14 Sep 2010

Huge layoffs announced in Cuba

4:10 pm on 14 September 2010

Cuba has announced plans to lay off huge numbers of state employees in the biggest shift to the private sector since the revolution in 1959.

The Cuban Labour Federation said 500,000 jobs would go by March, and total redundancies could exceed a million - one-in-five of all workers.

The BBC reports those laid off will be encouraged to become self-employed or join new private enterprises, on which some of the current restrictions will be eased.

Cuba's communist government controls almost all aspects of the country's economy and employs about 85% of the official workforce, which is put at 5.1 million people.

In a statement, the federation said:

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

"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 BBC reports that self-employed people will have access to social security and will be able to open bank accounts and even borrow money to expand their businesses.

They will have to pay tax on their profits and for each person they employ, and will be able to negotiate contracts to provide services to government departments.

A minority of Cuban workers already work for themselves, for example as hairdressers and taxi-drivers, or running small family restaurants.

There is also a thriving black economy involving many people.