Colonial buildings and outdoor restaurant are show in Old Havana, Cuba. Picture:123RF/KAREL MIRAGAYA
Colonial buildings and outdoor restaurant are show in Old Havana, Cuba. Picture:123RF/KAREL MIRAGAYA

Havana — Communist-run Cuba plans to convert most state-run eateries into co-operatives and private-run businesses in coming months and stop subsidising them as soon as next year, according to local reports and a government source.

The move is seen as a sign the country is moving towards a market-style socialism with increased private business, such as Vietnam or China, and away from the old Soviet-style system it has clung to since its former benefactor’s demise.

The country has been all but bankrupted by fierce US sanctions, the Covid-19 pandemic and its own inefficiencies, and faces mounting foreign debt and budget deficits.

Authorities have declared an emergency and are pushing through various market-orientated reforms first approved a decade ago under then president Raúl Castro but stalled ever since by bureaucratic self-interest and conservatives.

In recent speeches Castro’s successor, President Miguel Diaz-Canel, has said subsidies will be eliminated for the state-run eateries as part of a monetary reform expected by the end of the year, forcing the issue.

That will shake up what is known as the gastronomy sector, which has been unable to shake a reputation for poor service and theft ever since all eateries down to lowly hot dog vendors were nationalised in 1968.

“The plan now being put into effect calls for a small minority of the more than 7,000 government-run eateries in the country to form new, unsubsidised, state companies separated from local politicians and the remainder to be moved into private hands,” said a senior manager of the capital’s food service department, who asked not to be identified as he was not authorised to speak to journalists.

The Cuban government did not respond to a request for comment.

There were about 1,900 state-owned eateries in Havana before the government launched initial reforms under Castro, turning 258 into co-operatives and private businesses under a leasing system, according to the senior manager.

Of those, 60% had improved their service, increased wages by 600%-800% and controlled pilfering, he said.

Now more than 70% of the remainder will follow suit, the senior manager said, adding that city authorities had already picked about a dozen restaurants that will remain state-run and 450 establishments that will be leased to employees and other interested parties.

“The process should never have stopped and I think this time it will happen as the system can’t resist more scrutiny,” he said.

Reuters could not ascertain details yet for all Cuba’s other provinces. But the Cuban National News Agency reported last week that a new local state-run company will keep 15% of the 486 eateries run by the government in central Camaguey province. “The other facilities will pass to non-state forms of management, either in the form of self-employment or non-agricultural co-operatives,” the agency said, citing local authorities.

Ever since Castro announced the state would be pulling out of non-strategic activities at a Communist Party congress in 2011, thousands of private eateries have opened and successfully competed with the state sector.

Meanwhile the state bureaucracy has worked to spruce up, not move out of, most of its restaurants and cafeterias.

Yet economy minister Alejandro Gil, speaking to the National Assembly last month, said the sector had to be transformed, and those eateries remaining under state control must pay their own way.

“They have to be efficient, covering expenses with income, paying suppliers in a timely manner, linking salaries with economic results and banishing illegalities and the diversion of resources,” he said.

The move comes amid a depressed market and supply shortage affecting state and private eateries in the wake of the pandemic and Cuba’s cash crunch.

Reuters

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