Cuba to take brakes off economy, but not turn off socialism road

Cuba, Havana: Cuban President Raul Castro is pictured during the arrival ceremony for Venezuelan President Hugo Chavez at Jose Marti Airport in Havana on December 11, 2009. (AFP Photo / Adalberto  Roque)
Cuban President Raul Castro has vowed to ease state control over the country’s economy and allow more people to run their own businesses. However, he ruled out major reforms and said the republic will remain socialist.

Speaking at the opening of Cuba's National Assembly (parliament) biannual session on Sunday, Castro said that more Cubans will be given an opportunity to set up their own businesses and employ workers. The leader vowed that some bans on granting new business licenses and commercialization of some kinds of goods will be lifted, writes RIA Novosti. He did not stipulate, though, how many licenses will be issued.

In addition, Castro said that earlier in July the Council of Ministers approved a new taxation system to be applied to the self-employed and those who hire workers.

All those measures are aimed to “undertake, in stages, a downsizing of bulky payrolls in the government sector," he said, cites Cuban news agency, ACN. Currently, 95 per cent of Cubans work for the government and Raul Castro suggested up to a million people out of a five-million-strong working population are in unproductive jobs and will be laid off.

Castro said that he was aware that Cubans expected the government to suggest measures to pull the country out of the deep crisis it has been in for about two years now. The president of the Caribbean state admitted that it was necessary to increase the efficiency and productivity of the economy. Otherwise, he noted, it would be impossible to raise salaries, increase exports and replace imports while maintaining enormous costs of the Cuban socialist system.

It is planned that the first stage of the planned changes will be completed in the first trimester of 2011.

“We have to remove once and for all the notion that Cuba is the only country in the world where you can live without working,” he said, adding that “the strict observance of the principle of adequacy should help to avoid any display of favoritism and gender or other forms of discrimination.”

Castro assured that those who lose their jobs will not be left to the mercy of fate and said that the “socialist state” will provide necessary support to those who really are unable to work, writes RIA Novosti.

“The revolution will not forsake anyone. I will fight to create the conditions so that all Cubans have honorable jobs,” he said on Sunday in a speech to the Cuban Communist Youth, cites Montreal’s “The Gazette”.

However, according to the president, not everything is bad in Cuba’s economy. "We have … made progress in the postponement of monetary obligations, which we are determined to honor, and foreign deposits in Cuban banks have increased as a sign of confidence in the country," he noted, ACN cites. According to Castro, the progress has been achieved despite the breach of the year’s sugar production plan and other failures, as well as energy consumption, “which is growing more than expected.”

At the moment there are very few areas where people are allowed to work for themselves. Cuba’s former president, Fidel Castro, nationalized all small businesses in 1968. When his younger brother and successor Raul came to power in 2006, many hoped that he would start economic liberalization. However, so far not much has changed.

A tiny step in easing the state grip on economy was taken earlier this year when state-run barber shops and beauty salons were turned over to employees. Also, some taxi drivers were allowed to work for themselves. Earlier, striving to increase food production, Castro gave unproductive lands to farmers.

The latest announcement may be a signal that slowly but surely Cuba is moving towards market reforms.

Speaking at the assembly on Sunday, though, Economy Minister Marino Murillo said “You cannot talk about reforms.”

“We are studying a possible update of the existing economic model,” Itar-Tass quotes him as saying. He added that socialist, but not market, economic principles will be a priority and the state will keep playing the key role in economy. However, the state may get out of some activities.

“The state should deal only with the most important tasks in economy,” he said.

He added that the experiment with barbers and hairdressers being given an opportunity to rent the space where they work has now been accomplished. Similar measures may be taken in other sectors of the Cuban economy, Murillo said, but did not clarify what sectors those could be.

While it still remains unclear how far the changes will go, the recent moves may signal that the retired Comandante is losing influence in the country. It has been a while since the two brothers have been seen together.

Stirring up speculations, Fidel did not turn up at the parliamentary session on Sunday: his chair to the right of Raul remained empty. And that is despite the fact that last week the 83-year-old announced that he had completely recovered from a serious illness that forced him to leave the presidential seat. Moreover, the Cuban revolution leader did not appear at the celebration of the state’s major holiday – the July 26 Revolution Day. Making everyone even more puzzled, Raul – who was expected to be the main speaker at the celebration – remained silent. Instead, his deputy Jose Ramon Machado Ventura delivered a speech.

However, speaking on Sunday, Raul Castro denounced speculations that there might be a split within the country’s leadership.

“The unity of revolutionists and the unity of the revolution leaders and the majority of population is our most important weapon,” the president said, writes RIA Novosti.

He added that it may be painful to hear for enemies, “but our unity today is stronger than ever.”

Natalia Makarova, RT