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Education that's bad for business?

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

Unknown ObjectCuba’s economic problems are so severe that Castro has little choice but to test new strategies. His government plans to reassign or lay off as much as 20 percent of the more than 5 million Cubans who work for the state. Some will be offered jobs in agriculture or construction, but few doubt the government will be able to create employment fast enough.

The solution, it seems, will be more private-sector jobs. But how far is the government willing to go?

In 1993, when Fidel Castro allowed Cubans to acquire self-employment licenses, some 200,000 Cubans went to work for themselves, in many instances by simply formalizing the services they were already providing on the black market, like auto repair, carpentry or hair care.

Today, many of those self-employed Cubans face burdensome taxes and niggling inspections from the island’s communist government, which still maintains controls over an estimated 90 percent of the country's economic activity.

Raul Castro now seems ready to relinquish some of that control. But many would-be entrepreneurs are waiting to see what the new policies will permit.

“Will they let us rent commercial space? Buy supplies at reasonable prices? Hire the employees we need? We’ll have to see,” said one Havana auto mechanic, now working out of a cramped one-car garage in a residential neighborhood.

Dissident economist Oscar Espinosa Chepe said he thought the United States was right to try to organize and support new Cuban entrepreneurs.

“If it’s done in an open, transparent way, it could be an important contribution,” he said. “I don’t think there’s any reason to reject it.”

But under Cuban law, anyone cooperating with a U.S.-funded effort to undermine the Cuban government can be sent to prison, so the help for Cuban entrepreneurs will have to be provided covertly — creating a major risk for all involved. An American subcontractor working under a similar USAID grant, Alan Gross, was arrested in December and has been held without charges in a maximum-security prison since then.

“Given the nature of the Cuban regime and the political sensitivity of the USAID program, USAID cannot be held responsible for any injury or inconvenience suffered by individuals traveling to the island under USAID grant funding,” the guidelines warn.

European nations and others also fund efforts to help Cuban farmers and other entrepreneurs on the island, experts here say, but generally do not frame the aid in terms of political and ideological foreign policy objectives.