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Yes, they're abierto: Cubans open their doors to small business

Since President Raul Castro loosened the island's commerce rules to energize the economy, Cubans all over are pondering how to get in on the wave.

April 05, 2012|By Ken Ellingwood, Los Angeles Times
  • Raul Soto has started selling flowers in Havana as the country has slowly begun allowing free enterprise. Like many new business owners in the Cuban capital, he does not have a brick-and-mortar store.
Raul Soto has started selling flowers in Havana as the country has slowly… (Michael Robinson Chavez…)

HAVANA — Olga Lidia Garcia sat back and surveyed the length of her empire: a storefront with seven busy manicurists, scrubbing, clipping, buffing, gluing and polishing to the bounce of salsa.

The shop, decked out in oversize Oriental fans and racks stocked with a Day-Glo rainbow of nail polishes, shares the street-level space with a tiny photo studio. Garcia, wearing a tumble of frizzy hair, electric-blue dress and dangling golden hoop earrings, is manicurist-in-chief. This is a good day.

"Look at this," Garcia said, a note of wonder in her voice. "A full salon."

Filling seven chairs in a nail shop may not sound like a big deal. But this is socialist Cuba, and Garcia is on the leading edge of a push by the government to energize the creaky economy by allowing residents to launch small businesses and buy and sell property as never before.

The reform, announced in late 2010, is fast taking root around Havana's weather-worn downtown and in other cities and towns, prompting Cubans all over to ponder how to get in on the wave.

The sense of change is evident throughout Old Havana, where tourists are ferried past renovated colonial-era buildings in "coco-taxis," tinny-sounding motorized tricycles with rounded carriages that resemble giant baseballs, and nearby sections where the wrought iron balconies remain rusted and the pastel facades faded and crumbling.

Amid the exhaust-belching buses and 50-year-old American sedans that often serve as taxis are sprinkled no-name pizzerias and other businesses, some no more than tables stacked with drill bits and cellphone batteries, peeking from darkened, cave-like doorways. Taped to chipped power poles are hand-lettered fliers offering homes for sale or cooking jobs.

Websites are advertising houses and apartments for sale — a first in Cuba, where homeowners were previously allowed only to swap properties. Taxi stands serve as impromptu used-car lots for private transactions.

Garcia, 40, a single mother who began doing manicures in her home 18 years ago and expanded to two tables last year, is already talking about adding to her shop. She hopes to have two chairs for hairstyling by the end of the year.

The sudden wave of entrepreneurship has brought with it shades of cutthroat capitalism.

Garcia said a rival nail shop across the street was undercutting her price for a manicure, $1. But she planned to hold tight.

"I'm not going to change," Garcia said. "What matters more is that people enjoy coming here."

The loosened rules have others crafting new lives too.

In the southeastern city of Santiago, 58-year-old Rolando Cervantes, a former factory worker, capitalized on the new car-sale freedoms, buying a 1964 Pontiac from a friend for $5,000 using a loan from a daughter in the United States. The old car is now his livelihood, a taxi.

On a good day, Cervantes said, he can earn about $15.

"For us, that's a lot of money," he said. "Of course, I don't always earn that much but with what we make in a week, we can buy flour, rice, ham and even get a little piece of cheese on the black market."

Enterprising Cubans have long peddled merchandise on that market or informally, but the new push is sanctioned by the government — complete with licenses and tax bills.

One vendor said he quit a decent-paying government job last year to strike out on his own, getting a license to sell hardware at the entrance to his home. His "store" is basically a chest heaped with light fixtures, electrical cables, fittings, valves and pieces of rubber hose.

The budding businessman, who declined to give his name, said his earnings of up to $20 a day top his old salary, despite the permit fee and the ups and downs of a merchant's life.

"It's worth it," he said.

The reform has boosted the number of small enterprises in Cuba to more than 350,000 since the government of President Raul Castro moved to coax more out of Cuba's economy and ease the load on the treasury by shaving the bloated public payroll.

Residents are free to hire employees and expand operations of businesses that were already legal, such as small-scale restaurants. Many Cubans are hurrying to get titles so they can sell their homes.

"This is a big, complex reform that they're trying to pull off," said Philip Peters, a Cuba expert at the Virginia-based Lexington Institute. "Raul Castro has made it very clear that the economy does not produce enough."

The burst of startups will certainly mean heartache for some. Many would-be merchants lack marketing acumen or the savings to weather down times. It may be hard for a pizzeria to survive when others have sprouted close by.

On a recent afternoon in Havana, trade looked near-dead at a number of the modest shops, some lacking a name or sign. Taxes and the expense of covering employee's social security insurance adds another burden.

Still, there are signs of new promise even in businesses that have long existed.

Dario Gutierrez, who pedals a three-wheeled bicycle taxi he built from scrap, said the government has been issuing many more bike-taxi permits than before. He said he began without a license eight years ago and was fined often.

Gutierrez now earns as much in a day ferrying tourists in Old Havana as he did in a month in the rural town he came from. Buying a pair of jeans used to take two months' earnings. He can afford new pants in a week now.

"We don't live rich," he said during a break between fares. "But it's OK — we live."

ken.ellingwood@latimes.com

Times staff writer Cecilia Sánchez in Santiago contributed to this report.

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