13 September 2010 Last updated at 22:01 GMT
Cuba to cut one million public sector jobs
Cuba has announced radical plans to lay off huge numbers of state
employees, to help revive the communist country's struggling economy.
The Cuban labour federation said more than a million workers would lose
their jobs – half of them by March next year.
Those laid off will be encouraged to become self-employed or join new
private enterprises, on which some of the current restrictions will be
Analysts say it is biggest private sector shift since the 1959 revolution.
Cuba's communist government currently controls almost all aspects of the
country's economy and employs about 85% of the official workforce, which
is put at 5.1 million people.
As many as one-in-five of all workers could lose their jobs.
"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 labour federation said in a
"Job options will be increased and broadened with new forms of non-state
employment, among them leasing land, co-operatives, and self-employment,
absorbing hundreds of thousands of workers in the coming years," the
To create jobs for the redundant workers, strict rules limiting private
enterprise will be relaxed and many more licenses will be issued for
people to become self-employed.
Private businesses will be allowed to employ staff for the first time.
The self-employed will have access to social security and will be able
to open bank accounts and even borrow money to expand their businesses.
They will also have to pay tax on their profits and for each person they
employ, something which could dramatically boost the government's income.
And they will be able to negotiate contracts to provide services to
A minority of Cuban workers already work for themselves, for example as
hairdressers and taxi-drivers, or running small family restaurants.
There is also a thriving black economy, with many people working
independently without proper permission from the state.
The BBC's Fernando Ravsberg in Havana says salaries in Cuba's state
sector are so low that many employees could be better off working for
But he says not everyone has the skills and initiative necessary to be
He adds that the government plan does not foresee any kind of advice
being offered to people seeking to set up their own businesses.
President Raul Castro outlined some of the changes in a speech in
August, saying the state's role in the economy had to be reduced.
"We have to end forever the notion that Cuba is the only country in the
world where you can live without working," he said.
Cuba's state-run economy has been gripped by a severe crisis in the past
two years that has forced it to cut imports.
It has suffered from a fall in the price for its main export, nickel, as
well as a decline in tourism.
Growth has also been hampered by the 48-year US trade embargo.
Mr Castro became Cuba's leader when his brother, Fidel Castro, stepped
aside because of ill-health in 2006.