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Cuban Government Plans to Cut 500,000 Jobs by March

Sept. 13 (Bloomberg) -- Cuba’s government will cut more than 500,000 state jobs by March as part of a plan to reduce inefficiencies, the country’s largest union said in a statement.

The reductions are part of President Raul Castro’s goal of eliminating 1 million state jobs by 2015, according to the statement, which was published in state newspaper Granma and signed by the Central de Trabajadores de Cuba.

“Our state budget cannot continue maintaining business and services with inflated payrolls, with losses that weigh down the economy, or those that are counterproductive, generate bad habits and distort worker conduct,” the union said.

The government will increase private-sector job opportunities by allowing more Cubans to become self-employed and form independent cooperatives. The government will also increase private control of state land, businesses and infrastructure through long-term leases, the statement said.

President Raul Castro, 79, has initiated measures to open the economy since being handed power by his brother Fidel in 2008. The moves come as the economy suffers its worst slide since the former Soviet Union ended its support in the 1990s.

Fidel Castro told a U.S. journalist this month that Cuba’s economic system doesn’t work, a signal that the government is looking to private enterprise and foreign investment to bolster growth, said Julia Sweig, director for Latin American Studies at the Washington-based Council on Foreign Relations.

‘Cuban Model’

“The Cuban model doesn’t even work for us anymore,” Castro told journalist Jeffrey Goldberg after being asked if he believed it was something still worth exporting, according to a post Sept. 8 on The Atlantic magazine’s website.

Goldberg told reporters on a conference call today he didn’t have a chance to follow up on the question.

Two days after the publication, Castro said the comment was misinterpreted and he meant “exactly the opposite” of how it was understood. Castro may have been trying to make clear that reforms won’t include “importing Yankee-style capitalism lock, stock and barrel,” said Sweig, who accompanied Goldberg during his visit with Castro.

U.S. President Barack Obama in April eased travel restrictions to Cuba for Cuban-Americans and directed the U.S. government to allow companies to provide communications services to the island.

In August, the Cuban government loosened controls that prohibited Cubans from selling their own fruit and vegetables. It also eased property laws, extending lease periods to 99 years from 50 years for foreign investors in an effort to build up a tourism infrastructure and draw more visitors to the Caribbean island of 11.4 million people.

Cubans can now run private taxi companies, own mobile phones and operate their own barbershops and restaurants. The state still controls 90 percent of the economy, paying workers salaries of about $20 a month in addition to free rationed food staples and health care, and nearly free housing and transportation.

To contact the reporter on this story: Blake Schmidt in Granada, Nicaragua at bschmidt16@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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