Cubans Hope for More Self-Employment

Cubans Hope for More Self-Employment
Feb 22, 2008 3:20 AM (1 day ago) By WILL WEISSERT, AP

HAVANA (Map, News) - Juan Bautista Gonzalez's living room was already
crowded with customers when still more shuffled in, clutching gold
necklaces with broken clasps and bent rhinestone earrings. He knew he
would be skipping lunch again.

"If someone comes with a job, I'll do it. No matter what time it is,"
said Gonzalez, who gave up a government mechanic's job four years ago
and now earns more fixing his neighbors' jewelry for $1.25 per repair.
"Work more, earn more."

Gonzalez is among the 150,000 or so Cubans - a meager 3 percent of the
work force - who are allowed to be self-employed.

The communist government firmly controls more than 90 percent of Cuba's
economy. But as provisional president, Raul Castro has raised
expectations for tiny pockets of private initiative. With the
resignation of Fidel Castro, Cubans are hoping for an even greater
loosening of the economy. The easiest such reform might be to allow more
people to work for themselves.

But to understand the economic issues facing Raul, who will likely be
named president on Sunday, one has to consider the degree to which Cuba
controls private enterprise with licensing, taxes and enforcement, not
to mention an onerous approval process.

To be self-employed in Cuba means a lot of hard work and patience.

"There are good months and bad," said Gonzalez, 54, pulling a pair of
pliers from his battered worktable and straightening a silver ring.
"It's worth it. Not working, that's not worth it."

They are tutors, tire repairmen, taxi drivers and dozens of other
professionals who are licensed by the Labor Ministry and forced to pay
stiff taxes - $19.20 per month - slightly more than an average state salary.

Owners of small family restaurants, musicians and artists who earn money
abroad, and small farmers who sell excess produce above government
quotas are also among those lawfully allowed to earn their own money.
Far more Cubans work without approval in the underground economy in a
country where most people need a second income to make ends meet.

Raul Castro has criticized government inefficiencies and encouraged
debate about Cuba's economic future. Now many believe he could open
sectors of agriculture, retail and services to private entrepreneurs or
cooperatives, though there is little expectation he will privatize major
sectors such as energy, utilities, sugar or mining.

"He is the man of change. If anyone has experience with it, it's him,"
said Oscar Espinosa Chepe, a state-trained economist who became a
dissident anti-communist.

Others aren't convinced.

Ronaldo, a cobbler who receives a monthly government salary of $23 to
fix shoes, is allowed to keep any money he makes above his government
quota. But he has to pay $0.80 a day to rent his small workshop under
the stairs of an Old Havana apartment building.

"One goes, and there's another brother. Nothing will change," said
Ronaldo, who wouldn't give his last name, fearing he would be harassed
by authorities if he is seen as a complainer.

Cuba already has some experience with liberalizing its economy. When the
Soviet Bloc collapsed, taking away subsidies that represented as much as
a fourth of Cuba's gross domestic product, the government allowed some
self-employment. It reopened farmers markets based on supply and demand
and encouraged foreign tourism and investment.

As Defense Minister, Raul Castro was at the forefront of that economic
overhaul. His soldiers tended farms while their superiors oversaw
significant enterprises in electronics, cigar production and tourism.

From the start of the Cuban revolution in 1959, "Raul Castro is the one
who organized the country, and he's the one who saved the economy at the
start of the 1990s," said Chepe, the dissident economist.

The number of self-employed Cubans had climbed to nearly 210,000 by
January 1996, creating new economic divisions in Cuban society and deep
feelings of envy and resentment among those stuck with tiny state salaries.

Fidel Castro eventually denounced the "new rich class" and rolled back
some of the reforms. A 2004 decree forbade new licenses for 40 forms of
self-employment - including auto body repairmen, masseuses, stonemasons
and children's party clowns - reducing the number to the 118 professions
tolerated today.

Self-employment rates plummeted, but Cuba found new economic saviors:
high nickel prices, extensive borrowing from China and nearly 100,000
barrels of subsidized oil a day from Venezuela.

Havana's warm relationship with China and Venezuela has made the need
for major economic reform in Cuba less urgent, said William Trumbull,
director of West Virginia University's division of Economics and Finance.

"In China, after (Mao Zedong's) death, everyone, from the top down, was
so thoroughly disillusioned with the failed economics of socialism and
all the repression that they were ready for and committed to change,"
said Trumbull, who has run study-abroad programs to both Cuba and China.
"I am not sure those sorts of conditions exist in Cuba today."

But Evis, another cobbler, said Cuba's economy may need reform to stay
strong.

"The revolution gives you a good education, but you can't have educated
people there on the street without jobs," said the 44-year-old, who like
his colleague didn't want his last name used.

Evis is trained as a mechanic, barber, electrician and musician but said
he can make the most money repairing shoes because it allows some autonomy.

"It's miserable," he said. "But it could be worse."

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