The End of Cuba’s Entrepreneurship Boom

It isn’t just Trump who has put the country’s small businesses under pressure. Díaz-Canel is after them, too.

etween 2014 and 2017, just as then-U.S. President Barack Obama was working to thaw over 50 years of frozen relations between Cuba and the United States, the Havana lawyer Alfonso Larrea Barroso and his two business partners were busy making a fortune. In a span of three years, the annual revenue from Scenius, their financial services cooperative, multiplied by a factor of 10,000, skyrocketing from $280 to $2.8 million in total revenues. Cuban ministries and state-owned firms hired it to balance top-secret budget ledgers, U.S. Congress members and State Department officials courted them in Washington.

The good times didn’t last. In June 2017, U.S. President Donald Trump curtailed Cuba-bound travel and banned U.S. commerce with enterprises owned by the Cuban military. Later that summer, Cuban authorities abruptly shut down the thriving cooperative.

The closure was prompted by the government’s accusation that Scenius had provided unauthorized financial services. Larrea believes the charges are baseless. In the fall of 2017, the association sued the Ministry of Finance, the regulatory body that ordered the shutdown, and drew up an appeal that was eventually rejected. “When we asked to see the ruling in writing, they denied our request. They barely answered us. It became clear that it was fundamentally a political issue,” Larrea said.

The closure of Scenius was part of a more adversarial approach to nonstate enterprise that the Cuban Communist Party has adopted the last two years, after almost a decade of private-sector development. The same month Larrea and his partners lost the cooperative, the government of Raúl Castro, Cuba’s then-president, froze the issuing of new licenses for the nation’s small business owners. The move put the brakes on 2011 policy guidelines that had sparked a sizable yet regulated private-sector boom, generating an estimated 18 percent of Cuba’s gross national income.

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