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Interview: Ted Henken on Raúl Castro's "Economic Mambo"

Money exchange at a small business in Cuba

April 10, 2015

In 2011, the Cuban Congress approved a series of economic guidelines that opened doors to a virtually nonexistent private sector. Then, Raúl Castro lifted another layer of economic obstructions through renewed U.S.-Cuba diplomacy in December 2014. Now, U.S. companies can do business with private-sector employees in Cuba, and already Apple, Airbnb, and Netflix are making moves.

The shift is a result of Castro’s pragmatic approach when combining economics with ideology. But while the number of cuentapropistas (self-employed persons) on the island has more than tripled since 2010, rising to approximately half a million today, it doesn’t necessarily mean there are more jobs.

“Even though [he] has made significant changes, I don’t necessarily think Raúl Castro deserves all the credit,” said Ted Henken in this interview with AS/COA Online. The professor of Sociology and Latin American studies at Baruch College and the co-author of Entrepreneurial Cuba: A Changing Policy Landscape. says part of the growing group of cuentapropistas are workers coming up from the underground economy into the formal sector through official work licenses obtained from the government. “Some of what’s going on is entrepreneurial,” Henken explained, “but a lot of it is to sobrevivir . . . to survive.”

Explainer: What Changes with the New Cuba Regulations? 

With just 201 occupations to choose from—and among those, only handful of professional jobs—Cubans tend to have low quality or “medieval” jobs, as Henken puts it. This forces workers to seek a second source of income. The scarcity has forced Cubans to innovate, generating the entrepreneurial nature of the island economy: a recent poll showed that seven out of 10 Cubans want to start their own business. To further feed this entrepreneurial spirit, Henken suggested either getting rid of the list of official occupations or expanding it. Reforming an ineffective wholesale market and the tax code, which currently favors foreign investors over Cubans, is essential.

When it comes to the best opportunities for investors, tourism tops the chart—Airbnb already has more than a thousand listings in Cuba after only announcing it was opening business on the island this month. But Henken also said there is a knowledge economy that can be tapped into, including a pharmaceutical industry that is competitive internationally.

Castro is also trying to boost workforce productivity, not just through economic reforms, but through a redefinition of socialism. According to Henken, Castro has said that “egalitarianism is a form of exploitation. If you try to ensure egalitarianism in the workplace, then the lazy workers are exploiting the good workers, the hard workers.”