Tuesday, December 27, 2011

Cuba makes more reforms to retail sector

Cuba makes more reforms to retail sector
ReutersBy Marc Frank | Reuters – Mon, Dec 26, 2011

HAVANA (Reuters) - Cuba will open up more of the country's retail
services to the private sector next year, allowing Cubans to operate
various services such as appliance and watch repair, and locksmith and
carpentry shops, official media reported on Monday.

The measures are the latest by President Raul Castro in his attempt to
reinvigorate Cuba's struggling Soviet-style economy by reducing the role
of the state and encouraging more private initiative.

A resolution published in the official gazette on Monday said the new
reforms would take effect on January 1.

Earlier this year, the Cuban government turned over some 1,500 state
barbershops and beauty parlors to employees.

Former state employees now pay a monthly fee for the shop, purchase
supplies, pay taxes and charge what the market will bear.

Shortly after Fidel Castro's 1959 revolution, all businesses in Cuba
were taken over by the state. But since the former leader handed power
to his brother in 2008, the policy has been openly criticized as a mistake.

Ordinary Cubans have long complained about dismal state services,
including small retail services, which they say have deteriorated
because of a theft of resources and a shortage of sufficient supplies
from the government.

Cuba has been moving over the last year to liberalize regulations over
private economic activity. Since then, tens of thousands of Cubans have
taken out licenses "to work for themselves," a euphemism used by the
government to describe operating mom-and-pop businesses.

Cuba plans to have 35 percent to 40 percent of the labor force working
in the "non-state" sector by 2016, compared with 15 percent at the close
of 2010.

Raul Castro, faced with stagnating production and mounting foreign debt,
has made clear the economy must be overhauled if the socialist system he
and his ailing brother Fidel installed is to survive.

Moving most retail services to the "non-state" sector is one of more
than 300 reforms approved by the ruling Communist Party earlier this
year to "update" the economy.

The measures aim to introduce market forces in the agriculture and
retail services sectors, cut subsidies and lift restrictions on
individual activity that once prohibited the sale and purchase of homes
and cars.

On Monday, the Communist Party daily Granma said the moving of thousands
of state retail services to a leasing arrangement would be done
gradually throughout 2012.

Economy Minister Adel Yzquierdo Rodriguez told a year-end session of the
National Assembly last week the number of state jobs would be reduced by
170,000 next year, with 240,000 new jobs likely to be added to the
"non-state" sector.

Thousands of state taxi drivers are expected to move to leasing
arrangements next year. Some state food services are also expected to be
allowed to form cooperatives.

(Editing by Kevin Gray and Eric Beech)


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