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Entrepreneurs in Cuba Dive Into Capitalism

But some are concerned that the state will take over their businesses

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ALBERTO PAUSTE RUIZ is among the new breed of Cuban capitalists.

In the fairly common slack periods when there is no work for him as a set designer at the state television network, Mr. Pauste Ruiz makes wooden souvenir doll houses, tiny guitars, and miniature galleons for tourists.

On weekends, he hawks his goods at a crafts fair here. The houses go for $1 or $2 and the galleons for $5. Pauste, who lives with his parents, three bothers, and two nephews in a third-floor walkup apartment, makes about $12 a month, or about four times his salary in Cuban pesos. ``It helps make ends meet,'' he says, pointing out that soap is rationed and to get a bar on the black market costs $1, or about 70 pesos.

Officially, Pauste has only been in business about a month, since free enterprise has only been legal on the socialist isle since Sept. 9. But Pauste, like many Cubans, gives the impression that he has been supplementing his income for some time.

Pauste is the kind of person the Cuban government is trying to draw in from the underground economy. By legalizing private enterprise in more than 100 trades and services (from plumbers to music teachers), the state hopes to recover taxable income from the black market. It is also trying to reduce hunger and political tension by allowing the unemployed and the underemployed to be usefully occupied.

Many state factories have stopped operating because of the lack of spare parts and materials brought on by the end of support from the former Soviet Union and Eastern Europe - Cuba's principal trading partners.

To date, an estimated 60,000 people - including 19,000 here in Havana - have applied to set up their own businesses. Entrepreneurs can apply at their local labor ministry office by filling out a single page form. They state their name, current employment status, and proposed business. Depending on the business, there is a relatively modest monthly tax of up to 60 pesos (85 cents).

``We're granting about 40 to 60 new licenses a week,'' says Angela Medina Perez, head of the Plaza de la Revolucion municipal labor office. ``I haven't denied a license yet. We'll probably start doing some checking up on the new businesses in December.''

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