Havana awash with private investors finally allowed to pump money into economy after years of economic embargos

• Cuba is welcoming private sector entrepreneurs to save itself from collapse
• About 1.5 million people are employed in the private businesses as of 2023
• But citizens remain skeptical of the government’s decision to accept capitalism 

Long afflicted by financial crisis, a shortage of fuel and collapse in domestic production, Cuba has slowly began embracing its capitalists to save itself from total collapse. 

After years of being the only communist nation in the western hemisphere, the Latin-American country has started adopting capitalist notions and welcoming ‘filthy’ capitalists back into the economy. 

Taking advantage of relaxed government restrictions on private entrepreneurship, Cubans has successfully set up 10,200 new businesses since 2021. 

According to CNN, more than 600,000 Cubans were working in the private sector in 2021. 

In the past year alone, modern-day grocery stores shelved with all imaginable food items have opened up all over Havana.

Factories producing toilet paper in Marianao, large-scale dairy producers making ice cream and online private supermarkets that provide home delivery have also been emerging across the country. 

As of 2023, about 1.5 million people were employed in the private sector, which  along with government imports each totaled about $1 billion, according to the New York Times. 

The new privately employed population currently amounts to up to almost half of the total work force on the Caribbean island.

Pavel Vidal, who studies Cuba’s economy and is a university professor in Colombia, told the NYT: ‘Never has the private sector been given so much space to operate in Cuba. 

‘The government is bankrupt, so it has no other choice but to invite other actors in.’

This shift in policies is due to Cuba’s communist’s government inefficiency and mismanagement in managing state finance’s as well as rising inflation. 

The monetary reform, which was put in place in January 2021 to end the double-currency system, failed to establish the Cuban peso as the only one and led to an estimated 500 percent inflation in 2021 and 200 percent in 2022. 

On an average, a one-kilo (two-pound) bag of potatoes can cost about ₱8 (Cuban pesos) while a bottle of good red wine can cost ₱15. 

Even everyday essentials such as like toilet paper costs about ₱6 for a pack of 10 rolls, a gallon of whole milk costs ₱4.64 and a kilo of tomatoes can cost about ₱5.76.

Government employees and white-collar professionals, including doctors and teachers, are estimated to be making $15 a month, which is nearly ₱360. 

By comparison, private sector employees tend to make nearly five to 10 times that amount.

People who can comfortably afford amenities or even basic necessities are widely believed to be receiving money from abroad, working for other private businesses or are employed as diplomats.

Yoandris Hierrezuelo, 38, who runs a fruit and vegetables cart in Havana’s Vedado neighborhood and earns about about $5 a day said: ‘You have to be a millionaire to live in Cuba today. 

‘The state can no longer meet the basic needs of the population.’

While Cuba’s private sector seems to be booming, it accounts for only around 15 percent of gross domestic production.

The sector also continues to face challenges posed by the state government. 

Many new business owners are left wondering if the communist regime will allow them to ‘expand fast enough and freely enough to meet the challenges’ – especially given the country’s long history of banning free market practices as soon as economic pressures ease. 

While Cuba’s new capitalists are riddled with skepticism, Miami’s anti-Communist Cuban exile community too is suspicious of the nation’s government. 

Republican representative Maria Elvira Salazar, who is one of South Florida’s three Cuban Americans in Congress, said in an interview: ‘The Cuban regime is still in the business of power, and there’s nothing that proves to me that they’re willing to give a portion of that market share to anybody else but themselves’

Yet in light of the nation’s current shortage of fuel, aging electrical grid and a significant fall in production of food grains, citizens have swept their doubts aside and embraced capitalism to ensure a future for themselves.