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Tuesday, 14 September 2010 - Cuba announces mass layoffs in bid to spur private sector |
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    Edition: U.S. Article Comments (1) Save Email Print Reprints Read WRAPUP 3-U.S. Senate Republicans firm on tax cuts for rich 13 Sep 2010 Iraq combat over but U.S. troops still in danger 13 Sep 2010 Oil steady near 1-month highs on expected U.S. stock drop 2:59am EDT US scientists learn how to levitate tiny objects 07 Jan 2009 Pyramids, Nanowires Show Two Futures for Artificial Skin 13 Sep 2010 Shared Sri Lanka bourse hits new peak on growth hopes; low rates 09 Sep 2010 INTERVIEW-Garmin mulls future of smartphone unit 09 Sep 2010 Fewer than half of U.S. moms breastfeed enough: CDC 13 Sep 2010 USDA knew of problems at egg recall farm: report 10 Sep 2010 Q+A: Policy impact if Republicans do well in November 24 Aug 2010 Watched Gaga crowned; Oprah's big trip Mon, Sep 13 2010 Wall Street's Gordon Gekko is back Fri, Sep 10 2010 Hurricane Igor strengthening Mon, Sep 13 2010 NYSE and AMEX quotes delayed by at least 20 minutes. NASDAQ delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here. Cuba announces mass layoffs in bid to spur private sector Tweet This Share on LinkedIn Share on Facebook Related News Journalist says Castro quote not misinterpreted Mon, Sep 13 2010 Cuba to eliminate state jobs and spur private sector Mon, Sep 13 2010 Investment, freight declines reflect Cuban woes Wed, Sep 8 2010 Cuba to expand use of employee-run cooperatives Tue, Sep 7 2010 WRAPUP 8-U.S. payrolls data offer ray of hope for recovery Fri, Sep 3 2010 Analysis & Opinion African agricultural finance under the spotlight Cuba and twisted logic, double standards Related Topics World » Cuba » Women wait for customers at their licensed food outlet in Havana September 13, 2010. Credit: Reuters/Desmond Boylan By Marc Frank HAVANA | Mon Sep 13, 2010 11:42pm EDT HAVANA (Reuters) - Cuba will lay off more than 500,000 state employees by March and expand private employment to give them work in the biggest shift to the private sector since the 1960s, the Cuban Workers Federation said on Monday. Eventually more than a million jobs would be cut and, due to efforts to increase efficiency in the state sector, there would be few new state sector openings, the federation said in a statement. More than 85 percent of the Cuban labor force, or over 5 million people, works for the Soviet-styled one-party state, many of them in unproductive work. "Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls (and) losses that hurt the economy," the statement said. "Job options will be increased and broadened with new forms of non-state employment, among them leasing land, cooperatives and self-employment, absorbing hundreds of thousands of workers in the coming years," it said. The plan is the most important reform undertaken by President Raul Castro since he succeeded his brother Fidel Castro in 2008 and the biggest shift to private enterprise since all small businesses were nationalized in 1968. The younger Castro indicated last month that reform was coming to reduce the inefficiency of the Cuban economy. "We have to erase forever the notion that Cuba is the only country in the world in which people can live without working," Castro said, upon announcing in general terms his plans to cut state payrolls and increase self employment in an August speech to the National Assembly. According to Communist party sources who have seen the detailed plan to "reorganize the labor force," Cuba expects to issue 250,000 new licenses for self-employment by the close of 2011, almost twice the current number, and create 200,000 other non-state jobs. The government's definition of self-employment includes many entities that are essentially small businesses, including such things as family-run restaurants and cafeterias, auto repair shops and jobs in the building trades. The non-state jobs will include, among other things, workers hired by the small businesses, taxi drivers who will now lease their cabs from the state and employees of small state businesses to be converted to cooperatives. PINK SLIPS Cuba watchers said the statement marked the speeding up of reforms under Raul Castro, which have been gradual so far. "Today's announcement opens a new chapter, one that has a deadline, that will be felt and seen in every town, and that promises to create a much more substantial private sector inside the socialist economy," said Philip Peters, a Cuba expert at the Lexington Institute think tank in Washington. Peters said the half million workers will not find themselves suddenly on the streets of Cuba because their workplaces will likely be converted gradually into cooperatives driven by private initiative. "The 500,000 figure is alarming -- it conjures up an image of 500,000 Cuban workers going home with a pink slip, not knowing where they will go the next morning, and of the economy suddenly needing to create 500,000 new jobs," Peters wrote on his blog The Cuban Triangle. "In fact, many workers will go to the same workplace as ever, but the business arrangements will be different." Cuba currently has only 591,000 people working in the private sector, a number that includes mostly family farmers as well as 143,000 self-employed, according to the National Statistics Office. All state businesses and agencies were ordered in January to review payrolls with an eye to trimming unneeded positions. Laid-off state workers will be offered alternative jobs, and if they do not accept one, will have unemployment benefits equal to 70 percent of their wages for no more than three months, depending on their seniority, sources said. They will not be totally out in the cold because all Cubans receive free health care and education, subsidized utilities, a subsidized food ration and automatic adjustment of mortgages to 10 percent of the top breadwinner's income. Many Cubans also receive remittances from family abroad worth far more than the average monthly wage, equivalent to around twenty U.S. dollars. Castro has fostered discussion in the media and grass-roots meetings on what ails the socialist economy, and made mostly minor changes aimed at boosting productivity by putting more incentives in the system. The most important reforms up to now were in agriculture, where state lands have been leased to 100,000 new farmers and the state's monopoly on the sale of farm supplies including fuel and fertilizer and produce have been loosened. (Reporting by Marc Frank; Editing by Jeff Franks and Anthony Boadle) World Cuba Comments See All Comments (1)  |  Post Comment Sep 14, 2010 12:17am EDT Shame on the USA for not talking with Cuba and maybe lifting the trade ban. The USA seems to just want to wait for the Castro’s to die. Skylor Report As Abusive       See All Comments (1)       Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters.   © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback   Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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