Cuba has announced plans to eliminate one million state jobs and expand the private sector to increase efficiency and update its struggling economic model. Some 500,000 public sector workers will be laid off in a first round of cuts by March 2011.
AFP - Cuba announced that it was slashing one million state jobs and would allow self-employment and the opening of small business as part of an updating of the country's economic model.
Workers laid off from government jobs will no longer be sent home with partial pay, but will have to find other means to make a living, the Cuban Worker's Central, or CTC by its Spanish acronym, said.
It said more than 500,000 public sector jobs will be eliminated, in a first major cut, by March 2011.
"Our state neither can nor should continue maintaining companies... with inflated payrolls, and losses that are a drag on the economy, are counterproductive, generate bad habits and deform worker's performance," the CTC said.
President Raul Castro said in 2009 that the government wanted to relocate more than a million state employees. Cuba has a workforce of 4.9 million people in a country with 11.2 million population. The state controls 95 percent of the economy.
For years, the government has given laid off workers up to 60 percent of their salary while they were waiting to be placed in a new job.
But the CTC said "it will no longer be possible to indefinitely protect or subsidize workers income."
The government is expected to hand out 250,000 permits in some 120 different types of businesses, including household appliances repairs, cobblers, hairdressers, herb vendors, mechanics, gardeners and translators, according to documents circulating in workplaces.
Yvonne Molina, 27, recently received a permit to open a small seamstress business in her garage in downtown Havana. She said she hopes to earn more than the meager wages of around 20 dollars a month the government pays.
"Every month I pay 300 pesos (about 12 dollars) for my license, and I earned 250 pesos (around 10 dollars) in one week. I've always fixed clothes," she told AFP. "I used to do it illegally. Now I can make dresses, sell them and earn a living with no fear that I will be fined."
In Cuba, the official unemployment rate is 1.7 percent.
However half of Cuba's land is currently not producing, and the country imports 80 percent of the food.
Cuba's former president Fidel Castro last week caused a stir when it was reported he told a US journalist, "The Cuban model doesn't even work for us any more."
Castro, 84, later confirmed he made the remark, but was amused to see it had been taken literally and said that he meant "exactly the opposite."
Date created : 2010-09-14