Urban cooperatives all the rave as Cuba decentralises economy

Posted: 29-Oct-15 16:23

There has been an upsurge in the number of non-agricultural cooperatives registered in Cuba in the past three years. This follows a push by the government to make its industries more vibrant and productive as well as shed non-core activities. This is part of the new steps that the government have been taking to improve Cuba economy.

Urban cooperatives all the rave as Cuba decentralises economy

There's a new wave sweeping through Cuba today transforming the way business has been done for decades. Cooperatives, previously the preserve of the agricultural sector, are springing up in more and more sectors of the economy. In the past two years more than 500 non-agricultural cooperatives have been licensed by the government and, at the beginning of 2015, 300 more were awaiting approval. The move for urban cooperatives began in 2011 as part of broader efforts to upgrade and modernise the Cuban economy.

Decentralisation of business has been the key driving force of these changes as the government hopes to see non-state-run enterprises contribute somewhere near 45% of the country's GDP in the next five years. The shedding of non-core functions by the government is hoped to improve its efficiency as well as the productivity of those businesses.

While there are great potential benefits to be reaped from adopting this new model of business, there are a number of challenges. Of the numerous cooperatives registered so far, a number have floundered and died. Many of the cooperative members, previously used to a regular paycheck from the state, are still grappling with the added pressure of running an independent enterprise.

But the biggest hurdle is perhaps the long, uncertain and tedious process of obtaining state approval for a new co-op. However, the cooperatives press on, spurred by greater potential gains and the fact that the change is inevitable. It is hoped that they will become a model for the running of successful private businesses in Cuba and generate more jobs for the country's growing population.

Co-op El Carruaje member Rafael Diaz

One of the sectors that has benefitted from cooperatives is the horse-drawn carriage business. El Carruaje has 124 members, all drivers of the carriages that have been ferrying tourists around Old Havana for several decades from the colonial era. Though he has to work much harder than when he was on the state payroll, Rafael Diaz, one of these drivers, is happy. He said:

"In one day we earn about $20 to $25 CUCs, depending on the rides we give (…) The horses work one day and rest one day. We rotate the horses so they can rest and don’t feel a heavy load of work. Not me. I work daily and rest only one day out of the week if I wish to.

“I’ve had horses at home since I was born and I’ve been working at this job for approximately nine years (…). This type of work has been passed down from generation to generation: my grandfather, my father, then me and so on like that.”

Rafael Diaz and Peter Pan

But from the $20-30 he makes a day, $4 has to go back to the cooperative. This is a challenge as he and other carriage operatives are not guaranteed to make that much. On rainy days the chances of going back home empty-handed are high.


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