Over 2,000 state firms shifted to private sector in Cuba
Submitted by admin4 on 30 April 2013 – 12:18pm
Havana : The Cuban government has leased more than 2,000 small
businesses to their old employees, who have increased the firms’ income
and the quality of the services provided.
This new form of non-state management, included in the economic reform
plan of President Raul Castro, was begun on an experimental basis in
2009 in barber shops and hair styling salons, but it was later expanded
to 47 economic activities.
To date, 2,041 businesses have been leased to a total of 5,479
employees, according to figures compiled by the Domestic Commerce Ministry.
The former employees are in charge of organizing the business, providing
the necessary resources, maintaining or improving the store and they
assume all the rent, electricity, telephone, gas and water payments.
They also set the prices of the services they provide.
The Cuban government acknowledges that this method has improved service,
has increased salaries and the new business operators feel more
motivated to the point where absenteeism has been reduced, although it
is still prevalent in the state-run sector given the meager salaries and
the lack of incentives there.
The workers also feel they are benefiting, like the employees of the Leo
hair salon in Havana’s El Vedado neighbourhood, which for the past 16
months has been operating under new management.
“The pay has improved a lot. Before, the minimum wage was 255 pesos a
month (about $9) and now that things have changed, the improvement is
substantial,” Milagros, 35, one of the five hair stylists at the shop,
Not everything is favourable, however. Besides the burden of taxes, the
recurring complaint in Cuba’s emerging private sector is the absence of
a wholesale market where business operators can buy supplies.