How Cuba Wants to Save its Economy from Collapse

Cuba and cryptocurrencies

Cuba was struggling to cope with problems even before the coronavirus pandemic. However, the pandemic created even bigger challenges for the local economy. Importantly, the pandemic, as well as U.S. sanctions, introduced by the Trump administration caused a lot of problems for Cuba.

The country made an important announcement. According to this announcement, it will allow private businesses to operate in most sectors. Based on the information provided by Labor Minister Marta Elena Feito, the list of authorized activities expanded from 127 to more than 2,000. Interestingly, only a minority of sectors would be reserved for the state.

People should take into account that, the country’s economy shrank by 11%. It is the worst result in almost three decades. Unfortunately, Cubans are struggling to cope with problems and the shortage of basic foods underlines the severity of the problem.

It is worth noting that, just 124 economic activities would be exempt from private involvement, but Feito did not mention which ones. Importantly, the government’s step essentially opens up almost all economic activity on the island to some form of private enterprise.

Economy and new opportunities

Interestingly, this decision has the potential to boost the country’s economy. As a reminder, apart from hundreds of thousands of small firms, Cuba’s non-state sector is consists mainly of small private businesses run by artisans, taxi drivers, as well as tradesmen. Importantly, around 600,000 people, around 13% of the workforce, joined the private sector when the opportunity arose.

It is worth noting that, a large number of private businesses are involved in the island’s tourist industry. They suffered huge losses due to the coronavirus pandemic.

As can be seen from the information stated above, Cubans are struggling to cope with challenges. Hopefully, the government decided to open its economy to private businesses.

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