Cuba's Economy in Shambles and Nears Collapse

Cuba eyes more self-employment as massive layoffs loom


Aug 1, 2010
AFP
 
 
President Raul Castro expanded self-employment fields on Sunday, ahead of looming government plans to slash as many as one million jobs -- 20 percent of communist Cuba's work force -- from state payrolls.


The economy, 95 percent of which is currently in state hands, does not have the ability to absorb such vast numbers of jobless. Castro's move aims to try to reduce the socioeconomic fallout, but it will be an uphill battle.

The Council of Ministers "agreed to expand the range of self-employment jobs, and their use as another alternative for workers who lose their jobs," Castro said as he gave a closing address at one of two annual sessions of the National Assembly.

After the crash of the former Soviet bloc, Cuba's cash-strapped government in the 1990s approved a wide range of self-employment. Positions such as beauticians, dog groomers, small restaurant owners and even lighter refillers were legalized as long as workers got licenses and paid taxes.

But social resentment emerged as an issue when some workers, particularly in small private restaurants, achieved dramatic levels of success.

The government began increasing taxation and regulation, and decreasing license-granting, until the self-employed sector was largely rendered paralyzed, like the rest of the economy.

Cuba has no regular access to international funding; it depends heavily on the cut-rate oil it gets from Venezuela in order to keep its fragile economy afloat. Tourism earnings and remittances from emigres also are key pillars of the Cuban economy.

Inefficiency is rampant and wages are woefully low.

Cubans' hopes had been running high that some change was coming to allow some economic opening in the Americas' only one-party communist regime.

By 2009, there were just 148,000 people out of a work force of five million who were legally self-employed.

Raul Castro, 79, said he would launch new wage and salary practices early next year. He did not give details.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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