Connect to share and comment

Education that's bad for business?

Why US efforts to help Cuba’s entrepreneurs may backfire.

Cuban shoemaker
A Cuban shoemaker in Havana in 2008. Washington has set aside $3 million in development funding to help Cuba’s emerging entrepreneurs, but the effort may backfire. (Getty Images)

Photo caption: A Cuban shoemaker in Havana in 2008. Washington has set aside $3 million in development funding to help Cuba’s emerging entrepreneurs, but the effort may backfire. (Getty Images)

HAVANA, Cuba — Clues to this country’s economic future are visible all around Havana, hanging outside homes and garages on little hand-painted placards that read “Mattress Repair,” “I Fix Stoves” or, simply, “Cake.”

The signs belong to Cuba’s self-employed entrepreneurs, an incipient business class that the United States would like to help, viewing its members as agents of change on the communist-run island. With the Obama administration shifting U.S. strategy away from a confrontational approach to Cuba in favor of greater engagement, Washington has set aside $3 million in development funding to help Cuba’s emerging entrepreneurs and other “civil society” groups.

The money will nurture grassroots economic development on the island, particularly among those “focused on promoting self-employment and entrepreneurial initiatives,” according to guidelines released by the U.S. Agency for International Development, or USAID, last month.

But some of the same Cubans who have spent years advocating for more market-style reforms say they have a better suggestion for what to do with the $3 million: leave it in Washington.

“It’s a misguided policy,” said one pro-reform Cuban economist, who wasn’t authorized to speak to foreign reporters without official permission. “Whenever the U.S. puts its support and money behind something, people here grow suspicious or slam on the brakes.”

The U.S. funding, he said, “is counterproductive.”

He and others say a behind-the-scenes struggle is underway within Cuba’s government and ruling communist party between those urging market-style reforms and hardliners eager to keep the status quo. U.S. policymakers fail to appreciate the sensitivity of that debate, and their ability to influence it by injecting American political goals, analysts here said.

Do you think USAID's efforts to support Cuba's entrepreneurs will backfire? Join the conversation in the comment section below.

Others note that at $3 million over three years, the USAID funding is a largely symbolic amount that won’t make much of an impact on an island of 11 million people.

With Cuba’s economy cracking under the weight of debts, staggering inefficiencies, and nearly five decades of U.S. trade sanctions, President Raul Castro has pledged to allow more Cubans to start small businesses and even to hire employees, a measure that has long been taboo here. He insists the government isn’t turning toward capitalism, but modernizing its socialist system with a measure of common-sense economics.

“We have to erase forever the notion that Cuba is the only country in the world where one can live without working,” Castro told Cuba’s parliament on Aug. 1, even as Cuban economic officials played down the reforms as “adjustments” to the island’s state-controlled economic model.

http://www.globalpost.com/dispatch/education/100825/cuba-entrepreneurs-USAID