Cuba Expanding Private Sector Industries

Cuba’s communist government has authorized the expansion of private industry in most sectors of the country’s economy. It’s a change that was originally approved last August, though was approved by the country’s powerful Council of Ministers on Friday.

Currently, there are 127 authorized work activities that are allowed to be done by private labor. Most of those center around tourism like restaurants or renting rooms. The change will mean that more than 2,000 work activities will now be authorized for private work, of which 124 will be limited.

The government did not announce which areas will be limited, though AFP indicates they are likely to be strategic industries like healthcare, defense and media.

What that means for Cuba’s cigar industry remains to be seen. There are examples of private work within Cuba’s cigar industry—some tobacco growers have added Airbnb-like rental rooms to their farms—as well as sales of cigars that fall outside of the normal distribution channels which can range from custom rolled cigars to fake versions of Habanos S.A.’s cigars.

Habanos S.A.—the company responsible for the marketing and distribution of brands like Cohiba and Montecristo—is a joint-venture between the Cuban government and Allied Cigar corporation S.L., which recently bought a 50 percent stake in Habanos S.A. previously owned by Imperial Brands, plc.

The changes are likely in response to steep declines in Cuba’s tourism industry caused by both the Trump administration’s restrictions on American’s travel to Cuba and the coronavirus COVID-19 pandemic.