The Cuban government's announcement Tuesday that it would temporarily suspend new permits for private businesses isn't cause for alarm, at least just yet. A government mouthpiece, the Communist Party newspaper Granma, said Cuba needed time to put its "house in order" and was not abandoning an ongoing move to integrate some private-sector economic activity into the island's communist society. Still, the announcement shows the critical role the United States should play during this transition period. There should be no going back in building stronger political, social and economic ties.
The government said it would suspend the issuance of permits for a range of business ventures and occupations, clamping down on private restaurants, the rental of rooms in family homes and a growing number of services from tutoring and dressmaking to real estate brokers. President Raul Castro opened up the economy in 2010 to some limited private-sector ventures, and now nearly a half-million Cubans in a nation of 11 million take advantage of these side businesses to bring in outside income.
The government said it is not reversing course, but rather — as the newspaper said — getting its "house in order" after a radical realignment in Cuba's economy, one of the most closed in the world for the past half-century. This shouldn't be surprising, given the challenge of bringing some order to two largely parallel monetary operations. The spike in tourism has led many visitors to realize that private restaurants and homes are often nicer and more culturally enriching than the experience in government-run hotels and eateries.
But this also is as much about the legacy of Cuba's isolation as a reflection on a modern success story. The jump in entrepreneurial activity has outpaced the Cuban government's ability to manage it, leading to concerns over tax evasion and misappropriation of government property. Cuba needs the income from public ventures to pay for its vast social welfare obligations. With the tide of tourism expected to increase steadily in the years ahead, the Cuban government realizes it needs to develop the capacity to realize this new potential while seeing to its traditional safety net expectations. Managing these uncharted waters is difficult enough, but it comes as officials who either fear or favor them are maneuvering in preparation for Castro's retirement at the end of next year.
Cuba's pullback also comes as the Trump administration begins to administer tighter rules on traveling to Cuba that it unveiled in June. The new rules add red tape and cost for travelers to Cuba, requiring that those on "people-to-people" exchanges use tour groups rather than arrange their own travel. Travelers will also face more routine U.S. government audits, a harassment intended to dampen the Cuba travel market.
It's impractical to imagine that either side can reverse the public clamor for closer relations. But this still is a new relationship, and Americans need to continue voting with their feet to keep the two governments on track. The United States needs to see the ties as an opportunity to influence the post-Castro age, while the Cuban government needs to see them as a durable tool for sustaining the next generation.