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Cuba faces big reforms as it embraces privatization |
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Cuba's government plan to lay off half a million state workers and encourage them to move into private sector jobs is part of a sweeping economic reform. Economic experts say Cuba faces several challenges in fostering private businesses.
For months, President Raúl Castro has been warning about inevitable layoffs in the state sector, which represents 95 percent of Cuba's economy. He says the state is struggling because too many workers are redundant and have low productivity.
Monday, the Cuban Workers Confederation unveiled a plan that includes cutting more than 500,000 state employees by April. The labor union group says the government cannot continue to support entities with inflated payrolls and losses that drag down the island's economy.
Washington-based economist George Montalvan says the plan is in response to an economic crisis. He says Havana made a similar move when the Soviet Union and its financial support of Cuba collapsed in the early 1990s.
"They are doing something that is similar, but definitely of greater magnitude because 500,000 individuals is 10 percent of the Cuban labor force," he said. "So it is a lot of people."
Cuban officials say most of those people can be absorbed into private sector jobs as the government prepares to relax rules on non-state industries. The workers confederation says new reforms will allow Cubans to lease land, form cooperatives and become self-employed.
Cuba made a similar move in the 1990s when it allowed people to open small restaurants and hostels, and allowed businesses to accept U.S. dollars. Analysts say the current plan might go even further, by allowing businesses to hire employees and lease property.
John Kavulich, U.S.-Cuba Trade and Economic Council senior advisor, says many questions remain about how these changes will be implemented. He says current laws make it nearly impossible for Cubans to form a small business.
"They have to make available the means of production," he said. "If someone needs a machine for example, does the person own the machine? Does the government own the machine and lease the machine?"
Another question is where Cubans will find the money to finance their own businesses. George Montalvan says many foreign investors are wary of Cuba because of its history of failing to pay back loans and not respecting foreign ownership rights.
He says some Cubans might receive remittances from relatives abroad, but that it is unclear how the government will allow people to use that money.
"The Cuban government does not have the wherewithal to finance, in any important way, small businesses," he said. "So the question is: where is that financing going to come from?"
The proposed reforms also might have a strong social impact for a Communist state that for decades has sought to eliminate class divisions.
Analyst Kavulich says that opening the door to private enterprise might enable some business owners to prosper, especially in the eyes of other Cubans. He says it is unclear whether Cuban officials are ready to allow that to happen.
"The Cuban government does not do well with success; it tends to penalize it," he said.
Earlier this month, former Cuban leader Fidel Castro was quoted by a U.S. journalist as saying that the Cuban model no longer works, even for Cuba. He later said he was misquoted and that he believes capitalism does not work.
The latest reforms, analysts say, suggest that the Cuban government led by Raúl Castro is ready for a change to overcome the country's economic crisis and build Cuba's future.
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Castro, Church Discuss Political Prisoners |
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By Patricia Grogg
HAVANA (IPS) - Talks between the government of President Raúl Castro and leaders of the Catholic Church in Cuba may alleviate internal tensions and lead to the release of political prisoners, although the dialogue should be extended to include other social sectors in the country, religious leaders and analysts told IPS.
Castro met Wednesday with the archbishop of Havana, Cardinal Jaime Ortega, and with the head of the Cuban bishop's conference, archbishop Dionisio García, to discuss "matters of common interest" and the "favourable development of relations between the Catholic Church and the Cuban state," according to official sources.
The meeting, requested by the Church, went on for over four hours, and touched on topics like conditions of prison inmates and the Ladies in White, who hold a peaceful protest march every Sunday demanding the release of their husbands and sons, who they consider political prisoners.
In early May the cardinal successfully interceded with the authorities for the silent protests to be allowed without hindrance.
At a press conference Thursday, Ortega said the conversations "got off to a magnificent start" and "must continue soon." He confirmed that the issue of the prisoners is being addressed "seriously" and said it was an ongoing issue, which the Church hoped would be favourably resolved.
In Cardinal Ortega's view, the meeting with Castro implied support for the Church's efforts as a mediator, as well as "recognition" of its role as an interlocutor.
Among the expectations aroused by the meeting, some religious experts are already saying that it could be the start of a series of meetings that could be joined by representatives of diverse sectors of Cuban society.
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Spanish leader sees shift coming in U.S.-Cuba ties |
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Spain says Cuba's release of dozens of political prisoners would improve its relations with the European Union and the United States and could eventually lead to the lifting of the long-standing U.S. embargo against the Communist-led island.
Speaking Wednesday in Madrid, Spanish Foreign Minister Miguel Ángel Moratinos told Parliament that the releases would have "political consequences" in U.S. relations with Cuba and prompt a shift in EU policy toward the island.
Moratinos' remarks coincided with the arrival of a 12th freed political prisoner in Madrid. Another eight are expected in the Spanish capital this week. Cuba has agreed to release 52 political prisoners in a deal involving Madrid and the Roman Catholic Church.
The 52 were among 75 dissidents arrested and sentenced to lengthy prison terms following a 2003 government crackdown. Cuba has said it holds no political prisoners, only what it calls mercenaries who Havana claims are working with the United States to undermine Cuban communism.
U.S. President Barack Obama has said he wants improved relations with Cuba, and his administration has eased travel and money transfer restrictions for Cuban-Americans with relatives on the island. But Obama has said the embargo will stay in place until Havana takes steps toward democratic reform.
Tuesday, the State Department says diplomats at the U.S. Interests Section in Havana have met with families of remaining political prisoners in Cuba, following the recent release of some prisoners.
State Department spokesman P.J. Crowley said the meetings are part of an ongoing dialogue with families of Cuban political prisoners. He said the U.S. is stressing in the talks that it hopes Cuba will release all the political prisoners. But he said how far and how fast the Cuban government will go is a major question.
The United States and Cuba do not have formal diplomatic relations, but have interests sections that are technically part of the Swiss embassies in each other's capitals. |
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U.S. House May Pass Cuba Export Bill in April, Peterson Says |
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By Jonathan J. Levin
March 31 (Bloomberg) -- The U.S. House of Representatives may pass a bill next month that would ease restrictions on agricultural exports to Cuba and lift a ban on travel to the island, the measure’s sponsor said.
Congressman Collin Peterson, chairman of the House Agriculture Committee, said he needs backing from one more lawmaker to assure the panel will pass the legislation. He expects to secure that pledge after Congress’s Easter recess, and for the measure to get approval by the full House.
“Cuba used to be one of our big markets,” Peterson, a Minnesota Democrat, said in a telephone interview yesterday. The bill “would help us get those markets back.”
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