Cuban society is experiencing a transformation in the economic sphere, initiated by the domestic policy openings implemented by President Raúl Castro starting in 2010, and supported by the changes in Cuba policy implemented by former President Barack Obama. The result is Cuban entrepreneurs, despite limitations, have been able to create a market with an annual turnover that exceeds $3 billion.
The Cuban private sector has, in fact, experienced a boom since 2010, with entrepreneurs developing very successful and profitable business models. Due to the number of licenses that are active and the volume of business they generate, the most significant businesses are: privately-owned restaurants, popularly called paladares ; hostels for renting rooms, popularly called casas particulares; beauty salons; cellphone repair shops; footwear sales and repair; transportation; and wholesale activities. The last activity was developed even without being approved in the government’s list of 201 categories of self-employment.
Altogether, these industries generate a volume of business estimated at between 2.5 and 3.8 billion CUC annually (approximately the same in U.S. dollars).
The private sector now officially employs 535,000 people, with another half million operating informally. These workers receive an average wage ten times higher than state workers. This significant jump in income has given rise to new market segments with divergent levels of purchasing power and patterns of consumption different from the rest of the population.
Two aspects of consumption show the emergence of what undoubtedly represents the birth of a middle class on the island. First, the growth of national tourism in hotels that charge in dollars, which in 2016 hosted 991,122 Cubans. Second, travel by Cubans abroad, which saw some 671,000 citizens travel outside the island between January 2013 and December 2016. These trips represented an estimated expenditure of more than $1 billion just for air fares. The performance of both statistics marks an astonishing break from the past.