By Dave Sherwood
HAVANA (Reuters) – U.S. venture capitalist Stacey Brandhorst has traveled Latin America giving advice to fledgling entrepreneurs. But communist-run Cuba, she says, is a tough nut to crack.
“Being an entrepreneur is one thing, but (being one) in Cuba is entirely another,” she recently told a group of around 50 Cubans in a hotel conference room in Havana.
The crowd laughed as Brandhorst, a business adviser from Oklahoma, kicked off a series of in-person seminars last week that the U.S. Embassy in Havana says will offer tips to Cuban entrepreneurs looking to start and run their own businesses.
The workshops, while limited in scope, are the latest sign of U.S. policy the Biden administration says is intended to support the Cuban people and private sector on an island that decades ago ditched capitalism for a Soviet-style planned economy dominated by state-run enterprise.
The program follows a decision by Cuba’s government in 2021 to lift a ban on private companies that had been in place since shortly after Fidel Castro’s 1959 revolution. Upwards of 7,000 such businesses have opened since, according to an Economy Ministry list updated on March 23.
Those companies, ranging from restaurants to plumbing businesses, now account for 14% of Cuba’s 4 million employed, according to Cuba’s Communist Party.
Benjamin Ziff, the top U.S. diplomat in Havana, told Reuters that private enterprise could take up the slack in an economy going through perhaps its greatest challenge since Castro’s revolution.
“Cuba’s state-run economy has traditionally not delivered, and recently has delivered even less,” Ziff said in an interview. “We want a Cuba that’s democratic, free and prosperous. The prosperous part depends greatly on the private sector.”
Such programs, however, touch a nerve in Havana, where the U.S. embassy is often characterized by officials as meddling in a bid to overthrow the government.
“(The United States) is betting that the private sector, as it grows, will become a faction that opposes the Revolution,” President Miguel Diaz-Canel said ahead of recent March 26 elections in Cuba. “And we won’t let that happen.”
Cuba’s government did not respond to a Reuters request for comment on the program. Last week’s workshops ran without interference by Cuban officials.
The United States, which says it operates “transparently” in Cuba, is not alone in seeking to promote Cuba’s fledgling private sector.
The United Nations Development Program (UNDP) and Sweden’s aid agency last month held similar workshops on the island aimed at training entrepreneurs.
Both Russia and China have also recently offered their own blueprints for developing the private sector.
SMALL BIZ STRUGGLES
While Cuba has licensed thousands of small businesses in the past two years, many have struggled to ramp up, according to interviews and reports in state-run media.
Entrepreneurs complain of red tape and challenges ranging from raising capital to hunting down raw materials in a country where nearly everything is in short supply.
In Cuba’s eastern province of Camaguey, for example, 68% of 181 approved private businesses were not yet producing as of November 2022, according to a report in provincial state-run media outlet Adelante.
Camilo Condis, a participant in last week’s U.S. embassy workshop, runs a small crew of electricians and said his business faced hurdles both from within and outside Cuba.
“We need the government of the United States to try to find a way to exempt the private sector from sanctions that are gravely affecting us,” Condis said in an interview.
A Cold War-era U.S. embargo that remains in place complicates financial and banking transactions with Cuba, as well as the import and export of goods.
Diplomat Ziff said the United States was seeking ways to ease the burden of U.S. sanctions on private business but in a way that would not inadvertently benefit the Cuban government.
“We are working on it, I don’t know that is something we have achieved completely yet, but it is certainly something that we are trying to do,” he said.
Ziff said the Cuban government, meanwhile, should get out of the way of the private sector.
“The biggest impediment to doing business in Cuba is the Cuban government,” Ziff said. “The recent reforms for small and medium business in Cuba … are a Band-Aid on a much larger wound.”
Cuban entrepreneurs that attended last week’s workshop preferred to focus on the practical over the political: How to write a business plan, where to focus advertising, how to deal with tight resources and soaring inflation.
For Brandhorst, a successful businesswoman who has helped many launch their own companies, the politics are secondary.
“Every business anywhere in the world faces restrictions and constraints of some type,” she said. “In entrepreneurship, where there’s a will there’s a way.”
(Reporting by Dave Sherwood in Havana; Editing by Rosalba O’Brien)
