5 Facts About Cuba's Private Sector
Cuba's private sector, largely fueled by tourism, is growing rapidly. U.S. regulatory changes, including easing travel restrictions, have paved the way for private sector growth and economic development across the island.
That's why, yesterday, we urged U.S. Secretary of State Rex Tillerson to pursue policies that support growth in Cuba's private sector and create opportunities for American companies. Additionally, yesterday we released a short film on Cuban entrepreneurs, which you can watch here.
Here are five facts about Cuba's expanding private sector:
1. The private sector accounts for almost 1/3 of Cuba's workforce.
Private sector employment has expanded across a wide range of industries, from tourism, to transportation, to arts and entertainment. While Cubans in some professional service sectors are still restricted from self-employment, there are now 201 categories of legal private sector self-employment. Self-employed Cubans in the private sector are calledcuentapropistas. Cuentapropistas can now directly hire employees.
2. Self-employment has greatly expanded earning potential.
Cuban entrepreneurs have much higher earning potential than state employees. According to some estimates, cuentapropistas can earn up to 250% more a month than Cubans who work for the state.
3. Private restaurants, or paladares, are gaining a larger share of the food service industry.
There are now over 4,000 paladares, or privately owned restaurants, across Cuba, with up to 50 seats per restaurant. While paladares were legalized in the 1990s, restaurant owners faced many limitations. Reforms in 2011 allowed for loosened regulations, including increased seating and an ability to hire more employees. Paladares are creating a new culinary culture in Cuba, particularly in Havana.
4. Almost 1/3 of the rooms available for rent in Cuba are privately operated.
There are now over 28,000 rooms for rent in private bed and breakfasts in Cuba. With the help of American companies, including Airbnb, B&Bs are gaining market share in Cuba's growing hotel industry. Forecasts indicate that tourism will continue its upward trajectory over the next year, and hotels are often at capacity, which will further increase the high demand for B&Bs.
5. Cuba's tech entrepreneurs are modernizing the economy.
Thanks to a surplus of highly educated IT professionals, Cuba's technology sector has taken off despite low internet penetration. These entrepreneurs have developed a number of innovative mobile apps, many of which can be used offline. Cubans can now download maps and GPS data, restaurant reviews, and social media data for later use without an internet connection.
What can the U.S. do to help grow the private sector in Cuba? Pass the Freedom to Travel to Cuba Act to lift the travel ban on Americans going to Cuba. American travelers are fueling the private sector in Cuba and changing the lives of the Cuban people.
Want more information on the growth of the Cuban private sector? Here is a handy overviewput together by Cuba Emprende, Professor Ted Henken, and Engage Cuba.