Sonic Blasts And Economic Blunders: An Embarrassing Summer For Cuba

Aug 11, 2017

COMMENTARY

This is turning out to be quite the embarrassing summer for communist Cuba.

This week the State Department revealed that two Cuban diplomats working in Washington had been booted out of the U.S. in response to “incidents” last year that made U.S. diplomats working in Havana physically ill. The Associated Press reported investigators believe sonic devices were planted in the U.S. diplomats’ residences that left the Americans with hearing loss.

The Cuban government denies any involvement. But if the bizarre reports are true, and if Cuban operatives are to blame, it’s an egregious assault on U.S. attachés. It also reflects pretty sloppy spook work from a regime that prides itself on making even surveillance snakes like Vladimir Putin look like amateur eavesdroppers.

READ MORE: Bizarre Diplomatic Dust-Up Leaves U.S. Diplomats Ill, Cuban Diplomats Expelled

And it would be just the regime’s latest bungle. Along with the possibility that it blasted yanquis in the ears, there’s also the reality that it has again shot its economy in the foot.

Cuban leader Raúl Castro’s administration recently announced it’s cracking down on cuentapropistas, or private entrepreneurs. It’s suspending new licenses for small business owners – and shutting down some existing, and very successful, enterprises altogether.

An embarrassing summer for communist Cuba: Along with the possibility that the regime blasted yanquis in the ears, there's also the reality that it just shot its economy in the foot.

Remember the two key words there: Havana is putting a freeze on entrepreneurialism in Cuba because it’s become…very successful.

Castro authorized more cuentapropismo a decade ago as a way to help Cubans, who officially earn just $30 a month, make ends meet. But those ventures weren’t supposed to be profitable, comrade! The number of cuentapropistas is nearing 600,000 – and too many of them have had the effrontery to do really well. Even expand.

That makes the Cuban regime look bad, especially when it’s having to admit the island’s socialist economy is flatlining – or, as it did last year, shrinking for the first time in two decades. The image of the big statist ship sinking while its little entrepreneurial lifeboats float along in robust condition isn’t exactly a photo the elders of the Cuban Communist Party want going out on the wires.

And they seem especially resentful of one business in particular: an accounting cooperative called Scenius.

WLRN was one of the first U.S. media to take a look at Scenius’ pioneering undertaking – its unique leap beyond Cuban micro-enterprises like pizzerias, hair salons and mechanic shops and into the more professional realm of CPA work.

Read more: The Sunshine Economy In Cuba

When we visited Scenius’ Havana offices in the spring of 2016, its monthly revenues had shot up twenty-fold to more than 2 million pesos, or about $80,000, since its first month of operation in early 2015. Its employees, or partners, had grown from a handful to almost 200 – many making three times what they’d earned in Cuba’s public sector.

ACCOUNTANTS AND APPARATCHIKS

And we learned from Scenius’ president, Luis Dueñas, that it enjoyed such dynamic growth because the lion's share of its clients weren’t private businesses – but rather Cuba’s state-run enterprises.

“The government recognizes,” Dueñas told us, that the more motivated private accountants do better work for the Cuban state than its own accountants do.

And that made the Cuban apparatchiks who hired Scenius look good. Meaning, it made them look bad. Comprende?

Scenius president Luis Duenas (center) with accounting cooperative partners last year in Havana.
Credit Tom Hudson / WLRN.org

Sooner or later, Scenius’ success – especially success derived from state-sector demand – was going to set off alarms inside the regime. So last week Cuban authorities ordered Scenius to close shop. The cooperative, they said, was performing services outside its authorized purview. Dueñas, who is appealing the order, told me by phone from Havana that Scenius strongly denies the charge.

The government didn’t specify the unauthorized services. But it didn’t have to, because everyone on and off the island knows why it put the kibosh on Scenius: It was embarrassed by how decrepit the cooperative made Cuba’s Marxist model look.

Castro officials insist the cuentapropista freeze isn’t permanent – that they just want to make Cuba’s entrepreneurial process more orderly. As in, more firmly under the regime’s thumb again.

But the fact that private ventures like Scenius can rattle the government that way indicates their economic independence is itself an effective if more understated form of dissidence. The U.S. should be promoting it more strongly than ever – but unfortunately President Trump’s new restrictions on U.S. travel to Cuba will probably mean less business for the island’s entrepreneurs.

That too is embarrassing.