As the Cuban economy is liberalized, budding entrepreneurs are competing with more than just each other. Their biggest competitor may be the Cuban government.
Last year the Cuban government announced it would gradually lay off over one million of its employees as part of a move to wean the population from the services and payrolls of cash-strapped socialist government. The government hopes to reduce costs and increase revenue by taxing the newly privatized businesses formed after it flooded the private sector with workers.
As reported by NPR, new business are springing up across the country. Most are competing with each other. Many are competing with the state. Until recently, most services were offered by state-run agencies that faced little competition and thus little incentive to evolve and improve.
Cuban entrepreneurs are taking advantage of this stagnation by offering goods and services at lower prices than do traditional government agencies. If the entrepreneurs are successful, Cuba will come to rely more on its markets and less on its government.
Now that Cuba's free market is rolling, it may prove harder for the government to slow the free market's momentum than it was for entrepreneurs to start it.