Cuban Leader Díaz-Canel Declares: "Time to Take Action" on New Regulations for SMEs

“It’s time to take action!” With this phrase, Cuban leader Miguel Díaz-Canel confirmed the regime's shift in its cautious economic opening policy, reaffirming his intent to subject the activities of the “new economic actors” to state directives and centralized economic planning. “It’s time to move beyond diagnoses and take action,” Díaz-Canel stated during his closing speech at the third regular session of the X Legislature of the National Assembly of People's Power (ANPP).

The “debate and exchange” process with owners of micro, small, or medium-sized enterprises (SMEs) to convince them of the need to cap prices on essential products that the state fails to sell through the rationed family basket has ended. The result is yet another demonstration of the repressive and coercive nature of the Cuban totalitarian regime. Despite insisting that the government has not begun a “witch hunt” against SMEs, the Cuban leader emphasized the will to rein in the commercial activity of the “new actors” he himself promoted.

"Regarding our responsibilities in the uncertain and complex realm of the economy, it is necessary to acknowledge that in the effort to comply with the economic and social policy guidelines of the VIII Congress of the Party, by unblocking processes and promoting the formation of SMEs, we were not firm enough in demanding robust and comprehensive regulatory bases to guide the functioning of this management form that was already operating in the economy but without formal recognition," he noted.

According to the leader, the lack of regulation for SMEs caused chaos in the Cuban economy, driving up inflation and exacerbating inequality in the country. Therefore, “we must ensure compliance with what has been approved, clearly defining objectives, better preparing the implementers of each measure, providing political, communicational, material, and financial support, and organizing actions with an implementation timeline so they don’t remain mere rhetoric. And above all, exercising control over corrections and adjustments with the necessary feedback.”

“Post-control measures have shown that many of these businesses did not respond to the state’s trust with the honesty and transparency that a minimally organized society demands and expects. Consequently, no tax evader or general law violator can question the demands arising from the analysis of errors and distortions in the process. As has been stated, law and order must prevail if we want all forms of economic management to succeed and strengthen,” he added.

“Time to take action” is the new slogan of the regime that has been in power for 65 years, but Díaz-Canel does not want to scare the emerging entrepreneurs. “I want to reiterate that there is neither a witch hunt against private SMEs nor will there be one, as some claim, manipulate, or suggest.”

According to the also First Secretary of the Communist Party of Cuba (PCC), “the confrontation will be against disorder, illegalities, tax evasion, speculation, and fraud, regardless of whether the companies are non-state or state-owned.”

“This is a battle against illegality and not against specific forms of property and management,” concluded the leader appointed by General Raúl Castro to lead the “continuity” and implement the economic measures from the VIII PCC Congress that led to the failed “reordering.”

The "Step to Action": A Predictable Move by the Cuban Regime

"Remember, we are all here to save the Revolution and socialism," warned Díaz-Canel in early July during the Council of Ministers meeting, reaffirming once again the centrality of the socialist model in Cuba’s economy.

Recently, during his report to the ANPP's Economic Commission, the Cuban leader announced a “reordering” plan for both private and state sectors due to the “irresponsible manner” in which some of these institutions are managed. He emphasized that this is not a “witch hunt” against a specific form of management or property. However, the official discourse has been attacking SMEs, especially those that import finished products or do not comply with price caps, for months.

"What we are proposing here is a reordering so that there is the largest amount of goods and services available at appropriate prices for the population, and that everyone contributes what they have to contribute," he said.

For now, the “step to action” has resulted in the revocation of import licenses for nearly a third of the private businesses authorized to do so. According to Prime Minister Manuel Marrero Cruz, “it was decided to close this faculty to 24 of the 73 companies approved for importation due to low activity levels and poor performance.”

“In the analysis we conducted, there were many absurdities, errors...," said Marrero Cruz days ago before the ANPP deputies. “The resulting document from the work done by MINCEX allowed us to conclude that it was necessary to close this faculty to 24 companies due to low activity levels and poor performance,” the Prime Minister emphasized, announcing significant changes in regulations for SMEs and self-employment (TCP).

There is no “witch hunt,” but recently, the Minister of Finance and Prices in Cuba, Vladimir Regueiro Ale, warned SME owners that it was a “serious crime” to hide merchandise and not sell it to the population. The official appeared on Cuban television to explain the initial control actions the regime has agreed upon following the recent implementation of Resolution 225, which imposes a price cap on six essential products in the country.

Regueiro highlighted that hiding merchandise and obstructing commerce can be considered serious crimes or infractions. “We are warning, and where these cases have been identified, we have summoned municipal governments to the economic actors who are the owners,” he stated. SME owners are called to government headquarters to receive guidance on the measures to follow in each situation.

“In many cases, we have had to order forced sales of merchandise. Until July 13, we had ordered 151 forced sale actions of products,” he said. Additionally, he specified that the major violations are in the sale of chicken and oil.

In an intensive operation conducted between July 12 and 13, the Cuban government shut down 53 private businesses after carrying out 891 inspections nationwide. Marrero Cruz reported that during these inspections, more than 4,000 violations were detected, and fines exceeding 13 million pesos were imposed on SMEs. Among the main infractions identified were the concealment of products after the government-imposed price cap and the sale of goods at non-regulated prices.