Yesterday’s News: the Cuban (Free Market) Revolution

The government in Havana has had a rough time finding the right economic mix of free market and state control since it began instituting economic reforms more than six years ago. This week there was a setback for the free market reforms; this time for would-be restaurateurs in the capital.

As Reuters reports, “authorities in Havana stopped issuing new licenses for new private restaurants in the city.” The article goes on to mention the adverse regulatory framework that private restaurant owners face, such as higher input costs and seating capacity restrictions. Part of the push back against privately owned restaurants no doubt comes from state-owned restaurants that do not want the extra competition.

Dissatisfaction with the slow and bumpy pace of economic liberalization extends beyond the restaurant industry. Farmers in Cuba face limited access to markets and are frustrated with state monopoly and monopsony.

These and other liberalization issues were acknowledged by President Raul Casto during the Communist Party Congress in April. During the Congress, Castro acknowledged that “only 21% of the 313 economic guidelines adopted five years ago had been fully implemented.”

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