Weekly News Update on the Americas, September 28, 2010
Cuba: Government Describes Private Sector Expansion
On Sept. 24 Granma, the official newspaper of the Cuban Communist Party (PCC), published an article describing policy changes intended to expand Cuba’s small private sector. The changes are part of a plan announced on Sept. 13 to lay off some half million public employees, about 10% of the total labor force, over the next six months; the government expects about 465,000 of the laid-off workers to move to the private sector or to form cooperatives, according to unofficial sources.
The plan is basically an expansion of the “self-employment” (TCP) policy instituted during the “special period” in the 1990s after the collapse of the Soviet Union. The government will now issue licenses for 178 job categories in the TCP–which includes small businesses in addition to actual self-employment. Most of these occupations were authorized in the 1990s, but some were closed off again in 2004, and there are currently just 143,000 licenses for TCP businesses, down from a high of 210,000 in 1995. Much of the work authorized under the new policy is currently done in the black market; the changes will bring these jobs into the tax and social security systems.
What is probably more important than the increased number of TCP occupations is the lifting of several restrictions on private activity. Some seem minor, such as raising the number of seats at family restaurants from 12 to 20, but others are substantive. A small business will no longer be limited to hiring workers who live with the owners or are family members, and businesses will be allowed to operate in more than one municipality. People will be able to rent out entire houses and apartments instead of just renting rooms in their own homes.
Granma described the new policy as “an attempt…to distance ourselves from those concepts that almost condemned self-employment to extinction and stigmatized those who decided to legally join that sector in the 1990s.”
Government economists are also looking at further changes to an economy that has been highly centralized on the Soviet model. Some of the new job categories, such as auto repair and some types of retail sales, will only be productive if there are wholesale markets, but the economic planners say it will take several years to institute these.