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Cuba to cut one million public sector jobs

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the5thresistance Posted: Mon, Sep 13 2010 10:03 PM



Cuba has announced radical plans to lay off huge numbers of state employees, to help revive the communist country's struggling economy.

The Cuban labour federation said more than a million workers would lose their jobs - half of them by March next year.

Those laid off will be encouraged to become self-employed or join new private enterprises, on which some of the current restrictions will be eased.

Analysts say it is biggest private sector shift since the 1959 revolution.

Cuba's communist government currently controls almost all aspects of the country's economy and employs about 85% of the official workforce, which is put at 5.1 million people.

As many as one-in-five of all workers could lose their jobs.

"Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls and losses that hurt the economy," the labour federation said in a statement.

"Job options will be increased and broadened with new forms of non-state employment, among them leasing land, co-operatives, and self-employment, absorbing hundreds of thousands of workers in the coming years," the statement added.

Free enterprise?

To create jobs for the redundant workers, strict rules limiting private enterprise will be relaxed and many more licenses will be issued for people to become self-employed.

Private businesses will be allowed to employ staff for the first time.

Cuban leader Raul Castro President Raul Castro has said the state's role in the economy must shrink

The self-employed will have access to social security and will be able to open bank accounts and even borrow money to expand their businesses.

They will also have to pay tax on their profits and for each person they employ, something which could dramatically boost the government's income.

And they will be able to negotiate contracts to provide services to government departments.

A minority of Cuban workers already work for themselves, for example as hairdressers and taxi-drivers, or running small family restaurants.

There is also a thriving black economy, with many people working independently without proper permission from the state.

The BBC's Fernando Ravsberg in Havana says salaries in Cuba's state sector are so low that many employees could be better off working for themselves.

But he says not everyone has the skills and initiative necessary to be self-employed.

He adds that the government plan does not foresee any kind of advice being offered to people seeking to set up their own businesses.

Economic crisis

President Raul Castro outlined some of the changes in a speech in August, saying the state's role in the economy had to be reduced.

"We have to end forever the notion that Cuba is the only country in the world where you can live without working," he said.

Cuba's state-run economy has been gripped by a severe crisis in the past two years that has forced it to cut imports.

It has suffered from a fall in the price for its main export, nickel, as well as a decline in tourism.

Growth has also been hampered by the 48-year US trade embargo.

Mr Castro became Cuba's leader when his brother, Fidel Castro, stepped aside because of ill-health in 2006.

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Who would ever have thunk it? The US marching towards socialism and Cuba movings towards capitalism. Looks like the Castro's are finally admitting to failure. Raul apparently isn't as statist as his older brother. This looks like a good sign. Wish it happened at least ten years ago.

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boniek replied on Tue, Sep 14 2010 1:34 AM

Farmers are giving their stock a bit more freedom so they can continue being parasites. Nothing new to see there.

"Your freedom ends where my feelings begin" -- ???
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Kakugo replied on Tue, Sep 14 2010 2:03 AM

Cuban economy is in shambles. How I know? They stopped making my favorite cigars, Diplomaticos. They used to be manufactured in the Partagàs factory using a different mix of tobacco during a certain period of the year. Habanos SA, the State-owned tobacco monopoly, is in shambles despite having been such a good cash cow for decades: they blame anti smoking measures in Europe but the reality is that their manufacturing process is falling apart, sometimes quite literally. As a desperation move they recently tried to manufacture "ladies' cigars" which nobody bought and which threw a wrench in the very rigid manufacturing process. Even supplies of some world known brands have been affected and Cuban cigarettes have become impossible to find on the export market. 

When one of your best cash cows is in such straits you need to think of something different.

Together we go unsung... together we go down with our people
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