In August 2020, non-state-owned businesses in Cuba were authorised for the first time to carry out foreign trade operations by a state-owned company. The decision, it was said, responded to the urgency of adding efforts to boost the economy and face the crisis generated by covid-19. Two years later, there are thousands of signed contracts and experiences that indicate the need to make steps more flexible, gain agility and open up new possibilities.
In the opinion of Vivian Herrera Cid, director general of Foreign Trade at the Ministry of Foreign Trade and Investment, “the measure has been positive and has made progress”, with the signing of 15,497 contracts by non-state forms of management (such as self-employed workers, cooperatives, micro and SME’s, among others), totalling just over 300 million dollars.
However, he points out that there have been delays in the processes. “This possibility began to be implemented in the middle of the pandemic, with an intensification of the blockade in the worst scenario, an extremely complex financial situation and a logistical crisis in international transport without precedent in history.

“All this prevents goods from arriving on time. In addition, there is an increase in the prices of these operations, as a result of the decrease in travel and the overcrowding of the ports of origin. This is the first time I have seen such a big and sustained crisis,” says Herrera Cid, who has almost 40 years of experience in foreign trade.

Faced with these circumstances that affect the country’s foreign trade activity, including the services provided to non-state actors, the Mincex director points out that a series of alternatives have been adopted with the aim of creating conditions for the availability on the national territory of those supplies that are of daily use in business.

A timely initiative taking into account that the purchase of inputs has been the main demand in most of the contracts (15,101), in other words, the intention has been to import more than export, repeating the tendency of the Cuban economy.

According to Herrera Cid, the current marketing policy of the intermediary companies (currently 63) allows orders to be delivered “in the shortest possible time and to fulfil contracts”.

These are sales on consignment or through the customs warehousing regime, i.e. goods stored in the country by companies that carry out foreign trade.

“If we had a supplied wholesale trade, the situation would be different,” emphasises the Mincex director general of foreign trade, who assures that “working with non-state forms of management has allowed the socialist state enterprise to shake up and become more dynamic, because it has to look for a particular solution. They are not large purchases, but deliveries in small formats, with a client who has different requirements”.

For this reason, she adds, another step taken was to create state-owned MSMEs dedicated exclusively to offering foreign trade services to non-state management. “In just a few months of operation, they have made great progress, because they have sought agile mechanisms,” she stresses.

To date, these emerging actors have processed six export contracts and 1,092 import contracts.

Herrera Cid illustrates with two examples the changes in the ways of doing things in order to meet the demands of non-state actors.

“Solintel, an importer of supplies related to computers and electronics, found it complicated at the beginning because MSMEs asked for small accessories. How to bring these types of products in 20 or 30 days? This is why this company made certain investments in order to have a stock, which allows it to resupply all its customers, through an e-shop that it set up for this activity”.

The ITH trading company has set up a cash & carry format, i.e. wholesale shops in several provinces, where customers can buy wholesale.

Opening up opportunities
In recent days, the government approved the possibility for MSMEs to export directly, starting with those linked to technological services, “because they are simpler operations, and some have already exported through state entities and have knowledge of this activity”.

Herrera Cid adds that MSMEs related to renewable energy sources were also chosen, due to the country’s energy situation.

Those actors that initiate direct exports will be trained and “will receive a methodological control, as is the case with state entities”.

“This process will be done with care and moderation. I am sure that all MSMEs that wish to start this activity will make every effort to be trained and undertake operations in the right way.

Ingenius SRL is waiting for the green light, perhaps because it is “a software factory that loves challenging projects”.

However, Romero González has his misgivings, because he does not want to be burdened with the obstacles that Softel is currently facing in terms of contracting. “That opportunity can work as long as the mechanisms are more agile,” he insists.

According to him, import contracts have not been without their stumbling blocks. “The state-owned company is used to longer lead times, but for a small or medium-sized company, a week, a month, is a lot. All that time is money lost.

With regard to imports, he says that through state-owned MSMEs they have bought “specific things”, but these have not completely solved the issue of delays, because “the methodology is the same”.

Founded in 2012 as a small computer repair shop, Ingenius SRL has evolved into a software company. Dutch, Spanish, Costa Rican, Ecuadorian and even Irish clients have benefited from their contributions. A list that they intend to expand, because “taking on challenges is the only way to grow”, as the website of this Havana-based micro and SME reads.