Raul Castro's Shock Therapy for Cuban Economy
As many as 500,000 workers could lose government jobs over next six months.
HAVANA, Cuba Nov. 8, 2010— -- Cuba approved a dozen new laws in recent weeks that portend dramatic changes in the every day lives of islanders, as the government orders state-run companies to slash jobs even as it opens the door to private business and employment.For the first time since Fidel Castro's 1959 revolution jobs or income are no longer guaranteed and the stigma of entrepreneurship and employing others is lifting.
Decree law 276 puts an end to the practice of prioritizing employment over performance, orders state companies to "permanently look for new forms of organization and downsize those processes that do not reach expected levels of profitability as well as those that have lost competitiveness… laying off employees as needed."
The self employed, often a euphemism for small business, can now hire labor, rent store fronts, do business with the state and seek bank credits, among other novelties contained in Labor Ministry resolution 32, which the Communist party newspaper Granma said was a move to "distance ourselves from those conceptions that condemned self-employment almost to extinction and stigmatized those who decided to join it, legally, in the 1990's."
Another decree law establishes a labor tax on private businesses based on how many employees they, have up to more than 15. Still another regulates the hiring of labor by private farmers, remarkable in a land where Article 21 of the constitution states one's "personal and family property and means and instruments of work can not be used to obtain earnings from the exploitation of the labor of others."
Self employment covers everything from carpenters, gardeners, artisans and animal trainers to small businesses such as home-based bed and breakfasts, rental property, restaurants, pizzerias and snack shops.
When self-employment was first allowed in the 1990s, then-President Fidel Castro termed it a concession to capitalism and proceeded to limit licenses and over regulate them.
Resolution 35 from the Labor Ministry mandates that state workers be let go based on job performance, not length of service.
