Wednesday, June 9, 2021

Cuban Government Expands Private Sector But Monopolizes Travel


Cuba approves long-sought legal status for private businesses

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By Marc Frank

HAVANA, June 2 (Reuters) - Cuba has approved a reform that includes long-sought legal status for private businesses that began operating decades ago under the title of "self-employed", state-run media reported on Wednesday.

Top officials have said for months they were planning changes to sort out rules for state-run companies and private cooperatives and businesses so they can function on an equal footing in the Communist-run country.

The Council of Ministers agreed the measure at its latest closed-door session, state-run media wrote, without detailing when it would become law.

The reform would include legal status for the private sector's thousands of businesses from eateries and garages to construction and beauty salons and for cooperatives.

"With this decision we are approving how to organize the actors in our economy, which goes much further than the simple recognition of some of them," Communist Party leader and President Miguel Diaz Canel was quoted as stating.

Unlike Communist Party-ruled China and Vietnam, Cuba has been slow to implement market reforms to its Soviet-style command economy.

But the government has picked up the pace in the face of a severe economic crisis and food, medicine and other shortages it blames largely on U.S. sanctions and the COVID-19 pandemic, while admitting failure to reform is also at fault.

Still, Prime Minister Manuel Marrero Cruz emphasized the state would remain the dominant economic player, insisting "we are not privatizing the economy", according to the report.

Private farmers and cooperatives have operated for decades in Cuba in agriculture. The "self-employed" sector meanwhile - that includes businesses, their employees, trades people and others such as taxi drivers - has expanded over the past decade to include more than 600,000 workers.

Thousands more work in non-agricultural cooperatives, a new category allowed in 2012. Authorities had suspended issuing new licenses for such cooperatives but under the new reform will start issuing them once more.

All in all, the private sector now makes up around a third of the six million strong labor force.

Oniel Diaz, co-founder of the private businesses consultancy AUGE, said approval signaled a further expansion of the private sector was on its way, but it still could take a while.

"The wait continues," he tweeted.

National travel agencies to have primacy in tourist services in Cuba

Resolution 132/2021, published in the extraordinary Gaceta Oficial 46, indicates that national travel agencies are the only ones authorized to carry out procedures such as the issuance, reception and service of tourists, the representation of foreign tour operators, and the design and marketing of tourist packages.

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Description automatically generated OnCuba Staff

 June 9, 2021

in Tourism in Cuba

The Cuban Ministry of Tourism (MINTUR) approved a regulation for the activity of national travel agencies, which gives them primacy in a group of tourist activities and services on the island.

Resolution 132/2021, published in the extraordinary Gaceta Oficial 46, indicates that national travel agencies are the only ones authorized to carry out procedures such as the issuance, reception and service of tourists, the representation of foreign tour operators, and the design and marketing of tourist packages.


The regulation establishes that Cuban legal entities or individuals that market services “made up of groups, programs, circuits, excursions or other modalities, must do so through national travel agencies, with the exception of those authorized to do so directly,” according to the Agencia Cubana de Noticias (ACN) news agency.


The text also indicates that these agencies will be in charge of tourist guide hiring and servicing, the leasing and sale of airline capacities, the procedures for the extension of visas, and the selling of tourist cards.


According to the regulation, which will come into effect next month, national travel agencies will also mediate in the sale of reservations and services in all types of accommodation, transportation, insurance policies, and non-hotel services.


In the same way, they are the only ones authorized to sell phone cards, postcards, maps, and tourist guides, and they will be in charge of organizing the programs of international events and meetings that take place in Cuba, said the ACN in its report, according to which branches and representations of foreign travel agencies on the island must contract all services through national agencies, except accommodation capacities, which can be done directly.


The regulation indicates that to create an agency of this type requires the approval of the MINTUR, which will demand a description of the activity, the draft statutes, and the economic feasibility study, as part of the application.


The report, on the other hand, does not specify the nature of these agencies, if only the state agencies are considered or if agencies could be created as a cooperative or by private initiative.


So far, a group of activities for the non-state sector related to tourism is authorized, such as the rental of rooms and gastronomic and transportation services, but it is not clear if there will be new openings at least in the near future. This, despite the demands of professional sectors, such as tourist guides, to carry out their work autonomously, and the recent government measures to expand self-employment.

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