Cubans anxious as state moves to fire 500,000 workers

HAVANA — Cuba on Monday starts a six-month process of firing half a million state workers, in a shift that has Cubans very jittery about their fate.

"Job cuts for many will mean a process of readaptation that will be quite difficult," said Cardinal Jaime Ortega, noting: "people are worried."

The government already has unveiled guidelines for free enterprise activities in 178 fields, as part of the plan to absorb workers set to be laid off into a newly-expanded private sector.

In Cuba, the only communist country in the Americas, virtually all business is government-run.

Cuba's inefficient economy has strained under a US trade embargo for nearly five decades. And now the hard-pressed government of President Raul Castro is allowing an expansion of small-scale private enterprise.

The reforms will allow Cubans to become accountants, masseuses, park custodians, or even open small fruit and vegetable stores, according to the rules set out in the state-run daily Granma.

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Julia Sweig on the radical new phase in Cuba going largely unnoticed

Absent at the Creation

By JULIA E. SWEIG

A radical new phase in Cuban history is unfolding in plain sight. But unlike the rest of the world, Washington appears not to notice.
Under President Raúl Castro, preserving the Revolution is now about evolution: land reform, property rights, real estate investment, progressive taxation, small businesses, privatization and government lay-offs — a half-million will start next month, with more to come.

In practical terms, this means ending the system where everyone is paid but almost no one works, and where the state doles out a long list of freebies but has little productive tax base to finance its expenditures.

Starting next month, Cubans running businesses in a huge range of goods and services will pay income, payroll and social security taxes. And the Cuban state will spend the new revenue on health care, education and infrastructure.

Rolled out to a conservative public leery of life off the dole, and in the wake of the global financial crisis and a difficult internal debate, these changes amount to much more than a budgetary decision.

At the core of the reforms is a new relationship between the individual and the state and a bold political bet that Cuban society can — and out of sheer financial necessity must — endure the adjustment pains these measures will surely cause.

For years now, Cubans have been clamoring for the state to get out of their way, but to still provide the basics and regulate the economy enough to keep inequality in check.

No one can say for sure what kind of model is emerging in Cuba, and political reform remains distant. But a hybrid of market, state, local and foreign capital has the potential to unleash the resourcefulness and entrepreneurial energy of Cuba’s talented and well-educated citizens.

The rest of the world has been laying the groundwork to participate in the new Cuba since well before Fidel Castro stepped down. China, Venezuela and Russia, along with American friends like Spain, Canada, Brazil and even Israel, are investing in Cuban oil, minerals, tourism, infrastructure, agriculture and biotech.

Even while lodging their objections over human rights, most member states of the European Union now have a toehold in the Cuban economy. Cuba has agreed to allow the European Union to open a business school in Havana and extend a small but politically significant first tranche of $2.5 million in microcredits to the emerging private economy.

As it was after the near-total release of Cuba’s political prisoners this year, the Obama White House seems nearly immobilized in the face of these reforms — the very steps this and previous administrations have demanded as preconditions for a new policy toward Cuba.
Yes, Cuban-Americans — one-half of one percent of the U.S. population — can now visit relatives and send them remittances. And the two governments do talk to one another with some degree of civility — for example, about reconstruction in Haiti.

But domestic politics and campaign contributions, not national interest or foreign policy considerations, still carry the day in Washington when it comes to Cuba.

In one example, senior political advisers in the White House recently shut down the revival of a Clinton administration “people-to-people” program — one approved over the summer by President Obama, his secretary of state and sub-cabinet deputies from throughout the executive branch — to allow Americans tied to educational, cultural, religious and other nongovernmental organizations to travel to Cuba. Senate and House Democrats from Florida and New Jersey persuaded President Obama’s political hands to stop the modest opening lest they inflame Cuban-American voters and jeopardize campaign contributions.

Such legislators also fear that by allowing some Americans to travel to Cuba, the White House could strengthen supporters of legislation to lift the entire travel ban, scheduled for a politically decisive vote in the House Foreign Affairs Committee during the lame duck session of Congress. As with the White House, these legislators have lobbied their colleagues in the Congress that such a move will backfire against Democrats in 2010 and 2012 elections.

But their argument is out of date. Cuban-American majorities now support extending their right to travel to all Americans. They are eagerly investing in their families’ small businesses and with all manner of goods they ship down on 30 weekly flights from Miami.
Furthermore, most Cuban-Americans still vote Republican in presidential elections — as they did in 2008. And if they vote for the one Cuban-American candidate running for the House this fall, it will be on bread and butter issues, not Cuba policy. The perverse and decidedly un-American effect of the administration’s political timidity is that only Cuban-Americans, most of whom don’t even vote for Democrats, can now participate in the changes afoot in Cuba.

It’s no wonder that domestic politics now fill the foreign policy breach: Washington hasn’t really set out to define its own interests and craft a policy that flows from them since 1959.

The irony is that a half century later, Cuba is now charting a new course for itself, regardless of what Washington does or does not do. Washington’s inertia suits Cuba for now, allowing its policymakers to make major adjustments without the headache of Americans telling them what to do.

But it is bad for the United States. Even as they benefit financially from the American absence, American allies see us as bereft of credibility. Neither they, nor Cubans for that matter, expect a revolution in policy toward Cuba. But evolution — starting with allowing even the unhyphenated Americans to see for themselves what’s transpiring in Cuba — is an obvious place to start.





Julia E. Sweig is the author of “Cuba: What Everyone Needs to Know” and a senior fellow at the Council on Foreign Relations.

Wanna bet Cuba's GDP doesn't dip?