Communist Cuba turns to private enterprise
Cuba hopes that private enterprise will revive a struggling economy. The state will lay off 500,000 workers and encourage them to find jobs in the private sector.
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"The Cuban government is coming to terms with reality; they have to cede ground to private enterprise," says Ted Henken, a professor at Baruch College at The City University of New York, who has studied private enterprise in Cuba.Skip to next paragraph
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The government began to tolerate a degree of private enterprise in the 1990s, after the collapse of the Soviet Union left Cuba without its main benefactor. Today, nearly 1 million Cubans work in the private sector – and several thousand (the exact number is unknown) engage in the black market economy. A doctor, for example, who earns just a little more than the average monthly national salary of $20, might rent out a room on the side to earn extra money.
The purging of the government payroll goes much further than the small degree of privatization that followed the Soviet downfall when thousands of Cubans began running their own businesses legally for the first time.
"[The Cuban government] always downplayed it; it was not a major initiative in any way," says Mr. Peters. In fact, much of that opening was later rolled back when new benefactors, including Venezuelan President Hugo Chávez, began supporting Cuba in the early part of the decade.
The most recent change will also require a shift in the Cuban psyche. After all, this is a country that provides free health care and university education, and heavily subsidizes everything from housing to food.
Raúl Castro said it best recently: "We have to erase forever the notion that Cuba is the only country in the world where one can live without working."
Some Havana residents expressed doubt that Cuba is capable of such a significant shift – something the government hinted at as a possibility in a 26-page report outlining the changes. It warned that many small businesses could fail within a year because of a lack of expertise, training, and local support.
Raudel Hernández, a university student in Havana, says he doubts all those left unemployed can be absorbed by the private sector. "There would have to be an explosion of private businesses, and I do not believe the quantity of licenses nor the variety of them will be sufficient," he says.
• A Monitor correspondent in Havana who contributed reporting for this article could not be named because of government restrictions on reporters in Cuba.
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