Cuba eases economic restrictions

More Cubans will be allowed to work
for themselves and hire their own workers, the country’s president has said,
while ruling out wholesale reform of the communist economy.

Raúl Castro, who was speaking to
parliament at the opening of its biannual session, said the steps were aimed at
creating jobs as the government seeks to cut jobs from the public sector over
the next five years.

About 95 per cent of all Cubans
work for the government and Castro suggested that as many as one in five state
employees were redundant in what he called a “bloated” state sector.

Castro said those left out of work
would be retrained or reassigned to other jobs but warned that few sectors
would be immune to cuts. While sketchy, his comments signalled a liberalisation
of the economy at a time of financial crisis. Raúl Castro took power from
Fidel, first temporarily, then permanently, in July 2006. He has a reputation
for being more pragmatic than his brother.

The new measures eliminate
“various existing prohibitions for the granting of new licences and the
commercialisation of some production, giving flexibility to the hiring of
labour”, Castro said.

He did not say how many people
would receive self-employment licences. A substantial but unknown number of
Cubans work privately without a licence.

Similar moves were taken in the
1990s when Cuba’s economy went into freefall after the collapse of its
benefactor, the Soviet Union. Fidel took steps to improve efficiency in agriculture
and allowed barbers and taxis to operate more like small businesses, but many
licences were not renewed as the situation improved.

For the past two years hard
economic times have forced Cuba to cut imports, freeze the Cuban bank accounts
of foreign businesses on the island and delay paying its bills.

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