August 2, 2010 / 1:56 AM / 10 years ago

Castro says Cuba will allow more self-employed

HAVANA (Reuters) - More Cubans will be allowed to work for themselves and hire their own workers as the government tries to create more productive employment, President Raul Castro said on Sunday.

Former Cuban leader Fidel Castro meets China's Foreign Minister Yang Jiechi (L) in Havana August 1, 2010. REUTERS/Revolution Studios

The move could be a significant change on the Communist-led island where the state controls 90 percent of the economy and the biggest complaint is about monthly salaries equivalent to $18 (11.44 pounds).

Castro, speaking to the National Assembly, said the steps were aimed at creating jobs for 1 million excess workers said to be burdening the Cuban economy and who are expected to be laid off over the next five years.

The measure eliminates “various existing prohibitions for the granting of new licenses and the commercialization of some production, giving flexibility to the hiring of labour,” he said.

He did not say how many people would get self-employment licenses, which currently exist but in small numbers. A substantial, but unknown number of Cubans work privately without a licence.

It was Castro’s latest tweak to Cuban communism, and could be the most important if it includes a large number of people and stays in force.

A similar measure was taken in the 1990s when Cuba’s economy plummeted after the fall of its close ally, the Soviet Union, but when things improved, many licenses were not renewed.

Castro has previously taken steps to make agriculture more efficient and allowed barbers and taxis to operate more like small businesses.

For the past two years, Cuba has been in the grips of an economic crisis that has forced it to cut imports, freeze the Cuban bank accounts of foreign businesses on the island and hold off on paying its bills.

A number of Cubans told Reuters they welcomed the change.

One of them, teacher Victor Fonseca said, “It’s a measure that’s going to be popular. During all these years, there have been go-getters who want to move forward and this is an opportunity to fulfil their dream of having a small business.”

Cuba analyst Christopher Sabatini at the Council of the Americas think tank in Washington was more reserved, saying “These are reforms on the margin that don’t address the fundamental inefficiency of the Cuban economy.”

Paolo Spadoni, a fellow at Tulane University, said it was “a positive signal,” but “the key issue is how many people will be allowed to become self-employed and in what sectors.”

He said Cuba, population 11 million, had only 143,800 legal self-employed, or “cuentapropistas,” at the end of 2009.


Castro also spoke about U.S.-Cuba relations, saying “in essence, nothing has changed” since President Barack Obama took office.

“Although there’s less rhetoric and there are occasional bilateral conversations about specific and limited topics, in reality, the embargo continues,” he said, referring to the longstanding U.S. trade embargo against Cuba.

He also discussed the planned release of 52 political prisoners in a deal last month with the Catholic Church, saying all of them had been subversives working for the United States.

“It must be remembered that none of these citizens were put in jail for their ideas,” he said. So far, 20 of the 52 have been freed and sent to Spain.

He said the release was not a concession to outside pressure, but a “sovereign decision in strict adherence to our laws.”

His speech followed comments by Economic Minister Marino Murillo to reporters at the assembly that the Cuban government will reduce its role in small businesses, but continue to direct a centralized economy that eschews markets and private property.

“We are of the opinion that today the state has a group of activities it must get out of. The state doesn’t have to be in charge of everything,” he said. “The state has to be in charge of the economy, of the most important things.”

“It’s an updating of the economic model where the economic categories of socialism, not the market, will take priority,” he said. “It lightens a group of things of the economic model, but we are not going to hand over property.”

The government owns most things on the Caribbean island.

Former leader Fidel Castro, 83, is a member of the assembly, but did not attend Sunday’s session, even though he has recently emerged from four years of seclusion after falling ill in July 2006.

A state-run website said Castro instead met on Sunday with visiting Chinese Foreign Minister Yang Jiechi.

Additional reporting by Esteban Israel; writing by Jeff Franks, editing by Anthony Boadle

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