The New Realities of Running a Business in Cuba

 Havana, Cuba — The stakes were high when Café Nautico lost electricity during its grand reopening here last month. Losing power is commonplace in Cuba, but this occasion was different: It was the first time restaurant employees would be paid based on the day’s earnings. The chef scrambled to keep the kitchen running by candlelight while the waitstaff assured the handful of customers that the lights would be back shortly.

Café Nautico used to be a state-run restaurant, which meant reliable – albeit low – wages for the staff of 12 whether or not anyone came to dine. But the Cuban government recently transferred management of the location to its employees, now called “associates,” to be run as a cooperative....

“The Cuban government is afraid of losing subsidies from Venezuela and they are … turning to cooperatives to help fill the gap the state can’t provide,” says Christopher Sabatini, the senior director of policy at the Americas Society and Council of the Americas.

“Decentralizing the economy will allow the government to earn money from taxes [from cooperatives], inject productivity into the lumbering, inefficient government, and sop up some of the thousands of employees that were recently let go by the state,” Mr. Sabatini says....

Read more on this article here.