Opening the Cuban market

CANADA’S CONNECTION WITH ONE OF ITS FAVOURITE TOURIST DESTINATIONS, CUBA, MAY BE POISED TO REACH A NEW LEVEL — one that could be a changing market opportunity for Ontario specialty grain producers and help save the struggling Caribbean country from economic and humanitarian disaster.

This opportunity is a result of a sea change in Cuba’s constitution. In 2021, the Communist government did an about-face and started letting its citizens develop micro, small and midsize enterprises with up to 100 employees. It was a new development in the dawning of Cuba’s private sector that began back in 2011 with the approval of one-owner businesses.

This latest measure is driven by necessity. Beautiful yet beleaguered Cuba is becoming increasingly desperate for money. Long-standing U.S. economic sanctions, domestic bureaucratic mismanagement and miscalculations, Covid-19 reverberations, and a culture built around relying on the government for almost everything had made island living a mess.

The Cuban government hoped that giving the green light to private enterprises, called pequeña y mediana empresa or “mipymes,” would help turn things around economically. Even though mipymes are regulated by the Cuban government, they have the potential to open doors for entrepreneurial, profit- driven Cubans who want more than what communism has provided. This could bode well for anyone interested in doing business with them, too.

It turned out the pent-up demand was significant. In just three years, a whopping 11,000 mipymes sprung up, marking a new era in Cuba’s ideologically driven business culture. Start-up funds for many of the mipymes were courtesy of family members from abroad, who were accustomed to sending money back to Cuba to support their relatives’ day-to-day needs. Now, they would also be supporting their relatives’ mipymes.

The Cuban government still has a huge role in business, and commerce there is not simple. The Canadian government publishes a detailed 10-step process for exporting to Cuba. But with the constitutional change, factories run, equipped, and staffed by the state can now work with the private sector responsible for importing. For example, a state-owned pasta factory can work with a private importer to bring in wheat flour.

“Exactly how they’ll get along as business partners is a question,” says Paul Johnson, Chicago-based chair of the U.S. Agriculture Coalition for Cuba. “But at least now there’s an opportunity for them to come together.”