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Posted March 27, 2004 by publisher in Business In Cuba

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Knight Ridder Tribune

Sick of paying income taxes? Well, it could be worse. Some months, Ariel Duyos hands over 80 percent of his income to the government.

But this small-time Cuban capitalist isn’t complaining. He makes more money than the island’s top brain surgeons and nuclear physicists, 11 years after Fidel Castro — trying to provide relief during hard economic times — allowed the first wisp of free enterprise to seep into the socialist system.

Still, capitalists in the Western hemisphere’s only communist country don’t have an easy time. They pay some of the world’s highest taxes, endure mountains of red tape and regularly tangle with government inspectors.

Such difficult conditions have caused the number of cuentapropistas ó or workers on their own account, as these Cuban capitalists are called ó to drop from 209,000 in 1996 to 149,990 today.

“Cuban officials are taking measures based on a perception that they have breathing room,” said Philip Peters, a former State Department official and now Cuba specialist for the Lexington Institute, a private research organization in Arlington, VA.

Tourism has rebounded and the Cuban economy has improved, so officials are not encouraging growth in the number of cuentapropistas, Peters said.

“These entrepreneurs operate in a tightly limited legal space, but they show initiative and prosper.” he said.

U.S. officials say there’s nothing wrong with some Cubans earning more than others because some people have more talent, intelligence, energy or skill than others and should be compensated for it.

Castro makes it clear that he does not plan any changes or shift toward capitalism. He emphasized that point on Jan. 29 during a five-hour speech at the Third Hemispheric Encounter of Struggle, an event that drew participants from 32 nations and is aimed at coming up with alternatives to a hemispheric U.S. free-trade agreement.

Even so, the seed of capitalism planted in Cuba in 1993 remains alive.

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