse, Cuba's sugar crop, a vital export, was affected by a poor harvest, damaging revenue further.

As a result, foreign currency supplies are extremely low, meaning Cuba cannot buy imported goods to supplement shortages, as it would normally do.

Cuba has blamed the US and its strict trade restrictions for the protests and also for Cuba's wider problems. However, entrepreneurs across the island will be feeling optimistic about this dramatic change in policy.