Cuba Releases Informal Economy Numbers

Cuba Releases Informal Economy Numbers

By ANDREA RODRIGUEZ – 17 hours ago

HAVANA (AP) — Communist Cuba has issued what appears to be the first
public report on prices and inflation in the private sector, in an
unusually realistic acknowledgment of the key role the informal economy
plays in island life.

In its "Survey of Prices in the Informal Sector," the National Office of
Statistics estimated that the cost of goods and services purchased from
private sources rose 4 percent from February 2007 to the same month in 2008.

The report was posted on the office's Web site on Thursday, about a
month after Raul Castro assumed the presidency from his ailing
81-year-old brother Fidel. Raul is largely seen as a more pragmatic and
realistic leader, and Cubans generally believe he is more likely to
allow limited openings in the state-controlled economy — although he has
not undertaken any major measures yet.

Fifteen years after the Soviet Union's collapse forced Cuba to allow
some private enterprise, the government still subsidizes or provides
outright many goods and services such as education, health care, housing
public transportation, utilities and a basic food basket that makes up
about a third of islanders' dietary needs.

But Havana is unable to supply everything that Cubans need at affordable
prices, and people here regularly turn to private sources, both legal
and illegal, to get the rest of their food — plus a range of "extras,"
from laundry detergent and toilet paper to haircuts and plumbing services.

According to the study, the goods and services most frequently obtained
from private sources are rice, cheese pizzas, eggs, pork, manicures,
vegetable oil, lard and the informal exchange of the regular pesos that
government workers earn for the convertible pesos needed to buy items at
more expensive stores.

The report studied government-sanctioned markets where farmers may sell
any excess agricultural goods after meeting production quotas, as well
as commerce by licensed tradesmen and small business owners. It also
considered illicit activities such as the surreptitious sale of food,
medicine and other products stolen from state warehouses and factories.

Under Raul the government has urged Cubans to work harder and increase
economic productivity, and on Friday officials scolded Havana residents,
saying nearly one in every five chooses not to work.

Some 78 percent of the capital's work force is employed, the Communist
Party daily Granma reported. Another 3 percent cannot find jobs, while
19 percent prefer not to work, it said.

"The repeated answer given to social workers who interview them," city
labor chief Odalys Gonzalez Lopez was quoted as saying, "is 'I don't
work because they don't pay me well,' 'My mom and dad support me' or
'The business (black market) provides for me."

Granma said that only by boosting productivity will Cuba be able "to
resolve the complex problem of the dual currency and the development of
the country."

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