Analysts See Fear Behind The Cuban Government Crack Down on Private Sector

Aug 8, 2017
Originally published on August 8, 2017 3:19 pm

The Cuban government is putting the breaks on the bustling private taxi industry. It has released a proposal for a state-run taxi cooperative, and though membership will be optional, drivers are being enticed to join with incentives like cheaper gas and exclusive access to certain routes.

The announcement comes about a week after the government stopped issuing licenses for new private businesses in lucrative areas, including restaurants, Bed and Breakfasts, home rentals, web development, and tutoring.

Since the island is severely lacking in public transportation, many people in Havana rely on taxis to get to work. Between local dependence and tourism popularity, the drivers are accumulating serious wealth, a fact that according to some observers is making the Cuban regime uncomfortable. 

“What we have to have in mind is that a state worker earns about $20 per month,” said Nora Gámez Torres, a reporter for El Nuevo Herald who has been speaking to experts about the regulations. “Easily, a taxi owner giving services to tourists can make $200 per day. So that’s a lot of difference."

Raúl Castro has recently allowed the private sector to expand. Some experts are saying that the government must be motivated by political concerns because these latest measures hurting booming private industries don’t make economic sense.

“On one hand the government is fearful, fearful of this new class of actors who behave with more autonomy, and then they can eventually become political actors as well,” said Gámez Torres. “So they don’t want the successful class to widen in the island.”

Some are speculating that the timing of the announcements could have something to do with chaos in Venezuela.

“Cuba’s most important ally, Venezuela – it’s in crisis,” said Gámez Torres. “Cuba imports 40-50% of its oil; it comes from Venezuela. So if something big happens in Venezuela, they’re gonna lose that, and that’s gonna put a lot of pressure internally.”

She said other experts are suggesting that the crackdown is retaliation against President Trump’s changes to U.S.-  Cuba travel policy, making it harder for tourists to avoid supporting state-owned businesses.

Read more about the recent economic measures in Cuba in Nora Gámez Torres' article in the Miami Herald.

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