Cuba to axe one million state jobs

Cuba to axe one million state jobs
AFP

Cuba to axe one million state jobs AFP – Cuban Ivonne Molina works on
her sewing machine at her house in Havana on September 13. Cuba has
announced …
by Isabel Sanchez Isabel Sanchez – Tue Sep 14, 7:42 am ET

HAVANA (AFP) – Cuba has announced plans to slash one million state jobs
and encourage the growth of small businesses in a gamble it hopes can
keep its communist system and floundering economy afloat.

Workers laid off from government jobs will no longer be sent home with
partial pay, but will instead have to find other means to make a living,
the Cuban Worker's Central, or CTC by its Spanish acronym, warned Monday.

It said more than 500,000 public sector jobs will be eliminated, in a
first major cut, by March 2011.

"Our state neither can nor should continue maintaining companies... with
inflated payrolls, and losses that are a drag on the economy, are
counterproductive, generate bad habits and deform workers' performance,"
the CTC said.

President Raul Castro said in 2009 the government wanted to relocate
more than a million state employees, sending shockwaves through a
society grown accustomed to stable levels of employment over the last 50
years.

Cuba has a workforce of 4.9 million people in a country with 11.2
million population. The state controls 95 percent of the economy.

For years, the government has given laid off workers up to 60 percent of
their salary while they wait to be placed in a new job.

But the CTC said it would "no longer be possible to indefinitely protect
or subsidize workers' incomes."

The government is to now hand out 250,000 permits in some 120 different
types of small business and is encouraging mechanics, hairdressers,
gardeners and translators among others to apply, say documents
circulating in workplaces.

Workers typically will pay a license fee, and sometimes rent. The
government is hoping the emerging private sector can absorb workers but
many analysts have their doubts.

Still, Yvonne Molina, 27, who recently received a permit to open a small
seamstress business in her garage in downtown Havana, was hopeful.

Molina said she hopes to earn significantly more than the meagre wages
of around 20 dollars a month the government pays.

"Every month I pay 300 pesos (about 12 dollars) for my license, and I
earned 250 pesos in one week," she told AFP.

"I've always fixed clothes. I used to do it illegally. Now I can make
dresses, sell them and earn a living with no fear that I will be fined."

Cuba's economy went into freefall after the collapse of former communist
allies in the east bloc after 1989.

It emerged battered but afloat once it locked in Venezuela's President
Hugo Chavez as a key political ally. Caracas supplies Havana with
cut-rate oil and props up its economy -- as do hundreds of millions of
dollars in remittances from about 1.5 million Cubans who live abroad.

Hopes for change ran high when Raul Castro took over the helm in 2006 as
his brother, revolutionary icon and longtime president Fidel, faced a
life-threatening illness.

But even economic change -- much less political -- has been rare under
Raul Castro, 79. Fidel, now 84, remains Communist Party chief.

Half of Cuba's land is currently not producing, and the country imports
80 percent of its food.

Fidel Castro last week caused a stir when it was reported he told a US
journalist: "The Cuban model doesn't even work for us any more",
although he later said he did not mean to be taken literally.

This is not the first time Cuba's leadership has encouraged self-employment.

After the crash of the former Soviet bloc, jobs such as beauticians,
small restaurant owners and even lighter refillers were legalized as
long as workers obtained licenses and paid taxes.

But social resentment spread when some workers, particularly in private
restaurants, achieved dramatic levels of success.

The government began increasing taxes and regulation, as well as
decreasing the number of licenses, until the self-employed sector
essentially collapsed.

http://news.yahoo.com/s/afp/20100914/wl_afp/cubaeconomyjobs_20100914114225