Cuban taxi drivers – prospective small business owners
Having had the opportunity to travel to Cuba, I have maintained great interest in the island nation for many years – not least of which is because I maintain regular contact with family & friends; as well as with a prolific business & political network. That is why I am a huge fan of the Cuba Blog written by my FPA colleague, Melissa Lockhart, who does an excellent job of covering developments in Cuba. If you have an interest in Cuba, and haven’t had the opportunity to follow her reporting and musings on the Cuba Blog, I heartily suggest you do so: it is one of my first reads on what’s happening in Cuba. But this piece of news being reported by AP, and in today’s NY Times about the impending lay-off of over 500,000 employees was jarring in the context of our own stagnant economy. The junior Castro brother, Raúl, is following through on his previous pledges to make Cuba’s centralized, Socialist economy more efficient and to open up opportunities to its enterprising citizens. The Cuban government has already transferred tens of thousands of acres of state-owned farmland to private farmers, and begun freeing up a Market for agricultural supplies. It has loosened restrictions on cell phones and internet access, and created new areas for private enterprise – allowing barbers’ shops to become cooperatives, giving more licenses to private taxi drivers, and allowing private bistros, called Palladars in Cuba. All this is promising and begs the question whether Cuba will experience the same success as China has with its State-run capitalism economic model..?? As they say in Cuba, “El tiempo dire”, but for now, read more from the NYTs article below:
In perhaps the clearest sign yet that economic change is gathering pace in Cuba, the government plans to lay off more than half a million workers from the public sector in the expectation that they will move into private businesses, Cuba’s labor federation said Monday. Over the past several months, President Raúl Castro has given stern warnings that Cuba’s economy needs a radical overhaul, beginning with its workers. With as many as one million excess employees on the state payroll, Mr. Castro has said, the government is supporting a bloated bureaucracy that has sapped motivation and long sheltered a huge swath of the nation’s workers. “We have to erase forever the notion that Cuba is the only country in the world where one can live without working,” he told the National Assembly last month.
Since permanently taking over from his brother Fidel two years ago, Raúl Castro has often pledged to make Cuba’s centralized, Soviet-style economy more efficient and open up opportunities for people. The government has handed tens of thousands of acres of state-held farmland to private farmers and begun freeing up a market for agricultural supplies. It has loosened restrictions on cell phones and other electronics, and created a few areas for private business, allowing barbers’ shops to become cooperatives and giving more licenses to private taxi drivers. But these initial reforms have been comparatively limited, many analysts contend, and Cuba’s economy — grappling with the fallout from the global financial crisis and the aftermath of devastating hurricanes in 2008 — appears to be in dire shape. Tourism revenues have flagged, the country has faced rice shortages and its sugar crop has been disastrous. Last year, as the government tried to hold onto desperately needed hard currency, imports fell by 37 percent.
In its statement Monday, the Cuban Workers’ Central, the country’s only recognized labor federation, openly acknowledged the nation’s troubled economy, saying that changes were “necessary and could not be delayed.” “What’s stunning today is that they put a date and they put a number on it — 500,000,” said Philip Peters, who follows Cuba for the Lexington Institute. “It’s a very substantial decision,” he added. “It’s a major shift towards a larger private sector in a socialist economy.” New openings in the private sector would be welcomed by many Cubans, who are weary of the island’s stagnation and desperate for new opportunities. Even so, the disappearance of hundreds of thousands of jobs — and with them the security of a salary, workplace meals and the chance to make extra money through tips in some cases — would come as a shock.
While Cubans have access to free health care, education and subsidized food and housing, the government has already cut some of the subsidies that many Cubans rely on to supplement their average monthly wage of about $20. And given the government’s record of introducing new areas for enterprise only sparingly, it is unclear that new jobs can be created as quickly as the public sector positions will be cut.
And just how strongly the government plans to hold onto its traditional economic philosophies are a matter of debate. In an interview published online by the Atlantic last week, Fidel Castro said that the Cuban economic model no longer worked. But in a speech at the University of Havana shortly after his remarks were published, he said that he had been misinterpreted and that what he meant was that capitalism did not work. Ms. Sweig, who was present for the first interview, said that Mr. Castro’s speech correcting himself was not backtracking. Instead, she said his words were most likely intended to reassure Cubans that he did not intend to import American-style capitalism. “It is a hybrid that is evolving,” she said… Read more here.
Source: The New York Times Photo: European Press Agency
