Informacion economica sobre Cuba

Cuba lauds subcontracting to private sector

Thu Jun 21, 2012 2:24pm EDT

* Official daily says results of contracting impressive

* Practice seen stimulating small business

* Construction, landscaping and other services benefit

By Marc Frank

HAVANA, June 21 (Reuters) – Cuba praised state contracting of

landscaping, construction and other services to the private sector on

Thursday, in another sign a recent opening to small business is gaining


A long article in the communist party daily, Granma, focused on the

recently created western province of Artemisa, a pilot project for

reform of local government and state business administration under

President Raul Castro.

"One of the most important benefits of this mechanism (subcontracting)

is the rapidity and quality with which jobs are done," "Miguel Angel

Quijano, economic director of Artemisa, told Granma.

The newspaper said subcontractors were being used in public landscaping,

housing construction and state office renovation with ""impressive" results.

"Small businesses have been part and parcel of the birth of Artemisa,

spurring the strengthening of food and other services in which the

self-employed have been key, Granma said.

Havana province was divided into the rural provinces of Artemisa and

Mayabeque in 2010 and both were declared experiments for downsizing

government, moving local businesses out of local government and other


There has been little official coverage until now of the reforms

underway in Artemisa, with a population of 500,000. The province has

some minor industry located on its eastern border with Havana, and to

the west bordering Pinar del Rio, accounts for up to 50 percent of the

wrapper leaf for the country's famous cigars.

Castro is encouraging private sector growth to create jobs for the one

million employees he hopes to slash from bloated government payrolls

over the next few years. His goal is to strengthen Cuban communism to

assure its future.

More than 370,000 Cubans are now self-employed, more than double the

number of two years ago, although most are small operations based in

homes and 30 percent of the figure represents private sector employees.

But the ability of small businesses to grow has been hindered partly by

a lack of capital and access to government business, which is

significant because the state controls most of the economy.

That changed in December when new credit and banking regulations took

effect, allowing small businesses for the first time to obtain loans

and, along with private farmers, to open commercial accounts, a

prerequisite for doing business with the state.

The measures also lifted a 100 peso (roughly $4) cap on business between

state enterprises and private individuals.

The Granma report was just the latest to appear in the official media in

recent months praising subcontracting.

""This kind of positive coverage was unimaginable and these transactions

would have been illegal just a few years ago," Phil Peters, a Cuba

expert at the Virginia-based Lexington Institute said.

""This is one more sign that the government wants the private sector to

grow to boost productivity and to give laid-off government workers a

place to go," he said. (Editing by Tom Brown and David Adams)

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