Workers gain as Cuba shifts gears

Workers gain as Cuba shifts gears
By Marc Frank
Published: January 8 2009 18:51 | Last updated: January 8 2009 19:58

Fifty years ago, Fidel Castro swept into Cuba's capital on January 8,
promising to establish a socialist state that would promote collectivism
over individualism.

But the anniversary celebrations, which culminated in an evening rally
in Havana on Thursday, have put less emphasis on social spending and
more on rewarding individual labour, as Cuba under the leadership of
Fidel Castro's younger brother Raúl moves away from its decades-old
commitment to communism.

In a series of speeches and interviews dedicated to the anniversary,
President Raúl Castro hammered away at the theme that workers did not
appreciate many government benefits – with the exception of free health,
education and subsidised culture – and should be given higher wages instead.

"It is well known that the vast majority of people do not appreciate a
gratuity or generally high subsidies of goods and services as part of
the return for their labour, for which they look only at wages," he told
parliament on December 27.

In the same speech, he said subsidised vacations at tourism resorts were
being scrapped, along with 50 per cent of government travel abroad and
other unnamed gratuities.

Many Cubans applaud the new policy but worry that wages will not rise as
quick- ly as gratuities disappear.

Cuba has had a second world war-style food ration system since the
revolution. Public transport and utilities are heavily subsidised, as
are many workplace rewards, even though an economic crisis following the
Soviet collapse, combined with remittances sent by relatives from
abroad, have long since undermined income equality.

"Why, after working 24 years, is my ration the same as people who have
never worked?" asked Nancy Artigas, a Havana resident. "What's more,
their rights and benefits are the same as mine. That doesn't seem fair –
nor is it a way to get people to work."

Although 85 per cent of workers receive no hard currency from their
jobs, an estimated 40 per cent of the population receives some money
from abroad.

Cuba reports annual per capita income, including gratuities and
subsidies, as being $6,000 (€4,380, £3,960), although the average yearly
wage is the peso equivalent of only $240 at the official exchange rate.

After taking over from his ailing brother Fidel last February, Raúl
Castro has freed up sales of computers, mobile phones and other consumer
goods and lifted caps on wages and on what farmers may earn. Cuba is
struggling with mounting deficits, low productivity and the need to
import 70 per cent of its food.

In an interview carried by the official media to mark the anniversary of
the revolution, Mr Castro said wages should reflect the real value of
one's work, and that those who did not work should feel economic
pressure to do so.

"If we do not take measures to ensure people feel the necessity of
working to satisfy their needs, we will not get out of the hole we are
in, and we are going to get out of it," he said. Cuba's trade and budget
deficits soared and its current account balance deteriorated in 2008,
despite a 4.3 per cent increase in gross domestic product – casting a
pall over the anniversary celebrations that wound up in Havana on Thursday.

In recent years, the country has helped to pay for its trade deficit
through revenue from tourism and from services exports – mainly for
health and education to its oil-rich ally Venezuela, which now faces a
big drop in oil revenues. Tourism and services revenues did increase
last year, but not by enough to compensate.

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