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Cuban Entrepreneurs Seek Business Training from the US, Awaiting Easing of Sanctions under Biden

by Lucas Garcia
1 comment
Cuban entrepreneurs

Ana María Torres and María Carla Puga, both musicians, found an unexpected source of guidance for their burgeoning jewelry business in Cuba. Amidst an island that has long restricted private enterprise, they turned to an unlikely advisor: the U.S. Embassy.

Torres and Puga are among a small group of entrepreneurs who took advantage of a recent business training program offered by the embassy in Cuba. Unlike previous generations, many young Cuban entrepreneurs are more open to engaging with the American government.

Viewing it as a tremendous opportunity, Torres, 25, co-founded a successful store and workshop called Ama, which employs 12 people and even features a cafeteria.

In the past year and a half, nearly 8,000 small- and medium-sized companies have obtained legal authorization to operate in Cuba. The embassy’s training program selected 30 entrepreneurs, including the owners of Ama, from a pool of 500 applicants.

Torres and Puga vividly recall the mixture of fear and surprise on an older driver’s face when they asked him to drop them off at the U.S. Embassy while en route to showcasing their products. The driver suggested stopping one block away instead.

Puga, 29, explains, “Our generation is not as limited when it comes to participating in such endeavors with the U.S. embassy because the context has changed. We acknowledge the conflicts, but we also recognize the ongoing efforts, particularly with Cuban entrepreneurs. We are not afraid.”

Following the 1959 revolution, the Cuban government shut down the few remaining private businesses on the island. However, in 2010, former President Raúl Castro initiated economic reforms, allowing independent workers to engage in activities such as rental houses, restaurants, and transportation. These reforms gained momentum during the 2014 rapprochement with the U.S. under President Barack Obama, resulting in eased sanctions.

The Trump administration adopted a tougher stance towards Cuba, causing the economy to struggle, with an 11% contraction in 2020. The tourism sector, a vital source of income, experienced a significant decline, welcoming only 1.7 million visitors last year, less than half the number in 2018.

Cuba has been grappling with the effects of another crisis, leading to long queues for fuel, shortages of essential goods, power outages, inflation, and record emigration.

In September 2021, Cuba legalized the establishment of small- and medium-sized businesses as a response to its struggling economy. This historic decision resulted in the creation of 7,842 such companies, along with 65 non-agricultural cooperatives, generating around 212,000 jobs.

However, decades of living in a state-dominated economy have left Cubans lacking business knowledge, including financial administration, marketing strategies, advertising, and customer relations.

Adriana Heredia, a 30-year-old partner of Beyond Roots, a private enterprise encompassing a clothing store, a beauty salon specializing in afro hair, and various cultural projects, expressed her satisfaction with the renewed support from the U.S. Embassy. She emphasizes the importance of knowledge, an area where they were lacking.

While Cuban entrepreneurs appreciate initiatives like the embassy’s business training program, they also voice concerns about the negative impact of U.S.-imposed sanctions on their economy.

Economist Ricardo Torres, a researcher at the Center for Latin American Studies at the American University in Washington, acknowledges the evident adverse effects of the sanctions. He highlights the dominant market and economy of the United States, emphasizing how financial and commercial restrictions on entities based in Cuba have a negative impact on entrepreneurs.

Last month, representatives from 300 small- and medium-sized businesses sent a letter to President Joe Biden, requesting measures such as facilitating financial transactions, allowing U.S. businessmen to invest in Cuba and engage in trade with private companies, and removing Cuba from the U.S. list of countries sponsoring terrorism.

Cuban entrepreneurs find themselves caught between two forces: U.S. sanctions and internal limitations within Cuba, including high taxes, limited financing options, state control over imports and exports, and a lack of permits for professionals to work independently.

“Cuba’s private enterprises end up being victims of a kind of crossfire,” says Torres.

The Biden administration has promised to reverse certain measures affecting the island and its budding entrepreneurs. However, the Cuban government claims that Washington has yet to fulfill those promises.

Benjamin Ziff, charge d’affaires at the U.S. Embassy in Cuba, refutes claims that the administration has implemented few changes. He cites the resumption of flights, the allowance of remittances, and numerous educational and religious exchanges between both nations. The embassy’s business training classes, although a small measure, contribute to bolstering the private sector.

Ziff asserts, “Cuba’s future lies in its private sector, and those who consider it a necessary evil are completely mistaken. It is an increasingly essential aspect for the well-being of the people.”

Frequently Asked Questions (FAQs) about Cuban entrepreneurs

What is the business training program offered by the U.S. Embassy in Cuba?

The business training program offered by the U.S. Embassy in Cuba is a program designed to provide Cuban entrepreneurs with valuable knowledge and skills in areas such as marketing, finances, brand management, and web development. The program aims to support the development of the private sector in Cuba and empower entrepreneurs to succeed in their businesses.

How many entrepreneurs were selected for the embassy’s business training program?

Out of 500 applicants, the embassy selected 30 entrepreneurs to participate in their business training program. These entrepreneurs were chosen based on their potential and commitment to their businesses. The program offered them valuable insights and guidance to enhance their business operations and strategies.

What impact do U.S. sanctions have on Cuban entrepreneurs?

U.S.-imposed sanctions have had a negative impact on Cuban entrepreneurs. The dominant position of the United States in the global market, coupled with financial and commercial restrictions, weighs on Cuban entities and negatively affects entrepreneurs. These sanctions limit opportunities for trade, investment, and financial transactions, posing challenges for Cuban entrepreneurs and their businesses.

What are the limitations faced by Cuban entrepreneurs within Cuba?

Cuban entrepreneurs face several limitations within the country, including high taxes, a lack of financing options, state control over imports and exports, and the absence of permits for professionals to establish themselves as independent workers. These limitations hinder the growth and expansion of businesses, requiring entrepreneurs to navigate complex bureaucratic processes and limited resources.

Has the Biden administration taken any steps to support Cuban entrepreneurs?

The Biden administration has promised to reverse certain measures that have impacted Cuba and its entrepreneurs. While specific actions have been taken, such as the resumption of flights, allowing remittances, and facilitating educational and religious exchanges, there is ongoing discussion and evaluation of policies to further support the private sector in Cuba and ease restrictions imposed by the United States.

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1 comment

Sara82 June 28, 2023 - 9:54 am

Cuba’s private sector facing challenges from both sides! US sanctions hurt entrepreneurs while high taxes and limited financing stifle growth. But with training and support, they’re still making it work. #Resilience #Entrepreneurship

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