Cuba's Raúl Castro unveils plan for massive job cuts
By Bill Van Auken
5 August 2010
President Raúl Castro Sunday outlined plans that could eliminate the
jobs of some 1.3 million Cuban state workers, while promoting the growth
of private enterprise in the country's service sector.
In his speech to the opening of the biannual session of the Cuban
parliament, Castro insisted that the measures are merely an "updating"
of the Cuban economic system, and not "market reforms" based on
"capitalist recipes." Nonetheless, the proposals pose among the most
sweeping social and economic transformations in Cuba since the overthrow
of the US-backed dictatorship of Fulgencio Batista in 1959.
The country has faced a protracted economic crisis, exacerbated by the
global financial meltdown. The main export, nickel, has seen prices drop
from $24 a pound in 2008 to just $7 a pound last year. Tourism, the
biggest source of income, has been hit by the global recession, as have
remittances from Cubans abroad, particularly in the US, who are facing
unemployment and falling wages. A series of three hurricanes in 2008
combined with a drought in the eastern portion of the island ravaged
much of Cuba's crops.
Compounding these difficulties is the 48-year-old US embargo first
imposed by the Kennedy administration in retaliation for the Cuban
government's expropriation of US corporate property on the island.
The measures outlined by President Castro are aimed at imposing the full
burden of this crisis onto the backs of the Cuban working class.
Those to be purged from what Raúl Castro described as "bloated" state
payrolls comprise up to one quarter of the economically active
population on the island. It is anticipated that virtually every family
in the country will be affected, and the proposed economic changes are
creating growing social and political tensions.
"We have to wipe out forever the notion that Cuba is the only country in
the world where you can live without working," Castro told the Cuban
The official unemployment rate in Cuba was 1.7 percent last year and has
not risen above 3 percent in the previous eight years. Full employment,
one of the guarantees of the Castro regime, is being abandoned.
"We hope to eliminate 200,000 jobs annually, some 100,000 of them over
the next year just in the capital," a government economist told the
Reuters news agency. Lists of those slated for firing have reportedly
already been drawn up in factories, hospitals and offices.
Those first to be targeted are workers who have already been laid off
from state-owned enterprises. Beginning in the first quarter of next
year, Castro said, "[T]he labor and salary treatment of workers who are
idle and laid off from a group of administrative bodies of the central
state will be changed, overcoming the paternalistic emphasis that
discouraged the necessity to work for a living and with it reducing
unproductive spending which is rooted in egalitarian pay, independent of
years of employment, in a salary guarantee over long periods for people
who do not work."
Castro gave no details about the nature of the change that would be
implemented—whether pay for unemployed workers will be eliminated,
reduced or shortened in duration. The specifics of the plan will be laid
out to a session of the official trade union body, the Confederation of
Cuban Workers. Like the parliament itself, it has no independence from
the state apparatus that has devised these measures and serves merely as
another rubberstamp for decisions taken at the top.
What was unmistakable about Castro's remarks, however, is that
unemployment is being viewed increasingly within official circles as a
necessary tool for disciplining the Cuban working class.
Employment conditions in the key tourism sector have already been
altered, according to reports from the island. Workers are being laid
off, without salaries, during the off-season. In some cases, they are
being offered reduced compensation to take courses or work in
construction or the agricultural sector.
The clear aim is to compel workers to work harder for less. This was
made explicit in a report last month in the official daily Granma about
the "positive" development that labor productivity in Cuba had risen 4.3
percent in the first quarter of this year, even as the median salary
fell by nearly 1 percent. Over the previous year, the government has
sought to tie wages to productivity
The median monthly income has fallen to 429 pesos, the equivalent of
$17. While these salaries have been supplemented with various state
services, ranging from subsidized housing to free education and health
care to food ration cards, these subsidies are also being targeted as
part of the Cuban government's drive to close deficit gaps and meet
payments to its foreign lenders. Already, living standards in Cuba are
far lower than they were in 1989 and the liquidation of the Soviet
Union, which had heavily subsidized the island's economy.
It was during this so-called "special period" proclaimed after the end
of Soviet aid and the resulting 35 percent drop in Cuba's GDP that the
government last encouraged a growth in private enterprises.
Already, the government has closed down dining halls in state-owned
enterprises that previously provided Cuban workers with a free meal.
There is also reported discussion of eliminating food ration cards in
favor of means-tested assistance to the poorest sections of the
population. Meanwhile, the government has raised the retirement age,
while forcing workers to contribute more to their social security.
Castro combined the threat of mass layoffs with the announcement of
measures that would facilitate the expansion of the so-called
cuentapropista sector, made up of barbers, hairdressers, taxi drivers
and similar services that are allowed to operate privately, while
obtaining licenses from and paying rent and taxes to the government.
The idea that this sector—which currently consists of less than 145,000
licensed enterprises—can absorb 1.3 million redundant state sector
employees is absurd on its face. Nonetheless, Castro promised to create
greater "hiring flexibility," allowing for small proprietors to exploit
labor for profit.
A more significant expansion of the private sector was announced on the
margins of the parliamentary session by Minister of Tourism Manuel
Marrero, who announced that the government is negotiating with foreign
capital for the building of 16 golf courses as well as a string of new
hotels on the island. He also said that by January the government would
lift restrictions on the sale of houses to foreigners.
The net effect of these measures will be to widen already growing social
inequality in Cuba, which is determined in large measure by access, or
lack of it, to foreign currency. Those with high government posts, jobs
in the tourist sector or receiving foreign remittances have such access,
while the great majority of the population does not.
Significantly, the Western media largely dismissed Raúl Castro's speech.
This reflects the real concerns of US and European capitalism, which has
no problem with taking away a million workers' jobs, but wants to see
more sweeping privatization of core areas of the Cuban economy and a
dismantling of remaining restrictions on foreign direct investment.
Fidel Castro, 83, did not appear at the opening of the Cuban parliament.
He had led the Cuban government for 47 years until 2006, when, because
of ill health, he ceded the reins to his younger brother, Raúl, 79.
Nonetheless, Fidel has been increasingly in the public eye, making eight
appearances in the last month. Among the most recent was his reception
of Chinese Foreign Minister Yang Jiechi. China has extended desperately
needed credit to the Cuban government, and there is growing speculation
that Havana may emulate the path taken by Beijing, combining an embrace
of capitalist economic relations with the maintenance of the current
political regime, based on the ruling Cuban Communist Party and the
In his speech to the parliament, Raúl Castro also gave the first public
explanation of his decision to release and exile 52 imprisoned "dissidents."
Castro explained that those who were released had been arrested and
jailed for working for the US government under conditions in which
Washington was openly promoting "regime change" in Havana. "The
revolution can be generous because it is strong," he said, while
cautioning that there would be "no impunity for enemies of the fatherland."
The release was brokered by the Catholic Church and the Spanish
government in return for Spain's agreement to push for the European
Union to lift sanctions against the island. The Cuban government is
anxious to regain access to European credit and also hopeful that
Washington could reciprocate with a loosening of the trade embargo.
Raúl Castro also stressed in his speech that the advent of Obama had
brought no substantive change in US policy toward the island. He noted
the maintenance of the economic blockade as well as the continued
imprisonment of five Cuban agents who had been sent to the US to monitor
terrorist Miami-based exile groups. One of them, Gerardo Hernández
Nordelo, 45 and in ill health, was recently placed in a punishment cell
in a California prison.
Castro insisted that unity in Cuba's ruling party was "stronger than
ever." He dismissed speculation that there existed divisions over
economic policy, including between the Castro brothers themselves.
Since permanently assuming the presidency in 2008, Raúl Castro has
replaced a number of leading officials with his own confidantes, drawn
for the most part from the senior brass of the Cuban military.
A number of these changes have been accompanied by rumors of official
corruption. Most recent in this category was the sudden removal of
Rogelio Acevedo, longtime head of the state agency that directs Cuba's
airlines and airports.
A prominent intellectual in the ruling Cuban Communist Party called
attention to the danger posed by the increasingly open corruption within
ruling circles. Esteban Morales, who served as director of the US
Studies Center at the University of Havana and was a regular commentator
on the Cuban television's political analysis program "Mesa Redonda,"
wrote an article in April entitled "Corruption: the true counterrevolution?"
"When we closely observe Cuba's internal situation today, we can have no
doubt that the counter-revolution, little by little, is taking positions
at certain levels of the State and Government," Morales wrote.
He continued: "Without a doubt, it is becoming evident that there are
people in positions of government and state who are girding themselves
financially for when the Revolution falls, and others may have
everything almost ready to transfer state-owned assets to private hands,
as happened in the old USSR."
He stressed that corruption within the ruling elite was far more
dangerous than the US-backed "dissidents," which he described as
isolated and lacking any program, any leadership and any significant
Pointing to the case of the recently sacked airlines chief Acevedo, he
said that there had been no real public explanation of the affair, in
which "the people's money and resources were squandered amid an economic
situation that's quite critical to the country."
The case was not unique, he said, but rather typical of top officials
who "are receiving commissions and opening bank accounts in other
countries." He added that US intelligence knew far more than the Cuban
people about who these officials were and would seek to use this
information to recruit them.
While Morales's article appeared on an officially sanctioned website, he
was soon taken off of the television program, and it was announced in
June that he had been expelled from the ruling party. Apparently, the
regime believed the commentary revealed far too much about the real
political and class character of Cuba's ruling stratum.