The transition to a market economy in Cuba: inevitable and urgent

The rise of the private sector in Cuba, with over 11,000 registered small and medium-sized enterprises (mipymes), hundreds of thousands of jobs created, and an increasing role in the production of goods and services, demonstrates that individual initiative is now the most dynamic engine amid the crisis. This growth highlights that where the state fails, Cuban entrepreneurs fill essential gaps.

A report from Cuba Study Group reveals that the private sector has gained ground in the Cuban economy: it generates 31.2% of employment, contributes 23% of tax revenues, and dominates 55% of retail trade. Its influence in the domestic market makes it one of the pillars of the country's economic operation.

Despite this, the Cuban state still burdens micro, small, and medium enterprises with bureaucracy, excessive taxes, absurd regulations, and controls that limit their growth. At the same time, it insists on repeating the anachronistic message about the supposed importance of socialist enterprises, even though that concept has become synonymous with inefficiency and ruin.

Cuba, after more than six decades of socialist centralism, faces a crossroads: continue sinking into crisis or take the definitive leap towards a market economy. This transition is not only inevitable; the sooner it occurs, the better the living conditions will be for the majority of Cubans.

The real dilemma is not whether Cuba will transition to a market economy, but rather when and under what conditions.

The Cuban economic model, based on state planning and absolute control of productive sectors, has repeatedly demonstrated its inefficiency. Persistent scarcity, runaway inflation, endless blackouts, lack of water, the fiscal deficit, and the shortage of foreign currency characterize everyday life. Mass emigration is perhaps the harshest evidence: millions of young people see no future within a system that offers them no opportunities.

The model did not work even under the enormous subsidies from the USSR and the COMECON. Scarcity has been widespread since the beginning of the Revolution. The ration books and industrial products were not inventions of the 1990s as a result of the fall of the socialist camp; in socialist Cuba, rationing has always existed: if you bought stockings, you could not get shorts.

National textile productions, managed by state-owned companies, often ended up in storage because no one wanted to use them: unattractive clothing, lacking style and of poor quality. Products outside the basic basket were considered a luxury; obtaining beef or beer was always an epic challenge for the average citizen. Buying a lobster was like science fiction. Purchasing a car was only available to a select group of "vanguard" workers.

The Cuban socialist system destroyed the market economy and the establishment of the socialist enterprise; instead of stimulating productivity, it created a system specialized in rationing scarcity and dismantling nationalized factories and businesses.

State workers are, and have always been, the clearest reflection of failure. I still remember my first "salary" of 198 pesos in 1992, when the dollar exceeded 120 Cuban pesos. Salaries in Cuba are and have always been a joke. We have always had clear evidence of this: surgeons turned taxi drivers, engineers becoming bartenders, or scientists making satellite dishes.

Today, although the government has nominally increased salaries, due in part to inflation caused by that very increase, they remain insufficient and pale in comparison to the incomes of those working in the private sector or receiving remittances.

The regime insists that opening up more space for the market will create inequality. But the truth is that there has never been more inequality than there is now: between those who have access to dollars and those who depend solely on the state salary, between those who receive remittances and those who survive on what a dwindling ration booklet provides.

Private entrepreneurs pay and will pay better salaries because they need motivated and productive workers, not slaves. This means that thousands of state employees, currently subsidized without creating real value, could find better income and living conditions in the private sector.

This transition would not only benefit workers, but it would also relieve the State from bearing the burden of inflated and unproductive staffing, or from managing and trying to maintain outdated factories. Resources that are currently spent on sustaining fictitious payrolls and painting crumbling walls could be redirected to improve pensions, strengthen the healthcare system, and rescue social services that are falling apart.

The real dilemma is not whether Cuba will transition to a market economy, but when and under what conditions. Each year of delay multiplies poverty, destroys infrastructure, and forces more families to separate due to emigration.

The Cuban people deserve a future of opportunities, not endless lines, blackouts, and symbolic wages. The sooner the country transitions to a market model with clear rules, fair salaries, and a government focused on guaranteeing rights rather than managing ruins, the greater the chances will be to rebuild the economy and offer well-being.

The transition is inevitable. Delaying it only prolongs the misery. Accelerating it is the only way to save Cuba.