The Cuban economy continues to struggle due to the many restrictions by the state-controlled government. The failure of the long-standing Communist regime to provide a viable free market has led to constant shortages of essential goods for the average Cuban citizen, such as chicken, flour, eggs, bread, and rice.
Stores that receive new shipments of food quickly run out on the same day, as citizens wait in line for hours to attain these basic provisions. Many economists believe that the financial situation will only continue to worsen, as Cuba’s economy has only averaged 1% annual growth over the past three years.
The lack of a free market causes significant financial challenges for a country that was once on a track to prosperity before the rise of Communism.
Economic Changes Post-Fidel Castro
Economic reforms within the past decade have attempted, on the surface, to mimic free market norms by encouraging Cubans to become self-employed and start their own businesses.
The Cuban government created possibilities for non-state employment by legalizing over 200 different personal business licenses. Almost 500,000 Cubans have become self-employed by opening beauty salons, boutiques, bars, restaurants, and much more.
Unfortunately, many of these new laws keep entrepreneurs in continual “startup” mode, never growing or providing real economic security due to high business taxes, strict government oversight, and a business license dependent on overt loyalty to the party.
Current Economy of Cuba
Cuba has a planned economy that is completely controlled by their Communist government. This ineffective model has led to Cuba owing a considerable amount of debt to many countries across the world, which primarily includes China, Venezuela, and Russia. The Cuban government will need to make significant reforms if they hope to improve an economy that already limits the freedom of citizens.
FHR Cuba’s Microcredits Program
The Foundation for Human Rights in Cuba (FHRC) has established a Microcredits program to give Cuban citizens the freedom to experience a free enterprise system that isn’t controlled by an oppressive government. Each individual can contact a local coordinator within the community to apply for an interest-free business loan, thus avoiding legal complications according to Cuban laws.
The simple application process is reviewed by a committee in the United States, as it gives Cubans the incentive to start their own business and chase their dreams – even within the strict limitations of restringing Cuban laws – without relying on government handouts.
These loans are anywhere between $100-$600 to help them establish their business by purchasing the necessary tools and supplies. While the loans are interest-free, the repaid amounts from entrepreneurs are cycled back into the program for further reinvestment to future applicants.
FHRC’s Impact – Changing Lives
The FHRC has helped over 70 Cubans successfully start their own businesses by funding local farms, hair salons, florists, and more. Each one of these businesses creates additional jobs in the community and allows Cubans to experience the many benefits of a free economic system. The FHRC Microcredits program currently has a 100% repayment rate and continues to make a positive impact on the lives of everyday citizens in Cuba.
How You Can Help
The Microcredits program continues to grow in popularity with aspiring Cuban entrepreneurs. Contact us today to learn more about this important initiative and how you can help Cuban citizens transform their lives by starting their own business! A small donation changes lives!
Startup costs for the following economic activities are as follows:
- A small pig farm – $423
- Tailors & Seamstresses – $100-$300
- Manicurists – $200
- Florists – $300
- Hair Dressers – $300
- Chicken farms – $300
- Rabbit farms – $300
- Sheep & goat farms – $300
- Welding Shops – $300
You can also make a positive impact simply by donating as little as $5.00 each month to the Microcredits program! Thanks in advance for your support!