MercoPress. South Atlantic News Agency

Cuba with unions support announces elimination of 500.000 jobs to boost economy

President Raul Castro wants to streamline the inefficient Cuban economy

The Cuban 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 Raúl Castro’s goal of eliminating 1 million state jobs by 2015, according to the statement.

“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 in a release published in the state newspaper Granma.

“We need to increase production and the quality of services, reduce bloated social costs and eliminate inappropriate gratuities, excessive subsidies, studying as standing employment and anticipated retirement”, said the CTC text published in the Workers weekly.

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 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 of Foreign Affairs.

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% of the economy, paying workers salaries of about 20 USD a month in addition to free rationed food staples and health care and nearly free housing and transportation.