Since last July, the Cuban government has imposed fines that exceed 600 million Cuban pesos (equivalent to 25 million dollars at the official exchange rate for legal entities) on private businesses and MSMEs (small and medium-sized companies). Because?
The fines were imposed on private actors on the island because, according to officials, they violated the price limit established for certain food products. The measure, announced by official Cuban media, seeks to control inflation in a context of economic crisis.
Lourdes Rodríguez, vice minister of Finance and Prices, explained to the official newspaper Granma that, although prices are regulated by local governments, there is constant and systematic supervision by the inspection directorates at the municipal and provincial level, in addition to the authorities of Finance and Prices.
For her part, Jenifer Puebla, director of Inspection in the municipality of Guanabacoa, Havana, indicated that they detected serious violations in prices and sales of products in poor condition in certain establishments.
Fines of up to 25 million dollars to MSMEs for violating prices in Cuba
As we know, on July 8, the Cuban government implemented a price cap for six basic products in micro, small and medium-sized enterprises (MSMEs): chicken, oil, sausages, powdered milk, pasta and detergent.
For example, the maximum authorized price for a kilo of chopped chicken is 680 pesos ($5.6) and a liter of vegetable oil costs up to 990 pesos ($8.25). Since the end of July, the initial fines for non-compliance with these prices reached 30 million pesos.
Price control was part of the gradual opening of the Cuban economy, which since 2011 has allowed self-employment and, since 2021, authorized the creation of private companies, although with restrictions.
Currently, there are hundreds of thousands of self-employed workers and more than 10,000 MSMEs, mainly in the hospitality, retail and construction sectors in Cuba, but fines rain down daily for violations such as the one detailed above.
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**Interview with Dr. Maria Estevez, Economic Analyst and Expert on Cuban Policies**
**Editor:** Thank you for joining us today, Dr. Estevez. To start, could you elaborate on the recent fines imposed on private businesses and MSMEs in Cuba?
**Dr. Estevez:** Thank you for having me. The Cuban government has imposed fines exceeding 600 million Cuban pesos—roughly $25 million at the official exchange rate—on private businesses since July. This measure is part of a broader strategy to control prices on essential food products, which have become increasingly difficult for many Cubans to afford.
**Editor:** What led to this decision by the government?
**Dr. Estevez:** The officials argue that certain private enterprises have been violating price limits that were established to protect consumers. The government aims to prevent inflation and ensure that basic necessities remain accessible, particularly given the economic challenges facing the country.
**Editor:** How are these fines affecting the businesses that have been targeted?
**Dr. Estevez:** The fines are substantial for small and medium-sized enterprises, many of which are already struggling due to economic constraints. Some businesses have reported that these penalties could potentially lead to closures or significant operational cutbacks, which might exacerbate the economic difficulties for not only the businesses but also their employees.
**Editor:** Do you see this measure having the desired effect of stabilizing food prices?
**Dr. Estevez:** It’s complicated. While the government hopes to stabilize prices, the underlying issues—such as supply chain disruptions, limited resources, and inflation—may not be effectively addressed through fines alone. Instead, this could lead to a strained relationship between the government and private businesses, further complicating the economic landscape.
**Editor:** What alternatives could be considered to support both consumers and businesses?
**Dr. Estevez:** There needs to be a more balanced approach. The government could provide subsidies or financial support to struggling businesses while ensuring consumer protection through fair pricing practices. Encouraging dialogue between the state and the private sector may foster collaboration to tackle these economic issues more effectively.
**Editor:** Thank you for your insights, Dr. Estevez. It’s a complex situation, and we appreciate your analysis.
**Dr. Estevez:** Thank you for having me. It’s crucial we continue to discuss these economic dynamics in Cuba.