Cuba continues to trim state payroll, build private sector

Cuba's President Raul Castro addresses the audience during the opening session of the Community of Latin American and Caribbean States (CELAC) summit in Havana January 28, 2014. REUTERS/Adalberto Roque/Pool

By Marc Frank HAVANA (Reuters) - Cuba continued to shed state jobs and move workers into the private sector in 2013, according to a report issued by the official labor federation at the weekend, as President Raul Castro pressed forward with reforms to the Soviet-style system. The Cuban Communist Party adopted plans in 2011 to "modernize" the economy in search of greater efficiency and improved salaries for state workers. The plan includes shedding secondary economic activity in favor of markets, private businesses, cooperatives and leasing systems, while concentrating resources on major state-run companies in hopes of making them more competitive. The official Juvented Rebelde newspaper said on Sunday that the main report approved by the labor federation's congress over the weekend stated more than 10 percent of state jobs had been cut since 2009. "Jobs in the state civil sector have decreased by 596,500 since 2009," Juventud Rebelde quoted the report as stating. Cuba has a potential labor force of over 6 million, of which 5 million were reported employed in 2012, the last official figures available. At the same time, the number of private, or "non-state" workers as Cuba calls them, rose to over 1 million in 2012, close to double the number reported in 2009. The majority of the non-state workers were farmers, whose numbers have grown under Castro's agricultural reforms, which include leasing state lands to individuals. The goal is to stimulate local food production and cut the need for budget-draining food imports. The rest of the non-state workers, just over 400,000 in 2012, were mostly in small retail businesses or self-employed such as carpenters, seamstresses, photographers and taxi drivers. The report approved at the congress, which met in Havana last week, said that figure "increased to more than 450,000" last year. "If Cuba is to emerge from its economic inefficiency, it is crucially important to promote a mixed economy—with key sectors under state control, but with opportunities for small- and medium-sized enterprises," John Kirk, one of Canada's leading academic experts on Latin America and author of a number of books on Cuba, said by email. "There has been noticeable improvement in the services provided by small businesses and cooperatives, and these initiatives should be encouraged," he said. The cash-strapped state is closing thousands of its small retail outlets such as barbershops and cafeterias, notorious for economic inefficiency and employee theft, and offering to lease the premises to employees or others interested in running their own business. Last year the state turned more than 200 small and medium-sized businesses -- from restaurants, shrimp breeding and produce markets to recycling, construction and light manufacturing -- into private cooperatives. Hundreds more were expected to become cooperatives this year. The government hopes to slash 20 percent of the state labor force, or nearly a million jobs, from its bloated payrolls, by 2016. (Reporting by Marc Frank; Editing by Marguerita Choy)