Cuba Set To Cut Over One Million Public Sector Jobs

Posted by Golden on September 18th, 2010

There is a plan in place by the Cuban government to cut jobs up to the tune of 1 million. This plan according to the government is to help their communist economy to recover. This planned cut of job is scheduled to begin by March 2011. On the concern that the planned cut will raise unemployment tremendously, the government said that those affected will be encouraged to become self employed or join new private enterprises.

This is believed to be the biggest private sector shift since 1959 revolution. It should be noted that most of the work force in Cuba is currently controlled by the government. The government controls over 85% official work force in Cuba which include about 5.1 million people. With this planned cut in jobs, it means that 1 out of 5 people could loose their jobs.

"Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls and losses that hurt the economy," the labour federation said in a statement.

"Job options will be increased and broadened with new forms of non-state employment, among them leasing land, co-operatives, and self-employment, absorbing hundreds of thousands of workers in the coming years," the statement added.

With this policy shift, the private sector will be allowed to employ staff for the very first time. By this, the strict rules that have been limiting the private sector enterprises will be relaxed to enable more licenses to be issued thereby creating more jobs for the redundant workers. Another implication is that more people will now own businesses with was not allowed in the country before now. With this law tax payers will increase as the people continue to own businesses with would boost the economy of the country and add more money to the coffers of the government. Access to social security means that individual business owners will be able to borrow money to expand their business and also be able to own bank accounts.                                                        

President Raul Castro outlined some of the changes in a speech in August, saying the state's role in the economy had to be reduced. "We have to end forever the notion that Cuba is the only country in the world where you can live without working," he said. Cuba's state-run economy has been gripped by a severe crisis in the past two years that has forced it to cut imports. It has suffered from a fall in the price for its main export, nickel, as well as a decline in tourism. Growth has also been hampered by the 48-year US trade embargo.

Mr Castro became Cuba's leader when his brother, Fidel Castro, stepped aside because of ill-health in 2006.

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