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Cuba move to cut 500,000 government jobs is biggest change in decades

Cuba announced Monday that 500,000 government jobs will be cut by next year and that more private enterprise will be tolerated. The changes go further than economic opening of the 1990s.

By Staff writer / September 14, 2010

A man reads Cuba's Granma newspaper as others stood nearby in Havana on Monday. Cuba announced Monday it will cast off more than 500,000 government employees by mid-2011 and reduce restrictions on private enterprise to help them find new jobs.

Franklin Reyes/AP


Mexico City

Former revolutionary leader of Cuba Fidel Castro may claim he was misinterpreted by a US reporter last week when he stated that the Cuban model no longer works. But his words were bolstered Monday when Cuban authorities announced the biggest economic shift in decades: Half a million state workers will be laid off by next year and more private enterprise will be tolerated.

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The news generated concern across the communist island nation, but also hope that a more liberalized economic policy is in sight.

“It is a very good development toward harnessing the entrepreneurial spirit and know-how of the Cuban people,” says Ted Henken, a professor at Baruch College-CUNY who has studied private enterprise in Cuba. “It will hopefully be a beginning of the end of the Cuban government´s 'internal embargo' on the inventiveness of the Cuban people.”

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Raúl Castro, who has led the nation since his older brother Fidel Castro fell ill in 2006, has long been seen as the more pragmatic brother, open to a new, more functional economy. When he took power, he raised expectations that big economic changes were under way.

Under his recent leadership, Cubans have been given the right to buy cellphones and own other electronics. Some licenses for private taxis have been granted and land for private farmers distributed. But the changes announced Monday are by far the biggest to date, influencing huge swaths of the country.

This goes further than the economic opening of the 1990s, which was also spurred by economic crisis, notes Philip Peters, a Cuba expert at the Lexington Institute, in his Cuba blog.

“When self-employment was last expanded in the early 1990s, the government seemed to view it as a necessary evil or, at best, a small-potatoes option for providing a few services in which the state had no interest. This is different,” he writes. “The expansion of self-employment and cooperatives today is subsidiary to a larger goal, which is to shed unproductive people and activities from government payrolls.”

10 percent to be unemployed