Reactions to the new resolution (56) from the Ministry of Domestic Trade, which automatically cancels the retail licenses of those small and medium-sized enterprises (mipymes) that were conducting it as a secondary activity and requires those that pursue it as their main activity to partner with state entities to continue operating, are described as "a blow to market relations" and "discriminate against private activity," asserts the renowned economist Pedro Monreal.
Furthermore, given the impact of the economic decisions made by Miguel Díaz-Canel's regime, this is not a new decision, as it was already approved in August. "It's a case of rain on wet ground," he noted on the social media platform X (formerly Twitter), where he often shares his analyses.
In this regard, Monreal explains that under the pretext of carrying out "the regulation" of wholesale trade, Cuban authorities have approved a resolution outlining how a measure will be implemented that the Government believes will enable small and medium-sized enterprises (mipymes) to benefit from the state’s experience, transportation, and infrastructure. However, they overlook the burden of bureaucracy, inefficiency, and corruption, which are the Achilles' heels of a centralized economy with poorly paid workers.
With this decision to remove small and medium enterprises from wholesale trade, the Cuban regime kills several birds with one stone, Monreal insists. In his view, this resolution aims to attract private foreign currency to "re-monopolize wholesale supply and reduce competitors." The idea, he adds, is for state-owned wholesale companies to increase market power and profitability.
"Resolution 56 turns non-state actors, who possess liquidity and flexibility and currently conduct most of the retail trade, into a large pool of captive customers for state wholesale companies, which lack foreign currency and are often inefficient," emphasizes the economist.
Essentially, this move by the government aims to "revitalize" state wholesale trade by "squeezing out the private sector." In this way, they believe, "the fallacy of equality" among economic players is laid bare.
The fact that wholesale trade remains entirely in the hands of state-owned companies overlooks two important points: how an effective liquidity chain will function between private and state enterprises dealing in foreign currency and national currency. The other major obstacle Monreal observes is that the government believes this measure will control inflation in a market with high demand and low supply due to the chronic shortages facing the Island.
The economist finds it risky for the government to believe that by keeping private companies under control, they will not choose to move their money elsewhere.
An equally important issue stands out: the timing chosen to implement the measure. "There is also a problem with the timing of the application: a month when the demand for consumer goods typically increases, and where any additional shortages associated with 'experiments' could lead to greater social instability."
And there it is, the warning. It can be said louder, but not clearer. This experiment could lead to demonstrations in a country that is, as of now, a pressure cooker.
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