Cuba continues to trim state payroll, build private sector

Cuba continues to trim state payroll, build private sector
BY MARC FRANK
HAVANA Mon Feb 24, 2014 11:49am EST

(Reuters) - Cuba continued to shed state jobs and move workers into the
private sector in 2013, according to a report issued by the official
labor federation at the weekend, as President Raul Castro pressed
forward with reforms to the Soviet-style system.

The Cuban Communist Party adopted plans in 2011 to "modernize" the
economy in search of greater efficiency and improved salaries for state
workers.

The plan includes shedding secondary economic activity in favor of
markets, private businesses, cooperatives and leasing systems, while
concentrating resources on major state-run companies in hopes of making
them more competitive.

The official Juvented Rebelde newspaper said on Sunday that the main
report approved by the labor federation's congress over the weekend
stated more than 10 percent of state jobs had been cut since 2009.

"Jobs in the state civil sector have decreased by 596,500 since 2009,"
Juventud Rebelde quoted the report as stating.

Cuba has a potential labor force of over 6 million, of which 5 million
were reported employed in 2012, the last official figures available.

At the same time, the number of private, or "non-state" workers as Cuba
calls them, rose to over 1 million in 2012, close to double the number
reported in 2009.

The majority of the non-state workers were farmers, whose numbers have
grown under Castro's agricultural reforms, which include leasing state
lands to individuals. The goal is to stimulate local food production and
cut the need for budget-draining food imports.

The rest of the non-state workers, just over 400,000 in 2012, were
mostly in small retail businesses or self-employed such as carpenters,
seamstresses, photographers and taxi drivers.

The report approved at the congress, which met in Havana last week, said
that figure "increased to more than 450,000" last year.

"If Cuba is to emerge from its economic inefficiency, it is crucially
important to promote a mixed economy—with key sectors under state
control, but with opportunities for small- and medium-sized
enterprises," John Kirk, one of Canada's leading academic experts on
Latin America and author of a number of books on Cuba, said by email.

"There has been noticeable improvement in the services provided by small
businesses and cooperatives, and these initiatives should be
encouraged," he said.

The cash-strapped state is closing thousands of its small retail outlets
such as barbershops and cafeterias, notorious for economic inefficiency
and employee theft, and offering to lease the premises to employees or
others interested in running their own business.

Last year the state turned more than 200 small and medium-sized
businesses -- from restaurants, shrimp breeding and produce markets to
recycling, construction and light manufacturing -- into private
cooperatives. Hundreds more were expected to become cooperatives this year.

The government hopes to slash 20 percent of the state labor force, or
nearly a million jobs, from its bloated payrolls, by 2016.

(Reporting by Marc Frank; Editing by Marguerita Choy)

Source: Cuba continues to trim state payroll, build private sector |
Reuters -
http://www.reuters.com/article/2014/02/24/us-cuba-reform-idUSBREA1N16O20140224