Tuesday, May 17, 2011

Cuban plans to lift remaining restriction against hiring non-relatives

Posted on Tuesday, 05.17.11
Cuba economy

Cuban plans to lift remaining restriction against hiring non-relatives

The last requirements on hiring only relatives will be lifted, the Cuban
government announces.
By Juan O. Tamayo

The Cuban government has agreed to expand the types of private
businesses allowed to hire non-family members as employees, in an
apparent attempt to speed up the push to create new jobs for the 1.3
million public employees it plans to lay off.

A report in the official Granma newspaper Tuesday said the Council of
Ministers also reported that tax collections and the sugar harvest had
improved, but hinted that high world oil and food prices will force the
government to tighten its already cinched belt this year.

Granma's report said the Council had agreed at a meeting Saturday to
expand the permission to hire non-family members to all the 178 types of
private micro-enterprises now allowed — known in Cuba as
"self-employment" — such as restaurants, school tutors and party clowns.

The 171 categories could only hire relatives when they were first
allowed in the early 1990s, as the Cuban economy plunged into chaos
after the Soviet Union collapsed and stopped its massive subsidies to
the island. Last year, the government expanded them to 178 categories
and allowed 83 of them to hire non-family members.

Facing another economic crisis, the Raúl Castro government is now
pushing for massive cuts in state spending — including the lay offs of
more than 1.3 million public employees — and an expansion of the private
business sector in hopes it will create jobs and increase tax revenues.

"The Council of Ministers agreed to extend to all of the non-state
sector activities the approval to hire employees and continue the
process of easing the restrictions on self-employment,'' Granma
reported, adding that details would come later.

The Granma report made it clear that the Ministers were keeping a close
eye on the self-employment. Government figures had 295,000 Cubans
holding licenses for self-employment as of April — far short of the
level needed to cushion the state employees to be laid off.

Taxes and contributions paid by the self-employed, plus the sale at
unsubsidized prices of food items such as rice, sugar, bread and eggs
have all contributed to an increase in government revenues, the
newspaper added.

Some municipalities asked for unnecessary documents to issue the
self-employment licenses, and there were "excessive" delays in issuing
the sanitary licenses for enterprises such as cafeterias, the report noted.

It added, however, that some of the enterprises — many are sidewalk
kiosks selling items like food, clothes or music CDs — "make the streets
look ugly" and noted that there are empty state-owned storefronts that
could be rented to them.

Granma added that the ministers also discussed Cuba's high needs for
imports — the island has been buying up to 80 percent of its food needs
abroad — and repeated a Castro warning last month that high world oil
and food prices will cost the island an extra $800 million this year.

The report also noted that the Council had approved extending the time
frame for the lay offs of state employees, but gave no details. The
first 500,000 were to have been dismissed by April 1, but Castro himself
cancelled that deadline earlier this year, acknowledging that the
private sector was not creating new jobs fast enough.

One of the main concerns, it added, was for pregnant women who were laid
off and could not find other jobs. Until now, those women received a
month's salary but no maternity leave. Now, the government has approved
paying them 18 weeks of salary — six before and 12 after they give birth.


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