Cuban Traders Slow to Win Acceptance

Traders in Cuba's emerging private sector say they are dogged by corrupt officials and a lack of access to wholesale goods.

For their part, officials claim that the small-scale entrepreneurs known as "cuentapropistas" often deal in goods stolen from the state.

Cuentapropistas have been allowed to operate since the early 1990s, operating on the fringes of the state-controlled economy.

They occupy economic niches that the state is not nimble enough to fill, for example running small shops, selling goods from carts or stalls in the streets, and driving taxis.

President Raúl Castro expanded the scope for cuentapropistas to operate under a new economic strategy set out at the last Communist Party congress in 2011.

In one city - Camagüey in eastern Cuba, with a population of around 330,000 - more than 20,000 licenses for self-employed traders have been issued since the rules were relaxed.

The most popular permits in Camagüey are for stalls selling fruit and vegetables.

One street trader, Armando Rivero, said the licenses were affordable at between 70 and 200 pesos a month, the equivalent of 2.60 to 7.50 US dollars.

"That money can be made in a few hours' work," he said.

"What's difficult sometimes is getting hold of the merchandise, plus the fact that the inspectors want you to spend the whole day on the move [not staying in one place] pushing a cart weighing more than 200 pounds [90 kilograms], which is impossible."

Police as well as trading inspectors check up on the cuentapropistas regularly. One inspector from Camagüey, who asked not to be named, claimed that most traders dealt in goods stolen from state supplies.

"The majority of the products these people sell come from resources that have been diverted," he said. "Those that aren't stolen are made out of from stolen materials. In both cases, they come from the state. In the best-case scenario, they have been purchased, and are then resold at high prices."

Jorge Luis, a customer who had just bought some bathroom fittings from a private seller, agreed that many of the goods on the market were pilfered.

"You just have to do the maths," he said. "Some of these pipes cost more than four CUC [convertible pesos, valued 1:1 with the US dollar] in the shops, and these people are selling them for three CUC.

"It's logical that if they don't have the means to produce them themselves, then they're buying them from someone who steals them from state warehouses."

The trader who sold Jorge Luis the fittings denied this, saying, "We take advantage of sales in shops and we buy the merchandise in bulk. On occasion we have to travel to Havana - 520 kilometres away- to buy it."

At the same time, he conceded that if traders bribed the inspectors, "they don't care where the merchandise comes from".

The inspectors rarely demand payment directly, he explained.

"They simply pressure us so that we offer it," he said. "If you don't do it that way, then the second part of the game begins where they give you a really high fine… and when you go to the office to pay it, someone always turns up looking friendly and says that for half the money you're about to pay, they can revoke the fine. I'm sure the money gets shared out among them."

Since cuentapropistas depend on government permits to operate, they are easy targets for extortion.

Julián, a small-scale trader from Havana, said he paid to have a fine dismissed.

"They gave me a 1,000 peso fine - equivalent to 40 CUC - and I had to pay 10 CUC so they'd cancel it," he said.

Jorge, a trader who makes his living repairing and refilling lighters in Havana, said once refused to pay a bribe because he was convinced he had done nothing to deserve a fine. He made an official complaint, and the fine was dropped.

"In the end, they told me that the inspector had committed various irregularities, but they didn't take any action against him," he added.

One problem that contributes to the trade in stolen goods is the lack of a market in wholesale goods.

The government has promised to provide places selling merchandise and raw materials to cuentapropistas, although the plan is still in its early stages.

In March, the government authorised a pilot programme on Isla de la Juventud, an island off the Cuban mainland, selling foodstuffs as well as consumer and industrial goods. (The island is also being used to try out a scheme where bottled gas is sold at commercial rather than subsidised prices. See Cuban Government Trials Fuel Reform.)

In addition, a wholesale agricultural market, located on state-owned premises but run by a private cooperative, opened this month in Havana.